diff --git a/app/controllers/todos_controller.rb b/app/controllers/todos_controller.rb
index ab81272a..bdbf356f 100644
--- a/app/controllers/todos_controller.rb
+++ b/app/controllers/todos_controller.rb
@@ -89,7 +89,7 @@ class TodosController < ApplicationController
         @todo.errors.add(:context, "unknown") if context.nil?
       end
 
-      if @saved
+      if @todo.errors.empty?
         @todo.starred= (params[:new_todo_starred]||"").include? "true"
 
         @todo.add_predecessor_list(predecessor_list)
@@ -97,9 +97,11 @@ class TodosController < ApplicationController
         # Fix for #977 because AASM overrides @state on creation
         specified_state = @todo.state
         @saved = @todo.save
-      end
 
-      @todo.update_state_from_project if @saved
+        @todo.update_state_from_project if @saved
+      else
+        @saved = false
+      end
 
       unless (@saved == false) || tag_list.blank?
         @todo.tag_with(tag_list)
diff --git a/test/integration/todo_xml_api_test.rb b/test/integration/todo_xml_api_test.rb
index 7dbfee19..dc35fa33 100644
--- a/test/integration/todo_xml_api_test.rb
+++ b/test/integration/todo_xml_api_test.rb
@@ -37,17 +37,15 @@ class TodoXmlApiTest < ActionController::IntegrationTest
   def test_post_create_todo_with_wrong_project_and_context_id
     authenticated_post_xml_to_todo_create "<todo><description>this will fail</description><context_id type='integer'>-16</context_id><project_id type='integer'>-11</project_id></todo>"
     assert_response 422
+    assert_xml_select 'errors' do
+      assert_select 'error', 2
+    end
   end
 
   private
 
   def authenticated_post_xml_to_todo_create(postdata = @@valid_postdata, user = users(:other_user).login, password = 'sesame')
     authenticated_post_xml "/todos", user, password, postdata
-    assert_xml_select 'errors' do
-      assert_select 'error', 2, 'Project unknown'
-      assert_select 'error', 2, 'Context unknown'
-    end
-
   end
 
 end
\ No newline at end of file