### THEAXTORNEY GENERAL OFTEXAS

November 

### 18, lg.59

Honorable Bill Allcorn Commissioner General Land Office Austin 14, Texas

Dear Mr. Allcorn: OpinionNo. W-732 Re: Remittancewhich may be made pursuant to Article 5421m, Section 19(A),Vernon's Civil Statutes, to a successful bidder at a sale of forfeited landwho refuses to execute a contract of sale and 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 VeteransLand Boardwith his bid a 

### 5s down payment on $7,500.00, or $375.00, a contract service 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 submita sum in excess of the 

### 5s down payment.

You request OUP opinion on the followingquestions: 1. In compliancewith the provisions of Section 19(A) of Article 5&21m, Vernon's Civil Statutes,which of the required remittances (fiveper 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 remittanceabove $7,500.00which the veteran submittedwith 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 landwhich has been forfeited under the provisions of this Atit may be made to'the highest bidder;provided,however, that sale shall be made to qualifiedveterans'onlyand under the same terms and conditionsas provided elsewhere In thisAct for original sales. Such sales shall be held at such times and in suchmanner as the Board may prescribe,and the Board shallhave the right to reject any and all bids. If the successfulbidder refuses to execute a contract of sale and purchase, all moneys submittedwith his bid shall be forfeitedand deposited in the State Treasury and credited to the Veterans Land Board Special Fund." There are five distinct amounts of money to be considered in this opinion.

Three of these amounts of money are requiredby the Legislature to be submitt d by veteranswith theirbids when biddi ng for forfeited lanz under Section 19(A) of Article 542Z.mim,

the Veterans Land Act: (1) 

### 5sdown payment on $7,500.00 not to exceed $375.00 (Article5421m, Section 17); (2) 25.00 closing fee (Article5&2lm, Section

; 25.00 service fee (Article5421m, Section

Two of these amounts of money are not requiredby the Legislature to be submittd ith a veteran's bid h bid7 For forfeited land under gec:ion 19(A) of Articlew5%m, bi? are requiredby the Veterans Land Board, as a matter of pirricy and convenience,to be submittedwith 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 veteranmight desire to submit alongwith his bid. Therefore, theHonorable Bill Allcorn, Page 

### 3 (WW-73’2)

Legislaturedid not require thisparticular amount of money to be submittedwith a veteran'sbid for forfeited land.

The Act, however the veteran'sbid exceeds $ does speak of the amount of money 7,500.OO. In Section 16 of Article 5421m the Act states:

provided the veteranpays cash for all the purcha:eprice over Seven Thousand Five Hundred Dollars ($7,500.00)." This is the only reference to this amount ofmoney in the entireAct. 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 contractof sale between the veteran and the Veterans Land Board is consummatedbut not when the veteran bids on the land. Our reason for this is that the Legislatureused the words "pays cash." This indicates that a cash transaction is intendedand implies that themoney should change hands by the time of the consummationof the transaction, the execution of the contract of sale. Section 234, "Sales". 

### 77 C.J.S., Certainly, the veteran's bid, or offer, is not the consummationof the transaction,but the beginning thereof. Therefore, the Legislaturedid not require that this particular amount of money be submittedwith a veteran's bid for forfeited land.

We do notmean by this opinion that the Veterans Land Board does not have the right or power to require the two additional amounts to be submittedat 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 statutoryprovision does not answer the question of whether these additional sums are included in the forfeitureprovisions 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 submitshis bid along with the five amounts ofmoney listed above to the Veterans Land Board. The highest bid is acceptedby the Veterans Land Board. After this the veteran is expected to enter into a contract of salewith the VeteransLand 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 successfulbidder refuses to execute a contract of sale and purchase, all moneys submitted with his bid shall be forfeited. ~ *"Honorable Bill Allcorn, Consequently, ion request is this: page 

### 4 (W-732)

the questionpresented by this opinDoes the statute require all moneys to be forfeitedwhich were submittedwith a veteran's bid even though some of themoneys were not required by the Legislature to be submitted therewith, but were requiredas a matter of policy and convenienceby the Veterans Land Board? ing cases
down this

tion Our answer to this question is no, and the followdealingwith forfeituresare in point: ~oe~e~~lP~~9,:~~i~;r~:S.W. 817 (Tex.Sup.Ct.lgI5) lays

11

. . . A fundamentalprinciple of construcof statutes that terms of forfeitureare to be strictlyconstrued
. . ." The case of Crumleyv. Ramsey, 93 S.W.2d 191 (Tex. Civ.App. 

### 1936,writ I+??,;) stated the general rule this way: therefore in order to be effective (a PoLfeiture) shouldbe clear and unequivocal; and, if there is a reasonabledoubt as to the meaning of the terms employed,preference should be given to that constructionwhich will avoid the forfeiture," (Clarificationadded,) In the case of Sheppardv. Avery, 

### 34 S.W. 440 (Tex. Sup.Ct. 

### 1896),the Supreme Court stated this rulepertaining to forfeiture:

It

. . .forfeiture

. . , is not favored by the Courts, and lawswill 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 forfeltures. Alamo Health and Accideat InsuranceCompanyv. Cardwell, 

### 67 S w 2d 

### 337 (T Cl A Porest Woo&& Circle~.~~Hok~~; App. 

### 193’f,

no writ). Therefore, in view of themandate of the dourts of Texas to strictly construe forfeitures so as to forfeit only those itemswhich are beyond reasonabledoubt It is our opinionHonorable Bill Allcorn, page 

### 5 (W-732)

that only the following three sums ofmoney requiredby the Legislature to be submittedwith a veteran'sbid may be forfeited: (1) $z70w; payment on $7,500.00,not to exceed

. : (2) The $25.00 closing fee; and 

### (3) The $25.00 servicefee. As to the closing fee and service fee requiredby Section 21 of Article 542lm,V.C.S., the statutealso provides that: "Any such fees, or a portion thereof,which in the opinion of the Board are unused, shallbe refunded." Therefore, any unusuedportion of the closing or servfce fees shouldnot be forfeitedbut shouldbe returned to the veteran if the Board finds that such fee or portion thereof remainsas an unused balance.

The following two amounts ofmoney required to be submittedwith a veteran'sbid by theVeterans Land Board as a matter of policy and convenienceare not required to be forfeited and must be refunded: -

(4) The amount of money by which the veteran's bid exceeds $7,500.00;and (5) An amount ofmoney equal to as much of the downpayment In excess of 5% as the veteran desires to submit.

SUMMARY Section 19(A) of Article 5421m,V.C.S., requires 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 successfulbidder refuses to execute the contract of saleand purchase;however, the amount of money that the veteranssbid exceeds $7,500.00and the amount of money in excess of the 

### 5% down paymentHonorable Bill Allcorn,page 

### 6 (WW-732)

that the veteranmay have submittedwith 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