THE ATTOHNET GENERAL 

OF TEXxUS 

May 6, 1988 

Honorable Garry Mauro 

Chairman 

Veterans Land Board 

1700 N. Congress 

Austin, Texas 78701 

Opinion No. JM-897 

Re: Additional questions 

relevant to Attorney General 

Opinion JM-774 (1987) on paidin-full deed fee on contracts 

subject to Veterans Land Act 

(RQ-1275) 

Dear Mr. Mauro: 

You ask: 

1. May the Veterans Land Board impose a 

paid-in-full deed fee on [veterans' land] 

contracts entered into before 1961 but 

assumed by a new purchaser after 1961? All 

contract assignments since 1961 are made 

subject to the Veterans Land Act, 'as 

amended.' 

the"&r%t""%SO 

Veterans Land impose 

paid-in-full izzi" fee on 

contracts or assignments of contracts 

entered into after 1961 or is the board 

limited to the fee authorized by statute at 

the time the contract is entered into? 

As you indicated in your request, these questions relate 

to the question dealt with in Attorney General Opinion 

JM-774 (1987). There, we ruled that imposition of a 

paid-in-full deed fee, which was not adopted by statute or 

rule until 1961, would constitute an unconstitutional 

impairment of contracts if applied to contracts made 

before 1961 when no such fee was provided for by statute 

or by rule. U.S. Const. art. I, 510. See also Tex. 

Const. art. I, 516. 

In our opinion, the issues you now present are for 

the most part resolved by reference to JM-774 (1987) and 

the authorities cited there. Absent clear agreement to 

p. 4413 
Honorable Garry Mauro - Page 2 W-897) 

the contrary, parties to a contract are bound by the terms 

of the contract entered into and by the laws relating to 

its subject matter that are in effect at the time of its 

making. 

Attorney General Opinion JM-774 held that as the 

pre-1961 contracts themselves and the statutes and rules 

then in effect were silent as to the purchasers1 

obligations to pay a paid-in-full deed fee, imposition of 

paid-in-full deed fees set by later statutes or rules 

would unconstitutionally impair the contracts. Regarding 

post-1961 contracts as well, the contract's own terms 

taken together with the statutes and rules in effect at 

the time of its making govern the obligations under the 

contract absent clear agreement to the contrary. 

We note that the relevant provisions contained in the 

sample original contracts we have seen consist of: 

1. statements that the contract is made 

pursuant to a statute (currently chapter 161 

of the Natural Resources Code) and rules 

adopted by the Veterans Land Board; 

2. statements that the parties are bound 

by the provisions of such statutes and 

rules; and 

3. statements that the statute, 'as 

amended,' shall be binding on the parties. 

It is our opinion that where there are no provisions 

regarding controlling statutes, or where there is a citation of a statute, or of a statute 'Ias amended," the 

controlling law can only be that in effect, and "as 

amended," at the time the contract was made.1 In such 

? 

1. "As amended" could arguably be deemed to refer 

to the statute and rules as they will be amended in the 

future. But in light of the rule that ambiguous contract 

language is construed against the drafter thereof (the 

board here), and given that "as amended" is standard 

language appended to references to an act or rule to 

indicate as amended to the vresent, we consider that a 

1 

contract statement that the purchaser or assignee is 

subject to an act or rule "as amended" can, in itself, 

(Footnote Continued) 

? 

p. 4414 
P 

C 

Honorable Garry Mauro - Page 3 04-897) 

cases, to apply to the contract a fee statute or rule 

enacted or promulgated after the making of the contract 

would unconstitutionally impair it. 

None of the exceptions to the impairment rule set out 

in JM-774, e.a., in the cases where legislative enactments 

are in the "public interest," or where the exceptions turn 

on the distinction between impairment of rights and 

impairment of remedies, are any more apposite here than 

they were held to be in the context of the very similar 

issues presented in Attorney General Opinion JM-774. 

Thus, it is our opinion that original contracts, 

making references to the controlling statutes in the 

manner indicated above, and executed after 1961, are 

subject only to the fee which was provided for by the 

statute or rule at the time the contract was made. 

You also ask what paid-in-full deed fees, if any, 

assignees of such contracts could be made liable for. 

From the foregoing discussion, it follows that an 

assignment contract referencing the controlling statute 

and rules as they were referenced in the original contract 

provisions discussed above does not subject the assignee 

to fees or fee increases enacted or promulgated after the 

assignment was made. 

The issue, then, is whether the assignee is subject 

to the law in force at the time of the assignment or to 

that in force at the time the original contract was made, 

with respect to the deed fee, where the assignment 

contract made reference to controlling statutes or rules 

in the manner discussed above with respect to the original 

contracts. We feel that determination of this issue may 

be made only with reference to particular contracts and 

pertinent rules: what paid-in-full deed fee, if any, an 

assignee may be made liable for depends on whether the 

particular assignment and underlying contract, taken 

together with the pertinent statutes and rules, show that 

the assignment constituted a new contract with respect to 

the obligation of the assignee to pay a deed fee, or show 

a waiver by the assignee of the right under the original 

(Footnote Continued) 

only bind the purchaser or assignee to the provisions of 

such act or rules as amended up to the time of the making 

of the contract. 

p. 4415 
Honorable Garry Mauro - Page 4 W-897) 

contract to obtain the deed without paying a fee or 

increased fee, etc. 

? 

We note, however, that, in examining the various 

sample contracts and assignments supplied by the board to 

us per our request,we have found some sample assignment 

contracts which provide that the assignee "agrees to 

comply with the statutes, rules and regulations governing 

the Veterans Land Board, as thev mav be. from time to 

&&@I1 (emphasis added). We think that by assenting to 

such provisions in the assignment contract, an assignee 

could be deemed to obligate himself to pay whatever deed 

fee is in effect under rule or statute at the time he 

obtains his paid-in-full deed. Again, though, the overall 

effect of an assignment transaction can only be determined 

by reference to the assignment contract as a whole, the 

underlying original contract, and pertinent statutes and 

rules in effect at all relevant times. It is in any case 

our opinion that an assignee (or original purchaser for 

that matter, although we have seen no original contracts 

referring to future controlling statutes and rules as do 

the sample assignment contracts mentioned above) could 

obligate himself to pay the fee in effect at the time he 

obtains his deed in the future where the contract clearly ? 

indicates such. See, e.a 

ii1 

Newman v. Suvreme Lodae, 

Kniahts of Pvthias, 70 So. (Miss. 1915). 

SUMMARY 

The extent of the obligation of 

purchaser or assignee under a veterans lanz 

contract to pay a paid-in-full deed fee is 

determined by the pertinent statutes and 

rules in effect at the time of the making of 

the contract, unless the contract documents 

clearly show the parties' agreement to be 

subject to paid-in-full deed fees as they 

are in effect subsequently. 

Whether an assignee, under an assignment 

contract not clearly indicating the parties 

agreement to be bound by deed fees as they 

will be in effect in the future, is 

obligated to pay the deed fee in effect at 

the time of the original contract or to pay 

that in effect at the time of the assignment 

depends on whether all pertinent documents 

and rules taken together indicate that the 

assignment contract is a new contract at 

least with respect to the deed fee, that the ? 

p. 4416 
Honorable Garry Mauro - Page 5 UM-897) 

assignee has waived a right under the 

original contract to obtain the deed without 

paying a fee or increased fee, etc. 

Where a contract so provides, a purchaser 

or assignee may obligate himself to pay a 

deed fee enacted or promulgated at a time 

subsequent to the making of the contract. 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

p. 4417 
Honorable Garry Mauro - Page 6 (JM-897) 

LOU MCCRRARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by William Walker 

Assistant Attorney General 

p. 4418