Could a city require every owner selling or transferring a municipal cemetery lot to convey it back to the city at the original price?

Texas AG Opinion JM-175: City-Only Cemetery Lot Transfers

Plain-English summary

JM-175 concluded that a city operating a municipal cemetery could not prohibit a cemetery-lot grantee from selling or transferring the lot to anyone other than the city.

"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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

The ordinance required the owner to transfer the lot back to the city at the original purchase price. JM-175 treated that fixed-price, unlimited-duration, city-only rule as 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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

The opinion distinguished that prohibition from a right of first refusal or a time-limited preferential repurchase right, which did not necessarily restrain transfer.

"An agreement ... 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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

Currency note

This opinion was issued in 1984. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What did the cemetery ordinance require?

It prohibited sale or transfer except back to the city, which had to repurchase at the price originally paid.

"Any person desiring to sell or transfer a lot or lots or a part of a lot in the cemetery shall sell or transfer the same to the city at a price equal to the purchase price paid for said lot."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

What interest did a cemetery-lot purchaser receive?

The opinion said the purchaser did not receive ordinary fee-simple ownership, but the burial right conveyed by deed was still an interest in land.

"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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

"The interest passed by a deed to the purchaser of a burial lot is an interest in land."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

Why did alienability matter?

Texas law treated the ability to transfer property as an ordinary legal incident of ownership and disfavored restraints.

"Alienability is a legal incident of property, and restraints against it are not favored."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

Were all repurchase provisions invalid?

No. A right matching a bona fide third-party offer, exercisable within a specified period, could avoid being an unreasonable restraint.

"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 sell, to purchase the property by meeting any bona fide offer."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

What features made the city's rule unreasonable?

It fixed the price at the original amount, had no time limit, and let the city prevent any transfer to another buyer.

"It is unlimited as to time. The holder of the right, i.e. the city, can act to forbid any sale or transfer."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

Background and statutory framework

The city had operated the cemetery since 1966 under an ordinance defining a certificate of ownership as the instrument conveying burial rights in cemetery lots.

"The term 'Certificate of Ownership' as used herein shall be construed as the instrument conveying interment rights in lots in the cemetery."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

The request asked whether the city could lawfully prohibit a grantee's transfer to anyone other than the city.

"Whether 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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

JM-175 applied the public-policy rule that unreasonable restraints on alienation were void.

"Such restraints are against public policy and are void."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

Citations and references

• Articles 1015(13) and 1015(32) supplied the municipal-cemetery operating authority identified by the opinion.

"A city has operated a municipal cemetery pursuant to articles 1015(13) and 1015(32), V.T.C.S."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

• Article I, section 26 appeared in the discussion of restraints and perpetuities.

"Tex. Const. art. I, § 26 (provision prohibiting perpetuities)."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0175
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0175.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.

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 ,..

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 , .

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