=E ATI-ORNEY GENERAL 

OF TEXAS 

I' ,: ~. .'.:'j' : 

Hon. J. Earl Rudder 

Commissboner, General Land 

Office 

Austin, Texas 

.. OplaionNo. S-166 : 

:...RE:, Rightsof the State in 

certain- Instances upon forfelture af a veteran's contract of'sale and pupchase 

under the Veterans' Land 

Program. :' 

:?' Dear.Mr.: Rudder: 

~, 

You have requested an opinion on the following 

questions: 

"1. In those cases where it becomes 

necessary for the Veterans' Land Board.,to 

forfei~t a, veteran's contra~ct, land It 1s:~ 

found that the' veteran has executed a graz-~ 

lng lease on that particular traot.of land. 

with another party, what is the legal stabs 

of that pleases contract~lnsofar asp the Vet- : 

erans' Land Board Is ooncerne~d. 

"2. Where.a veteran has executed an 

agrlcultural~Lease.wlth another party tom. 

operate the tract of.land.-being purchased 

through the ,Vetetians' Land Program, and It 

becomes necessary for the Board to forfeit 

the veteran's ~c~ontract, what Is the'status 

~of this lease zontract and, what.r$ghts -accrue to the'Board as: to ownershlp.or possession of any,crops growing on .that~ l:aad at 

the time of such forfeiture? .Your attention 

ls;called,to the fact that: In no instance, 

does the Board become a party to any such 

lease agreement by indicating their approval 
Hon. J. Earl Rudder - page 2 (US-166) 

or disapproval of such. 

"3 . In the case of 011 and gas 

leases which may have been executed on 

land subject to forfeiture under the terms 

of the Veteran's contract, such leases before they become effective must be approved by the Chairman of the Veterans' 

Land Board and filed In that office. Are 

such 011 and gas leases affected in any way 

In the case of forfeiture of the veterans' 

land contract? 

"4. Where a veteran purchaser has a 

growing crop on lands he Is purchasing 

through the Veterans' Land Program, and 

has mortgaged all or a portion of such 

crops, what rights accrue to the Veterans' 

Land Board to participate in the yield 

from such crops If forfeiture action becomes necessary?" 

Article 5421m, Vernon's Civil Statutes, is cornmanly known as the "Veterans' Land Act.' Section 17 provides, In part: 

"The sale of all lands hereunder by 

the Board may be properly initiated by contract of sale and purchase, and said contract shall be recorded In the deed records 

In the county where the land Is located. 

The purchaser shall make an Initial payment 

of at least five (5$) per cent of the selling price of the property. The balance of 

said selling price shall be amortized over 

a period to be fixed by the Board, but not exceeding forty (40) years, together with interest 

thereon at the rate of three (3s) per cent per 

annum] . . . no property sold under the provisions of this Act shall be trankferred, sold 

or conveyed, in whole or In part, until the 

purchaser has enjoyed possession for a period 

of'three (3) years from the date of purchase 

of said property and complied with all the 

terms and conditions of this Act and the rules 

and regulations of the Board; provided, however, that property sold under the provisions 
. 

. 

Ron. J. Earl Rudder,‘- page 3 ~(S-166) 

of this Act may be .,transferred, sold, dr 

conveyed at any time after the entire ,in; 

debtedness due the Board has been paid. 

When the entire Indebtedness, due the State 

under .the, contract of sable Is paid, the 

Chalrman,of the Veterans' Land Board shall 

execute ~a deed under its seal ~to~'the.original purchaser.of.the land, which deed 

shall ,lnure to,the benefit .of the legal. 

owner 'of ,s,ald land," 

~Sectlon 18 providea: 

?If at,ani'tlme. while the veteran 

Is Indebted:,to the aboard for the land PMchased;,he .should~sxecute, oPth&e is In 

existence, .a~ oll,~,gas and mineral lease 

covering such.land or any part thereof, 

at leastone-ha&f.{i/2) of.ail bonus money 

reoelved: as.conslderatlon and one-half 

(l/i?) of all delay rentals paid under such 

leases and one-half (l/2) of all royalties 

received, (or,80 much thereof as may be 

required) shall be paid to the Board by 

the owner of said lease and applied by It 

toward the satlsfac,tlon of said lndebtedness. The lease made by the veteran will 

be of no force or effect until the Board 

has ,recelved Its portion themof, as hereIn provided." 

Section 19 provides for the forfeiture of the 

contract of sale and purchase ~ln the following manner: 

"In the event that any portion of the 

Interest or principal on any sale should not 

be'~pald~when due, the contract of sale and 

purchase shall be subject to forfeiture by 

the Board, and such~forfelture, shall be ef- 

:fectlve when the Board shall have met and 

'. passed a resolution directing the Chairman 

,of.the~ Board to endorse .upon the wrapper 

containing the papers of said sale, or upon 

the purchase.contract f,lled ln the Land Office, the word. 'forfeited,' or words of 

~! ,.. 
Hon. J. Earl Rudder - page 4 (S-166) 

similar Import, with the date of such 

action, and to sign officially; thereupon the .lands and all payments theretofore made shall become forfeited. ,A 

notice of the action of the Board In 

forfeiting the original contract shall 

be ma.iled to the County Clerk of the 

courity wherethe land Is located, and 

the said Clerk shall enter on the margin 

of the 'page or pages containing the record of the original contract, a notation 

of such forfeiture. Lands Included In 

such forfeited contract shall be subject 

to resale under the same terms and conditions as though said lands had not theretofore been sold. In any case where the 

sale has been forfeited and the title to 

the lands revested In the Veterans' Land 

Fund, the orlglnal purchaser or his vendee 

shall have the right to reinstate his 

claim In the purchase contract at any time 

prior to the date on which the Board shall 

have met and ordered the said lands to be 

advertised for resale, or for lease for 

mineral development, but not thereafter. . . .' 

The forfeiture of a defaulting veteran's contract 

of sale and purchase Is one of the few Instances in which 

formal resolution by the Board la required. Unlike many 

other duties of the Board which can be delegated to the 

Commissioner of the General Land Office, the forfeiture of 

a contract of sale and purchase cannot be so delegated. 

Section21 provides: 

"The Board Is hereby authorized and 

empowered to make and promulgate such rules 

and regulations under this Act as.they shall 

deem to be necessary or advisable, and to enforce the same. It shall likewise have the 

power to prescribe the form and contents of 

all notices, bids, applications, awards, contracts, deeds, or Instruments whatsoever In 

any manner used by It In so carrying out such 

project and plan when the same shall not be 

in conflict with law. The Board is hereby 

made the sole judge of forfeiture of any 

purchase contract under this Act, and anyone 
. 

Hon. J. Earl Rudder - page.5 (S-166) 

avalllng'of the provislons of tNs Act 

shall by so.dolng agree to abide by the 

same; and should'the Board declare a forfeitux under said purchase contract, 

then the purohaser hereby a 

'i; 

rees to vacate 

the premises within thirty 30) days after 

receipt of notice of such declaration." 

, 

The questions you have asked presuppose that the 

transactions with reference to the veteran and his lessee 

occurred subsequent to the execution of the contract of 

sale and purchase between the veteran and the State and 

before foffeltum'by the, Board for legal cause. It Is assumed, also, that the veteran's claim has not been relnstated. 

Not'only the'veterans' Land Act, but as well 

the 'contract of sale and purchase of record In the county 

clerk's office, puts on notice anyone who deals with the 

veteran, that the contract Is subject to forfeiture so 

long as there remains unpaid any portion of the Interest 

and principal due on the contract. Thus, there Is mlsslng one .of the three elements essential to a bona fide 

purchase, namely, absence of notice. Therefore, the life 

of any type of lease contract, except an oil, gas and 

mineral lease was partlcu&ai?ly~provlded for In Section 18, 

entered into between the veteran and his lessee, Is dependent upon the veteran's keeping current his obligations 

under,his ,contract of sale and purchase. 

From a mading of the foregoing quoted sections, 

It will be ndted that the procedure for the contract of 

sale and purchase of land to a veteran, together with the 

conditions attached thereto, Including the forfeiture 

provisions, Is rather definite and comprehensive. Apparently, the legislature patterned the forfeiture provisions 

after earlier ,laws authorizing forfeiture of sales of the 

public lands under certain circumstances. 

In Lawless v. Wright, 86 S.W. 1039 (Tex.Clv.APP. 

1905), it was said: 

"It Is the settled law that the State 

of Texas has the power and authority to forfelt, through a declaration of &he Land Commissioner, a sale of Its lands, for the nonpayment by the:vendee of,the Interest on the 
Hon. J. Earl Rudder - page ,6 (S-166) 

purchase money. Such being the law, the 

act of the Land Commissioner In forfeltlng the purchase of the land by Fancher 

had the effect of restoring such land to 

the public domain of the state . . . After 

the fo,rfelture the land assumed the same 

status that it occupied before the sale to 

Fancher, and the State'clearly had the right, 

which It exercised, of placing the land on 

the marketagain and selling It. . . .n 

~If the veteran's contract of sale and purchase 

Is forfeited, there can be no claim of rlgh~t In anyone 

holding under him. 

998 (1898). 

Frlstoe v. Blum, 92 Tex. 76, 45 S.W. 

You are advised, therefore, In answer to your 

first questlon, that the grazing lease referred to expires and is of no further.force and effect from and after 

forfeiture. 

The answer to your second question depends on the 

particular facts Involved at the time of forfeiture. Strlctly speaking, under the contract of sale and purchase, the 

State Is the owner of the legal title and the veteran Is 

the owner of the equitable title. The veteran Is entitled 

to possession and her is not prohibited under the Veterans' 

Land Act from leasing the land for grazing or agricultural 

purposes. Although the land Is not held subject to a 

vendor's lien as such, yet It Is subject to forfeiture and 

repossession. The same principles of law governing the 

vendor and purchaser in an ordinary transaction Involving 

the sale of land and the retention of the vendor's lien 

likewise apply to the contract of sale and purchase between the State and the veteran. 

Where the land Is held subject to a vendor's 

lien, the lien debtor until title has been divested by 

foreclosure, Is entitled to effect a constructive severance 

of crops growing on the land, and thus prevent them from 

passing to the purchaser at a foreclosure sale. w1111s v. 

Moore, 59 Tex. 628 (1883); Bowers v. Bryant Link Co., 15 

S.W.2d 598 (Tex.Comm.App.1929). 

The lien of a vendor of land does not extend to 

growing crops. 

Clv.App.1901). 

League v. Sanner Bros., 60 S.W. 898 (Tex. 

One who takes a mortgage on crops to be 

grown by the purchaser has a right which is superior to 
. . 

, 

Hon. J. Earl Rudder - page 7 (S-166) 

any claim on the part of the vendor or a purchaser at a 

foreclosure sale to enforce the vendor's lien. Caldwell, 

Hughes & Patterson v. Yarborowh, 186 S.W. 350 (Tex.Clv. 

App.1916), Leanue v. Sanner Bras., supra. 

A tenant Is entitled to his share of the crops 

grown on the land. In Brown v. Leath, 42 S.W. 655.(~ex. 

Clv.App.1897, error ref.) (concluslon,of facts In 44 S.W. 

42), the court said: 

" 

. . . The lessee had, under his lease, 

cult,lvated the land; and at the time of the 

sale then crop of cotton and corn was maturing, 

and some of It matured. The lease severed the 

right to the rents from the realty, and the 

sale of the land under the'deed of trust did not 

carry the title to the rents, or the crop on the 

premises standing at the date of the sale, whethBF mature or not. The lessee had the right of 

Ingress and egress for the purpose of gathering 

and preparing the crops for market or use. This 

Is no longer an open question In this state. 

(Citing Willis v. Moore, supra, and other cases). 

The fact that the tenant had notice of the 

mortgage by Its record Is lmmaterlal. It Is 

the right of the mortgagor, before foreclosure, 

to sever the rents from the reversion. In this 

case It was done by granting the lease. . . ." 

In Dlnwlddle v. Jordan, 228 S.W. 126 (Tex.Comm. 

App.1921), the court said: 

"The doctrine of emblements Is the common law right of tenant, whose lease of uncertain duration has been terminated without 

his fault and without previous knowledge upon 

his part, to enter upon the leased premises 

to cultivate, harvest, and remove the crops 

planted by him before the termination of the 

lease." 

The court, In the same case, supra, quoted the 

Supreme Court of Indiana as follows: 

"In order'to entitle one claiming to 

be a tenant, or his legal representative, 

to emblements, the follpwlng facts must 
Hon. J. Earl Rudder - page 8 (S-166) 

appear: (1) The existence of a tenanoy 

of uncertain duration. (2) A termination 

of the tenancy by the Act of Cod or by 

the act of the lessor. (3) That the crop 

was planted by the tenant, or someone 

claiming under him, during his right of 

occupancy." 

In the second question poeed, the veteran has 

leased the land for agricultural purposes. The tenancy 

is in existence and is of uncertain duration because it 

is subject to termination by forfeiture of the veteran's 

contract of sale and purchase by the action of the Board. 

Secondly, the tenancy has been terminated by forfeiture 

which Is the result of the landlord's (veteran's) act in 

not performing his part of the contract of sale and purchase. Thirdly, the tenant's ~crop has been planted by 

him, or someone claiming under him, during his right 

of occupancy. Therefore, your second question is answered as follows: 

Where a veteran has .executed an agricultural 

lease to another party and the veteran's contract of sale 

and purchase is forfeited by the Board, the lease Is terminated; however, the tenant is entitled to hls share of 

the crops. The State Is entitled to receive the landlord's 

I 

veteran's 

lord's veteran's I 

portion of the Brent provided the landportion has not been severed previously, 

eitheractually or constructively, by the landlord 

(veteran) prior to the forfeiture. We shall not attempt 

in this opinion to cover fully the matter of what constltutes a constructive severance, but we will note that 

a sale or mortgage of the crops is a constructive severance. Willis v. Moore, supra; Bowers v. Bryant Link Co., 

supra. 

The answer to your third question Is in the 

negative. The status of an 011 and gas lease exekuted 

pursuant to the terms of Section 18 is not changed by forfeiture except to the extent that the State thereafter 

would be entitled to receive all annual delay rentals and 

royalties. 

In Willis v. Moore, supra, the court said: 

I, 

. . . As, however, the crops are separate 

and distinct in their nature from the land upon 

which they grow, the ownership of the one, even 
Hon. J. Earl Rudder - page 9 (S-166) 

on mortgaged 

son, and the 

and whenever 

land covered 

of the Land, 

property, may be in one pertitle to the other in afiother; 

crops growing or standing upon 

by a lien given by the owner 

or acquired by law, have in . . law or In faci? Deen severed in ownership, 

or actually severed from the land prior to 

sale of the land under the lien, title ',. 

thereto will not pass by the foreclosure 

of the lien. 

"A mortgagor is entitled to sever in 

law or fact the crops which stand upon his 

land at any time prior to the destruction 

of his title by sale under the mortgage; 

this results from his ownership and consefluent right to the use and profits of the 

land, . . ." 

You are advised, in answer to your fourth question, that If a veteran purchaser has mortgaged all or a 

portion of the crops growing on lands he Is purchasing 

through the Veterans' Land Program, no rights accrue 

to the State to participate in the yield from such crops 

if forfeiture action becomes necessary, except to the 

extent only of the portion of crops which has not been 

severed, 

feiture. 

either actually or constructively, prior to forSUMMARY 

A grazing lease executed by a 

veteran purchaser under the Veterans' 

Land Act expires and Is of no further 

force and effect from and after forfeiture 

of the veteran's contract of sale and purchase. 

An agricultural lease executed 

by a veteran purchaser to another party 

Is terminated by forfeiture of the 

veteran's contract of sale and purchase; 

however, the tenant is entitled to his 

share of the crops and the State Is 

entitled to the veteran's portion of the 

rent provided the veteran's portion has 

not been severed previously, either 

actually or constructively, by the veteran 

prior to forfeiture. 
- . . 

Hon. J. Earl Rudder - page 10 (S-166) 

The status of an oil and gas lease 

executed by the veteran and approved by 

the Chairman of the Veterans' Land Board 

is not changed by forfeiture except to the 

extent that the State thereafter is entitled to receive all annual delay rentals and 

royalties. 

If a veteran purchaser has mortgaged 

all or a portion of the crops growing on 

lands he has contracted to purchase through 

the Veterans' Land Program, no rights accrue 

to the State to participate in the crops 

after forfeiture except to the extent of the 

portion of crops which has not been severed 

prior to forfeiture. 

Yours very 'truly, 

JOHN BEE SREPPERD 

Attorney General 

APPROVED: 

Mary K. Wall 

Reviewer 

John Davenport 

Reviewer 

Will D. Davis 

Special Reviewer 

Davis Grant 

Special Reviewer 

John Atchison 

Acting First Assistant 

John Ben Shepperd 

Attorney General 

JAA:bt