OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN

Honorable TO;PYaay CountJ Attorney Potter 

## couatf Amarillo, Texan

iaentthe r0u0w 

### aenta, whiohwe 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 ‘oretato 

### andoountf

oloalng ior'yoar osamination 

### and inor the rollowing laatrument6t (1) Oonhe Farmers Nutional Grain Corp. ~6 the rernamat~ (a)

### Orderapprovin& suoh sonawry Dept. or theUnited State8 goremonraganoe from Farmer8 ESationalWar&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 Qeubeidiary or tha othati).Honorable Tom iieay,Page 13


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

### OnJune 12, 

### 19.956,The

### Farmers NatIonal Orain Corp. entered Into a Oontraot to oonvey to thrU. 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 rldenoed

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 provI8loarialtering the origIna agree.oanta8 to any of 

### the 188ue8 to be dieouased herein. h8pite the iaOt that maoh a88,t8 

### woreto 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 a88lLoptionthat the ]rarmore National 

### Warehouse Corp. etill retained title to this property on Januarg 1, lQS9, when the tat lerrwae made, that the governm8nt did 

### not.hare title at suoh tine, and that when the oonreyanoo Wa8made to the ~oo*ormmnt in

### Tebruaryof lOSO, it took M **8ubJeet** to the tax lion ior t6Xe8 

### l Me88ed against 8ald OOrporation. I lpightadd that this property wa8 not render86 for taxation by 8uoh oorporatlon, 

### but 

### that an arbttruy ameement 

### waeamde by the tax oolleotof, and that auoh 

### aere88sent we8 probably me,deafter 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.
?,hegovernment 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 governmentXonorable TomSear, Page 3

had laerelyan 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 lnwhloh tha tadaral govemugiant

### hasun equitable t1tl.eia not subjaot to taratloll).

"2. It 

### is

## rurthera0ntandad that 

### nolien 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 inFebruary, 1997, It aoqulred legal tit18 before any tax lien W68ore&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 ELIto t& rolloWing matter8t

*l. Doe8 the oontraot merked Inrtrument #l oonref equltablo title 

### inthi8 propertyto 

### tha redaral 

### goverauaent?Ii ao, doe8 the raot that the 

### government

ha8equitable 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

### totha 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 t3tthe 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 oontrctotof sale, until aotual delivery or a deed, without retention or avendor’s lien 

### therein, said vendee or 

### pumhamer, e8paolally where he goee Into poaee88ion, la lnveetedwith 

### squitable 

### titlefrom date or aontraat, or, ln any event, 

### iron date ha 

### takes 

### poaaeaalon, and any fnorment, advantage, or enhancement to 

### the prop

### ertyInure8 to hi8 bendit, and

### detriment, dapraoIatlon,
or loss thereto without fault 

### of l 

### ithar party

## muat**bo** 

### borneby 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) f315iIngrem v. Control Bltulithlo co., 51 S.W. (2d) 1067; irluorthY. 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 theTexa8 oourta and the oplnlone or thIe Department 

### that,í l xoapt Insofar aa the rule loaybavaried **by** egreeumnt batwaen tha oontraoting parties or by

### aretsntlon ot 

### poaaaa8ion b the 

### vendor,thepurohaaer will ordInarlly b8 liable for aL t-8 aooruia& atter the ueoutioa ot the oontraot 

### whereIt 

### la of auoh a oharaoter as 

### to oonstltute him the equitable owner or the property. SS ths purohoaar, titer the oontraot la aa6e, -goesInto po8aeeelon and 

### enJoy the 

### uaao$ tha 

### prepertf, he is liable tar the taxes aCtOrUN during hlr poa8aaalon, notwithstanding the oontraot 

### require8 the

### vendor to 

### oonvrf bywarranty 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,tovest equitable title in the real eatate eought to be talEed,in the Far0 Credit iadmlnletratlonon the date thereor, to-wit, Juno 12, 1956, or,,

### amoontanded 

### 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 avowedHonorable Tom Jeay, Y&g8 5

instrunentality or agency 01 the Federal Government, prior toJanuary 1, 1937, therewouid probably arise an ianunity fros &ate and county taxation under the Constitution of the United states and iirtlcle7150, Revised Civil titatutes of Texas, 1925, exjmererrsly corU6rrlag eteqtion 

### uponland owned by theFader-61government.

However, we do not find **it** necessary in this opinion to detemlne the 

### preoim question ofwhether ma1 estato,**to** which theUnited %&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 questionin 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 **aob** joot to Stats 

### and oounty ad ralomm taxes for ths 

### year 1937.

To riaoh this oonoluslon it isneoeeeary to oonridor qIwtruaant 

### Ho. 1î initsl

ntlrety

and fr om its 

### four oorneca. H4no4, it **la our**  deelm the3 **aaid** l.artrumontmnaln
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 rorbatlm. **Howovor,**we deem itneorseary to rsfer to and sometimes quote pertinent portiona oi said Instrument.

La sscticn~.theroorit is 4tat4d that th4 offer or transfer by the Faramra Rational Grain Oorporation (hereinafter rerormd to aa the Corporation) to theFarm 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”aotlveas of the olose OS busLnesa oa June 30, 1936, and 

### the books of the Corporation 

### andthe 

### 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 

### holdJune 30, 1936, or th4 proo44aa theroof, 

### l xoopt 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.looatinua to bs liable under the t4rma of 

### this Agr4aDmAt.~

Section 4 provides that th4 Gorporatlon shall **re** tain 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**  **Corp** oratloa of oortaln deaoribed property, laoludlw oertiln real 

### e&ate, at the 

### option either of the Atlmlai8tration o¶?the Corporation, expreeaea inwriting 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 ternriaalaud 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 indebtrdnarceto the AdminIstratloa, whleh ahell bo roduord by the aggragato amount of oertaIn deaorlbed ltoma, Ineludlng not.46and grain drafts paynbla, cuetomre* oradit ba~anoos, aooounta peyable, aocruod grain handling 

### ahargo payable, 

### aoorued llablllty for 

### tame on aeeets retained, 

### and llabillty on olaiaiaend 

### open grain ooatraota. AA amount was fixed ior roaor?oa, 

### anditwas 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,
aomuoh of the roaemea, If AAJT,as are no longer raqulrod to meet the maxImum liability of the Corporation for llabllIt&esnot yet eettlea.

section 8 provides that Inaddition 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 

### sumofall 

### 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 “theAdmInlatratlon ahall on 

### or before October 31, 1936, loan to the Corporation, ror worklag oapltal, an amount equal to the diffstent$ebetween the amount paid the Secretary of the Troaaury under the romgoiag 8ootlon aad $E,500,000., 

### plus auoh additional amxtnte, ifany, ae may bo aooesaar to brlAg the total 

### working capital of the Corporation to s6,GOO,OOO., as of fun4 30, 19S6,4 tha amount loAnsedtobo 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 

### notea 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 

### thatthe 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 arid18eued
on a b4el4 prorid4A therein.

Loans to 

### etookholders for th4 puroh484 Or 4uah 4took are proribed by S4otion 11 from the A~i6tratiOn, 

### MA prorleion 14m4d4for the l xeoutloa end peymnt of notes therefor iaaturlw as late a4 1946.

Seotlon 12 

### provides that ths 

### Corporationshall. retain one-eighth oenf 

### per bunhe 

### outor the marketing proaeede or grain up to end lnoludiog fun4 30, 1936g onefourth osnt 

### perbunhe 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 

### loentheCorporationP3,000,000.00,evrfdenoeii byno840 

### matUdll6 Jtdy 51, 1939, 

## tobe 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 611400~~44, re4ommnA to th4 Seantary or 

### Treasurythe 84oeptenoe 

### byhim of .th4eettl4iwnt 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 Oof

### ober31, 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 br00144erreotioemh4n 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%- cellerritethe 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 oonduotitsaffairs 

### Inan erriofl nt buelneee-like manner and ~111 meke no ootemitm4nteor 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 isnot 

### 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 a**bore,** but on the oontrary is a detailed and Oompapnhmeive eettlsmsnt crgr4e;arnt between the Farmers National Grain Corporation end theFarm 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 

### tothe 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 

### Isoontemplated by Seotlon S, shell be tranmfierred in **re** lief 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 

### titleto real 

### estatewouldpass to a

### rend44or 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 

### underen exeoutory oontract or eale, turn upon faotual eltuat5.one

## 611

iionorableTom Seay, Page 10

wherein the 

### puroheeeror

### 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 xeoato ry oontraot of sale. insofar a8 title 18 0onuerneA). or 

### under5

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 eioneyln truet for the 

### vendor. &oh
a oontract of sale, while ternd executory, 1srer 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

### propertybe not forthwith rsllnquldmd to the alleged rend44 but remelt with ‘the alleged vendor.

It le-sucha 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 forwrit 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 oon

### version, 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 oonverrrlonla not applicable to a oontra4t like that here 

### under oonsideration. Upon the rxeoutlon of thle oontraot normthing other then the paymnt or money remelned

### HonomblaToaday, Peg411

l;eo to be done. The p4reonal eervlaee yet 

### tobe rendered byWe. 

### Sendereon thmughout 

### there

### rmrlndsr

or 

### ‘&a.K4lton'e **life oould**  not **b4 r4-**  

### garde4a4perrorsmd attheexeoutlon 

### ofthe oontraot

. Theageement 

### eontemplatethere

### tentlon

byA&e.Keltonofthe 

### fulltitletothe property 

### untilherdeath.Undereuohoontraot ( the

### equitable

title4rrightteth4property wouldnot 

### peerpoti Mrs.K41ton1e death.

. .* Again,Inthe 

### oaeeofGosrle t* Burgess, et al., 

### S.W.(24)988,theOomalu~lon oiAppeals, 

### inoon4tmaoontraot

**or** 

### agreezumt

*oh etronmr thur th4 

### lastant w3 on4 for the applloatlon of the rule of equitable 

### oonvuelon 

### stated above,h414thatneithertheleg41norl ouitrhla 

### - -l_-_-_-_ 

### titlepassed thereby, In the following lan&u

### ageI

(at 

### page990)

"We anewu the 

### firstqueatloa 5.n the afrlrm4tire. The 

### eontraot eetout18N.aialyonly an eueutory 

### agreement to esnri* It 

### 15nota 4ontraat 

### or

### sale. It**passe6**

### n4lthG thelegal**nor** 

### therqultabhtitle. It4045 not even

### reel84that the 

### r4nAer

### h4dagreed 

### tosellaatllone

### hn3.f oftheagroodpurehaee moneywas

### paid,atwhlehtime 

### hewasto424- 

### oat4 a1444liTrr a 

### elliilOl4& deed, *&rating endoonveyla# 

### theproperty to 

### ther4nA44. 

### It 1solmr thatnorqultable titlewastorest unti1.hal.f

the ~noney



### wa8paid.lweau44, in 

### 0484or44fault

prior te that

## time,thm paymnte **were**

### to

### beforfeit&asllqulA4teA Aemg48, ann,e oontraet

wouldbeofno form 

### and Thisappearstohare 

### bemnthe 

### prao

### tloalketructlon whlohth4partlee'thomeelvtre ph44d upon th4 eontraot, 

### for 

### itis l h4n4 that 

### Jermoatinally 

### abandoned the pr~puty end turned 

### itbaok 

### toburgeee:no444Aever

### hevln6been AellvueA.a(Emphaele ours)L-m.- 

### 613

Konorable Tom deey, Page 13

Theretort we say that the aontract or agreement, AeelgueteA aa 

### wInatrumntNo.1," is, atmeet, only anLx40utory agreement 

### to 40nvey, 

### andnot 

### aoontraot of

Being dependent 

### or oonAltlonal 

### upon some eontlngene; or 

### future aot of .the partlee, end oontemplatlng 

### thatpoeereelon or **end**Aomlnlon end control 

### overthe property remeln with the Corporation, 

### rather thanthe kdmlnlatratlon, it does not pass equitable title to the &im.inietratiOn. 

### Norle this effected by WInetrwa4nf No. glWwhloh 

### laa mere letter of approval, with ohengee noteA, of this oompromlee or settlement agreeant by the tieoretaryof the Treasury. Legal title to oortaln drscribed property rested 

### inthe Farm 

### CreditAAmlnlstratlon
on February 24, 1937, by virtue of 

### l xeoutlon of the

### formal deed of.oonveyanoe, without rrtrntlon of

### rendor~elien, byethe Corporation. But prior thereto, both legel am! equitable title **rested** ln the Oorporatlon, eo as to make it personally liable for etute and aounty adTelOMm taxes for the year 1937. TheFara Credit Administration isnot 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 

### oountyaA talomatax lien opm the land 

### eon~eyed,rortaxes for th4 peer 1931. If eald lien brome **fixed** upon 

### thereal estate in question 

### as of January 1, 1937, then the 

### FarmCredit Adminirrtrationwould **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 

### taxlien 414 not beoolsra 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 theUnited 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.kionorebleTos 6eay, Page 13

xrtlole 8, section 16, Conetltutlon or T4xae. provides ror the rollowing lien:

*The annual aseeee:>entma44 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 thepayment of all the **tax**
es 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.~ (jSmpheeleOurs)


### ArtiOle 7172, RevleeA 

### CivilStatutes of Texas, 1925, laAealaratory of this oonetltutlonal lien, and prov1488:

"All taxes upon real property shall be a lien upon euoh property until the earn4shall **have**been paid. end should the aeeeeec~ fall **to** ee4eee any real estate ror any on4 or

### more years, the lien shall be good 

### forevery y4ar 

### thathe should fall to aeeeee for; and he'may, in llatlng property ror **tax48**

### any**year** 

### there**atter,** aeeeee all the beok

### tuee duethereon, 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 taxa**tion** between January 1 and April 3(iof eaoh year, when required by the ameasor, with r4ferenoe to the quantity h414 or own44 on the .flretday of January in the year for whloh the property lerequired to be lleteA or rendaml."
**No**eyeoiflo tlruebeing 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, 3Willson, 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 **asoer** talned, and though oolleotion oould not bemade 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 

### ownerof the land until after January 1, 1222. This being true, we think the lien provid&d by the Constltutlon attaohee at the 

### timethe llablllty 1srlxed by the statute, **and** la an lnoumbranoe upon 

### theland though the amount or the taxes 18not then fixed and determined.
. . .
Under our eystem the tax is levied on the 1st day ofJanuary of l aoh 

### year,and the assessment 1s made as of that date, although therendering or listing and valuatlon ot the property 18 

### infact 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 euohHonorable Tom Seay, Page 16

taxes has been ascertained, an4 before the paysent thereof becomes due. Iinot 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 

### andths 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 aluountof said taxes is not fixed and determined until txolastirW 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 

### suohuntil paid off by them, lnJune, 1901. Cruger v. Cinnuth, 3Allison, 

### 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

### firstview, oontrary to the

### abovedeolslons, 

### instating:

“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, 

### 0rthe 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 

### toany delinquent taxpayer shall bo liable to seizure an4 sale for the pay.xentof all the taxes and penalties due by suoh delinquent ;end suah 

### property may be sold for the payment of the taxes and penalties 411sby such delinquent, under suoh regulation 

### asthe legislature 

### mayprovide.’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 sumwbloh 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

### wordembraces 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 ‘issuebefore 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 believe the quote4 1 uage shouf4 be extended to mean that the lien does not?:- 

### taohuntilsucht&w as all ttatutory duties of the 

### assessor are performed and the anmunt of the tax rlna.llyoomputed. 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 

### SupremsCourtto overthrow the deolslons hereinabove discussed, holding that the lien attaohes 

### asof January 1st of the tax year, rather than 

### on. the date of the aotual vassesament,w 1s lodloated 

### bythe 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 

### FarmCredit 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 beoomedue an4 payable until 

### Ootober1, 1937.

Trusting the foregoing fully snarers your lnqulrlea, ws are

Yours very truly
Al'TORNfsy

QENmL OF T&ICAS

BY