Court Opinion

ID: 4137023
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:20:09.676675+00
Date Added: 2024-06-11T14:35:32.475223
License: Public Domain

AUR'IW~X;~
JOEN BEN s--
   *--    o-
                      '-December 12, 1955

       Hon. J. Earl:Rudder /.
       Cha$rman, Veterans' Land Board
       Austin, Texas
                        Opinion NO. s-183

                        Re:   Questions relating to exe-
                              Outlon sale of .the interest
                              of a purchaser under the.
          .~                  Veterans' Land Program.
       BearSir:'
                 Your opinion request consists of sixteen
       questions contiernlnglevy of execution and foreclosure
       sale, before land after forfe~ltureof the contract of
       sale and ~purchase;.pursuantto.~judgments for ~delin-
       quent taxesand private debt, and the effect on a
       veteran's contractual interest In land 'he Is purchas-
       ing.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 judg-
       ment 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
          i. Board?
                  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 coti-
     tract of sale and purchase has not oc-
     curred.
          The answer to question number two is in the
affirmative if the facts exist as set
                                   _- forth
                                         _a in either
of the preceding paragraphs numbered 1 and 2 and~the
veteran and ,purchaserhave complied with the terms and
conditions of the Veterans' Land A&t,.and;‘!as:+gahds the
tax sale, the two-year‘redemption period 'hasexpired
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 Vet-
erans' 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 'takespossesSiOn. 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.), Lee-
        son 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 af-
        feot thenanswer? By referring to Section 17'of the Act
        it will be seenthat "the Board .isempowered,in each in-
        dividual case.to specify the termsof the contract
        entered into with the purchaser, not contrary to the pro-
        visions of this Act, but no property sold under the pro-
        vlslons~of this Actshall be transferred, sold or con-
        veyed, 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 be-
        fore the expiration of said three (3) years by said pur-
        chaser or his heirs, administrators or executors; . . .n
                  A veteran in possession for three years or
        more, or in possess'ionunder three years and incapaci-
        tated 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 ordi-
        nary 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 un-
        der a contract of sale and purchase with forfeiture pro-
        visions.' 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 pur-
     poses 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 ac-
     count 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 prop-
     erty."
          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,videsfor
     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 vendi-
     ble 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 thenjudgment debtor, and rema1n.s
     liable to be defeated by the same contin-
     gency 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 pur-
chaser or to any other person to whom the purchaser
may d,irectthe 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 unityfor the use and benefit of Itself and all
other taxing units which are parties to the suit and
whioh,.havebeen.adjudged to 'havetax 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-wellas to convey his interest upon
certain terms and conditions. (Sec.17.) It is compara-
ble to a'mortgagor's right of redemption.
           InBuchanan v.'Monroe, 22 Tex. 537 (1858), in
speaking of the equity of redemption, the court said:
     " . * . The doctrine of equity is that the
     equity of redemption is the real and bene-
     ficial estate, tantamount to the fee at law;
     .and,it.ls.accordlnglyheld to be descendible
    .by,'tiherltance, devisable by will,and alien-
     able by'deed, precisely as if it were an ab-
     solute estate of Inheritance at law; . .':
      'The mortgagor has a right to lease, sell, and
     ,inevery respect to deal with the mortgaged
    -.premisesas 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 exe-
cution .and-'themortgagor's rlght'of redemption:
          "Where,~as .here, lands subject to
     contract liens are sold on execution
     against the owner,,the purchaser at exe-
     cution 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 ac-
            quired 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 con-
            veyed 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 ap-
            proved 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 in-
       capacitated by reason of illness is prohibited from
       transferrin     selling or conveying his interest in the
       property. 7' Sec.17.) In this cir&mstance he has no
       vendible interest in the property subject to sale under
       execution or like recess. Moser v. Tucker, 87 Tex.94,
       26 S.W. 1044‘(1894 P , Bourn v. Robinson, 107 S.W. 87'8
       (Tex.Civ.App.1908). 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.~ 'Dancinerv. State, 140 Tex.
252, 166 S,w.2d ,914 (1942):

          Forfeiture of the veteran's contract restores'
the land to the'veteranst 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.l934jerror ref.),. The for-
feiture 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,,issubject to a forced sale.
Further, upon relnstatement 'of the contract the veteran
would take the property.subjeot to all tax liens which ex-
isted-at the ~timethe forfeiture occur~red,and his interest
could‘thereafter be subjected'to foreclosureand satis-
faction'of the.'taxliens. Danciger v. State, supra.
Forfeited land sold',to~another veteran would not be bur-
dened 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 fore-
     closure 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
     'veteranhas died.
          2.  If a veteran's contract has not been
     forfeited and the veteran's contractual if-l-
     terest-is sold..under'anexei?ution(see answer
     to.questlon No. l), the purchaser at the fore-
     closure sale may.be placed in possession of
     the land and assume the payment of the con-
     tract 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; Bur-
     ing the two-year redemption period and prior
     to redemption, the purchaser would be en-
     titled to make the required payments to the
     Board under the contract in order-to pre-
     vent a forfeiture of the contract, but if the
     veteran later exercised his right of re-
     demptionthe purchaser's rights as a DLU-
     ohaser 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 ,interestand hold ,it In trust'for the
     taxing agencies involved. However, the
     right of the Veterans' Land Board to for-
     feit the contract for nonpayment of prlnci-
     pal 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-:'.page9. (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 .ofTexas, and .judgmententered,
     an &ecution.may be levled only on,the
     .lnt,er$st
              owned by the 've~teran,
                                    and his
     interest~only may be sold'at,a foreclosure
     sale to s&tlsfy the judgment, and then
     only tn:the following'lnstanoes~: '(a)the
     veteran has had possession of the land for
     thriaeyearsor more, or (b) .$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~tby'thia'countgIn ~the'name of the
     Stkte of Texas,.-apersonal 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 Pro-
     gram and the veteran's contract is forfeited
     and the land .is resold by the Board, as pro-
     vided in the 'Veterans'Land Act, the pur-
     chaser 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 ef-
     fect 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 be-
     come 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 pur-
     chaser and said purchaser bi substituted
     on the contract in lieu of the veteran,
     unless the veteran's interest is not sub-
     ject 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 re-
     deems the land from the Veterans' Land
     Board and then only in the following in-
     stances: (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