Garnishment Of Royalties From Judgement

[Bensen]

I have a small farm in Tarrant county that is my

homestead, that has an existing mortgage. My mineral royalties payments(2-5 k per month)have been assigned to a judgement receiver. All of this is disregarding existing mortgage lien that also included any mineral royalties in deed of trust. How do I stop this judgement from collecting funds that have been used for mortgage obligation.

[blakeley]

Hello Steve.  It sounds like you have been subjected to a  Receivership under our Texas Turnover Statutes.  If the statutory burden of proof is satisfied, a judgment debtor can have a receiver appointed to collect non-exempt property that is not readily subject to ordinary execution.  A judgment lien attaches to real property in Texas and does not burden personal property interests like royalty proceeds.  To collect royalty payments in satisfaction of a judgment a receivership is often used.  The royalty proceeds from your homestead are non-exempt property, even if the minerals in the ground are exempt as part of your homestead. If the mortgage on your property pre-dated the judgment lien, and has been recorded,  and if your mortgage contained a present assignment of royalties and rents to help reduce the mortgage obligation, the holder of the mortgage would arguably be entitled to these proceeds as against a junior lien holder. In many mortgages, however, the assignment of rents and royalties is not a present assignment, but is triggered only in the event of a default and the decision of the mortgagor to collect these royalty proceeds.  I don't  know what constitutes a default under your deed of trust or if your deed of trust contains an assignment of rents.

The best advice I can give you is to contact a lawyer to have him/her review your paperwork and to represent you in the receivership.  I also think it would be helpful to contact the mortgagor to inform them of the situation.  Your lawyer could work with the bank to clarify any priority issues with respect to claims against the royalty proceeds.  In reality, this seems to be a matter between the Receiver and your bank.  

Good luck Steve and let me know if you have any other questions.  

[Butcher]

I have a small farm in Tarrant county that is my

homestead, that has an existing mortgage. My mineral royalties payments(2-5 k per month)have been assigned to a judgement receiver. All of this is disregarding existing mortgage lien that also included any mineral royalties in deed of trust. How do I stop this judgement from collecting funds that have been used for mortgage obligation.