Court Opinion

ID: 4137040
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:20:21.555639+00
Date Added: 2024-06-11T14:35:32.561661
License: Public Domain

=E      ATI-ORNEY           GENERAL
                      OF TEXAS

                                 I'
                                  ,: ~..'.:'j'
                                         :
  Hon. J. Earl Rudder
  Commissboner, General Land
     Office
  Austin, Texas
                  ..OplaionNo.   S-166   :
                 :...RE:,Rightsof the State in
                         certain-Instances upon for-
                         felture af a veteran's con-
                         tract of'sale and pupchase
                         under the Veterans' Land
                         Program. :'
:?'Dear.Mr.:
          ~,Rudder:
            You have requested an opinion on the following
  questions:
            "1. In those cases where it becomes
       necessary for the Veterans' Land Board.,to
       forfei~ta,veteran's contra~ct,land It 1s:~
       found that the'veteran has executed a graz-~
       lng lease on that particular traot.of land.
       with another party, what is the legal stabs
       of that pleases
                     contract~lnsofar aspthe Vet- :
       erans' Land Board Is ooncerne~d.
             "2. Where.a veteran has executed an
        agrlcultural~Lease.wlth another party tom.
        operate the tract of.land.-beingpurchased
        through the ,Vetetians'
                              Land Program, and It
        becomes necessary for the Board to forfeit
        the veteran's ~c~ontract,
                                what Is the'status
       ~of this lease zontract and,what.r$ghts -ac-
        crue to the'Board as:to ownershlp.or poss-
        ession of any,crops growing on .that~
                                            l:aadat
        the time of such forfeiture? .Your attention
        ls;called,to the fact that:In no instance,
        does the Board become a party to any such
        lease agreement by indicating their approval
    Hon. J.   Earl   Rudder - page 2 (US-166)

    or disapproval of such.
         "3 . In the case of 011 and gas
    leases which may have been executed on
    land subject to forfeiture under the terms
    of the Veteran's contract, such leases be-
    fore they become effective must be ap-
    proved by the Chairman of the Veterans'
    Land Board and filed In that office. Are
    such 011 and gas leases affected in any way
    In the case of forfeiture of the veterans'
    land contract?
         "4. Where a veteran purchaser has a
    growing crop on lands he Is purchasing
    through the Veterans' Land Program, and
    has mortgaged all or a portion of such
    crops, what rights accrue to the Veterans'
    Land Board to participate in the yield
    from such crops If forfeiture action be-
    comes necessary?"
          Article 5421m, Vernon's Civil Statutes, is corn-
manly known as the "Veterans' Land Act.' Section 17 pro-
vides, In part:
          "The sale of all lands hereunder by
     the Board may be properly initiated by con-
     tract of sale and purchase, and said con-
     tract shall be recorded In the deed records
     In the county where the land Is located.
     The purchaser shall make an Initial payment
     of at least five (5$) per cent of the sell-
     ing price of the property. The balance of
     said selling price shall be amortized over
     a period to be fixed by the Board, but not ex-
     ceeding forty (40) years, together with interest
     thereon at the rate of three (3s) per cent per
     annum] . . . no property sold under the pro-
     visions of this Act shall be trankferred, sold
     or conveyed, in whole or In part, until the
     purchaser has enjoyed possession for a period
     of'three (3) years from the date of purchase
     of said property and complied with all the
     terms and conditions of this Act and the rules
     and regulations of the Board; provided, how-
     ever, that property sold under the provisions
     .
.

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

     of this Act may be .,transferred, sold, dr
     conveyed at any time after the entire ,in;
     debtedness due the Board has been paid.
     When the entire Indebtedness,due the State
     under .the,contract  of sableIs paid, the
     Chalrman,of the Veterans' Land Board shall
     execute ~adeed under its seal ~to~'the.ori-
     ginal purchaser.of.the land, which deed
     shall ,lnure to,the benefit .of the legal.
     owner 'of ,s,aldland,"
          ~Sectlon 18 providea:
          ?If at,ani'tlme. while the veteran
     Is Indebted:,tothe aboard for the land PM-
     chased;,he .should~sxecute, oPth&e   is In
     existence, .a~ oll,~,gasand mineral lease
     covering such.land or any part thereof,
     at leastone-ha&f.{i/2) of.ail bonus money
     reoelved:as.conslderatlon and one-half
     (l/i?)of all delay rentals paid under such
     leasesand one-half (l/2) of all royalties
     received, (or,80 much thereof as may be
     required) shall be paid to the Board by
     the owner of said lease and applied by It
     toward the satlsfac,tlonof said lndebted-
     ness. The lease made by the veteran will
     be of no force or effect until the Board
     has ,recelvedIts portion themof, as here-
     In provided."
          Section 19 provides for the forfeiture of the
contract of sale and purchase ~ln the following manner:
            "In the event that any portion of the
      Interest or principal on any sale should not
      be'~pald~whendue, the contract of sale and
      purchase shall be subject to forfeiture by
      the Board, and such~forfelture,shall be ef-
      :fectlvewhen the Board shall have met and
    '.passed a resolution directing the Chairman
      ,of.the~Board to endorse .upon the wrapper
      containing the papers of said sale, or upon
      the purchase.contract f,lledln the Land Of-
      fice, the word. 'forfeited,' or words of
         ~!    ,..
Hon. J. Earl Rudder - page 4 (S-166)

     similar Import, with the date of such
     action, and to sign officially; there-
     upon the .lands and all payments thereto-
     fore made shall become forfeited. ,A
     notice of the action of the Board In
     forfeiting the original contract shall
     be ma.iled to the County Clerk of the
     couritywherethe land Is located, and
     the said Clerk shall enter on the margin
     of the 'page or pages containing the re-
     cord of the original contract, a notation
     of such forfeiture. Lands Included In
     such forfeited contract shall be subject
     to resale under the same terms and condi-
     tions as though said lands had not there-
     tofore been sold. In any case where the
     sale has been forfeited and the title to
     the lands revested In the Veterans' Land
     Fund, the orlglnal purchaser or his vendee
     shall have the right to reinstate his
     claim In the purchase contract at any time
     prior to the date on which the Board shall
     have met and ordered the said lands to be
     advertised for resale, or for lease for
     mineral development, but not thereafter. . . .'
          The forfeiture of a defaulting veteran's contract
of sale and purchase Is one of the few Instances in which
formal resolution by the Board la required. Unlike many
other duties of the Board which can be delegated to the
Commissioner of the General Land Office, the forfeiture of
a contract of sale and purchase cannot be so delegated.
          Section21   provides:
          "The Board Is hereby authorized and
     empowered to make and promulgate such rules
     and regulations under this Act as.they shall
     deem to be necessary or advisable, and to en-
     force the same. It shall likewise have the
     power to prescribe the form and contents of
     all notices, bids, applications, awards, con-
     tracts, deeds, or Instruments whatsoever In
     any manner used by It In so carrying out such
     project and plan when the same shall not be
     in conflict with law. The Board is hereby
     made the sole judge of forfeiture of any
     purchase contract under this Act, and anyone
       .

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

     avalllng'of the provislons of tNs Act
     shall by so.dolng agree to abide by the
     same; and should'the Board declare a for-
     feitux under said purchase contract,
     then the purohaser hereby a rees to vacate
     the premises within thirty 'i;
                                 30) days after     ,
     receipt of notice of such declaration."
          The questions you have asked presuppose that the
transactions with reference to the veteran and his lessee
occurred subsequent to the execution of the contract of
sale and purchase between the veteran and the State and
before foffeltum'by the,Board for legal cause. It Is as-
sumed, also, that the veteran's claim has not been reln-
stated.
          Not'only the'veterans' Land Act, but as well
the 'contractof sale and purchase of record In the county
clerk's office, puts on notice anyone who deals with the
veteran, that the contract Is subject to forfeiture so
long as there remains unpaid any portion of the Interest
and principal due on the contract. Thus, there Is mlss-
lng one .of the three elements essential to a bona fide
purchase, namely, absence of notice. Therefore, the life
of any type of lease contract, except an oil, gas and
mineral lease was partlcu&ai?ly~provldedfor In Section 18,
entered into between the veteran and his lessee, Is de-
pendent upon the veteran's keeping current his obligations
under,his ,contract of sale and purchase.
          From a mading of the foregoing quoted sections,
It will be ndted that the procedure for the contract of
sale and purchase of land to a veteran, together with the
conditions attached thereto, Including the forfeiture
provisions, Is rather definite and comprehensive. Appar-
ently, the legislature patterned the forfeiture provisions
after earlier ,laws authorizing forfeiture of sales of the
public lands under certain circumstances.
          In Lawless v. Wright, 86 S.W. 1039 (Tex.Clv.APP.
1905), it was said:
          "It Is the settled law that the State
     of Texas has the power and authority to for-
     felt, through a declaration of &he Land Com-
     missioner, a sale of Its lands, for the non-
     payment by the:vendee of,the Interest on the
Hon. J. Earl Rudder - page ,6 (S-166)

     purchase money. Such being the law, the
     act of the Land Commissioner In forfelt-
     lng the purchase of the land by Fancher
     had the effect of restoring such land to
     the public domain of the state . . . After
     the fo,rfelturethe land assumed the same
     status that it occupied before the sale to
     Fancher, and the State'clearly had the right,
     which It exercised, of placing the land on
     the marketagain and selling It. . . .n
            ~If the veteran's contract of sale and purchase
Is forfeited, there can be no claim of rlgh~tIn anyone
holding under him. Frlstoe v. Blum, 92 Tex. 76, 45 S.W.
998 (1898).
          You are advised, therefore, In answer to your
first questlon, that the grazing lease referred to ex-
pires and is of no further.force and effect from and after
forfeiture.
          The answer to your second question depends on the
particular facts Involved at the time of forfeiture. Strlct-
ly speaking, under the contract of sale and purchase, the
State Is the owner of the legal title and the veteran Is
the owner of the equitable title. The veteran Is entitled
to possession and heris not prohibited under the Veterans'
Land Act from leasing the land for grazing or agricultural
purposes. Although the land Is not held subject to a
vendor's lien as such, yet It Is subject to forfeiture and
repossession. The same principles of law governing the
vendor and purchaser in an ordinary transaction Involving
the sale of land and the retention of the vendor's lien
likewise apply to the contract of sale and purchase be-
tween the State and the veteran.
          Where the land Is held subject to a vendor's
lien, the lien debtor until title has been divested by
foreclosure, Is entitled to effect a constructive severance
of crops growing on the land, and thus prevent them from
passing to the purchaser at a foreclosure sale. w1111s v.
Moore, 59 Tex. 628 (1883); Bowers v. Bryant Link Co., 15
S.W.2d 598 (Tex.Comm.App.1929).
          The lien of a vendor of land does not extend to
growing crops. League v. Sanner Bros., 60 S.W. 898 (Tex.
Clv.App.1901). One who takes a mortgage on crops to be
grown by the purchaser has a right which is superior to
          ..

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

any claim on the part of the vendor or a purchaser at a
foreclosure sale to enforce the vendor's lien. Caldwell,
Hughes & Patterson v. Yarborowh, 186 S.W. 350 (Tex.Clv.
App.1916), Leanue v. Sanner Bras., supra.
          A tenant Is entitled to his share of the crops
grown on the land. In Brown v. Leath, 42 S.W. 655.(~ex.
Clv.App.1897, error ref.) (concluslon,of facts In 44 S.W.
42), the court said:
          " . . . The lessee had, under his lease,
     cult,lvatedthe land; and at the time of the
     sale thencrop of cotton  and corn was maturing,
     and some of It matured. The lease severed the
     right to the rents from the realty, and the
     sale of the land under the'deed of trust did not
     carry the title to the rents, or the crop on the
     premises standing at the date of the sale, wheth-
     BF mature or not. The lessee had the right of
     Ingress and egress for the purpose of gathering
     and preparing the crops for market or use. This
     Is no longer an open question In this state.
     (Citing Willis v. Moore, supra, and other cases).
     The fact that the tenant had notice of the
     mortgage by Its record Is lmmaterlal. It Is
     the right of the mortgagor, before foreclosure,
     to sever the rents from the reversion. In this
     case It was done by granting the lease. . . ."
          In Dlnwlddle v. Jordan, 228 S.W. 126 (Tex.Comm.
App.1921), the court said:
          "The doctrine of emblements Is the com-
     mon law right of tenant, whose lease of un-
     certain duration has been terminated without
     his fault and without previous knowledge upon
     his part, to enter upon the leased premises
     to cultivate, harvest, and remove the crops
     planted by him before the termination of the
     lease."
          The court, In the same case, supra, quoted the
Supreme Court of Indiana as follows:
           "In order'to entitle one claiming to
      be a tenant, or his legal representative,
      to emblements, the follpwlng facts must
Hon. J. Earl   Rudder - page 8 (S-166)

     appear: (1) The existence of a tenanoy
     of uncertain duration. (2) A termination
     of the tenancy by the Act of Cod or by
     the act of the lessor. (3) That the crop
     was planted by the tenant, or someone
     claiming under him, during his right of
     occupancy."
          In the second question poeed, the veteran has
leased the land for agricultural purposes. The tenancy
is in existence and is of uncertain duration because it
is subject to termination by forfeiture of the veteran's
contract of sale and purchase by the action of the Board.
Secondly, the tenancy has been terminated by forfeiture
which Is the result of the landlord's (veteran's) act in
not performing his part of the contract of sale and pur-
chase. Thirdly, the tenant's ~crophas been planted by
him, or someone claiming under him, during his right
of occupancy. Therefore, your second question is an-
swered as follows:
          Where a veteran has .executed an agricultural
lease to another party and the veteran's contract of sale
and purchase is forfeited by the Board, the lease Is termi-
nated; however, the tenant is entitled to hls share of
the crops. The State Is entitled to receive the land-
lord's veteran's portion of the Brentprovided the land-
lord's Iveteran'sI portion has not been severed previously,
eitheractually or constructively, by the landlord
(veteran) prior to the forfeiture. We shall not attempt
in this opinion to cover fully the matter of what constl-
tutes a constructive severance, but we will note that
a sale or mortgage of the crops is a constructive sever-
ance. Willis v. Moore, supra; Bowers v. Bryant Link Co.,
supra.
          The answer to your third question Is in the
negative. The status of an 011 and gas lease exekuted
pursuant to the terms of Section 18 is not changed by for-
feiture except to the extent that the State thereafter
would be entitled to receive all annual delay rentals and
royalties.
           In Willis v. Moore, supra, the court said:
          I,. . . As, however, the crops are separate
     and distinct in their nature from the land upon
     which they grow, the ownership of the one, even
Hon. J. Earl Rudder - page 9 (S-166)

     on mortgaged property, may be in one per-
     son, and the title to the other in afiother;
     and whenever crops growing or standing upon
     land covered by a lien given by the owner
     of the Land, or
                  . . acquired by law, have in
     law or In faci?Deen severed in ownership,
     or actually severed from the land prior to
     sale of the land under the lien, title ',.
     thereto will not pass by the foreclosure
     of the lien.
          "A mortgagor is entitled to sever in
     law or fact the crops which stand upon his
     land at any time prior to the destruction
     of his title by sale under the mortgage;
     this results from his ownership and conse-
     fluentright to the use and profits of the
     land, . . ."
          You are advised, in answer to your fourth ques-
tion, that If a veteran purchaser has mortgaged all or a
portion of the crops growing on lands he Is purchasing
through the Veterans' Land Program, no rights accrue
to the State to participate in the yield from such crops
if forfeiture action becomes necessary, except to the
extent only of the portion of crops which has not been
severed, either actually or constructively, prior to for-
feiture.

                       SUMMARY
                A grazing lease executed by a
         veteran purchaser under the Veterans'
         Land Act expires and Is of no further
         force and effect from and after forfeiture
         of the veteran's contract of sale and pur-
         chase.
                An agricultural lease executed
         by a veteran purchaser to another party
         Is terminated by forfeiture of the
         veteran's contract of sale and purchase;
         however, the tenant is entitled to his
         share of the crops and the State Is
         entitled to the veteran's portion of the
         rent provided the veteran's portion has
         not been severed previously, either
         actually or constructively, by the veteran
         prior to forfeiture.
                                                   -   . .

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

          The status of an oil and gas lease
    executed by the veteran and approved by
    the Chairman of the Veterans' Land Board
    is not changed by forfeiture except to the
    extent that the State thereafter is enti-
    tled to receive all annual delay rentals and
    royalties.
          If a veteran purchaser has mortgaged
    all or a portion of the crops growing on
    lands he has contracted to purchase through
    the Veterans' Land Program, no rights accrue
    to the State to participate in the crops
    after forfeiture except to the extent of the
    portion of crops which has not been severed
    prior to forfeiture.
                             Yours very 'truly,
                             JOHN BEE SREPPERD
                             Attorney General

APPROVED:
Mary K. Wall
Reviewer
John Davenport
Reviewer
Will D. Davis
Special Reviewer
Davis Grant
Special Reviewer
John Atchison
Acting First Assistant
John Ben Shepperd
Attorney General
JAA:bt