Court Opinion

ID: 4130572
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:05:55.923956+00
Date Added: 2024-06-11T14:33:09.502292
License: Public Domain

THE      ATTOHNET      GENERAL
                     OF  TEXxUS

                     May 6, 1988

Honorable Garry Mauro          Opinion No.   JM-897
Chairman
Veterans Land Board            Re:     Additional   questions
1700 N. Congress               relevant to Attorney General
Austin, Texas 78701            Opinion JM-774 (1987) on paid-
                               in-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.'

                       Veterans Land          impose
       the"&r%t""%SO     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 cita-
tion 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          1
indicate as amended to the vresent, we consider that a
contract statement that the purchaser    or assignee    is
subject to an act or rule "as amended" can, in itself,
                                     (Footnote Continued)
                                                              ?

                         p. 4414
    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
P   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
C
    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      Newman v. Suvreme    Lodae,
Kniahts of Pvthias, 70 So. ii1 (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