Forest Hill Cemetery Co. v. City of Ann Arbor

• Decision Date: 08 September 1942
• Docket Number: No. 19.,19.
• Parties: FOREST HILL CEMETERY CO. v. CITY OF ANN ARBOR et al.
• Court: Michigan Supreme Court

303 Mich. 56

5 N.W.2d 564

FOREST HILL CEMETERY CO.

v.CITY OF ANN ARBOR et al.

No. 19.

Supreme Court of Michigan.

Sept. 8, 1942.

Action in chancery by Forest Hill Cemetery Company, a Michigan corporation, against the City of Ann Arbor, a municipal corporation of the State of Michigan, and another, to perpetually restrain defendants from collecting the unpaid installments on special assessments levied by defendant city for paving, either by levying on plaintiff's lands or by levy and sale of its personal property and to recover the installments which plaintiff had paid on the assessments. From an adverse decree, defendants appeal.

Decree affirmed. Appeal from Circuit Court, Washtenaw County, in Chancery; George W. Sample, Judge.

Before the Entire Bench, except WIEST, J.

William M. Laird, of Ann Arbor, for appellants.

Burke & Burke, of Ann Arbor (Rowan Fasquelle, of Ann Arbor, of counsel), for appellee.

STARR, Justice.

Plaintiff was incorporated in about 1857 as a nonprofit corporation under Act No. 87, Pub.Acts 1855, 2 Comp.Laws 1929, § 10401 et seq., Stat.Ann. § 21.821 et seq., known as ‘An act relative to burying grounds.’ Plaintiff acquired certain lands within the corporate limits of defendant City of Ann Arbor and has improved and continuously used the same for cemetery purposes. About 14,000 persons have been buried in such cemetery. Plaintiff sold lots for burial purposes and issued deeds or certificates therefor. It also issued ‘memorial endowment certificates.’ Plaintiff's financial statement as of October 31, 1940, shows personal property consisting principally of an ‘endowment fund reserve’ of about $19,000, a ‘perpetual care reserve’ of about $58,000, and a balance or surplus of about $32,000. Plaintiff's treasurer testified that such surplus was the ‘result of an accumulation from time to time, and is not earmarked for any other purpose other than the care and upkeep of the cemetery.’

Plaintiff's cemetery lands were bounded on the south by Geddes avenue and on the west by Observatory street. In April, 1924, the common council of defendant city confirmed a special assessment for the paving of Geddes avenue and assessed plaintiff's land $8,957.85, payable in 10 equal annual installments of $895.79 and interest. Plaintiff, without protest, paid the first six annual installments for the years 1924 to 1929, both inclusive, together with interest and collection fees. Four annual installments of such special assessment remain unpaid. In April, 1925, the common council of defendant city confirmed a special assessment for the paving of Observatory street and assessed plaintiff's land $4,777.90, payable in 10 equal installments of $477.79 and interest. Plaintiff, without protest, paid the first five annual installments for the years 1925 to 1929, both inclusive, together with interest and collection fees. Five annual installments of such special assessment remain unpaid.

No action appears to have been taken by either party regarding the unpaid installments of the two special assessments until about 1935. Plaintiff then declined to pay such remaining installments, on the ground that its property was exempt from taxation and that both special assessments were illegal and void. In December, 1935, the common council of defendant city authorized its city treasurer to collect the unpaid installments of the assessments and in default thereof to levy upon plaintiff's personal property.

In January, 1936, plaintiff began the present chancery action to perpetually restrain defendants from collecting the unpaid installments of both special assessments either by levy on its lands or by levy and sale of its personal property, and also to recover the installments which plaintiff had paid on both assessments. Plaintiff alleged, in substance, that its property was exempt from taxation and from such special assessments and that both assessment were illegal and void. Defendants answered denying plaintiff's right to maintain such action and its right to the relief sought.

The case was tried in November, 1940. On September 22, 1941, the trial court entered decree, in effect determining the special assessments on plaintiff's cemetery property to be illegal and void. Such decree also permanently enjoined defendants from ‘attempting to collect said tax assessments or to levy by a distress and sale of the goods and chattels of the plaintiff.’ The decree also denied plaintiff's right to recover the installments it had paid on such special assessments, on the ground that its claim was barred by the statute of limitations. 3 Comp.Laws 1929, § 13976, Stat.Ann. § 27.605. Defendants appeal from such decree. Plaintiff does not appeal from that portion of the decree denying recovery of the installments paid.

While admitting, in effect, that it does not have a lien upon plaintiff's cemetery land and cannot collect such special assessments by levy and sale of the land, defendant city nevertheless contends that it has the right under its charter to collect the unpaid installments of such assessments either by law action against plaintiff or by levy on its personal property. Defendants contend further that plaintiff's present suit was barred by its laches and also by the statute of limitations; that plaintiff had an adequate remedy at law; and that it was not entitled to the injunctive relief granted.

In pursuance of the provisions of its charter, defendant city, by action of its common council, attempted to make such special assessment taxes a lien upon plaintiff's cemetery land. Section 3395, 1 Comp.Laws 1929, as last amended by Act No. 243, Pub.Acts 1933, Comp.Laws Supp.1935, § 3395, Stat.Ann. § 7.7, provides, in part:

‘The following real property shall be exempt from taxation: * * *

‘Sixth, All lands used exclusively as burial grounds, and the rights of burial therein, and the tombs and monuments therein, while reserved and in use for the purpose.’

Other provisions of the above-cited statute exempting lands of the State and of ‘library, benevolent, charitable, educational or scientific institutions' from taxation, have been held to exempt the lands only from general taxes and not from special assessments. In re Petition of Auditor General, 226 Mich. 170, 197 N.W. 552;City of Big Rapids v. Board of Supervisors of Mecosta County, 99 Mich. 351, 58 N.W. 358.

However, the law is well established in this State that the lands of a cemetery association, used for cemetery purposes, cannot be subjected to a lien for a special assessment for street improvement and cannot be sold to satisfy such an assessment. Woodmere Cemetery Association v. City of Detroit, 192 Mich. 553, 159 N.W. 383;White Chapel Memorial Association v. Willson, 260 Mich. 238, 244 N.W. 460; In Avery v. Forest Lawn Cemetery Co., 127 Mich. 125, 129, 86 N.W. 538, 540, we said:

‘It is the settled policy of this state, in common with the universal sentiment of mankind, to preserve and maintain the burial places of the dead. The legislature has by express enactment prohibited the sale, except for burial purposes, or mortgaging, of lands set apart for cemetery purposes. It has also in express terms provided for the exemption from levy and sale on execution, or upon any other final process of a court, all cemeteries, etc., while in use as repositories of the dead. This was within the power of the legislature to do, and so careful has the legislature been to preserve such properties for burial purposes that it has also in express terms taken it out of the power of the court of chancery to decree satisfaction of any judgment out of such exempt property.’

Under the above-expressed policy of this State it is as essential to protect the personal property of a cemetery company from levy and sale as it is to protect the land used for cemetery purposes from a lien and sale. The upkeep, care and maintenance of a cemetery are necessary to carry out the policy of preserving and maintaining the burial places of the dead. If the funds obtained and accumulated for such purposes can be taken to satisfy a special assessment for street improvement, then the State policy is not carried out. A cemetery without funds and equipment for its upkeep, care and maintenance, would soon deteriorate into an unsightly and disgraceful condition.

It is impossible to reconcile the State's policy to ‘preserve and maintain the burial places of the dead’ with any policy permitting the levy and sale of any part of the cemetery company's personal property which is necessary for the care and maintenance of the cemetery.

In Woodmere Cemetery Association v. City of Detroit, supra, an equally divided court affirmed the trial court's decree holding that plaintiff's cemetery property was exempt from a lien for a special assessment for street paving. Whether the personal property of plaintiff association could be taken by execution to satisfy such special assessment, was also considered. We agree with Mr. Justice Ostrander who, writing for affirmance, said, page 559 of 192 Mich.,page 385 of 159 N.W.:

‘Whether the city may sue the owner of the property as for a debt (see Charter, § 221), in any case where a special assessment for paving has been laid and is not paid, is not in this case a material question. * * * It is impossible to consider whether the property of complainant is exempt from the particular tax or assessment, apart from the [charter] remedy provided for the collection of the tax. If the property is exempt from the lien, it is exempt from the tax. In my opinion, the property here in question is exempt from the particular [special assessment] tax. It is exempt from the general taxes by virtue of 1 Comp.Laws, § 3830 [1 Comp.Laws 1915, § 4001]; it is exempt from the particular [special assessment] tax by virtue of a settled state policy.’

As plaintiff's cemetery land was exempt from lien for the special assessments in question, it is necessary and logical to conclude that under the ‘settled policy of...