Tree Harvesting

Facts:
John Doe (Doe) purchased rights to harvest timber from Ms. Green (Green) and later sold those rights to Joe, a Hispanic male. Joe harvested timber from Green’s land and harvested timber from Jacob Roe’s land, even though Jacob Roe (Roe) never agreed to let Doe harvest timber from his property. Jacob Roe never received payment for the timber which was taken from his land. As a result, a Grand Jury indicted Doe that he “acting as a trustee, did then and there, knowingly or with intent to defraud, directly or indirectly retain and use and disperse and otherwise divert more than $500 of trust money without first fully paying all of the beneficiaries, to-wit: Jacob Roe, the purchase price of the timber.”

Issue:

Was Doe a trustee of trust money obtained through the sale of Jacob Roe’s timber?

Short Answer:

No. Before a trustee-beneficiary relationship can exist between two individuals under § 151.101-.105, the trustee must have purchased the rights to the timber on the beneficiary’s land. Doe never purchased the right to harvest timber from Roe’s land, and therefore, is not a trustee of the money Joe received through the sale of the timber he harvested from Roe’s land.

Discussion:

Under section 151.103 of the Natural Resources Code, a trustee of trust money[1] obtained through the sale of harvested timber is a “timber purchaser and each . . . partner or agent of a timber purchaser.” Tex. Nat. Res. Code Ann. § 151.103 (Vernon Supp. 2006). And a timber purchaser is “a person who purchases standing timber for harvest.” Id. at § 151.101. Therefore, for a trustee-beneficiary relationship to exist between two people, there must be a “purchaser-seller relationship for the sale of standing timber” between them. Harris v. Nelson, 25 S.W.3d 917, 923 (Tex. App.—Beaumont 2000, no pet.). At minimum, for a purchaser-seller relationship to exist between a landowner and another person, the landowner must have agreed with the other person to let the other person harvest timber off his land. Id. Harris v. Nelson is a civil case, but it is the only case which construes the definition of “trustee” under the Natural Resources Code.[2] Id. at 919, 922. In Harris v. Nelson, Nelson agreed with Mr. Tauber (Tauber) to sell Tauber fifty-three acres of land. Id. at 919. But the transaction was never consummated, and Nelson never gave permission to harvest timber from her property. Id. at 919, 923. But while the sale of the property was pending, Tauber contracted with Harris to cut and remove timber from the fifty-three acres. Id. at 919. Harris’ employee, Marshall, not knowing Tauber never purchased Nelson’s property, harvested timber from the fifty-three acres belonging to Nelson and sold it for $16,000. Id. at 919. On appeal, Harris argued he was not a trustee because he had not purchased from Nelson any rights to harvest the trees from his property. Id. The court of appeals agreed and held Harris was not a purchaser of Nelson’s timber because Nelson never agreed to let Harris harvest timber from her land. Id. at 923. Because he was not a purchaser, Harris was not a trustee of the money received for the timber. Id.

There is no substantive difference between the situation involving Nelson and Harris and the situation involving Roe and Doe. Roe, like Nelson, never agreed to let Doe harvest timber from his property. Because he never agreed to let Doe harvest timber from his property, no seller-purchaser relationship existed between them, and Doe is not a “timber purchaser” under section 151.101 of the Natural Resources Code of the timber harvested from Roe’s property. And because he is not a “timber purchaser” of the timber harvested from Roe’s property, Doe cannot be a trustee of the money Joe received for the timber he harvested from Roe’s property.

Conclusion:

Doe is not a trustee of the money Joe received for the timber which was harvested from Roe’s property because Roe never agreed to let Doe harvest timber from his property. Therefore, no purchaser-seller relationship existed between Doe and Roe, and because no purchaser-seller relationship existed between Doe and Roe, Doe was not a “timber purchaser” under section 151.101 of the Natural Resources Code. And to be a trustee under section 151.103 of the Natural Resources Code, a person must be a timber purchaser. Therefore, because he was not a timber purchaser of the timber harvested from Roe’s land, Doe is not a trustee of any money Joe received for the timber he harvested from Roe’s land.

Endnotes:

[1] Trust money, under the Natural Resources Code, is “money a timber purchaser collects for harvested timber.” Tex. Nat. Res. Code Ann. § 151.102.
[2] Since the Beaumont Court of Appeals decided Harris v. Nelson, the Texas Legislature has renumbered the statutes defining trustees and timber purchasers under the Natural Resources Code, but it did not change the wording of the statutes.