Untitled Texas Attorney General Opinion ( 1959 )

THEAXTORNEY GENERAL
OFTEXAS
November 18, lg.59
Honorable Bill Allcorn Opinion No. W-732
Commissioner
General Land Office Re: Remittance which may
Austin 14, Texas be made pursuant to
Article 5421m, Section
19(A), Vernon's Civil
Statutes, to a success-
ful bidder at a sale of
forfeited land who re-
fuses to execute a
contract of sale and
Dear Mr. Allcorn: purchase.
Your request for an opinion states that a qualified
bidder who was awarded a tract of land at a Veterans Land Board
sale of forfeited land on March 5, 1959, has refused to execute
a contract of sale and purchase for such land. You also state
that the veteran submitted to the Veterans Land Board with his
bid a 5s down payment on $7,500.00, or $375.00, a contract ser-
vice fee of $25.00, a closing expense fee of $25.00 and a check
for $155.00, which was the amount that his bid was in excess of
$7,500.00. The veteran did not submit a sum in excess of the
5s down payment.
You request OUP opinion on the following questions:
1. In compliance with the provisions of Section 19(A)
of Article 5&21m, Vernon's Civil Statutes, which of the required
remittances (five per cent down payment, contract service fee
and closing expense fee), if any, may be refunded to the veteran
after he has refused to execute the contract of sale and purchase?
2. Should the excess remittance above $7,500.00 which
the veteran submitted with his bid be refunded or forfeited and
deposited in the State Treasury?
. .
Honorable Bill Alleorn, page 2 (W-732)
Section 19(A) of Article 5421m, V.A.C.S., states:
"The resale of land which has been forfeited
under the provisions of this Atitmay be made to'the
highest bidder; provided, however, that sale shall
be made to qualified veterans'only and under the
same terms and conditions as provided elsewhere In
this Act for original sales. Such sales shall be
held at such times and in such manner as the Board
may prescribe, and the Board shall have the right
to reject any and all bids. If the successful bid-
der refuses to execute a contract of sale and pur-
chase, all moneys submitted with his bid shall be
forfeited and deposited in the State Treasury and
credited to the Veterans Land Board Special Fund."
There are five distinct amounts of money to be con-
sidered in this opinion.
Three of these amounts of money are required by the
Legislature to be submitt d by veterans with their bids when
bidding for forfeited lanz under Section 19(A) of Article
542Z.mim,
the Veterans Land Act:
(1) 5s down payment on $7,500.00 not to exceed
$375.00 (Article 5421m, Section 17);
(2) 25.00 closing fee (Article 5&2lm, Section
;
25.00 service fee (Article 5421m, Section
Two of these amounts of money are not required by the
Legislature to be submitt d ith a veteran's bid h bid7
For forfeited land under gec:ion 19(A) of Articlew5%m, bi?
are required by the Veterans Land Board, as a matter of pirricy
and convenience, to be submitted with the veteran's bid:
(4) The amount of money by which the veteran's
bid exceeds $7,500.00; and
(5) An amount of money equal to as much of the
down payment in excess of 5% as the veteran
desires to submit.
The Veterans Land Act does not contain one word about
the amount of money in excess of the 5% down payment that a vet-
eran might desire to submit along with his bid. Therefore, the
Honorable Bill Allcorn, Page 3 (WW-73’2)
Legislature did not require this particular amount of money
to be submitted with a veteran's bid for forfeited land.
The Act, however does speak of the amount of money
the veteran's bid exceeds $7,500.OO. In Section 16 of Article
5421m the Act states:
provided the veteran pays cash for all
the purcha:e price over Seven Thousand Five Hundred
Dollars ($7,500.00)."
This is the only reference to this amount of money
in the entire Act. As can be seen the question as to when
this amount of money must be paid is not answered. Wesubmit
that the Legislature intended this amount of money to be paid
at least by the time the contract of sale between the veteran
and the Veterans Land Board is consummated but not when the
veteran bids on the land. Our reason for this is that the
Legislature used the words "pays cash." This indicates that
a cash transaction is intended and implies that the money
should change hands by the time of the consummation of the
transaction, the execution of the contract of sale. 77 C.J.S.,
Section 234, "Sales". Certainly, the veteran's bid, or offer,
is not the consummation of the transaction, but the beginning
thereof. Therefore, the Legislature did not require that this
particular amount of money be submitted with a veteran's bid
for forfeited land.
We do not mean by this opinion that the Veterans Land
Board does not have the right or power to require the two addi-
tional amounts to be submitted at any time the Veterans Land
Board so desires. This power is given to the Veterans Land
Eoard under Section 21 of Article 5421m. However, this statu-
tory provision does not answer the question of whether these
additional sums are included in the forfeiture provisions of
Section 19(A) of Article 5421m.
When a veteran desires to bid on forfeited land under
Section 19(A) of Article 5&21m, he submits his bid along with
the five amounts of money listed above to the Veterans Land
Board. The highest bid is accepted by the Veterans Land Board.
After this the veteran is expected to enter into a contract of
sale with the Veterans Land Board. If the veteran refuses to
enter into this contract of sale a forfeiture comes into play
under Section 19(A) of Article 5421m, which states in part:
"If the successful bidder refuses to execute a
contract of sale and purchase, all moneys submitted
with his bid shall be forfeited. ~ *"
Honorable Bill Allcorn, page 4 (W-732)
Consequently, the question presented by this opin-
ion request is this:
Does the statute require all moneys to be
forfeited which were submitted with a veteran's
bid even though some of the moneys were not re-
quired by the Legislature to be submitted there-
with, but were required as a matter of policy and
convenience by the Veterans Land Board?
Our answer to this question is no, and the follow-
ing cases dealing with forfeitures are in point:
~oe~e``lP``9,:``i~;r~:S.W.
817 (Tex.Sup.Ct. lgI5) lays
down this
11
. . . A fundamental principle of construc-
tion of statutes that terms of forfeiture are to
be strictly construed . . ."
The case of Crumley v. Ramsey, 93 S.W.2d 191 (Tex.
stated the general rule this way:
Civ.App. 1936, writ I+??,;)
therefore in order to be effective
(a PoLfeiture) should be clear and unequivocal;
and, if there is a reasonable doubt as to the
meaning of the terms employed, preference should
be given to that construction which will avoid
the forfeiture," (Clarification added,)
In the case of Sheppard v. Avery, 34 S.W. 440 (Tex.
Sup.Ct. 1896), the Supreme Court stated this rule pertaining
to forfeiture:
It. . . forfeiture . . , is not favored by the
Courts, and laws will be construed to prevent,
rather than to cause such forfeiture. Hill v. Kerr,
78 Tex. 217, 14 S.W. 556.”
The law abhors forfeitures; equity abhors forfel-
tures. Alamo Health and Accideat Insurance Company v. Card-
well, 67 S w 2d 337 (T Cl A
Porest Woo&& Circle~.``Hok``;
App. 193’f,no writ).
Therefore, in view of the mandate of the dourts of
Texas to strictly construe forfeitures so as to forfeit only
those items which are beyond reasonable doubt It is our opinion
Honorable Bill Allcorn, page 5 (W-732)
that only the following three sums of money required by the
Legislature to be submitted with a veteran's bid may be for-
feited:
(1) $z70w; payment on $7,500.00, not to exceed
. :
(2) The $25.00 closing fee; and
(3) The $25.00 service fee.
As to the closing fee and service fee required by
Section 21 of Article 542lm, V.C.S., the statute also provides
that:
"Any such fees, or a portion thereof, which
in the opinion of the Board are unused, shall be
refunded."
Therefore, any unusued portion of the closing or
servfce fees should not be forfeited but should be returned
to the veteran if the Board finds that such fee or portion
thereof remains as an unused balance.
The following two amounts of money required to be
submitted with a veteran's bid by the Veterans Land Board as
a matter of policy and convenience are -not required to be for-
feited and must be refunded:
(4) The amount of money by which the veteran's
bid exceeds $7,500.00; and
(5) An amount of money equal to as much of the
down payment In excess of 5% as the veteran
desires to submit.
SUMMARY
Section 19(A) of Article 5421m, V.C.S., re-
quires the Veterans Land Board to forfeit the 5%
down payment, the used portion of the closing fee,
and the used portion of the service fee, when the
successful bidder refuses to execute the contract
of sale and purchase; however, the amount of money
that the veteranss bid exceeds $7,500.00 and the
amount of money in excess of the 5% down payment
Honorable Bill Allcorn, page 6 (WW-732)
that the veteran may have submitted with his bid
must be refunded, as well as the portion of the
closing and service fees which in the opinion of
the Board are unused.
Yours very truly,
WILL
_. WILSON
@-&=~
Assistant
PF:dhs
APPROVED:
OPINION COMMITTEE
Geo. P. Blackburn, Chairman
Riley Fletcher
Jack Goodman
Houghton Brownlee, Jr.
REVIEWED~.~FOR
THE ATTORNEY GENERAL
BY: W. V. Geppert