JIM MATTOX Attorney General

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# The Attorney General of Texas

June 21, 1984

Honorable JackA. McGaughey DistrictAttorney forArcher, Clay, and Montague Counties P. 0. Box 55 Montague, Texas 76251 OpinionNo. JM-175
Re: Validity of a municipal ordinance which prohibits the transferofmunicipal cemetery lots to a party other than the city
DearMr. McGaughey:
You ask us "[wlhether or not a city which owns and operates a municipal cemetery may lawfully enact an ordinance prohibiting the 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 alienation.
You inform us that a city has operated a municipal cemetery pursuant to articles lOlS(13)and 1015(32),V.T.C.S., since 1966under an ordinancewhich provides the followingat section 7:

The sale or transferof any lot or lots orpart of a lot in the [clemeteryis prohibited, except any oerson desirinn to sell or transfera lot or lots or a part of a lot in the [clemeteryshall sell or transfer the same to the [c]lty at a price equal to the purchase price paid for said lot, lots or parts of [al lot, and the [cllty shall be obligated to purchase the same at -said price. (Emphasisadded). The ordinanceprovides at section4(5) that

[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 conveyancedoes not acquire a fee simple title,but only acquires the lot for its intendedburial purposes; it is clear, however, that such grantee isnot the ordinaryowner of an easementand that the interest passed by a deed to the purchaser of a burial lot is an interest in

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HonorableJack 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 [lstDist.] 1970,writ ref'd n.r.e.). See Tex. Con&. art. I, 626 (provisionprohibitingperpetuities). 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'dn.r.e.). An agreement,on the otherhand,which merely provides for the first refusal tobuy or for a preferentialright of repurchase to be exercised within a specified period of time does not restrain alienation. U.S. Life Title Cornan 185 (Tex.App. p y of Dallas V. Andreen, 644 S.W.2d

- 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 agreementmust containa direction to thevendee orderinghim 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 theproperway to characterizesection 7 of the ordinance.
(Tex 522 In Forderhause v. :.Civ. App. Cherokee Water Company, 623 S.W.2d 435, 437

- Texarkana 1981), rev'd on other grounds, 641 S.W.2d (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 tobe accentedor reiectedwithin five (5)days after Grantee-hasbeen furnishedwith the bona fide offermade by such thirdparty. Failure to exercise such option on one sale, shall not be a waiver to purchasing at any subsequent sale or salesby Grantor. (Emphasisadded). The court then concluded:

The purchase right involved here does not constitute an unreasonable restraint on alienation. There is no fixedprice. 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

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TOM GREEN FirstAssistantAttorneyGeneral
DAVID R. RICHARDS ExecutiveAssistantAttorneyGeneral Preparedby Jim Moellinger AssistantAttorneyGeneral APPROVED: OPINION COMMITTEE Rick Gilpin, Chairman David Brooks Colin Carl SusanGarrison JimMoellinger Nancy Sutton Honorable JackA. McGaughey - Page 3 (JM-175)

he fix the price for a sale. In those circumstances there is not such a restraint on alienationaswould violate our publicpolicy. 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 ordinancewhich is the subjectof this requestdoes set forth a fixedprice. 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 citywhich owns and operatesa municipal cemeterymay not enact an ordinanceprohibiting the sale or transferby a grantee of lots in that cemeteryto 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 transferby a grantee of lots in that cemetery to a party other than the city.

JIM MATTOX AttorneyGeneral of Texas

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