             E             NEY       GENE
                      OF     EXAS           ----d-~
                                            i
                     AUSTIN x*.TEXAS
                   September 23, 1964       i



Honorable Jerry Sadler     Opinion No. C-313
Commissioner
General Land Office        Re:   Computationof interest on
Austin, Texas                    Veterans' Land Loans when
                                 payment in advance of due
Dear Mr. Sadler:                 date is tendered.
    Your opinion request reads as follows:
       "I respectfullyrequest an opinion of your
    office on the followingVeterans' Lend Board
    matter:
       "Can the Veterans' Land Board of
       Texas, by the adoption of a rule
       or regulation, require, on an
       account to be paid in full between
       the regular May 1st or November 1st
       installmentdates, that interest be
       paid to the date when such payment
       is received?
       "Previously,the Board's requirementpro-
    vided that interest be computed to the next
    regular installmentdate, when such payments
    were made between the May 1st or Novembes 1st
    installmentdates. This requirementwas con-
    firmed by the Attorney General of Texas on
    July 31, 1953, by Opinion No. S-79.
       "However, this has caused great aissatis-
    faction on the part of the veteran contract
    holders, who have asserted that the spirit and
    intent of Article 5421m, V.R.C.S., Sec. 17,
    has not been construed,ina manner favorable
    or beneficial to them when they desire to pay
    their account in full between such regular in-
    stallment dates, and who have contended that
    this requirement is not consistentwith the
    general practice of private or commercial
    lendors.


                            -1488-
Honorable Jerry Sadler, page 2 (C-313)


        "I desire to recommend to the Board the
     adoption of a rule providing that, when an
     account is paid in full between such install-
     ment dates, the interest will be computed to
     the date payment in full is received, to
     become effective on the date of its adoption.
        "After review of the above opinion and
     the statutes, I would appreciate your opin-
     ion as to the legality of adopting such a
     rule by the Veterans' Land Board.
     In our study of your request, we have reviewed the
form
 .   of "Contract
          .       of.-
                     Sale.and_ Purchase"
                                      _ ^which, with varia-
tions not nere material, nas been used for many years by
the Veterans' Land Board. After reciting the cash down pay-
ment made by the veteran, the contract states:
        "The unpaid principal . . . shall be
     amortized . . . with annual interest at
     4s upon all unpaid principal. Buyer shall
     pay . . . installmentsof principal ana in-
     terest semi-annually. . . on or before the
     first day of each May and November hereafter
     until the total purchase price is paid."
      A study of the foregoing form reveals that the veteran
promises to pay interest only on the "unpaid principal."
Further, the 'on or before" provision, as commonly under-
stood  in commercial transactions, allows payment of the pur-
chase price balance at any time without penalty. Upon such
payment, there would be no unpaid principal remaining,and
hence no basis for further interest.
     We pass next to a considerationof the validity oftthe
form used b the Board. Section 21 of the Veterans' Lend
Act (Art. 5%21m, V.C.S.) empowers the Veterans' Land Board
to "prescribethe form and contents of all . . . contracts
. . . or instrumentswhatsoever in sny manner used by it
      when same shall not be in conflict with law." Is
there anything in the quoted provisions in the form above
referred to which conflict with law?
     Article III, Section 49b, Texas Constitution,provides:
        "The lands of the Veterans' Land Fund shall
     be sold by the State to Texas veterans . . .
     on such terms, and at such prices and rates of
     interest, and under such rules and regulations
     as are . . . provided by law."
                           -1489-
Honorable Jerry Sadler, page 3 (C-313)


     Section 2(A) of the Veterans' Land Act makes it the
duty of the Board 'Itofix the interest rates as prescribed
by law" and "to formulate such policies, rules and regula-
tions as may be necessary . . . to insure the proper
administrationof the law and to carry out the intent and
purposes thereof."
     Section 17 of the Act provides that the unpaid balance
under the land purchase contract is to be amortized over a
period not exceeding 40 years
    "togetherwith interest thereon at a rate
    to be fixed br the board, not to exceed 4%
    per annum; provided, however, that the p$-
    chaser shall have the right on any install-
    ment date to pay any or all installments
    still remainingunpaid; provided further,
    that in an..individual case. the board mav,
    for good cause, postpone from time to timk;
    upon such terms as the Board may deem proper,
    the payment of the whole or any part of any
    installmentof the selling price or interest
    thereon. The board is empowered in each
    individual case to specify the terms of the
    contract entered into with the purchaser, not
    contrary to the provisions of this act. . . .I'
     From the foregoing, it is obvious that the Board under
its granted power to fix the rate of interest, to prescribe
the contract forms and to make rules and regulations,is
authorized to make a rule that payment of the unpaid balance
at any time stops the running of interest,unless such a
rule is forbidden by the proviso in Section 17 giving the
purchaser "the right on any installmentdate to pay any or
all installmentsstill remainingunpaid."
     It will be noted that the form used by the Board fixes
May 1st and November 1st as dates upon which installments
are due under the contract. However the effect of the "on
or bzre" provisions of the contrac: is that s     date is
an installmentdate on which the veteran has the right, al-
though not the duty, to make a prepayment. The Act does
not impose any limits on the number or times of installment
dates.
     Further, we are of the opinion that the "on or before"
provisions are not in conflict with the statute, even if
it were considered that May 1st and November 1st were the
only "installmentdates." The statute givesthe veteran the
                           -1490-
Honorable Jerry Sadler, page 4 (C-313)


right to prepay on installment dates. If the Board's form
denied the existence of such a right, there would be a
conflict with the statute. It is our view, however, that
the granting of an additional prepayment privilege to the
veteran does not create a conflict.
     Applicable,we think, is the text statement in 53
Tex.Jur.2d 208, Statutes, Section 142:
       “Thus a statute enumerating some of the
    things to be done by a commission is not an
    implied denial of authority to do anything
    else, and a recital of some of the ways in
    which waste occurs is not exclusive defini-
    tion of the only kinds of waste which the
    legislature recognizes."
    & Refining Company v. Railroad
      W 2d 6,s( 641,
    s:w:2a 1075.
     The purpose of the Veteranst Land Program is to help
Texas veterans through the establishmentof a liberal credit
program by which Texas veterans may purchase Texas lands,
which program supplants in some measure the giving away of
public lands to veterans of wars as the same was done in
the early history of this State. The making of money by
the State through harsh exactions from veteran purchasers
is contrary to the spirit of the law. Allowing prepayment
without penalty, thus encouragingsuch prepayment,actually
is in furtherance of the purposes of the program in at
least two respects:
     (1) The history of the program has been that the
demand of veterans for participationin the program has
during much of the time exceeded available funds. Every
loen that is prepaid, therefore,makes money available for
another veteran waiting in 'line. The encouragementof
prompt prepayment,,therefore, is in furtheranceof the
program.
     (2) The history of the program has further been that
the earlier loans to veterans were made at a lower rate of
interest, the latest increase to 4-&$per annum having been
authorizedby the 1961 amendment to the Act. Prepayment,
therefore, on contracts executed before 1961 would enable
the Board to re-lend the money to another veteran at a
highter rate of interest, resulting in financial benefit
to the Veterans' Land Program.


                           -1491-
Honorable Jerry Sadler, page,5 (C-313)


     If a veteran is to be penalized for prepaymentby
requiring payment of unearned interest, he would, doubt-
less, prefer in many cases to keep his money, perhaps
placing it in a savings account so as to earn interest,
until the installmentdate rolls around, all to the detri-
ment of the program. We do not believe that it was the
legislativeintent to effect such a result. The statute
should be liberally construed in accordance with its basic
intent and purpose, which is to help Texas veterans.
     The general rule is set forth in 47 C.J.S. 53,
Interest, Section 41b:
        "Interestgenerally is computed to the
     time when the debt is paid."
     We conclude that the proposed rule or regulation
authorizingfull payment of veterans' accounts between the
Nay and November installment due dates, without penalty
interest, may be validly adopted by the Veterans' Land
Board, and we accordingly answer your question in the
affirmative.
     Opinion No. S-79 of this office was rendered at a
time when, as pointed out by your letter, your Board was
operating under a rule contrary to the proposed rule and
regulation. If Opinion No. S-79 is in any manner in con-
flict with this opinion, same is hereby to such extent
overruled.
                   SUMMARY
                   -------
       The Veterans' Land Board may validly adopt
    a rule or regulationauthorizing veterans'
    loans to be prepaid in full at any time, with
    interest being charged only to the date of
    such final payment.
                             Yours very truly,
                             WAGGONER CARR
                             Attorney General of Texas




JAS/WJA:afg
                          -1492-
Honorable Jerry Sadler, page 6 (C-313)


APPROVED:
OPII?IOIs
       COMMITTEE
W. V. Geppert, Chairman
Linward Shivers
George Black
Jerry Brock
Ralph Rash
APPROVEDFORTHEiATTORNEYGENERAL
BY: Roger !&ler




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