 ’ I.:?
                 OFFICE OF THE ATTORNEY GENERAL OF TEXAS
iI I
                                      AUSTIN
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-o.uAml
 -a-


          Hon. Fred Erieman
          Criminal Diatriot Att&ney
          Gregg county
          Longview, Texae
          Dear Sir:




                                                         any liable  for
                                                         taxes on inten-

                                                   rully 0onsidereU    your
                                                    tment upon the above
                                                 a confined to a dieous-
                                               e the eubjeot matter of
                                                 thin the jurisdiction




          provisions   from the Aot as follows~
                         Yk’he oorporation  * * * shall be exempt from all
                ,tazazion now or hereafter    imposed by the United Stetee,
                        or by any state, oouuty, munloipality,     or looal
                taxing authority;     exoept that any r~eal property of the
                corporation    shall be subjeot to Stats, Territorial,
                County, munioipal, or loaal taxatiod to the am extent
                acoording to its value aa other real property ie taxed.
Eon. .Fred   Plsiuan,   page g


           *he exemptions provided for in the preoodiug
     senteuoe with respeot to taxation * * * #hell be
     oonrtrued to be applicable   not only with rsapeot to
     the Fieoonrtruction Finanoe Oorporatlon but also with
     respect to the Defense Flaut Corporation,    the Defense
     Supplies Corporation * * * and any other aorporetion
     heretofore   or hereafter organized or oreeted by the
     Beoonstruotion   yinanoe Corporetian under Seotlon 5d
     of this Aot, ae amended, to aid the Government*o$ $he
     United States in it.8 National derenee program
           vgueh exemptions ahall aleo be oonstrued to be
     epplioeble   to * * * personal property owned, by the
     Reoonstruotion   Finance Corporation or by any oorpore-
     tion referred to iu * * * the preceding sentenoe,
     but such exemptions ehall not be oonstruea to be nppli-
     oable in any State to any building whioh are oonsldered
     by the lawa of auoh State to be personal property for
     taxation purp0ess.v
           We also are in receipt    of a right of way easement
oonveyed by Gaines T. Shmlta to Defense Flaut Corporation,
whioh yoi.1 advise is the type of instrument beiug used gener-
ally.   In this oonneotion,   you also advise that the deed
conveyingthe     prpperty in fee, upon whioh said propertJ,
storage tanka and pumping equil;caent are looated,     is ala0
nede to the Defense Plant Corporation.       The pertinent   @or-
tlone of the right of way easement are as followa:
             “K?W#ALLI.fEN BY T!E3EI’RESlWTS: That Gainee T.
      ShOulIa, a single man Of the poetofri0e      of Headquartera
      Division,   Freeidio,  California,  in the State of Celi-
      fornia for and in consideration     of Eighty-three    aud
      SO/100 ($83.60) Dollars Cash in hand paid, receipt of
      whioh la hereby aoknowledged, do hereby grant, bargain,
      sell aud oonvey unto Defense Plant Corporation,        a oor-
      poration controlled    by the United States of Amerioa
      and created pursuant to Seotion Sd of the Reoonatruotion
      Finance Corporation Act, as amended, and its auccesaoro
      and aasfgns the right to lay, operate, renew, alter,
      inspect and maintain a pipe line for the trauaportatlon
      of oil,   gas, petroleum produots or any other mteriel
      or substanae ‘uhioh oan be tramported      through a pipe
      line, or any one or ::lore of said substances,      Grantee
      selecting   tile route upon, over, under and throu& the
      following   described land situate in the County of Gregg,
      State of Texaa:

              (Eere follows   desoription)
                                                                          350



Hon. Fred ETlsman, page 5


     *and also the right, upon the payment of the llks oon-
     sideration,   to lay, operate, renew, alter,   inspeot and
     maintain a seoond pipe line for like transportation,
     adjabent to and parallsl    with the first pipe line;
     and Grantee at any and all reasonable times shall have
     tfie right of ingress and egress to and from such pipe
     lines,   sod may r8move the same in whole or in part at
     will.
           *TO ABATE ANDTO HOLDthe said easements unto
     said Defense Plant aorporation,    its sucosssors and
     assigns,  so long as such structures   or any thereof
     are meinteined.
           *By eoceptanoe hereof, Grantee agrees to bury
     such pipe line so that they will not interfere       with
     the cultivation   or drainage of the land and also to
     pay any and all damages to stook, crops, fences and
     land whioh may be suffered    from the oonstructlon,
     operations,   renewal, inspeation or maintenenoe of
     auoh pipe lines."
           %e have been unable to find any federal rtatuts
which defines *real pr0i:erty.v  Therefore, for the purposes
of this opinion, we shall give tha term Its usualmeaaing.
           In the Ytate of Texas real proporty for the pur-
pose of taxation is defined by Artiole 7146, Vernon's Anno-
tated Civil 3tatutes of Texas, whioh reads as followst
           %osl proprty   for t?,e purpose of taxation,   shall
     be oonstrued to inolude the land itself,     whethar laid
     out in town lots or otherwise,    and all buildings,   struo-
     tures and improvements, or other fixtures     of whatsoever
     kind tharees, and all the rights and 5Wivileg88 belonging
     or in any w&ae appertaining   thereto,   and all mines, mln8r8l.8,
     quarries and fossils   in and under the sa-ae.”
           An easement is an Interest in land.    It is so stated
in PR C. J. S. 620.     The Texas decisions are in aooord with
this doctrine.   '&-fastv. Gieaen, 242 3. W. 312, writ of error
refused.   *An easement in land Is an interest   ln land and
therefore  is land.*    Burgess v. city and County of Dallas
Levee Improvement Dietriot,    155 3, X. (2d) 408, writ of error
refused.
                                                                         351


loll.rred Eriaasaa,Pago 4


            In view of the foregoins quoted authorities,       in
0~   opinion the easement is taxable au real properg.
           The easemeat referred    to being real property, we
now oome to a oonsibaration    of whether the pipe line haa
become a part of the realty,    1. e., the easement.      In this
~onnedtion, it should be noted that there is not involre$
in the inetant situation    a landlord-tenant  relationship,
nor la there Involve4 a mortgagor-mortgagee      relationship.
           It la to be noted that the instrument oonveying
the right of way for the pipe line contains this stipulation,
*Grantee map remove the 881&ein w-hole or in gart at will.*
Said rtipulation  has reference  to the pipe lines whloh it
is oonteinplated will be put in the ground by the grantee.
       ~..-~--It is obvious that the pipe line, prior to the
time the pipe was plaoed in the ground, was personal propertY.
Upon being plaoed in the ground, if it beoame a *fIxturea
then It beoams real       roperty and la taxable as aueh. If        it


did not beoome a fix kr e, then of oourae it would retain its
8tatua as personal property.
          In the ease of Rutohins v. Kaataraon, deaided bY
otx Supreme Oourt at the Galverton term in 1879, and reported
In 46 Texas Reports 861, Mr. Aaeooiate Justlae Xooro had this
to say:
           "The word frirture*,ir a legal term, whioh Lord
     Oampbell seems to doubt, it Is universally         oonoeded, la,
     68 a aubatautlve term, or modern origin.          hi,    an ha8
     been frequently   said, there is no other legal term in
     so general uae to whioh there haa been more different
     and aontradiotory   eignlrioetione     attaohed.    (-11    on
     Mxtures,   8&)    To a great Begree, this has been
     oooadioned by the different      standpoints   from whioh
     the questions touohlng its applioation        have been
     viewed: the relation    of the perties regarding it, the
     degree of fixedness    of the property involved,        and the
     purpose or intention with whioh the a.rtio~Ie in question
     was annexed to or plaoed upon the land.          The neoessPry
     oonsequence of this absenae of certainty         and uniformity
     in the use of the ~0x6, has ocoasioned        confusion and
                                                                352




oonfliot  in the dealsions     on the subjeat, in reepeot
to the rights of parties      interested    in ita determina-
tion In the great number of oases in whioh, in reoent
times, it h~asbeen under dfeoueaion;         and eapeoially
in referenae  to the proper teats for determining
whether the particular     artiole    in. question should be
regarded as a fixture    or not,
       *It is said, the weight 0r the modern authorftlee
establish    the dootrine that the true oriterion    ror
determining whether a ahattel has beoome an immovable
fixture,   oonaUts in the united application      of the
following    tests:
     "lat.    Has there been a real or construotive
annexation   0r the artlole in question to the realty?
       "2d.   Was there a fitness or adaptation of aueh
artiole    to the uaea or purpoaea of the realty with
which it la oonneoted?
       *al.   Whether or not It was the intention of the
party ~maakiwthe annexation that the chattel should
beao=k a permanent aoeeasion to the rreshold?-this
intention    being inferable   from the nature of the
article,    the relation   and situation of the parties
inter~eted,    the pollay of the law in respeot thereto,
the mode of annexation, and purpose or uae for which
the annexation is nade.
     W&ndof these three teate, pre-eminence is to,be
given to the question of intention   to make the article
a permeaent aoceaaion to the freehold,   while the othere
are o?~ierlyof value as evldenoe as to thia intention.
@well on Fixtures,   21, 22.)
       *IIt is also to be noted, that ow.'ng to the greater
relative    imI#ortance and valuenow attached to chattels
than rorserly,     end, in the interest  of manufacture and
oommerce, a muoh more liberal      rule bee been adopted,
in determining whether or not chattels      whioh have been
plsoed upon land by'lessesa      an8 tenants are permanently
annexed to it, than once prevailed.       It is well BeStled




                                c.
    Fred Eciaaan, page 6


    however that there has bean no such modification     in
    the ancient rule,   in the abamoe of eridenaa of lnton-
    tion to vary their rights,   a% botnean grantor and
    grantee.  (8 Kent, 545; Kinsill  v. Billi~a,   35 Iowa,
    154; De 5rarrenreid   v. Stubba, 4 Humph., 451.)"
         The ease of Yaro Co.,    Ino.,   v.   State,   US S. Iv.
(2d) 510, decided by our Court of Civil Appeal8 at Aemrillo
in January, 1943 rehearing denied Febrmry 15, 1945, and
in which 0-e  nit  or error wee refuaetl, rarer8 with ap-
proml to the enunaiationof grinoipleaas set forth in
the above quoted oaae of Hutohina v. Masterson.   The oourt
said irr putt
           @The controversyreaolrea Itself into a queaticn
    of whether or not the cadng, rod%, tub-,     pumpa,
    tenk8, et& were peraonal propwrty or a part of the
    realty.   . + .
         n. . .

           "Arlrtiole 9146 or tha Revised Oirll Statute8 pro-
    vides:     *Real property ror the purpaae or taxation,
    #hell bo oonatruod     to inolude the lend it8elf,  whether
    laid out In town lota or othmwiae,       end all buildinga,
    etraetureaand Larprwementa,or other rixtw08         or what-
    aoever kind thereon, end all the rights end privllegea
    belonging or in w        wlae app@Helniag thereto, end all
    mine%, minerala, querriee and foseils      in end under the
    Bame.'
          *In this conneotion,  it aecma that the *buildingcl,
    atruoturea and improvements, or other fixturea   of what-
    aoever k!.nd thereon* applisa to the improvement% pleas4
    on the aurraoe of realty but that acme does not appu
    to 'all minea, minerals,   quarries and foeails in and
    under the ame.'
           "It does not eeem that the rule is changed by the
    provieionr   of article  9319, R. C. S.,~ich   provider an
    r0ilara t *For the purpoee of taxation,reel property
    shell lnalude all lends, within this State, end all
    bulldinee and fixtttrea'thereon   and appertaining   thereto,
    except such as ere exi.u%esly exempted by law.'
                                                                 354   ---




      "Appellee tries to make a distinction    between
the rule making aooe8roriesor applianoea suoh aa
theae a part of the realty for taxable purposes
and any other rul.es governing the question ot whether
such appliances  or aooessoriar are personal property
or a pert of the realty.    After naking an exhaustive
researoh we have failed   to rind any dietihotion   or
any difierenoe  in the rule8 applicable    in suoh oases.
       *A good teat and a true oriterion whioh is orten
followed to detsrmlne whethar proysrty Is peraonal or
real 18 laid down in the oaae of Fiutohins. Y. Waatsraon
dc Street in 46 Tex. 651, 664, 66 Am. Rep. 666, aa fol-
lowat
       w*lat. Baa there be8n a real or conetruotite    annera-
tlcn   of the artiols   in queetlon   to the realty?
       *‘2d. BDaathere a iitnesa or adaptation of suah
artiole   to the uses or purposes of the realty with
whlah it 1.3 aonneotea?
      l'6d. mether or not it wea the intentLon of the
party msk-int, the annexation that the chattel should
beoome~a"permanant aocasaion to the rreaholdT-thlr
intantion bedng inrerable     from the nature of the utlole,
the relation   and situatlan    of the parties interested,
the polioy of thalaw      in respaat thereto,  the mode of
annesatlon,  and purpose or use for whloh the annexatian
18 ride.
     **And of these three    testa, pre-eminence Is to be
given to the questfon of     intention to make the artiole
a permanent aaceasion to     the rreehold,  while the other8
are ohfeily of value as     evldenoo as to this intention.1
      *mile appellant contends that the orip,inel leeee-
hold in guestion here from V:. T. Zaggoner to Barkley lb
keadows provided that the oe&ng, roda, tubing, tanks,
eta., may be renovad by the lessee irom the leasehold,
we find only a small part of said lease In the reoord
in this case and such a provlafon,  ii made, was not
contained in that part of the leesehold   in the reoord.
                                                                           355   r




     However, it stands to reason that the intention of
     the partiee to the original   lease sontreet wmld be
     to place the oaeing,rods, tubing and evsn the pump6
     and tanks on suoh a leasehold tor temporary use only
     with the full intention   of removing the% onto other
     leases ii desired,  and certainly   in oaseproduotlon
     beoame unprofitable   es was the ease with the leasehold
     iA queI3tiOn.




          The applloable      rules   are also   stated   in 86 0, J. 3.
89%. aa roilore
          I        . Prdinarily    the courts
                                            hold that Gor an
     arti&    ;o beoams a tlrture thare must anlte      the rollon-
     ing requisites:   (1) annexation to the realty or something
     appurtenant thareto;    (a) adaptability   or appliaation  oi
     the ahattel airlxed to the use or purpoee to whioh the
     realty is appropriatsd;    and (3) the iatsntion    or the
     party making ths aanexetfon to msJce a perrnaaent asoes-
     810~ t4 the fr ehold.*
          lfhe requieit   abeled “(I)* above is perhapa eaal4
eatleried. Aooorrliq \ to   e t6ZnII ab the iAStraPl6At OOAvayiAg
the right of way, the grant&s weeo     to burr the pipe line Ln
the ground below     plow depth.
           Bequiolte  "(2)" ia apparently uatlsriea   ror the
reason that the easement was aoqulred on4 for the purpoae Or
maintaining a pips line, or possibly    two pips lines,  aorQa8
the lend in question.
            IA rsaent years mere and more weight has been gfrea
to requisite   v(3)*, until it is AOWregarded as the major test
in determining whether ar not parsonal property has beaome a
rixture.    As stated in the ieregoing Texas deaisions,    *And of
these three tests,    pre-eminence is to be given to the question
of intention   to make the'artlale   a permanent aooession to ths
freehold    while the others ars chiefly   of value as evidenoo
a8 to this iAtaAtiQA.*
Hon. Fred Erieman, page 9


           The only eridenoe of the intention of' ths partiss
with rsspeot to whethar or not they Intend ths pipe line
In question to beomne a fixture   is the above quoted exoerpt
from thee oonrepine  instrumant, where it is reoited that the
grantee *may remove t?!e same (meaning the pipe line) in whole
or in part at will,*
            Absent other and oontrolling svldanoe eatablloblng
sn lntantion   of the parties to make the pips line a fixture,
we would be oonatrained to say that ths pips line is not a
fixture but is personal property and tharsfore    not subjest
to being taxed as real property.
              In our opinion the pumping equipment Is a part or
  the realty.    It Is losated on property owned In fse. by Ds-
  fsnse PlantAorporation.       wa hare baon plaosd In poaaaa8ion
  of no fam     whloh lndloate the pumping equlpmsnt was not
.intendedby     the parties ts become a part of' the realty.      A
 number of deoieions     support the propsaltion    that pumping
  eqtiwnt     beoomes a part of the realty when annbnd tJmreto.
  (See Blain Y. Corbin, 51 Ga. App. 498, 180 S. E. e54; First
  State h 8aringa Bank T. Olirsr,     101 Or. 49, 198 P. 990~
 Bell v. Bank of Perrle      58 Cal. Afir, (ad) 66, 185 P. (9d)
 829; Rlnbrand well Dri&ing Co.,           ., t. L. h 3. Thsatres,
 Ino., 80 A. (ad) 35.8.)~
                                      ,'
              We also are of the.oplnion     that the buildings
  inquired about are taxable as real property.        Although in
  the great majority of oases the burden of proof is upon
 one aseertlng     that the olrou.matanoes of annexation of ger-
 sonalty to realty are such as to make the article         a part
 of the realty,     such is not the oase with buildings.      Build-
  ings ars presumed to be a part of the realty.       36 Cf. J. 3.
1006-1008.

                                      Yours very truly




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