THEAXTORNEY GENERAL 

OFTEXAS 

November 18, lg.59 

Honorable Bill Allcorn 

Commissioner 

General Land Office 

Austin 14, Texas 

Dear Mr. Allcorn: 

Opinion No. W-732 

Re: Remittance which may 

be made pursuant to 

Article 5421m, Section 

19(A), Vernon's Civil 

Statutes, to a successful bidder at a sale of 

forfeited land who 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 Veterans Land Board with 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 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 Atit may 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 bidder refuses to execute a contract of sale and purchase, 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 considered in this opinion. 

Three of these amounts of money are required by the 

Legislature to be submitt d by veterans with their bids when 

biddi ng 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 veteran 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 

the veteran's bid exceeds $ 

does speak of the amount of money 

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. 

Section 234, "Sales". 

77 C.J.S., 

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 additional 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 statutory 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, 

Consequently, 

ion request is this: 

page 4 (W-732) 

the question presented by this opinDoes the statute require all moneys to be 

forfeited which were submitted with a veteran's 

bid even though some of the moneys were not required by the Legislature to be submitted therewith, but were required as a matter of policy and 

convenience by the Veterans Land Board? 

ing cases 

down this 

tion 

Our answer to this question is no, and the followdealing with forfeitures are in point: 

~oe~e~~lP~~9,:~~i~;r~:S.W. 817 (Tex.Sup.Ct. lgI5) lays 

11 

. . . A fundamental principle of construcof statutes that terms of forfeiture are to 

be strictly construed . . ." 

The case of Crumley v. 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) 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 forfeltures. Alamo Health and Accideat Insurance Company v. Cardwell, 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 forfeited: 

(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 forfeited 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., 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 

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