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