            E                      GENERA
                   OF      TEXAS




                                         1 Ihrrrul4
Hon. Baacom Giles, Chairman
Veterans' Land Board
Land Office Building                   s              'cg
Austin, Texas            Opinion No. S-79
                           Re:   Legality of computing in-
                                 terest on veterans' land
                                 loans to the next semi-
                                 annual installment date
                                 uhen payment in advance
Dear Mr. Glles:                  of due date Is tendered.
          You have requested the opinion of this office
on the following veterans' land matter:
          "On May 18, 1950, this office executed
     a forty year contract with Mr. Joseph P.
     Hart for purchase of land through this Pro-
     gram. The contract executed between Mr.
     Hart and the Veterans' Land Board provided
     for semi-annual installments payable on or
     before the 1st day of each May and November.
          "Under date of September 8, 1952, Mr.
     Hart wrote this office that he had made ar-
     rangements to pay off his veteran's loan in
     the near future, and requested that we for-
     ward abstracts of title on the tract of land
     for examination purposes. After securing
     the required deposit for loan of the abstract,
     it was forwarded to Mr. Hart on September 16,
     1952, Under date of October 29, 1952, Mr.
     Hart made a written request that this office
     advise him of the balance due on hia contract
     together with the daily Interest accrual rate.
     The request was received In this office on
     October 30, 1952, but due to the heavy press
     of Incoming mail at that time was not reached
                     " .
Hon. Bascom Glles, Page 2 (Opinion No. S-79)


     for action until November 5, 1952. On that
     date we advised Mr. Hart in writing of the
     amount of principal due on the contract and
     Interest calculated until May 1, 1953, which
     was the next installment date. Mr. Hart has
     objected to payment of this interest beyond
     the date on which his remittance was made to
     pay off his contract in full.
          "The entire Veterans' Land Board unani-
     mously determined that due to the wording of
     the contract which was based on Section 17,
     Senate Bill 29, Acts of the 51st Legislature,
     and Section 7, S. B. 351, Acts of the 52nd
     Legislature, which is a revision of the first
     named section, that interest should be com-
     puted and charged until the next installment
     date following the remittance of any payment
     over and above the current amount due on the
     contract."
The date on which Hart remitted the balance of the principal
Is not stated in your letter, but from accompanying papers
It appears that remittance was made sometime between Novem-
ber 5, 1952, and January 8, 1953. The portion of your con-
tract with Mr. Hart which is material to this present prob-
lem reads as follows:
         "3 . The total consideration for this
     urchase is Sixty-five Hundred and OO/lOO
     $6500.00) DOLLARS, of which the sum of
    if
    Three Hundred and twenty-five and OO/lOO
    ($325.00) DOLLARS has been paid. The un-
    paid principal of Sixt -one Hundred and
    Seventy-five ($6175.003 DOLLARS shall be
    amortieed over a period not to exceed 40
    years with annual interest at three (39%)
    per cent upon all unpaid principal. Buyer
    shall pay or cause to be paid Installments
    or principal and Interest semi-annually
    to the Conmissioner of'the General Land
    Office at Austin, Texas, on or before the
    first day of each May and November here-
    after until the total purchase price is
    paid. The amount of One Hundred & thirty-
    three and 06/100 ($133.06) DOLLAHS shall
Ron. B&scornGiles, Page 3 (Opinion No. S-79)


    be due and payable on or before the 1st day
    o'fFovembeF, 1950, and the amount of One
    Hundred:& thirty-three and 06/100 ($133.06)
    DOLL&K? shall be due and payable seml-
    annually on or before the first day of
    each Meg and November thereafter until
    the total purchase price and interest
    have been paid. All interest and princi-
    pal which shall become delinquent shall
    bear penal interest at the rate of five
    (54%) per cent per annum fr;; ;;fd;;;er
    same becomes delinquent.
    agreed and understood that buyer may on
    any installment date pay or cause to beg
    paid any or all of the unpaid principal,
    but payment of a portion of the unpaid
    pHncFpa1 will not relieve buyer from
    payment of the regular semi-annual in-
    stallments thereafter in the amount of
    One Hundred & thirty-three & 06/100
    ($133.06) DOLLARS."

          Section 17 of Senate Bill 29 (Acts 51st Leg., R.S.
1949, ch. 318, p. 597), which controls the terms of thin
contract, and also the act as amended, Article 5421~ 8 17
(Acts 52nd Leg., R.S. 1951, ch. 324, p. 55O),provldes "that
the purchaser shall have the right on any Installment date
to pay any or all installments still remaining unpaid."
          It can readily be seen that the wording In the
contract relating to premature payments of the principal
was taken from the portion of the statute quoted above.
The phrase "installment date" appearing in both the con-
tract and the statute must be explained by the portion of
the contract relating to the installments. The. lnstall-
ments are therein required to be paid "on or before the
first day of May and November," and therefore the phrase
"installment date" clearly refers to November 1 and May 1
of each year, since these are the dates upon which the ln-
stallments become due. Lovenberg v. Hen-    104 Tex. 550,
140 S.W. 1079 (1911); National Bank of Co&erce v. Kinney,
98 Tex. 293, 83 S.W. 3w  (1904) Fenner, Beane &Under;
leider v. Donoshy, 62 S.W.2d 264 nex.Ci v.App. 1933, error
ai5m. 1
Hon. Bascom Giles, Page 4 (Opinion No. S-79)


          Both the statute.and the contract .require that
any premature payment shall be made on or as of the next
"Installment date." The "installment dates!'arenashotin
by the contractsto be Noyember 1st and May 1st of each
year. We therefore agree.with the Board that Halrt'sen-
tire obligation included Interest up to the next lnstall-
ment date following the date of remittance oftthe unpaid
~~II;IEX~ and that:lntereet was properly charged to May
 ,     .

                          SUMMARY




     that interest on veterans' land loans~be com-
     puted to the next semi-annual installment
     date when payment In advance of due date is
     tendered.
APPROVED                      Yours very truly,
,JesaeP. Luton. Jr.           JOHN BEN SREPPERD
  nd Division                 Attorney General
Willis E. Gresham
Reviewer
Mary,K. Wall
Reviewer
                              ByA- &Thomas~~Black
                                    Assistant
Robert S, Trottl
Pirst Assistant
John Ben SheDpperd
Attorney General
