OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Honorable TO;P Yaay 

CountJ Attorney 

Potter couatf 

Amarillo, Texan 

iaent the r0u0w 

aenta, whioh we 

d eapplemntal latter 

inion ot this dopartm faotaal Etatoopioton x0. 1910, 

tat8 -~om&roalu, 

:oa..yetl 

oh -0plniOa dealing 

by tha lhrn*~‘s Hattha united sate8 or tierloa 

irotlon ‘or etato and oountf 

oloalng ior'yoar osamination and inor the rollowing laatrument6t (1) Oonhe Farmers Nutional Grain Corp. ~6 the 

rernamat~ (a) Order approvin& suoh sonawry Dept. or the United State8 goremonraganoe from Farmer8 ESational War&XI80 

to the United Statea ~vsrrunant. {Note; 

Bar #s~prrrpxms of the opinion requestad herain, the 

Farmera Xatlonal Grain Corp. and the Farmer6 fatLonal 

Warehou~o Gorge map be oonsldared as one and tha sama 

organleation, one being Q eubeidiary or tha othati). 
Honorable Tom iieay, Page 13 

~Bridlf, the f&at8 In this aa8e are a8 fO11OW8: 

On June 12, 19.956, The Farmers NatIonal Orain Corp. 

entered Into a Oontraot to oonvey to thr U. 3. governmont all oi It8 aeaet8, ruoh oonveyanoe to bo mado 

prior to Ootober 31, 1936, (See Sec. J of Xnrtrumont 

&l), and to be eubjeot to the approval of thr Soo'. 

of Trea8ury (See Sea. 19 Of 8UCh iMtrUzU.nt). It 

eeonm that oertain minor ohanger were mado In the 

orlglnal agamtent, a8 l r ldeno ed by ~upplemntal 

agraemmt8, 00plr8 of whloh we have sot been able to 

obtain. However, we unduotand that ouoh aupphmnt-: 

al agreesont8 do not oontaln any provI8loari altering 

the origIna agree.oant a8 to any of the 188ue8 to be 

dieouased herein. h8pite the iaOt that maoh a88,t8 

wore to be transferred to the government prior to 

October 91, l@bd, it 8eema that the Secretar of the 

hOa8UI'y dib not approve thi8 agreement unti I BoIembar 7, 1986, (See Instrument #S) and that no aotual 

oonvepanoe 0r th6 speolfio property In quretfon Wa8 

made until February 84, 1937, (SW Instrum8nt #S). 

We are aoting under the a88lLoption that the ]rarmore 

National Warehouse Corp. etill retained title to 

this property on Januarg 1, lQS9, when the tat lerr wae 

made, that the governm8nt did not.hare title at suoh 

tine, and that when the oonreyanoo Wa8 made to the 

~oo*ormmnt in Tebruary of lOSO, it took M 8ubJeet 

to the tax lion ior t6Xe8 l Me88ed against 8ald OOrporation. I lpight add that this property wa8 not render86 for taxation by 8uoh oorporatlon, but that an 

arbttruy ameement wae amde by the tax oolleotof, 

and that auoh aere88sent we8 probably me,de after the 

a(orunment aoquired title. Wo do not olaim that the 

government l8 liable ror the tax88 la question, but 

do oontenb that there 1~ a lien against suoh p%Wpertf 

ror unpaid taxes for the year OS 1937. 

?,he government Lo threatening to rile 8uit In 

Iode& Court to clear title to this property anA 

denies that the State nnd CoUnty have a lien on 

same r0r 1981 taxe8, for two realroas, to-wit: 

"1 . It is oontended that the federal governimsnt 

acquire6 equitable tltls by rlrtuo o? the oontraot to 

oonvey (Iurrtrumant #l), whleh oontraot beoam rrmtivo on approval of the Treaeury Department before 

January 1, 1937, and that even though the government 
Xonorable Tom Sear, Page 3 

had laerely an oqultabla title, the property waa not 

aubjeot to tixatlon by the State and County. (Not.: 

The U. 8. attorney ha8 agreed to turnish authorltIe8 

to the effect that property ln whloh tha tadaral govemugiant has un equitable t1tl.e ia not subjaot to taratloll). 

"2. It is rurther a0ntandad that no lien r0s 8tata 

and oountp taxra attached to this property beoause the 

tax88 in question wre not daa and payable until Qotober 1, 1991, (ii the oorporatlon had retained title), 

&ud that under our state law, no lien 18 oraated iOr 

taxes until aam8 broom du8, and that sinoa the government aoqulrad title in February, 1997, It aoqulred 

legal tit18 before any tax lien W68 ore&ad or attaohad 

to thir property, and that no tax lien oould b8 att;;gd to the property arter the gorernmnt aoqulred 

. 

We will, themtore, greatly appreolate it It you 

will advise UB ELI to t& rolloWing matter8t 

*l. Doe8 the oontraot merked Inrtrument #l 

oonref equltablo title in thi8 property to tha 

redaral goverauaent? Ii ao, doe8 the raot that the 

government ha8 equitable title exempt suoh property 

fcoa llabllfty ror state and oounty taxes? 

w2. At what data or time doe6 the lien tot rtata 

and oountf tam8 attach to property? 

"3. In four opinion, la there any akarlt to tha 

Sovarnsent'8 oontantlon No. 8, whloh is set out on 

Page 8. of thl8 letter?” 

The dotcralnatlon of whether or not “Inrtrument 

No. 1" oonsidered in oonneotlon with *InInetrument Ilo. a*, 

operate8 as a transfer, a88&MIe!lt or aonrefence t3t the aquitabla title to the pmperty involved, to the United Statate or 

Amuloa, depend8 upoa tbo rule8 or oonstructlon annouaoed by 

the oowts or Texas, browse it is a rundammtal prlnolpla 

that raal proputf 18 exolu8lvelf subjaot to tha 

hc. 

orarmaut w%thln whoaa territory it la sltuat$d ii "5eF . x% . 
Bonorabie Tom Leaf, Page 4 

Although legal title doea not paas to a vendee or 

purchaser under a oontrctot of sale, until aotual delivery 

or a deed, without retention or a vendor’s lien therein, 

said vendee or pumhamer, e8paolally where he goee Into 

poaee88ion, la lnveeted with squitable title from date or 

aontraat, or, ln any event, iron date ha takes poaaeaalon, 

and any fnorment, advantage, or enhancement to the property Inure8 to hi8 bendit, and detriment, dapraoIatlon, 

or loss thereto without fault of l ithar party muat bo 

borne by hln. 43 Tex. Jur. 3. 241, 242; 66 C. J. 702-708; 

Peters Y. Clewnte, 46 Tex. 114; ke8on v. City of fbu8toA, 

(Corn. App.) 245 S.H. 485, 225 SAY. 756; DImIt Elevator Co. 

Y. Garter, 70 S.W. (26) f315i Ingrem v. Control Bltulithlo 

co., 51 S.W. (2d) 1067; irluorth Y. Elllaon 29 S.W. (2d) 

639; Willie 6: Conner Y. Turner, 25 S.W. (2J) 642s Rirer Y. 

Janeb, 9 3.W. (2-d) Q&?; Fullerton Y. Sourry CO., 14s 8.W. 

971; Bled808 Y. Fltt8, 105 S.W. 1142; Slaughter 0. Ooka co., 

79 S.W. 863; White Y. Cole, 29 S.W. UAS; Taylor et al v. 

Barrin et al., 127 S.W. (2d) 945. 

It 18 6180 nettled by the deofaione’ot the Texa8 

oourta and the oplnlone or thIe Department th a t,í l xoapt Insofar aa the rule loay ba varied by egreeumnt batwaen tha 

oontraoting parties or by a retsntlon ot poaaaa8ion b the 

vendor, the purohaaer will ordInarlly b8 liable for a L t-8 

aooruia& atter the ueoutioa ot the oontraot where It la of 

auoh a oharaoter as to oonstltute him the equitable owner 

or the property. SS ths purohoaar, titer the oontraot la 

aa6e, -goes Into po8aeeelon and enJoy the uaa o$ tha prepertf, he is liable tar the taxes aCtOrUN during hlr poa8aaalon, notwithstanding the oontraot require8 the vendor to 

oonvrf by warranty doed at a tutura date. 66 C. J. 1047 - 

1048; Taber Y. Stat., 86 S.W. 0Sb& Harvey Y. Provldent In748t0ent Co., 156 S.W. 1127; Leonard t. K8tia.U. 5 S.W. (2d) 

197; Attorney General*8 opinion 0-226S. 

Thus, it iollows that ii the attached instant, 

designated as Ynetruaent No. 1” is or form and eubatanoe, 

tenor and erireot, to vest equitable title in the real eatate 

eought to be talEed, in the Far0 Credit iadmlnletratlon on the 

date thereor, to-wit, Juno 12, 1956, or,, am oontanded by the 

admlnlstratlon, on November 7, 1996, the data of letter oi 

Trearury Department approving with ohaagee noted, raid oontraot, 

which letter la deslguated a8 ~In8trument No. 2-, than 8uOh 

real estate would not be 8ubjeot to State end OO~tf ad Valorem taxes tar the year 1937; beoauee, the equitable a8 aontradiatlngufshed from the legal title, being eubjeot to aase68- 

mnt for taxes, and said equitable title vesting In en avowed 
Honorable Tom Jeay, Y&g8 5 

instrunentality or agency 01 the Federal Government, prior 

to January 1, 1937, there wouid probably arise an ianunity 

fros &ate and county taxation under the Constitution of 

the United states and iirtlcle 7150, Revised Civil titatutes 

of Texas, 1925, exjmererrsly corU6rrlag eteqtion upon land 

owned by the Fader-61 government. 

However, we do not find it necessary in this 

opinion to detemlne the preoim question of whether ma1 

estato, to which the United %&tern hea equitablr but not 

legal title on January 1st of any tax year, is aubjeot to 

state and oounty ad vaiorea taxes for that year; bsoause 

we are aoniinoed that nInotr~nt No. I”, whether oonaidered 

alone or in oonnectlon with Qmtrament Ho. 2" does not 

operate to vest equitable title to the land in question in 

tha United 3tates prior to January 1, 1937, bu%, on the 

aontrary, both legal and equitable title on said date rostod 

in tha Faraera Xctional Grain Corporation, 80 am to be aobjoot to Stats and oounty ad ralomm taxes for ths year 1937. 

To riaoh this oonoluslon it is neoeeeary to oonridor qIwtruaant Ho . 1 î in its l ntlr etay nd fr o m its fo ur 

oorneca. H4no4, it la our deelm the3 aaid l.artrumont mnaln 

aa au attaohed l xhibtt to this opinion and oowlderea as a 

part hor4of, booauso it is too,lon@hy to ba oopiad h4so5,n 

rorbat lm. Howovor, we deem it neorseary to rsfer to and 

sometimes quote pertinent portiona oi said Instrument. 

La sscticn~.theroor it is 4tat4d that th4 offer or 

transfer by the Faramra Rational Grain Oorporation (hereinafter rerormd to aa the Corporation) to the Farm Cmdlt 

Administration (heroinafter referrod to a8 AdPliniUtratioa) 

in payment of or to relleva itself of liabllltisr as OS June 

SO, 1936, oontemplatsa the transfer of awsta and the reloaee 

of debts of the aubsidiarlcs ae well as the Corporation, exoept suoh asoets as am expmesly reeervsd. 

Section 2 provides thet all aots under the ooatraot shall be SrSorcted on or before October 31. 1930, but 

shall be nade efi”aotlve as of the olose OS busLnesa oa June 

30, 1936, and the books of the Corporation and the Qat4rmlaatioa of prorits au6 lose44 therbirom shall be aa of that 

date. 

section 9 atipulatea, in part, as follows: 
Honorable Tom Saay, Pago 6 

XB of the close of buaimao on June 30 

l036,"k aotually on or prior to Ootobsr 31, l&b, 

the Corporation shall transfer all of its aasota 

hold June 30, 1936, or th4 proo44aa theroof, l x oop t 

for assets retained as her4lnafter provided, to tha 

Mralalatratlon, or as ordorod by the Admlaletration, 

and the Uminiatration shall thereupon 04no41 or NlI.4~4 the Corporation of all obligations of any Mture whatooarer of the Corporation to the Admlal8tration except obligations erldencrd by notaa or dooumeats bearing date on or aftor June 13, 1938, and oxoopt obllgatloaa Sor rhloh the Gorporatloa 8hal.l ooatinua to bs liable under the t4rma of this Agr4aDmAt.~ 

Section 4 provides that th4 Gorporatlon shall retain and oontinue to be liable for the payaoat of oortaln 

daacrlbtd asaeta held and owned by the Corporation at the 

oloae or buaia484 oa June 30, 1936, at a dotormlr#d prlO4, 

uuong whloh aaaste wem drafts for oollootLoa, aoaoanta r4- 

oelvable, depoelte, adYancea on grain, lnv4ntoriaa Of grain, 

aood, oto., norships ln aommodity exohangoa, offloo turni- 

,ture, rlrturie and automobiles, insureno oontraota, end 

open gralo. contracts, spot or tuturoa. 

soctlon 5 provides tar th4 retontloa by tha Corporatloa of oortaln deaoribed property, laoludlw oertiln real 

e&ate, at the option either of the Atlmlai8tration o¶? the 

Corporation, expreeaea in writing before Ootobor 31, 1936. 

Section 6 provides for the leaelng by the Adfalalatratioa at the option of the Corporation, of oortala groporties owaod by the Corporation Sor a period OS oaa y4ar Oomnwnolng July 1, 1936, with an optloa of ronawal for a further 

period of oaa year on terms and oonditioaa to \M agreed upon 

aad with an option to pur~hesa+ xaoludoa in thi8 property 

era certain aouutrg elovatora aad 8o.m nlnoteoo ternriaal aud 

eubtorminal sl4ratore located in Terse, Oklahooma, Ohio, IObra&m, Illinois, Kansas, Ylnneaota, Iowa, Waehlngton and 

North Dakota. 
Honorable Tom Sony, Fogs 7 

section 7 providee that the Corporation, In addltion to the lIabllitiea acoruing after June 30, 1936, shall 

oontlnuo to be liablr and in due oourse pay the balanooa due 

at June 30, 1936, on All of its lIabllltlas at that date, 

inoluding the indebtrdnarce to the AdminIstratloa, whleh ahell 

bo roduord by the aggragato amount of oertaIn deaorlbed ltoma, 

Ineludlng not.46 and grain drafts paynbla, cuetomre* oradit 

ba~anoos, aooounta peyable, aocruod grain handling ahargo 

payable, aoorued llablllty for tame on aeeets retained, and 

llabillty on olaiaia end open grain ooatraota. AA amount was 

fixed ior roaor?oa, and it was agrood that if all llabllItlee 

ror whioh roaervea are set up are not soonor settled, then 

col~vlanolng with the year 1937, the CorporatIoa shall oa 

July 31 of l aoh year, pay to the Saoratary or the Treasury, 

ao muoh of the roaemea, If AAJT, as are no longer raqulrod 

to meet the maxImum liability of the Corporation for llabllIt&es not yet eettlea. 

section 8 provides that In addition to the. amount 

the Corporation will owe to the United &ate8 of rmerioa on 

aooouut of faoilltIea retained by it, the Corporation shell 

on or before Ootobrr 31, 1936, pay to the Secretary of the 

Treasury aa amount equal to the value of alI aseeta rotaSnod 

by it under paragraph 4;9saa the sum of all llabllitio8 whloh 

are herein provided. to be paid by the Corporation Ander~ paregraph 7, and all raaervoa provided, or #2,500,000., whloihar 

amount &all bo gmatar. dootfon 0 prorldaa that “the AdmInlatratlon ahall on or before October 31, 1936, loan to the 

Corporation, ror worklag oapltal, an amount equal to the diffstent$e between the amount paid the Secretary of the Troaaury 

under the romgoiag 8ootlon aad $E,500,000., plus auoh additional amxtnte, if any, ae may bo aooesaar to brlAg the total 

working capital of the Corporation to s 6,GOO,OOO., as of fun4 

30, 19S6,4 tha amount loAnsed to bo l vlaoaaod by a new noto sf 

the &%rporatIon, dated June 30, 1936, payable quarterlr, the 

unpaid principal bahxe on ouch new note to finally mature 

on June 30, 1946; to eocure said note a new Funding Agreemoat 

is provldod for, dated as of June 30, 1936, to euporaede the 

present funding agreement but alm.l.lar thereto, and providing 

that upon default in payment of’ Interest or prinoipal, the 

AdmiAiatrutIoa ehell hare the right without notioe to acoelerato the maturity of the entire lndebtednees. 
Honorable Tom deaf, Page 8 

Section 10 provide4 that the Corporation ahall 

on or b4for4 Ootob4r 31, 19116, oau44 it4 original 4tookholder4 to oontrlbut4 at 14a4t $3,000,000.00 to the capital 

stook of surplur, aooount of th4 Corporation, ths pr44mt 

outetandlng rtook and new 4tock to b4 allooated arid 18eued 

on a b4el4 prorid4A therein. 

Loans to etook holders for th4 puroh484 Or 4uah 

4took are proribed by S4otion 11 from the A~i6tratiOn, 

MA prorleion 14 m4d4 for the l xeoutloa end peymnt of 

notes therefor iaaturlw as late a4 1946. 

Seotlon 12 provides that ths Corporation shall. 

retain one-eighth oenf per bunhe out or the marketing 

proaeede or grain up to end lnoludiog fun4 30, 1936g onefourth osnt per bunhe to and lnolading fun4 30, 194Oi end 

one-hall cent per buehel to and inaludlng June 30, 1946, ~14 

retain8 to be addltlonel oollatsral for the note4 of the 

regional4 to the.gMnl4ttatlon, with sp44lflo prorlelon~ 

for the applioation of 4uoh payments. 

Seotion 14 mvld44 that the AddniStratiOn will 

loen the Corporation P 3,000,000.00, evrfdenoeii by no840 matUdll6 Jtdy 51, 1939, to be paid from the $3,OO0,000.00 reoelted from its regional atoakholder4. 

84otlon 13 provide4 that the Umlnlatratlon ahall, 

a4 proqtly a4 porslbla and in 6114 00~~44, re4ommnA to th4 

Seantary or Treasury the 84oeptenoe by him of .th4 eettl4iwnt 

and roarraugrmnt of fh4 lnAebtadne44 of the Corporation, n44- 

eseary w a4 to permlt rlnal perroreanoe of 4ll of the act4 

provided to be performs4 in thl4 agreenmnt, a4 of the 4lo4r 

of bueine44 on June 30, 1936, but eotually on or before Oofober 31, 1936, exoept a4 to aooounting end any aAj@4tnmnt4 

thet may be neoeeeery in oonneotlon therewith and any other 

obligation4 or undertakings whloh by their term4 extend b4- 

food that date. 8eotion 16 prorid that the llablllty on 

Oapital stook oontrlbutlone au4 note thueon shall oaly br00144 erreotioemh4n the approval or the Seoretary of the 

Trea4ury is obtained, and SacMon 19 provider that the <allure 

of stookholdsrs to aontribute to the oapitel end 4urpltts 

eaoounts ahell, et the election of tha &lmInistratlon, e%- 

cellerrite the wturlty of all sxfeting inAebteAnee4 to the 

AArainl6tratlon. 
Honorable 'porn seal, Page 9 

Yeotlon 18 contain8 the agr44ment of the Corporation that Vrom the date hareor to and inoludlng the Aete 

that this agreement beoomee exeouted, as oontraeted rlth 

being rxroutory’ ft 1~111 oonduot its affairs In an erriofl nt buelneee-like manner and ~111 meke no ootemitm4nte or 

Aiepoeition of aeeete other than in the ueoal 40~~04 of 

business, without having first obtained the written ooneent 

0r th4 AAminietration. 

We here thus eumaerizeA the salient featuree or 

the contract, dreigneted wInetruawnt No. l*, not broauw 

they are germme to any questIOn Of tax liability b4for4 

us, but rather, to demonstrate that it is not an l xeoutory 

eontra4t of e&l4 of land, of the ordinary and u&al form 

and eubet(UIoe, euoh as lnrol~4A in th4 Aealelons olted abore, but on the oontrary is a detailed and Oompapnhmeive 

eettlsmsnt crgr4e;arnt between the Farmers National Grain 

Corporation end the Farm Crsdlt id.mlnietratlon, whereby 

the fleoal and finaubial afralre of the Corporation er4 

m&late4 and rehabilitated. The lnetrument has ror Its 

l ubjeot metter property from th+tPenhenAle to the Dakotas, 

and obligations ranging from the date thereof to 1946. It 

eont4apl4t45 that the Corporation shall aontlnur es a going oonoun, in full p05548510n anb control of the properties and assets, reel, pueonel and mixed, all end eingular. 

The nel estate ln oontrorerey her4 AeeorlbeA in the formal 

deed of oonreyanoe between th4 part145 on February 24, 19S7, 

AeelgnetaA as aInetrum4nt No. g 

or AeeorlbeA in this oontreot. 

," Is not enywher4 mentioned 

If lneluA4A, It 18 4mbraoeA 

in the general term8 waeeete brld Sun4 30, 1936" whioh It 

Is oontemplated by Seotlon S, shell be tranmfierred in relief of outein obllgetlone owing to the AAmlnletration. 

We hive found no euthoritlee in thle State (and 

many ar4 existent upon tha general eubjeot) whloh hold Alrsctly, or by reasonable analogy, that equitable title to 

real estate would pass to a rend44 or purohaeer under 

such oontraot or agresm4nt as the on4 Aesoribed ebOT4. 

any 

Without eroepCion, the oaeee Ofted ebooe and holding that 

equitable title to land would test in a vendee under en 

exeoutory oontract or eale, turn upon faotual eltuat5.one 
611 

iionorable Tom Seay, Page 10 

wherein the puroheeer or Tend44 went into imaediate poeaeeelon or the land, either under a deed, with retantlon or tha 

venAor*a lien, rwhioh, in l ffeot, is the 8-e as an l xeo a to r y 

oontraot of sale. insofar a8 title 18 0onuerneA). or under 5 

whereby equltj regards that as done whioh ought to be dohe, 

the vendor held legal title In trust for the Tendee, and the 

vender be14 the purohaee eioney ln truet for the vendor. &oh 

a oontract of sale, while ternd executory, 1s rer Alfferent 

from the wholly ueoutory oontraot or eettlenmnt agrroment 

In the Instant oaer, l mbraolng the entire fle4e1 set-up of 

the Corporation, with future oondltlone and oontlngenolee, 

and oontemplatlng that poeeeealon of the property be not 

forthwith rsllnquldmd to the alleged rend44 but remelt with 

‘the alleged vendor. 

It le -such a oontract as the Comleelon of AppeaZe 

wee epeaKlng about in the Ohm of Sendereon T. Sandereon, 109 

S.W. (24) 744, at page ~748; 

-. . .DefurAant in error takes the porritlon 

that the rules govuning suite for epeolflo perfornun04 ha*4 no applloation to the eulf vhloh, she 

submits, is ror the reooruy or the ,proputy In 

virtue or squftablr title given hrr by the oontraot. 

Tim authorltlre relied upon 4r4 there holding that 

the vendee ln the ordinarf l xeautory atntreot for 

the sale of real eetate aoquiree at the Oh the 

eontraot is exeouted the equitable title to the 

property, eubjoot to lien securing the pur4haee 

prlae. Tompkins v. Broooka (TeX. Clv. ~pp.) 45 

S.W. 70, (applloation for writ of mror nfueed); 

Ruaeell end 2WefalA v. Kirkbride, 63 Tex. 436. 

Thin ohange In the beneflolal title results from 

the applioatlon of the Aodtrine of equitable oonversion, equity regarding as done that whloh ought 

to be done. Poemroy's Bqnlty 3urlepruAenor (4th 

&A.) TOl. 1, # 108, pp. 117-119; a 368, pp. 688, 

686. But the Aootrlne of equitable oonverrrlon la 

not applicable to a oontra4t like that here under 

oonsideration. Upon the rxeoutlon of thle oontraot 

normthing other then the paymnt or money remelned 
Honombla Toa day, Peg4 11 

l;eo 

to be done. The p4reonal eervlaee yet to be 

rendered by We. Sendereon thmughout the rermrlndsr or ‘&a. K4lton'e life oould not b4 r4- 

garde4 a4 perrorsmd at the exeoutlon of the 

oontraot .The ageement eontemplate the retentlon by A&e. Kelton of the full title to the 

property until her death. Under euoh oontraot ( 

the equitable title 4r right te th4 property 

would not peer poti Mrs. K41ton1e death. . .* 

Again, In the oaee of Gosrle t* Burgess, et al., 

S.W. (24) 988, the Oomalu~lon oi Appeals, in oon4tmw3 a oontraot or agreezumt *oh etronmr thur th4 lastant 

on4 for the applloatlon of the rule of equitable oonvuelon 

stated above, h414 that neither the leg41 nor - l - ouitrhla l_-_-_-_ 

title passed thereby, In the following lan&u age I 

(at page 990) 

"We anewu the first queatloa 5.n the 

afrlrm4tire. The eontraot eet out 18 N.aialy only an eueutory agreement to esnri* It 

15 not a 4ontraat or sale. It passe6 n4lthG 

the legal nor the rqultabh title. It 4045 

not even reel84 that the r4nAer h4d agreed 

to sell aatll one hn3.f of the agrood purehaee 

money was paid, at whleh time he was to 424- 

oat4 a14 44liTrr a elliilOl4& deed, *&rating 

end oonveyla# the property to the r4nA44. It 

1s olmr that no rqultable title was to rest 

unti1.hal.f the ~noney wa8 paid. lweau44, in 

0484 or 44fault prior te that time, thm paymnte 

were to be forfeit& as llqulA4teA Aemg48, 

ann,e oontraet would be of no form and 

This appears to hare bemn the praotloal ketructlon whloh th4 partlee'thomeelvtre 

ph44d upon th4 eontraot, for it is l h4n4 that 

Jermoa tinally abandoned the pr~puty end turned 

it baok to burgeee: no 444A ever hevln6 been 

AellvueA.a (Emphaele ours) 
L-m.- 

613 

Konorable Tom deey, Page 13 

Theretort we say that the aontract or agreement, AeelgueteA aa wInatrumnt No. 1," is, at meet, only 

anLx40utory agreement to 40nvey, and not a oontraot of 

Being dependent or oonAltlonal upon some eontlngene; or future aot of .the partlee, end oontemplatlng 

that poeereelon or end Aomlnlon end control over the 

property remeln with the Corporation, rather than the 

kdmlnlatratlon, it does not pass equitable title to the 

&im.inietratiOn. Nor le this effected by WInetrwa4nf No. 

glW whloh la a mere letter of approval, with ohengee 

noteA, of this oompromlee or settlement agreeant by the 

tieoretary of the Treasury. Legal title to oortaln drscribed property rested in the Farm Credit AAmlnlstratlon 

on February 24, 1937, by virtue of l xeoutlon of the formal deed of.oonveyanoe, without rrtrntlon of rendor~e lien, 

bye the Corporation. But prior thereto, both legel am! 

equitable title rested ln the Oorporatlon, eo as to make 

it personally liable for etute and aounty ad TelOMm 

taxes for the year 1937. The Fara Credit Administration 

is not pereonallr liable ror euoh~taue. Maters v. In&ependent Sohool District of chant, eo8 8.01. S74, Childreee 

Oounty T. State, 137 Texas, 343, 93 S.W. (3A) loll. 

Thle oonelaelon requlrer oonelduation of your 

second end third questlone regarding the effeotlre date of 

aoorual of the State and oounty aA talomatax lien opm 

the land eon~eyed, ror taxes for th4 peer 1931. If eald 

lien brome fixed upon the real estate in question as of 

January 1, 1937, then the Farm Credit Adminirrtration would 

take l uuh property on February g4, 1937, nubJrot to said 

lien but without any personal llal$llty for eald texee. 

On the other hand, it this tax lien 414 not beoolsr a 

oharge upon the property until the aeoreement of the taxes, 

or, as 4ontenAeA by the Govunment, until euoh taxer should 

beooma Au4 and payable on Oatob4r 1, 1937, th4n no lien 

would exist to 840~~4 these taxes, beoaoee legal title ~ 

vested ln the United states, through ite agenaire, admlttedly prior to these dates and 000ur%?45044, dth a 4oneoquent lmmnlty. In the latter lnetauoe, only a pereunal 

llablllty would rest upon the lrermerte #atlonal Wein 

Corporation for the 1997 taxes. 
kionoreble Tos 6eay, Page 13 

xrtlole 8, section 16, Conetltutlon or T4xae. 

provides ror the rollowing lien: 

*The annual aseeee:>ent ma44 upon lenA4A 

property shnll be a epeoiaf lien thereon; and 

all property, both real and p4reona1, belonging 

to any delinquent taxpayer 4hell be liable to 

seizure and sale ror the payment of all the taxes end panaltlee due by euoh delinquent; and such 

property nay be sold for the paymnt of the taxes 

and psnaltlee Au4 by such delinquent, under euoh 

regulation8 a4 the Legielature &my prOTlA4.~ 

(jSmpheele Ours) 

ArtiOle 7172, RevleeA Civil Statutes of Texas, 

1925, la Aealaratory of this oonetltutlonal lien, and 

prov1488: 

"All taxes upon real property shall be a 

lien upon euoh property until the earn4 shall 

have been paid. end should the aeeeeec~ fall 

to ee4eee any real estate ror any on4 or more 

years, the lien shall be good for every y4ar 

that he should fall to aeeeee for; and he'may, 

in llatlng property ror tax48 any year thereatter, aeeeee all the beok tuee due thereon, 

aocordlng to the provisions of this title." 

&tlolo 7151, K.C.8. of Texas, 1923, proTlA4e 

in pert as roilowe: 

*All property shall be listed for taxation between January 1 and April 3(i of eaoh 

year, when required by the ameasor, with r4ferenoe to the quantity h414 or own44 on the 

.flret day of January in the year for whloh the 

property le required to be lleteA or rendaml." 

No eyeoiflo tlrue being fixed in the Constitution 

or 4tututae ror the attaohment of the ad valorem tax lien 

on land, resort muet be ha6 to oeee law for the 4OlUtlOn 

or thle oontrolllng faot. 
Honorable Tom Seay, Page 14 

The curly o&se of Cruger v. Clnzuth, 3 Willson, Tex. 

ir. Clv. Cas. Section 24, under oonstitutlonhl and etatutory 

provlslons substantially similar to the ones now govsrnlng, 

ha16 a8 follows with rererenoe to the time for the aoorual 

of this lien: 

RUnquestloneblp under th@ provisiona or the 

laws olted, appellant, being the owner of the land 

on the 1st day or January, l&32, was liable personally for the tars6 thereon Zor that year, though t&e 

amount of suoh taxes wa8 to be subsequently asoertalned, and though oolleotion oould not be made 

thereof before October; for the law expresely provides that the taxes shall be oharges against the 

person owning the property on January 1st. From 

thle it follows that appellee Mnnuth was not llable personally for the said taxes, he not having 

beooma the owner of the land until after January 1, 

1222. This being true, we think the lien provid&d 

by the Constltutlon attaohee at the time the llablllty 1s rlxed by the statute, and la an lnoumbranoe 

upon the land though the amount or the taxes 18 not 

then fixed an d determined. . . . 

Under our eystem the tax is levied on the 1st 

day of January of l aoh year, and the assessment 1s 

made as of that date, although the rendering or 

listing and valuatlon ot the property 18 in fact 

subsequently made. The evtdenoe ln thls aase shows 

that the etate and oounty taxes wsre an lnoumbranoe 

upon the land when oonveyed by appellant." 

This deolelon is followed in the oase of Carswell 

& Co.mpany '1. Habberzsttle, 87 3.W. 911, wherein the court 

said: 

"All property owned by a person in this state 

on the 1st day or January cruet be lleted ror taxetion between that date and June 1st of eaoh year; 

ad, notwlthatandlng tho taxes do not bsooa due 

until the 1st day of October following, he is 

personally liable for the taxes. of that year, though 

he sells~the property before the amount of euoh 
Honorable Tom Seay, Page 16 

taxes has been ascertained, an4 before the paysent 

thereof becomes due. Ii not paid on or before 

the 31st day of January of the suooeedlng yesr, 

a penalty of 10 per oent on the entire ampunt of 

suoh taxes aoorues. To meoure the payment of 

taxes and penalties, the Constitution provldee 

that ‘the annual assessment made upon landed 

property shall be a speolal lien thereon, and 

aLl property, both real end personal, belonging to any delinquent taxpayer shall be liable 

to seizure and sale for the pay;;lent of all the 

taxes an4 penalties 4ue by such 4eiinquent.’ 

Article 8, 1 15. This lien attaohes and ths 

taxes beoome an lnoumbranoe on the land from 

the date llablllty is fixed on the owner, which 

1s the 1st bay of January oi the year, although 

the aluount of said taxes is not fixed and determined until txolas tirW subsequent thereto. It 

tollows that the tax88 due by apjellee@s lntestate for the year 1900 on the land sold aypellsnts 

were an lnoumbranoe on said land when oonveyed, 

and remained suoh until paid off by them, ln June, 

1901. Cruger v. Cinnuth, 3 Allison, Clv. Car. 

Ct. App. 1 84; Almy v. Hunt, #S Ill. 451 Rundell 

v. Lakey, 40 N.Y. 614.’ 

In the oase of Sate v. Barmer, 59 S.W. 541, the 

8uprems Court of Texas, ln construing this constitutional 

lien held, at first view, oontrary to the above deolslons, 

in stating: 

“The state olalao no personal llablllty on the 

part of the detsndant, Farmer, for the taxes, but 

asserts that Farmer bought it subieot to the tax 

lien on the state, and seeks to onforoe the llen 

upon the land itself. Artiole 7, I 15, 0r the 

oonstitutlon reads as follows: *The annual asseesment made upon landed property shall be a spealal 

llan thsreon, and all property, both real and personal, 

belonging to any delinquent taxpayer shall bo liable 

to seizure an4 sale for the pay.xent of all the taxes 

and penalties due by suoh delinquent ; end suah property may be sold for the payment of the taxes and 

penalties 411s by such delinquent, under suoh regulation as the legislature may provide.’ The lien of 

the state, under the provisions of the Constitution, 
Honorable Tom Seay, Page 16 

arfses out or the assessment of the property, 

an4 does not exist until that assessment Is 

made. It 1s the assessment made annually by 

the offloers of the state, un4er and in aooordanoe with the law, which holds a lien upon the 

land. The word ‘assessment,’ as here used, evldently means the sum wbloh has been ascertained 

as the apportioned part of the tax to be charge6 

against the partloular pleoe of property; but 

under our oonstitutlon, an4 the provisions of 

our statute, the word embraces more than s,lmply 

the amount, and inoludes the procedure on the 

part of the offlolals by whloh the property is 

listed, valued, and finally the pro rata deolared. Clegg v. State, 42 Tex. 610; . . .v 

However, the ‘issue before the court in State 

.v. Farmer, supra, was the exlstenoe of this lien, under 

an assessment, invalid because of a defeotlve desorlDtlon 

of property, rather than the time for the attaohment-of 

suoh liens. Therefore, we 4o not beli eve the quote4 1 

uage shouf4 be extended to mean that the lien does not?:- 

taoh until such t&w as all ttatutory duties of the assessor are performed and the anmunt of the tax rlna.lly oomputed. 

The oourt was merely holding that.8 lawful and valid assessment was a prerequisite to the existence of a lien but was 

not passing upon the time for the aoorual thereof. That it 

was not the intention of the Suprems Court to overthrow the 

deolslons hereinabove discussed, holding that the lien attaohes as of January 1st of the tax year, rather than on. 

the date of the aotual vassesament,w 1s lodloated by the 

approved judgment of the Commlsslon of Appeals ln the oaso 

of ~lsslon Independent Sohool District, et al v. Al?UstrOng, 

222 S.K. 201, wherein sol4 oases were olted with approval, 

in determining the time of attaohment of the lien to seoure taxes of an independent sohool district. 

It 1s our oplnlon’that the Farm Credit Admlnlstratlon did not eoGuire title to the land in question, either 

legal or equitable until February 24, 1987, and that said 

property was oharged with an4 subjeot to a oonstltutlonal 

lien to secure state and oounty a4 valorem taxes for the 

year 1937; an4 that said lien attached on January 1, 1937, 
Honorable Tom tieay, Page 17 

despite the foot that the assessment of such taxes was made 

subsequent to the aoquisltlon of title by the Farm credit 

Admlnlstratlon and did not beoome due an4 payable until 

Ootober 1, 1937. 

Trusting the foregoing fully snarers your lnqulrlea, ws are 

Yours very truly 

Al'TORNfsy QENmL OF T&ICAS 

BY