Untitled Texas Attorney General Opinion

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Hon. Bascom Giles Opinion Eo. s-66 Commissioner General Land Office Re: Assignabilityof a good Austin, Texas faith claimant'sprefer- ential right to !.urchase land under Section 6, Dear Sir: Article 5421c, V.C.S. Your opinion request of June 4, 1953, reads aa follows: "We desire the opinion of your office as, to whether or not a Good Faith Claimant's pre-. ferential rlght under Article 5421c, Section 6, V.A.C.S., is assignable. "E. Ii.Schuoh, San Angelo, Texas, filed in the General Land Offlce on Febiwary 4, 1953, application to purchase certain land.In Coke County a8 a Good Faith Claimant under the pro- visions of an act approved June'lg, 1939. A portion of the area includedwithin Mr. Schuch's application is within the encloeure of adjoin- ing lands which he owns. However, other por- tions of the area in said applicationare out- side of Mr. Schuch',senclosure. Mr. Schuch has acquired assignmentsfrom the owners of the lands adjoining the balance of such alleged~vacancy and such assignmentsare limited to the area described in Mr. Schuch's application. There have been filed in this offlqe affidavits and supportinginstru- ments to the,effect that all of the alleged vacant area is includedwithin enclosures~ of Mr. Schuch's land and within the enclosuresofMr. Schuch's ae- signore. "At the date Mr. Schuch's appiicatlon (S.F. 15495) was filed In this office, Feb- ruary 4, 1953, there was no well~produclng 011 or gas within five miles of the area ln- eluded in said applicationbut a producing 011 well baa been brough in since-thatdate. It has been the policy of this office to re- quire each land owner to make a separate Good Faith Claimant appllcatlon~on~thepor- tlon of a vacant area within hl&~enElonure.. If this office approves Mr. Schuch's appli- cation for the entire area described in Euch

Hon. Bascom Glles, page 2 (S-66)

application,the State will be entitled to reserve l/8 of the sulphur and l/16 of all other minerals as a free royalty to the State on the entire area. If, however, this office requires that each land owner file separate Good Faith Claimant appllca- tions at this date, the State will be en- titled to reserve a free royalty of l/8 of the sulphur and all other minerals on those portions of said vacant area not within Mr. Schuch's enclosure. ,, . . . "Your opinion as to whether or not such preferentialrights are assignable prior to the possessors of such rights making applicationto exercise same la requested by this office In order that the proper mineral reservationto be re- served by the State can be ascertained." Under the provlslons of ArticIb 5421c,-V;C;S., a "good faith claimant" le given a prcferintlaI'~right to purchase or lease unsurveged school land, commonly called a "vacancy." Section 6(a) of said statute, omltt- lng portions not material to this Inquiry, defines "good faith claimant" as 'any person . . . occupying or using, or theretoforeoccupying or using, or whose predecessors In interest,have occupied or used a vacancv . . . with a good faith be- lief that the-same was Included within the bounda;ya$ a survey . , . previously . . . . . . . Provided a person or those under whom he claims, shall have'said land in his enclosure or under definite recognizedboundaries and be in possession thereof for . . . ten (10) years with a good faith belief that he was the owner . . . , except that whenever the owner of the tract . . . adjoining the alleged va- cant area makes applicationto buy . . . and no prior application . . . 1s on file, then such owner . . . who otherwise quali- flea as a good faith tilalmant,shall be considereda good~falth claimant' without regard to the length of time he maY~'have owned . . . or had such alleged vacant

Hon. Bascom Glles, page 3 (S-66)

tract inclosed, or under definite recog- nized boundaries and in possession with the belief that the vacant area vas in- cluded within his survey." (Emphasisadded.) From the underlinedportions of this statute, It will be observed that, with the exception below, an assignee of a preferentialright in vacant lands, re- gardless of his own good faith, will himself be a "good faith claimant" If his predecessorsin interest held such status. The exception is where the vacancy assign- ee's status as "good faith claimant" depends on his own- ing adjoining land and he owns none. In the latter case, whatever rights he haa must be as assignee of a good faith claimant, which requires considerationof whether such rights are assignable. In Rone v. Buehn, 81 S.W.2d 194 (Tex.Cl~.App. 1935, error ref.) cited in Tour opinion request, a va- cancg applicant filed his application,after which the tract of which the vacancy was a part was sold along with the preferentialright in the vacancy, and the grantee thereupon filed his applicationunder the pro- visions of the 1931 Act. In upholalng~the'~preferenti~1 right of the grantee or assignee to purchase, the court said: "We think it conclusivelyappears that appellee's predecessor In title had a prior right of purchase, and that such right passed to appellee . . . . II . . . The fact that appellee may have thought that the strip was unsur- veTed school land when he purchased from Stolley could not affect his right of recovery; it appearing that Stolley's preference right to purchase passed to appellee. We think Stolley's preference right was an assignable one, and could be transferredto appellee. Stiles v. Hawkins (Tex.Com.App.)207 S.W. 89; Gun- nels v. Cartledge, 26 Tex. Clv. App. 623, :&f.;: &&6i 34 Tax. Jur. p. 74. 5 Tex. (81 s.W.2a at 1951 It la evident that the court in that case did not re- quire the assignee to be a good faith purchaser. The effect of the opinion is that the aaslgnee wae entitled

Hon. Bascom Glles, page 4 (S-66)

to stand in the shoes of his assignor,, who was a good faith clalmnt. In Graham v. lie 17 Tax. 164, 167 (1856); involving an assigned lan rtiflcate, the court said: 'Whatever exclusive right a man has In anything, he has a right to dispose of absolutely as he pleases, provided he makes no dl8pOsltion of It prohibitedbj law . . . Hence anr Incipient title or contingent in- terest which is susceptibleof being ripened Into a title to lands may be asalgned; and such ha8 been the usage in this and other countries. It has never been supposed nec- essary to consunvnate the title before the right could be assigned." We have consideredthe following portion of Section 6(g) of Article 5421~: "El0title to either land or mineral interest In land acquired from the State under preference right shall ever be held to pass as an after-acquiredtitle by rea- son of any covenant of general warranty, descrlptlon,or other provision, contained In anj conveyance executed prior to the date of award under such preference." However, Inasmuch as the asslgnec in this case is to receive the award from the State, no "after-acquired title" Is involved, and accordinglythis paragraph can have no applicationhere. We find nothing in the 1939 amendment to Artl- cle 5421~ (Acts 46th Leg., 1939, ch. 3, p. 465) prohlbit- lng the assignee of a good faith clalmant from making an application to purchase the vacant land covered by the assignment and receiving an award thereof under this stat- ute. It is our opinion, therefore, that under the above authoritiesMr. Schuch succeeded to the rights of his grantors or assignors and is entitled to purchase the en- tire area described In his application under the provis- ions of Section 6 of Article 5421~.

Hon. Bascom Giles, page 5 (S-66)

SUMMARY

The preferentialright of a "good faith clakant" under Sec. 6 of Art. 921c, V.C.S., is assignable. The asslgn- ee of a "good faith claimant,"regardless of his own good faith, Is himself a "good faith claimant" except In cams where the assignee's status of "good faith claimant" depends on his owning adjoining lands and he owns none. APPROVED: Yours very truly, JOHElBEPISHEPPERD Attorney General