JOEN BEN s-- 

AUR'IW~X;~ 

*-- o- '-December 12, 1955 

Hon. J. Earl:Rudder /. 

Cha$rman, Veterans' Land Board 

Austin, Texas 

Opinion NO. s-183 

Re: Questions relating to exe- 

.the interest 

.~ 

BearSir:' 

Outlon sale of 

of a purchaser 

Veterans' Land 

under the. 

Program. 

Your opinion request consists of sixteen 

questions contiernlng levy of execution and foreclosure 

sale, before land after forfe~lture of the contract of 

sale and ~purchase;.pursuant to.~ judgments for ~delinquent taxesand private debt, and the effect on a 

veteran's contractual interest In land 'he Is purchasing.through the Veterans'-Land Program. 

Your questions may be resolved into two 

basic ones, the answers to which will determine~the 

answers ~to.your spcific questions. Summar~ized; the 

basic questions are: 

1.. Is a veteran's interest in the land 

he Is-purchasing through the Veterans' Land Program 

subject to foreclosure and sale pursuant to judgment for delinquent taxes thereon and for private 

debts incurred by him? 

..,.' 

2. May the purchaser at the foreclosure 

or execution sale be~substituted for the veteran in 

the contract of sale and purchase with the Veterans' 

Land Board? i. 

The answer ~to question number one is in the 

affirmative:, if either of the following sets.of facts 

exist and, In the case of private debt, the land is 
Hon. J. Earl Rudder- page 2 (NO.%183) 

nbt otherwise exempt from forced sale: 

1. The veteran has had possession 

of the land for three years or more and 

forfeiture of the contract of sale and 

purchase has not occurred. 

2. The veteran has had possession 

of the land under.three years and has 

died or become incapacitated by reason 

of illness, and forfeiture of the cotitract of sale and purchase has not occurred. 

The answer to question number two 

affirmative if the facts exist as set forth 

_- _a 

is in the 

in either 

of the preceding paragraphs numbered 1 and 2 and~the 

veteran and ,purchaser have complied with the terms and 

conditions of the Veterans' Land A&t,.and;‘!as:+gahds the 

tax sale, the two-year‘redemption period 'has expired 

and the veteran has failed to redeem. 

The Veterans' Land Act, hereinafter referred 

to as the Act, is codified as Arti’de 542lm, Vernonis 

Civil Statutes. The Act was amended by Chapter 520, 

Acts of the 54th Legislature, 1955, effective on 

September 6, 1955, and discussion herein will be in 

the light of the Act as amended. The ~Veterans' Land 

Board will be referred to as the Board. 

All lands purchased by the Board and all 

lands previously sold by the Board and repossessed for 

any cause on account of the acts of the purchasers or 

any other lawful reasons oonstltute a part of the Veterans' Land Fund. (Sets. 8 and 11.) Thus, suCh lands 

are exempt from taxation -so long as they remain a part 

of the Fund. (Art. 7150, V.C.S.) However, when a portion 

of the lands is sold to a veteran under a contract of sale 

and purchase (Sec.l7), it ceases to be a part of the Fund. 

Although the legal title to the land so contracted to be 

sold Is In the State, ltls to be considered for all 

the purposes of taxation, as the property of the person 

so holding the same. (Art.7173, V.C.S.) 

A veteran, upon execution of a contract of 

sale and purchase with the Board and entry into poss-: 

ession, becomes Invested with the equitable title from 

the date of the contract, or in any event, from the 

date he 'takes possesSiOn. Ingram v. Central Bltulithic 
. . 

* -,,y 

Hon. J. Earl Rudder - page 3 (No.S-183) 

@., 51 S.W.2d 1067 (Tex.Clv.App.1932 error ref.), Leeson v. City of~~Houston, 243 S.W. 485 [Tex.Comm.App.;lm), 

Walcott v. Kershner, 291 S.W. 195 (Tex;Comm.App;l927). 

The equitable title Is the taxable title in this instance. 

,Texas TurnDike Company v. Dallas County, 271 S.W.2d 400 

(Tex.Sup.1954). 

But why distinguish the number of years the 

veteran has held.possession of the land and how does 

the ~veteran's death or Incapacity because of illness affeot then answer? By referring to Section 17'of the Act 

it will be seenthat "the Board .is empowered, in each individual case.to specify the termsof the contract 

entered into with the purchaser, not contrary to the provisions of this Act, but no property sold under the provlslons~of this Actshall be transferred, 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 

should the veteran purchaser die or become incapacitated 

by reason of Illness, the property may be conveyed before the expiration of said three (3) years by said purchaser or his heirs, administrators or executors; . . .n 

A veteran in possession for three years or 

more, or in possess'ion under three years and incapacitated because of illness, has a vendible interest in the 

land. A vendible interest vests in his heirs, devisees, 

or personal representatives upon his death. (Sec. 20.) 

Since the Interest is taxable, as well as vendible, the 

tax lien can be foreclosed and the interest sold-at a tax 

sale. A tax suit Is brought as an ordinary foreclosure 

for debt, and sale of the Interest is had as under ordinary execution. (Art. 7326,v.c.s.) 

The purchase by a veteran under the Act Is 

analogous to a purchase by an individual of county school 

lands or of public lands owned by the State and sold under a contract of sale and purchase with forfeiture provisions.' In Taber v. State, 85 S.W. 835 (Tex.Clv.App. 

1905, error ref.), the court said: 

"That our tax laws should be construed 

as they long have been, to require the vendee 
Hon. J. Earl Rudder - page 4 (No.S-183) 

holding lands under an executory contract 

of sale to pay the taxes assessed against 

such lands, we entertain no doubt. Lands 

so held are subject to execution as the 

property of the vendee, . . .~after the 

school lands are sold by the county'they 

become the property of the vendee for purposes of taxation, as well as of execution, 

even though the sale be on a credit, and 

the contract executory . . . True, the county 

is not entirely divested of title to the lands 

until they are finally paid for, but until a 

forfeiture or rescission takes places on account of the default of the purchaser the 

purchaser Is to be regarded as the owner,and 

the lands may be sold for taxes as his property." 

In.Martin v. Bryson, 71 S.W. 615 (Tex.Clv.App. 

1902, error ref.), the court quoted Freeman on Executions 

as follows: 

"So one who purchases lands'from a 

state under a contract which pro,vides for 

certain payments, upon the making of which 

he will become entitled~ to a patent, and 

upon default in any of which he forfeits 

all rights under his contract, has a vendible interest in such lands prior to their 

forfeiture, and one which is subject to 

execution. The estate acquired under the 

levy of an execution is, of course, no 

better or more certain estate than-\that 

held by then judgment debtor, and rema1n.s 

liable to be defeated by the same contingency to which It was subject before the 

execution sale." 

In all cases in which lands have been sold, 

or may be sold, for default In the payment of taxes, 

the sheriff selling the same or any of his successors 

in office, shall make a deed or deeds to the purchaser or to any other person to whom the purchaser 

may d,irect the deed to be made. (Art. 7330,V.C.S.) 

However, the purchaser takes the interest subject to 

the veteran% right, or the right df anyone claiming 

under him, to the two-year redemption period from the 

filing for record of the purchaser's deed, during 

which perlod the veteran is entitled to possession. 

(Art. 7345b,V.C.S.) 
r-- ~~ 5, “Y 

Ron. J. Earl Rudders- page 5 (Wo.S-183) 

If the veteran~l~s interest is purchased at the 

tax sale by any tajring~'un$t, it may be held or sold by 

the unity for the use and benefit of Itself and all 

other taxing units which are parties to the suit and 

whioh,.have been. adjudged to 'have tax liens against the 

lntarest., (Art. 73#5bi~) But such interest is held or 

sold subject to the,veteran's right of redemption. 

,... 

:What is the interest of the veteran.to be 

acquired by the purchaser ata tax or ordinary execution 

sale? It'ls the veteran'.srlght under his contract of 

sale'and purchase, to possess the land and have a deed 

executed: to him when theentire indebtedness due the 

State $6. paid;.~as-well as to convey his interest upon 

certain terms and conditions. (Sec.17.) It is comparable to a'mortgagor's right of redemption. 

InBuchanan v.'Monroe, 22 Tex. 537 (1858), in 

speaking of the equity of redemption, the court said: 

" . * . 

equity 

ficial 

.and ,it 

The doctrine of equity is 

of redemption is the real 

estate, tantamount to the 

.ls.accordlngly held to be 

that the 

and benefee at law; 

descendible 

.by,'tiherltance, devisable by will,and alienable by'deed, precisely as if it were an absolute estate of Inheritance at law; . .': 

'The mortgagor has a right to lease, sell, and 

,in every respect to deal with the mortgaged 

-.premises as owner, so long as he is permitted 

to remainin possession, and so long as it Is 

understood and held, that every person taking 

under~hlm,. takes subject to all the righta of 

the ,mortgagee, unimpaired and unaffected!: . . . 

The equityof redemption . . . is liable to sale 

on execution. . . .It 

'In Houston vi Shear, 210 S.W. 976 (Tex.Civ.ADD. 

lglg;ePfor-dism.I;-.~b~ follow%ig was said concerning execution .and-'the mortgagor's rlght'of redemption: 

"Where,~as .here, lands subject to 

contract liens are sold on execution 

against the owner,,the purchaser at execution sale succeeds to his rights, and 

equity confers upon him the privilege of 

rede~mp,tion, but only on condition that 

the rights acquired at execution sale are 

valid. 
r.,, 

.I. 

Hon. J. Earl Rudder - page 6 (NO-S-183) 

In Rosenthal v. Desberger, 1)C S.W. 192 (Tex.Civ. 

App. 1910), the court said: 

1, 

. . . All that Is seized and subjected 

to aale by the levy of the execution is such 

fight or tltle.as the defendant therein had 

at the timej and all that passes at the sale 

Is such right or title as the latter had or 

owned at the date of the levy, or Fad acquired between that time and the date of the 

sale. : : At exebutlon sales the purchaser 

can claim no greater rights than such as he 

might acquire had the defendanthimself conveyed all his right, title and interest in 

the propertylevied upon." 

You have advlsed.that a resolution was passed 

by the Board on January 6, i953, which reads In part as 

follows: 

All transfers by Assignment of 

Contradt'oh Sale and Purchase shall be approved by the Chairman of the Veterans' Land 

Board. Such approval shall be accomplished 

by his signature and by affixing the Veterans' 

Land Board seal thereto. . . ,' 

A veteran may convey all his right, title and 

interest in the land he Is under contract to purchase, upon 

certaln~ terms and conditions provided .in the Bet and in 

conformity with the rules and regulations of'the Board. 

Hence, there appears to be no reason why a purchaser at a 

tax or execution sale may,not. be substituted for the 

veteran in the contract and~be permitted to continue it 

or liquidate the Indebtedness, provided the Board is 

satisfied that the facts existas assumed herein. 

A veteran in possession for less than three 

years from the date of his purchase contract and not incapacitated by reason of illness is prohibited from 

transferrin 

property. 7' 

selling or conveying his interest in the 

Sec.17.) In this cir&mstance he has no 

vendible interest in the property subject to sale under 

execution or like 

P 

recess. 

1044‘(1894 

Moser v. Tucker, 87 Tex.94, 

26 S.W. 

(Tex.Civ.App.1908). 

, Bourn v. Robinson, 107 S.W. 87'8 

Therefore, a tax judgment against 

the veteran must be satisfied otherwise than by subjecting 
..,;_~ 

Hon. J. Earl Rudder "'page ?'(No. s-183) 

his interest to a tax sale.~ 'Danciner v. State, 140 Tex. 

252, 166 S,w.2d ,914 (1942): 

Forfeiture of the veteran's contract restores' 

the land to the'veterans t Land Fund (Sec.lg), leaving no 

interest of.the veteran therein subject to taxation or 

execution. ,Danclger'v. State> s,upr&I .State v. Stovall, 

76 S.w.2d~206~~fTex.Civ.App.l934j error ref.),. The forfeiture would not extlngulsh'the personal liability of 

the veteran and upon reinstatement of thecontract an 

execution could be levied upon~ the veteran's interest in 

the eventthat his interest,,is subject to a forced sale. 

Further, upon relnstatement 'of the contract the veteran 

would take the property.subjeot to all tax liens which existed-at the ~time the forfeiture occur~red, and his interest 

could‘thereafter be subjected' to foreclosureand satisfaction'of the.'tax liens. Danciger v. State, supra. 

Forfeited land sold',to ~another veteran would not be burdened with taxes accrued against the original veteran 

purchaser. Att'y,Cen. Op. No. o-5062. (i943). 

Based upon the above discusuion, asasummary 

we will answer each of your questions by numbering them 

as listed by.you. 

SUMMARY 

1. If a veteran's contract has not been 

.forfeited'and ~a delinquent tax suit is brought 

and execution levied on the veteran's interest, 

the Veteran's interest may be sold at a foreclosure sale only In the.event that (a) the 

veteran has had possession of the land for three 

years or more, or (b)' the veteran has become 

incapacitated by reason of illness, or (c) the 

'veteran has died. 

2. If a veteran's contract has not been 

forfeited and the veteran's contractual if-lterest-is sold..under'an exei?ution (see answer 

to.questlon No. l), the purchaser at the foreclosure sale may.be placed in possession of 

the land and assume the payment of the contract with the Veterans' Land Board in place 

of the veteran, provided that the two-year ~, 

period of redemption has expired and the veteran 
Hon. J. Earl Rudder - page 8 (No.S-183) 

has not exercised his right to redeem; Buring the two-year redemption period and prior 

to redemption, the purchaser would be entitled to make the required payments to the 

Board under the contract in order-to prevent a forfeiture of the contract, but if the 

veteran later exercised his right of redemptionthe purchaser's rights as a DLUohaser would be cut off. 

3. If a veteran's contract has not 

been forfeited and the veteran's contractual 

interest is sold by levy of execution (see 

answer to question No. 1) and there are no 

purchasers, the State or county may purchase 

said ,interest and hold ,it In trust'for the 

taxing agencies involved. However, the 

right of the Veterans' Land Board to forfeit the contract for nonpayment of prlncipal or interest would continue. 

4. If a veteran's contract has been 

forfeited when a'dellnquent tax suit is' 

brought, only a personal judgment against 

the veteran could be obtained, as the veteran 

has no interest that can be foreclosed. 

5. Our answer to the above question 

No. 4 fully answers your question No. 5. 

6. If the veteran's contract has been 

forfeited, the veteran's contractual interest 

cannot be sold under execution; and the pur 

chaser at such a sale, if held, would acquire 

no interest in the land and should not be 

allowed to assume the payment of the contract 

with the Veterans' Land Board ,in the place 

of the veteran. 

7. If a veteran's contract has been 

forfeited, the veteran's contractual interest 

Is not subject to execution or foreclosure 

and therefore the State or county would have 

no authority to purchase said Interest at 

such a sale, if held, and hold it In trust 

for the taxing agencies Involved. 
Ron. J. Earl Rudder-:'.page 9. (S-183)' 

8. If a veteran's contract has not 

been forfeited, and~aadelinquenttax ~suit 

is brought. by the county in the name of 

th&%tate .of Texas, and .judgment entered, 

an &ecution.may be levled only on, the 

.lnt,er$st owned by the 've~teran, and his 

interest~only may be sold'at,a foreclosure 

sale to s&tlsfy the judgment, and then 

only tn: the following'lnstanoes~: '(a) the 

veteran has had possession of the land for 

thriae yearsor more, or (b) .$he veteran 

has becomeincapacitated by reason oft 

illness,, OT (0) the veteran has died. 

..9. Ifa veteran's contract has been 

forfeited when a'delinquent tax suit is 

brough~t by'thia'countg In ~the'name of the 

Stkte of Texas,.-a personal judgment only 

should be entered againstthe veteran, and 

neither a foreclosure of a tax lien nor an 

execution could-be Issued sgainst the land 

orthe 'veteran's interest therein. 

'10. In the event thatdelinquent taxes 

have accrued against a tract of land being 

purchased through the Veterans' Land Program and the veteran's contract is forfeited 

and the land .is resold by the Board, as provided in the 'Veterans' Land Act, the purchaser of the land at the second sale takes 

the land free from all past delinquent taxes. 

In such case.there Is no lien upon the land 

by reason of the prior delinquent taxes, and 

a personal judgment for such taxes could be 

secured only against the original veteran. 

11. If a veteran's contract has not 

been forfeited and a creditor of the veteran 

obtains a judgmentagainst the veteran and 

the'veteran's contract has not been in effect for three years, an execution cannot 

be; levied on the veteran's contractualin+ 

terest and said contractual interest be 

sold at foreclosure sale and the purchaser 

be substituted in place of the veteran on 

his contract of sale and purchase, except 

in the event that (a) the veteran has become incapacitated by reason of illness, or 
Hon. J. Earl Rudder - page 10 (S-183) 

(b) the veteran has died and the interest 

of the veteran Is subject to a forced sale. 

12. Our answer given to the above 

question No. 11 makes it unnecessary to 

answer your ~'questlon No. 12. 

13. If a veteran's codtract has not 

been forfeited and a creditor of the veteran 

obtains a judgment against the veteran for 

a debt and the veteran's contract has. been 

in effect'for more than three years, an 

execution may be levled on the veteran's 

contractual Interest and said contractual 

Interest be sold under execution to a purchaser and said purchaser bi substituted 

on the contract in lieu of the veteran, 

unless the veteran's interest is not subject to a forced'sale. 

14. If a veteran's contract has been 

forfeited and a- credltor of the veteran 

obtains a judgment against the veteran for 

debt, an executioncannot be levied on the 

veteran's interest unless the veteran redeems the land from the Veterans' Land 

Board and then only in the following instances: (a) the veteran has had possession 

of the land for three years or more, or (b) the 

veteran-has become Incapacitated by reason of 

illness,' or (c) the veteran has died3 and fur 

ther provided that the veteran's Interest Is 

subject to a forced sale. 

15. Our answer to the above question 

No. 14 fully answers your qUeStiOn No. ~12. 

16. After a.veteran's contract has 

been forfeited, no taxes accrue thereon as 

loti& as It is held as a part of the Veterans' ~ 

Land Fund. In the event the veteran secures 

a reinstatement of his c,ontract, he should be 
Hon. J, Earl Rudder - page 1% (s-183) 

required to pay the delinquent taxes 

that acerued before the forfeiture. 

Yours very truly, 

JOHN EEN SHEPPERD 

Attorney Qeneral of Texas 

APPRQVED: 

Ha* K.~Wall 

Reviewer 

will D. Devils 

Special Reviewer 

L. W. Gray 

Special Reviewer 

Da& @pant 

First Assistant 

John Ben Shepperd 

Attorney General 

JAA:bt