Untitled Texas Attorney General Opinion ( 1945 )

GENERAL
OF TEX&S
Hon. H. A, Jamison ClpinionNoi O-6746
Commissioner Re: Constitutionality of Section
State Banking Depart- 15, House Bill Nor 46, 49th Legis-
ment lature, pertaining to the regula-
Austin, Texas tion of perpetual care cemeteries.
Dear Mr. Jamison:
You ask this Department to advise whether or not the
controversial portion of Section 15 of House Bill No. 46 of the
49th Legislature is unconstitutional, and if so, whether or not
the unconstitutional portion thereof is severable from the Act.
You refer to a brief attached, from which we have no difficulty
in isolating the particular problem confronting your.
Article 925 of our Revised Civil Statutes, authorizing
the organization of perpetual care cemeteries, contains the fol-
lowing:
If**** The principal of all funds for perpetual care
shall forever remain irreducible and ,inviolableand shall
be maintained separate and distinct from all other funds."
Article 925a provides:
"A perpetual care cemetery is one which shall hereaf-
ter deposit in its perpetual care fund as provided under
the provisions of Article 925, an amount equivalent to a
minimum of Twenty (209?)Cents per square foot of ground of
interment right sold or disposed of as perpetual care
property for earth Interment, until such fund reaches a
minimum of One Hundred Thousand Dollars ($100,000.00), and
the minimum thereafter shall be Ten (lO#) Cents per square
foot; ***,n
These quotations are from the amendment of 1934.
Now, Section 15 of House Bill No. 46 of the 49th Leg-
islature reads as follows:
"Each perpetual care cemetery shall deposit in its
perpetual care fund an amount equivalent to a minimum of
Twenty (20#) Cents per square foot of ground area sold or
dis osed of as perpetual care property, after March 15,
193 z: , together with such amount as was stipulated in any
Hon. H. A. Jamison, page 2 (O-6746)
contracts under which erpetual care property was sold
prior to March 15, 193t; ***, such minimum requirement
shall apply to all property In which the exclusive right
of sepulture has been sold and paid for, whether used for
interment purposes or not. The deposit of such funds in
the perpetual care fund shall be made within thirty (30)
days after the receipt of the final purchase price of each
lot, grave, crypt or niche sold as property entitled to
perpetual care. No cemetery shall hereafter operate as a
perpetual care, permanent maintenance, or free care ceme-
tery until the provisions hereof,,arecomplied with."
It will be seen that House Bill No. 46 omits the limi-
tation of $100,000.00 provision, and likewise the further pro-
vision for a lesser deposit, after such minimum sum has been
reached.
Your question .is amplified in the brief for the com-
panies, stating:
"It is submitted that as to all perpetual care ceme-
teries operating under the 1934 law, which have built up
their endowment funds to $100,000.00 since the effective
date of the 1934 Act and which then as provided by the 1934
Act have reduced their paymenizinto the perpetual care
fund to lOq!per square foot as they are permitted to do by
said 1934 Act, the provisions of the last paragraph ~of
Section 15 of H. B. 46, the new 1945 law which compels
such cemeteries to go back, dig down into their own funds
and pay into their perpetualcare funds enough money to
equal 20@ per square foot for each square foot of grave
space or ground sold under perpetual care and making it
unlawful for such cemeteries to hereafter operate as a
perpetual care cemetery, is void as being a retroactive,
retrospective and ex post facto law which is prohibited
and forbidden by the Constitution of the State ofTexas."
Section 16 of Article 1 of the Constitution provides:
"No *** retroactive law, w* shall be made."
This is, of course, the supreme lsw ,of theland, but
it remains to be seen whether it has any application to the
question here presented.
Now, a private corporation is an artificial person,
and has no rights whatsoever except those conferred upon it by
the creating power. It exists only by grace of the statute.
Its charter does not constitute an irrevocable contract be-
tween the corporation and the State for "all charters or amend-
ments to charters, under the provisions of this chapter, shall
Hon. H. A. Jamison, page 3 (O-6746)
be subject to the power of the Legislature to alter, reform or
amend the same." (Rev.Civ.Stat.Art. 1318). If the charter it-
self is not immune from legislative alteration, reformation or
amendment, by the same token, and for greater reason a private
corporation cannot acquire a fixed or vested right in the con-
tinuation of the statutory provisions regulating such corpora-
tion. There can be no vested right by anyone in the continua-
tion of a particular statute. The Legislature may not even
make a law that is irrepealable by any succeeding Legislature.
Judge Cooley has said:
"As the power to grant unamendable and irrepealable
charters is one readily susceptible of being greatly
abused, to the prejudice of important public interest, and
has been greatly abused in the past, the people of a ma-
jority of the states, in framing or amending their consti-
tutions, have prudently guarded against it by reserving
the right to alter, amend, or repeal all laws that may be
~as``~a.~o;``fr``,::orporate powers.I* (Cooley Const.Lim.
While we do not have such a provision in the Constitu-
tion itself, nevertheless the statute above quoted has been in
existence since 1874, antedating the charters involved in this
inquiry.
Ihe establishment or mai,ntenanceof a cemetery for
the burial of the dead is a quasi public matter in which the
State has a peculiar interest, under the police power.
We are not implying that rights may not be acquired
by a private corporation, or by persons dealing with a private
corporation that are immune from future retroactive legislative
interference, and from any other character of legislative im-
pairment, for it is well settled thatsuch vested rights do often
exist. At this very point we again quote from Judge Cooley, as
follows:
"Perhaps the most interesting question which arises
in this discussion is, whether it is competent for the
legislature to so bind up its own hands by a grant as to
preclude it from exercising for the future any of the es-
sential attributes of sovereignty in regard to any of the
subjects within its jurisdiction; whether, for instance,
it can agree that it will not exercise the power of taxa-
tion, or the police power of the State, or the right of
eminent domain, as to certain specified property or per-
sons; and whether, if it shall undertake to do so, the
agreement is not void on the general principle that the
legislature cannot diminish the power of its successors
. -
Hon. H. A. Jamison, page 4 (O-6746)
by irrepealable legislation, and that any other rule might
cripple and eventually destroy the government itself. If
the Legislature has power to do this, it is certainly a
very dangerous power, exceedingly lia,bleto abuse, and may
possibly come in time to make the constitutional provision
in question as prolific of.,evil as it ever has been, or is
likely to be, of good.
“So far as the power of taxation is concerned, it has
been so often decided by the Supreme Court of the United
States, though not without remonstrance on the part of
State courts, that an agreement by a State, for a consider-
ation received or supposed to be received, that certain
property, rights, or franchises shall be exempt from taxa-
tion, or to be taxed only at a certain agreed rate, is a
contract protected by the Constitution, that the question
can no longer be considered an open one. In any case,
however, there must be a consideration, so that the State
can be supposed to have received a beneficial equivalent;
for it is conceded on all sides that, if the exemption is
made as a privilege,only, it may be revoked at any time.
And it is but reasonable that the exemption be construed
with strictness."
No citizen has any vested right to have rules of law
remain unchanged for his benefit.
Munn v. State of Illinois, (U.S.) 24 Law Ed. 77;
Middleton v. Texas Power & Li ht Company (U.S.)
63 Law Ed. 527, affirming 1%8 S.W. 276;
Alley v. Denson, 8 Tex. 297;
Houston v. Gonzales Ind.Sch.Dist., 202 S.W. 963,
229 S.W. 467;
Lyford Ind.Sch.Dist. v. Willamar Ind.Sch.Dist.
34 S.W. (2) 854;
Hunt County v. Rains County, 7 S.W.(2) 648;
Bodeman et al v. First Addition to Rattlesnake
Drainage District, (Wis.) 221 N.W. 864.
Now, the claimed immunity of the companies arises out
of the Act of 1934. Literally, the Act confers no right on the
associations, but rather it imposes a burden upon them with re-
spect to deposits in the perpetual care fund--that is to say,
it actually imposes the duty of paying into the fund ten cents
per square foot upon burial lots sold. The right, if any exists,
therefore, Is in the nature of an implied permit, license, or
privilege to carry on their corporate purpose.
It is well settled that the issuing of a permit, or
the granting of a license, upon compliance by the holder with
Hon. H. A. Jamison, page 5 (O-6746 )
existing legal requirements, does not of itself create a vested
right immune against further legislative regulation and require-
ment, in pursuance of the police power of the sovereign,
Tennessee Electric Power Co. v. Tennessee Valley
Authority (U.S.) 83 Law Ed. 543;
U. S. ex rel Kerr v. Ross, 5'hpp. D.C. 241;
Home Indemnity Company of New York v. O'Brien,
104 Fed. (2) 413;
Geneva Inv. Co. v. City of St. Louis, 87 Fed.
(2) 83; Cer.Den. (U.S.) 81 Law Ed. 1348;
State v. Clark, 187 S.W. 760;
Peters v. City of San Antonio, 195 S.W. 989.
Neither the liquor dealer, the lawyer, the doctor, nor
any other citizen has the vested right to continue his business
authori,zedby and conducted in compliance with an existing law
as against the superior right of the State, in the exercise of
its police power, to repeal or amend that law, and add other
burdensome requirements. This is but the exercise of a legiti-
mate governmental function, and is in no sense the interference
with vested proper rights, within the meaning of the Constitu-
tion. They are merely legal rights, under existing law, exer-
cised with the notice that such existing law may be repealed or
amended at any time, and the legal right itself taken away or
charged with additional burdens at the will of any Legislature.
Now, one may acquire a vested right by the payment of
a consideration under a franchise or similar contract, but that
principle does not help the associations here, for they paid no
consideration whatever for the claimed exemptions; they have
their money in the endowment fund, as part of their capital,as-
sets.
In its last analysis, the 1945 Act is but the legiti-
mate requirement of such companies that they create and main-
tain an endowment fund of adequate size.
From what we have said it follows that the advice is
that there is no constitutional invalidity in Section 15 of
House Bill 46 of the 49th Legislature.
Very truly yours
ATTORNEY GENERAL OF TEXAS
By /s/ Ocie Speer
Ocie Speer.
- , Assistant
APPROVED: OPINION COMMITTEE
BY: BWB, CHAIRMAN
0S:MR:wb