On April 16, 2014, about 1030 central daylight time, a Cessna O-1E airplane, N50WP, sustained substantial damage when it struck a fence during a forced landing following a loss of engine power near Fredericksburg, Texas. The pilot and instructor pilot received serious injuries. The airplane was registered to an individual and operated by the pilot under the provisions of 14 Code of Federal Regulations Part 91 as an instructional flight. Visual meteorological conditions prevailed for the flight, which was not on a flight plan. The local flight originated from the Silver Wings Airport (TS36), Fredericksburg, Texas, at an unconfirmed time. The flight instructor reported that he was providing instruction to an 82 year old pilot in the airplane when the accident occurred. The instructor was seated in the rear seat and the instructed pilot was in the front. The instructor noted that from the rear seat, there is no view of the gauges except for the flap indicator that was located at the top right edge of the instrument panel. He stated the instructed pilot entered a right downwind for runway 17 at TS36, and the flaps were extended to about 20 degrees. Just prior to turning onto a base leg, the engine abruptly "failed". The instructor called for the magnetos and boost pumps "on" and took control of the airplane. He switched fuel tanks although both were full, and looked for a suitable area to make an off-airport landing to no avail. He executed a landing to a small field that had a large oak tree at the end. During the landing the instructor attempted to avoid the tree and the airplane struck a cattle pen. He noted that after the accident he could see that the magneto switch was in the "off" position. The instructed pilot reported that he was receiving a checkout in the accident airplane. He stated that stop and go landings were being performed at the Gillespie County Airport (T82), Fredericksburg, Texas. After several landings were performed at T82, a decision was made to fly to TS36 for further practice due to more favorable wind conditions. He reported that they entered a right downwind for runway 17. Immediately after turning on a right base leg, the engine stopped producing power and the instructor assumed control of the airplane. He stated that during the forced landing, the airplane struck the corner post of a cattle pen. An examination of the engine was conducted by a representative of the engine manufacturer with oversight provided by a Federal Aviation Administration Inspector. The examination did not reveal any preimpact anomalies.