Untitled Texas Attorney General Opinion ( 1984 )

The Attorney General of Texas
June 21, 1984
JIM MATTOX
Attorney General
Supreme Court Building
Honorable Jack A. McGaughey Opinion No. JM-175
P. 0. Box 12546
Austin, TX. 76711. 2546
District Attorney for Archer,
512/475-2501 Clay, and Montague Counties Re: Validity of a municipal
Telex 9101674-1367 P. 0. Box 55 ordinance which prohibits the
Telecopier 5121475-0266 Montague, Texas 76251 transfer of municipal cemetery
lots to a party other than the
714 Jackson, Suite 700 city
Dallas, TX. 75202.4506
2141742-6944 Dear Mr. McGaughey:
4824 Alberta Ave., Suite 160
You ask us "[wlhether or not a city which owns and operates a
El Paso, TX. 79905.2793
municipal cemetery may lawfully enact an ordinance prohibiting the
9151533-3464 sale or transfer [by a grantee] of lots in that cemetery to a party
other than the city." We conclude that a city may not enact such an
ordinance, because it would constitute an unreasonable restraint on
I Texas, Suite 700
alienation.
Houston. TX. 77002-3111
71312235666
You inform us that a city has operated a municipal cemetery
pursuant to articles lOlS(13) and 1015(32), V.T.C.S., since 1966 under
606 Broadway, Suite 312 an ordinance which provides the following at section 7:
Lubbock, TX. 79401.3479
606/747-5236
The sale or transfer of any lot or lots or part of
a lot in the [clemetery is prohibited, except any
4309 N. Tenth, Suite B oerson desirinn to sell or transfer a lot or lots
McAllen, TX. 76501.1665 or a part of a lot in the [clemetery shall sell or
5121682-4547
transfer the same to the [c]lty at a price equal
to the purchase price paid for said lot, lots or
200 MaIn Plaza, suite 400 parts of [al lot, and the [cllty shall be
San Antonio. TX. 76205.2797 obligated to purchase the same at -said price.
51212254191 (Emphasis added).
An Equal Opportunity1
The ordinance provides at section 4(5) that
Affirmative Action Employer
[t]he term 'Certificate of Ownership' as used
herein shall be construed as the instrument
conveying interment rights in lots in the
[clemetery.
We note at the outset that the grantee of a burial lot in a deed of
conveyance does not acquire a fee simple title, but only acquires the
lot for its intended burial purposes; it is clear, however, that such
grantee is not the ordinary owner of an easement and that the interest
passed by a deed to the purchaser of a burial lot is an interest in
p. 770
,..
Honorable Jack A. McGaughey - Page 2 (JM-175)
land. Oak Park Cemetery, Inc. V. Donaldson, 148 S.W.2d 994 (Tex. Civ.
APP. - Galveston 1941, writ dism'd judgmt car.).
Alienability is a legal incident of property, and restraints
against it are not favored. Citizens' State Bank V. O'Leary, 167
S.W.2d 719 (Tex. 1942); Mischer V. Burke, 456 S.W.2d 550 (Tex. Civ.
APP. - Houston [lst Dist.] 1970, writ ref'd n.r.e.). See Tex. Con&.
art. I, 626 (provision prohibiting perpetuities). Suchrestraints are
against public policy and are void. Benson v. Greenville National
Exchange Bank, 253 S.W.2d 918 (Tex. Civ. App. - Texarkana 1952, writ
ref'd n.r.e.). An agreement, on the other hand, which merely provides
for the first refusal to buy or for a preferential right of repurchase
to be exercised within a specified period of time does not restrain
alienation. U.S. Life Title Cornpany of Dallas V. Andreen, 644 S.W.2d
185 (Tex. App. - San Antonio 1982, no writ); Foster V. Bullard, 496
S.W.2d 724 (Tex. Civ. App. - Austin 1973,v.e.);
Courseview, Inc. V. Phillips Petroleum Co., 258 S.W.2d 391 (Tex. Civ.
APP. - Galveston 1953, writ ref'd n.r.e.). In order for a uurchase
agreement to constitute an unreasonable restraint on alienation. the
purchase agreement must contain a direction to the vendee ordering him
not to convey. U.S. Life Title Company of Dallas V. Andreen, supra;
Mattern V. Herzog, 367 S.W.2d 312, 319 (Tex. 1963). At issue in this
request is the proper way to characterize section 7 of the ordinance.
In Forderhause v. Cherokee Water Company, 623 S.W.2d 435, 437
(Tex:. Civ. App. - Texarkana 1981), rev'd on other grounds, 641 S.W.2d
522 (Tex. 1982), the court declared that the following contractual
provision did not constitute a restraint on alienation and did not
violate the prohibition against perpetuities set forth in article I,
section 26, of the Texas Constitution:
Grantee is hereby given the first option to
purchase the oil, gas and other minerals herein
reserved, at the same price and on the same terms
as Grantor has agreed to sell to a third party;
such option to be accented or reiected within five
(5) days after Grantee-has been furnished with the
bona fide offer made by such third party. Failure
to exercise such option on one sale, shall not be
a waiver to purchasing at any subsequent sale or
sales by Grantor. (Emphasis added).
The court then concluded:
The purchase right involved here does not
constitute an unreasonable restraint on
alienation. There is no fixed price. There is no
absolute option unlimited as to time. There is
only the right, exercisable whenever the owner
desires to sel~l, to purchase the property by
meeting any bona fide offer. The holder of the
right cannot force or prevent a sale; neither can
p. 771
, .
Honorable Jack A. McGaughey - Page 3 (JM-175)
he fix the price for a sale. In those
circumstances there is not such a restraint on
alienation as would violate our public policy.
623 S.W.2d 435 at 439. See also Gray v. Vandver, 623 S.W.2d 172 (Tex.
Civ. App. - Beaumont 1981, no writ) (court held that resenration in
deed to the effect that grantors reserved their right to repurchase
property for $175 at any time that grantee, his heirs, executors and
administrators decide to sell was an unreasonable restraint on
alienation).
The ordinance which is the subject of this request does set forth
a fixed price. It is unlimited as to time. The holder of the right,
i.e. the city, can act to forbid any sale or transfer. It does act,
therefore, as a restraint on alienation. Accordingly, we conclude
that a city which owns and operates a municipal cemetery may not enact
an ordinance prohibiting the sale or transfer by a grantee of lots in
that cemetery to a party other than the city.
SUMMARY
A city which owns and operates a municipal
cemetery may not enact an ordinance prohibiting
the sale or transfer by a grantee of lots in that
cemetery to a party other than the city.
JIM MATTOX
Attorney General of Texas
TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
Prepared by Jim Moellinger
Assistant Attorney General
APPROVED :
OPINION COMMITTEE
Rick Gilpin, Chairman
David Brooks
Colin Carl
Susan Garrison
Jim Moellinger
Nancy Sutton
p. 772