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Arkansas courts hold that if the restraint is valid the intent of the donor controls.
In 1940, the appellee city, lacking funds to acquire a reservoir site asked the donor to donate land for that purpose. An agreement was entered into by the city and the donor, which contained restrictions regarding the use of the land. In 1981, the city leased the oil and gas rights of the deeded land to an oil company. The appellant heir brought the case and alleged that the city's lease of the mineral rights subjacent to the land violated the 1940 agreement. He demanded immediate reconveyance of the land and payment of all monies the city received under the lease. Both parties moved for summary judgment. The district court found that the agreement was an impermissible restraint on alienation and granted the city's motion for summary judgment. The heir challenged the decision.
Did the district court err in granting the city’s motion for summary judgment?
The court reversed the district court’s decision and held that summary judgment in favor of the city ignored the public purpose of the grant and defeated the donor's intent.