State v. Memorial Gardens Development Corp.
Decision Date | 14 January 1958 |
Docket Number | No. CC837,CC837 |
Citation | 101 S.E.2d 425,68 A.L.R.2d 1233,143 W.Va. 182 |
Court | West Virginia Supreme Court |
Parties | , 68 A.L.R.2d 1233 STATE of West Virginia v. MEMORIAL GARDENS DEVELOPMENT CORPORATION. |
Syllabus by the Court.
To the extent that legislation declares pre-need contracts for the furnishing of personal property or funeral or burial merchandise or services wherein the delivery or performance of the same is not immediately required, to be against public policy and void, unless all money paid thereunder shall be paid to and held by a bank, trust company or savings and loan association, covered by federal insurance and authorized to do business in this State, and subject to withdrawal only by the purchaser before death and by the seller (trustee) thereafter, such legislation is an unwarranted exercise of the police power of the state, and is unconstitutional, as being in violation of the provisions of Section 10 of Article III of the Constitution of West Virginia, and the Fourteenth Amendment to the Constitution of the United States.
W. W. Barron, Atty. Gen., Virginia Mae Brown, Asst. Atty. Gen., for plaintiff.
Hale J. Posten, Robert T. Donley, Morgantown, Edward D. Hansen, Kansas City, Mo., for defendant.
The plaintiff, State of West Virginia, instituted this suit against the defendant, Memorial Gardens Development Corporation, a West Virginia corporation, in the Circuit Court of Monongalia County, seeking to enjoin the defendant from violating the provisions of Chapter 153 of the Acts of the Legislature of West Virginia, Regular Session, 1955, (Michie's Code 47-14). Defendant filed its answer and cross bill to which plaintiff demurred. The court overruled plaintiff's demurrer to defendant's answer and cross bill, and upon the joint application of the parties certified to this Court for determination the question of the correctness of the decision by the Circuit Court holding in effect that the statute under which the plaintiff seeks relief is invalid and unconstitutional.
The plaintiff in its bill of complaint alleges that the defendant is engaged, among other activities, in the sale of pre-need burial merchandise, interment spaces and services under a form of contract, specifically set out as an exhibit to the bill, in violation of the provisions of Chapter 153 of the Acts of the Legislature of West Virginia, Regular Session, 1955, by neglecting and refusing to comply with the provisions of said Act by not depositing the money paid to defendant in a bank, trust company or savings and loan association authorized to do business in this state, and that defendant plans to continue in the future so to violate the provisions of that statute.
The provisions of said statute insofar as the same are pertinent to this decision are as follows:
notice to the other party to the agreement. The funds deposited shall not be partially withdrawn at any time by the purchaser, but shall be entirely withdrawn, if withdrawn at any time before the completion of the agreement or contract.
'[Sec. 5] Provisions of this Article Cannot Be Waived by Contract.--Any provision of any such agreement or contract whereby a person who pays money under or in connection therewith waives any provision of this article shall be void.
'[Sec. 6] Article not Applicable to Sale of Lots or Graves.--This article shall not apply to the sale of lots or graves by a cemetery.'
The statute also makes violation of it a misdemeanor and authorizes injunction proceedings to prohibit violations.
The answer and cross bill of the defendant admits the factual allegations in the plaintiff's bill of complaint to the extent that it has entered into contracts with many persons in the Morgantown area under a plan known as the 'Gold Cross Plan', which contracts are sales on a pre-need basis of interment spaces, burial vaults, memorial markers and certain services in connection with interments, but that it does not contract for caskets or embalming services or the services of a funeral director. And defendant says that it has so engaged in such business in the belief that such statute is invalid and unconstitutional, that it has not and cannot comply with the provisions of said statute relating to the deposit of the proceeds of such contracts in a trust fund as required by said statute, and if so required, it will be compelled to cease doing business. Defendant further says that under its West Virginia corporate charter, it is authorized to own and operate a cemetery and to buy, sell and deal in personal property and services relating to the final disposition of human bodies; that it has expended more than $150,000 in the development of the Beverly Hills Memorial Park Cemetery at Morgantown, and to insure perpetual care of it, has deposited nearly $100,000 in an irrevocable trust in the Farmers' and Merchants' Bank of Morgantown; that by reason of the large scale upon which it does business, it is able to purchase in quantity lots and to sell to the ultimate user materials at a substantially lower price than its competitors could; that it is necessary to employ salesmen at substantial commissions; and that to effect economies in operating overhead, defendant joined with some two hundred other cemeteries located in twenty-two state in a central accounting office in Kansas City Missouri and as rapidly as becomes proper under the contracts, individual trust accounts for the purchasers are set up in the City National Bank & Trust Company of that city. And the defendant further alleges that between the time that it commenced sale of Gold Cross Plan contracts in 1954 and the effective date of the statute under consideration in June, 1955, it entered into four hundred and forty-eight individual contracts involving in the aggregate some $98,000, of which contracts twenty-three have been completed by deliveries of the merchandise sold; that the defendant has never defaulted, its customers are satisfied, that if by the statute the defendant is required to deposit in trust all of the proceeds of any pre-need contract until a rescission by, or until the death of, the other contracting party, it is impossible for the defendant to continue in business.
The defendant alleges, by way of its cross bill, that the statute hereinbefore set forth is invalid and unconstitutional in that it is a denial of the equal protection of the laws guaranteed by the Fourteenth Amendment to the United States Constitution in that it sets apart a particular method of transacting a lawful business by a particular group of citizens and imposes upon this group and this method of business restrictions amounting to a...
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