Any lease of state lands for grazing or agricultural purposes and any contract for the purchase of state lands may be assigned as collateral security, with the approval of the commissioner of public lands; and after such approval such assignment shall have the effect of giving the assignee a lien on any lease or purchase contract so assigned, or any renewal or renewals thereof by assignor and all rights of renewal of any such lease, together with the improvements thereon, to secure the indebtedness specified in such assignment and any further advances or expenditures authorized to be made by the assignee by the terms of such assignment; and after any such assignment shall be approved by the commissioner of public lands, and while same is in force and effect as hereinafter provided, no relinquishment or assignment of a lease or transfer of a state purchase contract, or portions thereof, embraced in such assignment shall be accepted or approved for filing respectively by the commissioner of public lands, unless the holder of such collateral assignment shall release in writing any collateral assignment held by him covering such lease or contract being transferred, assigned or relinquished or, in case of assignment only, unless the assignee agrees in writing to assume or take the lease or contract subject to the rights of any collateral assignee. The preference right of renewal of any lease held under collateral assignment shall be vested in the holder of such assignment, subject only to the right of renewal of the lessee at the date of expiration of said lease, and to all the provisions of law now in effect or hereinafter enacted; provided, however, that any renewal lease issued to subsequent collateral assignees, under the preference right of renewal provided for herein, shall be subject to the rights of the holders of the prior assignments of record in the state land office.
History: Laws 1933, ch. 126, § 1; 1937, ch. 51, § 1; 1939, ch. 48, § 1; 1953, ch. 69, § 3; 1941 Comp., § 8-836; 1953 Comp., § 7-8-39; Laws 1971, ch. 94, § 1.
ANNOTATIONSCross references. — For sale of state lands under deferred payment plan, see 19-7-9, 19-7-10 NMSA 1978.
For exception of existing instruments from approval, requirement, see 19-7-45 NMSA 1978.
For provision giving existing lessee preferential opportunity to meet highest rental offered by other applicant, see 19-7-49 NMSA 1978.
Assignment as collateral security. — The owner and holder of a state grazing lease may assign his interest therein as collateral security. American Mortgage Co. v. White, 1930-NMSC-030, 34 N.M. 602, 287 P. 702, distinguished in Arrow Gas Co. v. Lewis, 1962-NMSC-145, 71 N.M. 232, 377 P.2d 655.
Assignment as collateral security. — It is not a violation of law to assign a grazing lease obtained from the state land commissioner, as collateral security, so as to render the lease subject to cancellation. Lusk v. First Nat'l Bank, 1942-NMSC-056, 46 N.M. 445, 130 P.2d 1032.
Foreclosure on contract assigned as collateral. — An assignment of a contract for the purchase of state lands creates a lien on the contract itself rather than on the land covered by the contract; thus, a creditor who forecloses on a state land contract assigned as collateral for a debt obtains only the right to a new purchase contract. U.S. v. Agri Servs., Inc., 81 F.3d 1002 (10th Cir. 1996).
Irregular assignment. — Though this act prescribes the proper method and manner of making assignments of grazing and agricultural leases, it does not follow that an assignment which is not made in strict compliance with its terms is subject to cancellation. Lusk v. First Nat'l Bank, 1942-NMSC-056, 46 N.M. 445, 130 P.2d 1032.