'AV

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Court of Appeals

Ifxfitf Itstnct of Okxas at Batlas

JUDGMENT

LAURAL LAND MEMORIAL PARK,

INC., LITTLE BETHEL MEMORIAL

PARK, INC., RESTLAND OF DALLAS,

INC., and ROSELAWN MEMORIAL

GARDENS, INC. Appellants

No. 05-94-01668-CV V.

DALLAS CENTRAL APPRAISAL

DISTRICT, DALLAS CENTRAL

APPRAISAL DISTRICT APPRAISAL

REVIEW BOARD, and FOY

MITCHELL, JR., Appellees

Appeal from the 160th Judicial District

Court of Dallas County, Texas. (Tr.Ct.No.

92-10665-H).

Opinion delivered by Justice Morris,

Justice Devany participating.

In accordance with this Court's opinion of this date, the judgment of the trial court

is REVERSED and judgment is RENDERED that dedicated cemetery property is exempt

from the assessment of ad valorem taxes. After all costs of this appeal have been paid, the

clerk of the district court is directed to release the balance of the cash deposit in lieu of cost

bond to Laurel Land Memorial Park, Inc.

Judgment entered October 20, 1995.

^ ?U^^
REVERSE and RENDER and Opinion Filed October 20, 1995

In The

QLautt of Appeals

2xfty Itstrtrt of (Eexas at 5allas

No. 05-94-01668-CV

LAUREL LAND MEMORIAL PARK, INC., LITTLE BETHEL MEMORIAL

PARK, INC., RESTLAND OF DALLAS, INC., and ROSELAWN

MEMORIAL GARDENS, INC., Appellants

V.

DALLAS CENTRAL APPRAISAL DISTRICT, DALLAS CENTRAL

APPRAISAL DISTRICT APPRAISAL REVDZW BOARD, and

FOY MITCHELL, JR., Appellees

On Appeal from the 160th Judicial District Court

Dallas County, Texas

Trial Court Cause No. 92-10665-H

OPINION

Before Justices Baker1, Morris, and Devany

Opinion By Justice Morris

This summary judgment case presents an unanswered question of law. We decide

whether publicly dedicated cemetery property is exempt from ad valorem taxation even

1The Honorable James A. Baker, Justice, participated in this cause at the time it was submitted for decision Due to the appointment of Just.ce Baker to the Texas Supreme Court on October 3,1995, he did not participate in the J*Z££££.
though a corporation organized to make profit owns the property. We conclude the

property is exempt from taxation.

In four points of error, Laurel Land Memorial Park, Inc., Little Bethel Memorial

Park, Inc., Restland of Dallas, Inc., and Roselawn Memorial Gardens, Inc., appealed a

summary judgment granted in favor ofthe Dallas Central Appraisal District, Dallas Central

Appraisal District Appraisal Review Board, and Foy Mitchell, Jr.2 The Cemeteries filed suit

to challenge the District's decision to assess ad valorem taxes on the Cemeteries' publicly

dedicated cemetery property. The trial court rendered judgment in favor of the District

after all parties filed cross-motions for summary judgment and made extensive stipulations

of fact. The trial court's judgment subjected the Cemeteries' dedicated cemetery property

to ad valorem taxation.

In deciding the Cemeteries' appeal, we conclude first that dedicated cemetery

property is statutorily exempt from ad valorem taxation by the Texas Health and Safety

Code. That decision, in turn, leads us to conclude that publicly dedicated cemetery property

is not "held for profit" as contemplated by the Texas Tax Code and, therefore, is also

exempt under the tax code. Because we conclude the property involved in this case is

exempt, we reverse the trial court's judgment and render judgment for the Cemeteries.

For clarity, appellants will be referred toas the "Cemeteries" and appeUees will be referred toas the "District.

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FACTUAL BACKGROUND

The Cemeteries own and operate perpetual care cemeteries, which are comprised

of distinct categories of land. The Cemeteries own publicly dedicated ,and used or to be

used exclusively for human burial. The Cemeteries also own undedicated tend, which is no,

in.nded to be used for interment purposes. The only property a. issue in this case is the

f «category: publicly dedicated cemetery property used or to be used exclusively for

.iman burial.

Before 1992, the District granted exemption from taxation to the Cemeteries for their

publicly dedicated cemetery property in which at least one interment had taken place or at

least fifty percent of the burial spaces had been sold even if there had not yet been an

interment. But in 1992, the District ended its practice of exempting dedicated cemetery

property from taxation if acorporation chartered and organized for profit owned the land

and operated the cemetery. The Cemeteries fit this description. The District then assessed

ad valorem taxes on all of the Cemeteries' property. The District did not assess ad valorem

taxes on other publicly dedicated cemetery property if anon-profit corporation owned the

property.

After unsuccessfully protesting the District's tax notices for their publicly dedicated

cemetery property, the Cemeteries appealed the review board's decisions to the district

court. There the Cemeteries alleged nine causes of action. In one of the causes of action,

the Cemeteries alleged that the Texas Health and Safety Code exempts dedicated cemetery

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property from taxation, regardless of the cemetery owner's corporate character.

The District and the Cemeteries filed cross-motions for summary judgment based

upon stipulated facts. The District's motion for summary judgment asserted that, because

the parties stipulated to the value of the dedicated property, the only question for the trial

court was whether the law entitled the dedicated property to an exemption from ad valorem

taxation. The District's position rested on its conclusion that the Cemeteries held their

properties for profit and, therefore, under the Texas Tax Code, the property was not

exempt from taxation. In their motion for summary judgment, the Cemeteries asserted the

dedicated property was exemptfrom ad valoremtaxation under the TexasHealth and Safety

Code. The trialcourtgranted the District's motion forsummary judgment in its entirety and

denied the Cemeteries' motion for summary judgment in its entirety. The trial court

rendered judgment to the effect that the Cemeteries' dedicated property is not exempt and,

consequently, is subject to taxation. The Cemeteries perfected their appeal to this Court.

DISCUSSION

We apply well-known standards when reviewing a motion for summary judgment.

See Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985); see also

Tex. R. Civ. P. 166a. When both parties move for summaryjudgment, each must carry its

own burden of proof. Benchmark Bank v. State Farm Lloyds, 893 S.W.2d 649, 650 (Tex.

App.--Dallas 1994, no writ). That burden is to show an entitlement to summary judgment

as a matter of law by conclusively proving all the elements of the cause of action or defense.

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Odeneal v. Van Horn, 678 S.W.2d 941, 941 (Tex. 1984). In this case, we review both the

Texas Tax Code and the Texas Health and Safety Code, as well as the summary judgment

record, to decide whether the trial court should have granted either motion. See Jones v.

Strauss, 745 S.W.2d 898, 900 (Tex. 1988). We necessarily address the nature and legal

consequences of publicly dedicating property for use as a cemetery.

Cemeteries historically have received special favor under Texas law. See Peterson v.

Stolz, 269 S.W. 113, 115-16 (Tex. Civ. App.-Beaumont 1925, writ refd). For example,

land that a cemetery owner publicly dedicates is exempt from the exercise of eminent

domain. Sacred Gardens ofMemory, Inc. v. State, 334 S.W.2d 220, 222 (Tex. Civ. App.-San

Antonio 1960, writ refd n.r.e.). Also, dedicated cemetery property is not subject to levy

and execution. Tex. Health & Safety Code Ann. § 711.037(b) (Vernon Supp. 1995);

Oakland Cemetery Co. v. People's Cemetery Ass'n, 93 Tex. 569, 575, 57 S.W. 27, 29 (1900).

And, despite thelong-standing antipathy against restraints onalienation, dedicated cemetery

property is exempt from the rule against perpetuities. Tex. Health & Safety Code Ann.

§ 711.035(c) (Vernon Supp. 1995). The statute also makes it difficultfor utilities to obtain

easements through, over, or across any part of a dedicated cemetery. Id. § 711.035(d).

Exempting dedicated cemetery property from taxation is also an expression of

society's interestin protecting and preserving places ofburial. Texas recognizes this interest

in its constitution and various statutes. In particular, the issue of taxability of cemetery

property is expressly addressed in the Texas Constitution, the Texas Tax Code, and the

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Texas Health and Safety Code.

The constitution authorizes the legislature to exempt from taxation public property

and certain places of burial. It provides:

[Tjaxes shall be equal and uniform upon the same class of subjects within the

limits of the authority levying the tax; but the legislature may, by general laws,

exempt from taxation public property used for public purposes . . . [and]

places of burial not held for private or corporate profit.

Tex. Const, art. VIII, § 2(a).

The policy expressed in the constitution is found again in the Texas Tax Code. The

tax code states:

Aperson is entitled to exemption from taxation of the property he owns and

uses exclusively for human burial and does not hold for profit.

Tex. Tax Code Ann. §11.17 (Vernon 1992). Under this provision ofthe tax code, property

qualifies for tax exemption if it meets atwo-part test. First, it must be used "exclusively for

human burial." Second, it must not be held "for profit."

Additionally, the health and safety code grants "cemetery organizations" tax

exemption for certain cemetery property that the organization publicly dedicates as cemetery

property. Acemetery organization can be an unincorporated association of plot owners not

operated for profit, provided its articles of association authorize it to conduct business for

cemetery purposes. Tex. Health &Safety Code Ann. § 711.001(3)(A) (Vernon Supp.

1995). Acemetery organization also can be acorporation chartered either for profit or not

for profit, provided its articles of incorporation authorize it to conduct business for cemetery
purposes. Id. §(3)(B). The health and safety code requires acemetery organization to

dedicate its property for interment purposes. Id. § 711.034. Once the cemetery

organization publicly dedicates property for interment purposes, the cemetery organization's

dedicated property is exempt from taxation under the health and safety code. Section

711.035 ofthe health and safety code states:

(a) Property may be dedicated for cemetery purposes, and

the dedication is permitted in respect for the dead, for

the disposition of remains, and in fulfillment of a duty to

and for the benefit of the public.

(b) Dedication of cemetery property and title to the

exclusive right of sepulture of a plot owner are not

affected by the dissolution of the cemetery organization,

nonuse by the cemetery organization, alienation,

encumbrance, orforced sale ofthe property.

(e) All property of a dedicated cemetery, including a road,

alley, or walk in the cemetery:

(1) is exempt from public improvements assessments,

fees, and public taxation; and

(2) may not be sold on execution or applied in

payment of debts due from individual owners and

plots.

(f) Dedicated cemetery property shall be used exclusively

for cemetery purposes until the dedication is removed by

court order or until the maintenance of the cemetery is

enjoined or abated as a nuisance under Section 711.007.

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Tex. Health &Safety Code Ann. § 711.035 (Vernon Supp. 1995).3 We note that the

health and safety code requires dedicated property to be "used exclusively for cemetery

purposes," which is similar to the condition imposed by the tax code where it requires

property to be used "exclusively for human burial." The two code provisions in this regard

are consistent.

Nevertheless, the apparent tension between the Texas Tax Code, which provides that

cemetery property held for profit is not exempt from taxation, and the Texas Health and

Safety Code, which provides for exemption of publicly dedicated cemetery property even if

owned by a corporation chartered for profit, creates the central issue in this case: what is

the effect of a public dedication of cemetery property for burial purposes by a cemetery

organization chartered and organized to make a profit? Based upon the following analysis,

we conclude the effect of public dedication is to qualify the property involved in this case

for tax exemption under both the Texas Health and Safety Code and the Texas Tax Code.

Acemetery organization dedicates portions of its property for human burial by filing

a public declaration of dedication with the county clerk. See Tex. Health & Safety Code

Ann. § 711.034(b) (Vernon Supp. 1995). The effect of publicly dedicating cemetery

property is to commit the land to a public purpose different from any other land. See Oak

We note that neither an unincorporated association operated for profit nor individual persons are covered by the health and

safety code's provisions for dedicating cemetery property. Thus, neither an unincorporated association operated for profit nor an

individual can qualify for tai exempt status under the health and safety code. See Tex. Health &Safety Code Ann. H711.034-

.035 (Vernon Supp. 1995). Whether or not unincorporated associations operated for profit or individuals may be eligible for

exemption under section 11.17 ofthe Texas Tax Code isbeyond the scope of this opinion.

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Park Cemetery. Inc. v. Donaldson, 148 S.W.2d 994, 998 (Tex. Civ. App.-Galveston 1940,

writ dism'd judgm't cor.). Once a cemetery organization publicly dedicates property, the

organization cannot use that property for any purpose other than for human burial. See

Tex. Health & Safety Code Ann. § 711.035. Moreover, once a cemetery organization

dedicates property, the dedication may be removed only through judicial proceedings. See

id. § 711.036. In effect, the dedication fixes the property's use. Thus, once dedicated, the

property not only must be used "exclusively for cemetery purposes" as required by the health

and safety code, but also must be used "exclusively for human burial" as contemplated by

the tax code. Publicly dedicating cemetery property, therefore, not only satisfies the health

and safety code's prerequisite for tax exemption, but also satisfies the first condition of the

two-part test for tax exemption set forth in the tax code.

Once public dedication fixes the property's use, the dedication also causes the

property not to be held "for profit," which is the second part of the tax code's test for tax

exemption. It does so because public dedication of land for burial purposes effects an

abandonment of the land's use and possession for all purposes other than burial. See

Smalhvood v.Midfield OilCo., 89 S.W.2d 1086,1090 (Tex. Civ. App.-Texarkana 1935, writ

dism'd); see also Damon v. State, 52 S.W.2d 368, 370 (Tex. Comm'n App. 1932, judgm't

adopted). Once the property is dedicated, it cannot be sold or otherwise disposed of for

any purpose other than burial. State v.Forest Lawn Lot Owners Ass'n, 152 Tex. 41, 48, 254

S.W.2d 87, 91 (1953). Dedicated property can no longer be a subject of any conveyance

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or inheritance that might interfere with its use and possession as a burial ground.

Smallwood, 89 S.W.2d at 1090; see also Damon, 52 S.W.2d at 370. Public dedication

effectively takes the dedicated cemetery property out ofthe ordinary realm of commerce.

See Smallwood, 89 S.W.2d at 1090. Once dedicated, the property is no longer the subject

of trade and commerce. Peterson, 269 S.W. at 115.

Indeed, after public dedication, a corporate owner, such as the Cemeteries in this

case, retains only the legal title to the dedicated property. Publicly dedicating the property

ends the corporate owner's dominion over the land as the fee simple owner because the

owner has the power to sell and convey only the right of burial. Oakland Cemetery Co., 93

Tex. at 573-74, 57 S.W. at 28-29. Thus, once a cemetery owner publicly dedicates property

for burial purposes, the property becomes appropriated fully and exclusively to the public

purpose of burying the dead and for no other purpose. SeeTex. Health & Safety Code

Ann. § 711.035(a) (Vernon Supp. 1995); cf. Peterson, 269 S.W. at 117. Merely because the

property ultimately may be sold for more money than the owner paid for it does not mean

the propertyis "held for profit." As a matter of law, the public dedication of property for

cemetery purposes causes the property to be held for the sole purpose of burying the dead,

regardless of whether the owner sells it for more than it paid for it.

We conclude that, regardless of the cemetery owner's corporate character, once

cemetery property is dedicated as required by the Texas Health and Safety Code, it is no

longer held for profit as contemplated by the Texas Constitution or section 11.17 of the

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Texas Tax Code. See Tex. Const, art. VIII, §2; Tex. Tax Code Ann. §11.17 (Vernon

1992). Because the property is no longer held for profit and can be used only for human

burial, it is exempt from ad valorem taxation as amatter of law. See Tex. Tax Code Ann.

§11.17 (Vernon 1992); Tex. Health &Safety Code Ann. §711.035(e) (Vernon Supp.

1995).

The only issue before us is aquestion of law. Because there were cross-motions for

summary judgment, the proper disposition is for us to render judgment for the party whose

motion the trial court should have granted. Tex. R. App. P. 81(c); see Jones, 745 S.W.2d

at 900. Accordingly, we reverse the trial court's judgment. We render judgment for the

Cemeteries that the dedicated cemetery property is exempt from the assessment of ad

valorem taxes.4

Publish

Tex. R. App. P. 90

941668F.P05

ICE

MORRIS "

from taxation pursuant to Tex. Health &Safety Code §711.035(e). P

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