Title Examination Series: Exceptions v. Reservations

An exception is not a reservation, but a reservation is an exception.

Well, technically they are not the same thing. However, if you reserve an interest, it has to be excepted from the conveyance, but if you except an interest, you have not necessarily reserved it for yourself. Quite often the terms are used interchangeably, without consequence, but there is a difference.

Simply stated, a reservation is always in favor of the grantor and an exception is in favor of someone besides the grantee, it may be the grantor or someone else. When you reserve it, you keep it for yourself. When you except something, it stays wherever it is at; whether that be with you or someone else. From the grantee’s point of view, it does not matter whether it was reserved or excepted, the grantee does not get it.

Example: A conveys Blackacre to B, reserving 1/2 of the minerals. B conveys Blackacre to C reserving 1/2 of the minerals. A has 1/2, B has 1/2 and C has nothing (ignoring Duhig which will be addressed in another post).

Example: A conveys Blackacre to B, reserving 1/2 of the minerals. B conveys Blackacre to C excepting 1/2 of the minerals. A has 1/2, C has 1/2, and B has nothing.

Lying is O.K. (for exception purposes only)

One of the issues that a title examiner can face in dealing with exceptions and reservations is the situation of a false reason for the exception. In Pich v. Langford, 157 Tex. 335, 339 (1957), the Supreme Court of Texas stated that the giving of a false reason for an exception does not alter or cut down the interest excepted, or cause the excepted interest to pass to the grantee.

Example: A conveys Blackacre to B, reserving 1/2 of the minerals, B conveys to C, C conveys to D, and excepts “1/2 of all oil, gas and minerals, being the same interest previously reserved by B in that certain Deed from B to C.” Even though B did not reserve any interest in its deed and the reason for the exception is false, the exception is still effective to prevent a 1/2 interest from passing to D. Because it was excepted, it stays where it was at, back with A. A owns 1/2, D owns 1/2, and C did not breach its warranty in the conveyance to D.

Therefore, a lie is acceptable when dealing with exceptions. The explanation for the exceptions is immaterial, it can be a lie, a misunderstanding, or a simple mistake. Once an interest is excepted, it no longer passes with the conveyance. And that is the truth.