Sullivan v. Mt. Carmel Cemetery Ass'n

• Citation: 155 N.E. 580,244 N.Y. 294
• Parties: SULLIVAN v. MT. CARMEL CEMETERY ASS'N.
• Decision Date: 23 February 1927
• Court: New York Court of Appeals Court of Appeals

244 N.Y. 294

155 N.E. 580

SULLIVAN

v.MT. CARMEL CEMETERY ASS'N.

Court of Appeals of New York.

Feb. 23, 1927.

Action by Hannah Sullivan, as receiver of the estate of Timothy D. Sullivan, against the Mt. Carmel Cemetery Association. Order of the Appellate Division, Second Department (217 App. Div. 309, 216 N. Y. S. 576), affirming an order for the Special Term, which denied a motion for judgment on the pleadings, and plaintiff appeals by permission of the Appellate Division (218 App. Div. 737, 218 N. Y. S. 914), which certified a question.

Order affirmed, and question certified answered.

Appeal from Supreme Court, Appellate Division, Second department.

Abraham Benedict, Gustavus A. Rogers and Edith H. Kunen, all of New York City, for appellant.

Clinton T. Roe, of New Yrok City, for respondent.

CRANE, J.

The plaintiff is the holder of the following certificate of indebtedenss issued by the Mt. Carmel Cemetery Association on the 16th day of October, 1918:

‘Number 393

Amount $200,000.

‘Certificate of Indebtedenss of the Mt. Carmel Cemetery Association.

‘Incorporated under the laws of the state of New York.

‘This is to certify that the Mt. Carmel Cemetery Association, a corporation duly organized under and by virtue of the laws of the state of New York, is indebted to Hannah Sullivan, as receiver of the estate of Timothy D. Sullivan, deceased, or assigns, in the sum of two hundred thousand 00/000 dollars, for value received, which sum the said Mt. Carmel Cemetery Association hereby promises to pay on the first Monday in June, in the year nineteen hundred and twenty-five, at its office in the city of New York, on the presentation and surrender of this certificate.

‘This certificate is one of a series of certificates amounting in the aggregate to three million,one hundred and fifty-six thousand, eight hundred ($3,156,800) dollars, all of like tenor and effect. The Mt. Carmel Cemetery Association shall and will apply at least one-half, or fifty (50%) per cent. of the proceeds of the sale and use of lots and plots semiannually, or oftener at the option of the said Mt. Carmel Cemetery Association, to the payment pro rata of all outstanding certificates of indebtedness, aggregating said amount of three million, one hundred and fifty-six thousand, eight hundred ($3,156,800) dollars, until the whole amount of said indebtedness is paid; the unpaid balance of this certificate of indebtedness to be paid on the said first Monday of June, 1925, at the office of said Mr. Carmel Cemetery Association, in the city of New York.

‘The said Mt. Carmel Cemetery Association may apply as much more than one-half, or fifty per cent. of the proceeds of the sale and use of its lots and plots to the payment of its certificates of indebtedness as it may deem advisable and proper after the payment of the incidental expenses and liabilities of the said Mt. Carmel Cemetery Association, and the amount necessary for the preservation, improvement and embellishment of the cemetery grounds and the avenues and roads leading thereto.

‘This certificate of indebtedness is transferable only on the books of the Mt. Carmel Cemetery Association in person or by attorney on surrender of this certificate.

‘This certificate shall not become obligatory until it shall have been authenticated by the signature of the registrar selected by the Mt. Carmel Cemetery Association.

‘It witness whereof, the said Mt. Carmel Cemetery Association has caused this certificate of indebtedness to be signed by its president and its secretary, and its corporate seal to be hereto affixed at the city of New York on this 16th day of October A. D. 1918.

‘Mt. Carmel Cemetery Association.

‘[Corporate Seal.]

‘By Ben Blumenthal President.

‘Maurice B. Blumenthal, Secretary.’

On June 15, 1925, the due date, only $69,500 had been paid, and there was due $130,500 for which this plaintiff has brought an action at law. There is included in the complaint a second cause of action upon another like certificate, but, for the purposes of this opinion, only one need be mentioned.

The defendant answered, setting up that the certificates held by the plaintiff represented part of land purchase certificates, and are for the unpaid balance of the purchase price of land acquired and to be used for cemetery purposes, that, pursuant to the laws and statutes of the state of New York, the proceeds received from the sale of cemetery lots are to be applied to the payment and reduction of such certificates, and that the defendant was unathorized by law to obligate itself to pay said amounts at a fixed date.

The plaintiff having moved for judgment on the pleadings, the motion was denied, and the order of the Special Term has been affirmed by the Appellate Division. This not being a final order, the Appellate Division granted leave to appeal to this court, certifying the following question: ‘Is the plaintiff entitled to judgment in her favor upon the pleadings?’ We may put this question in another form. Can the plaintiff maintain an action at law on this certificate, obtain a money judgment, and issue execution to collect it; or must she resort to an action in equity for an accounting and for the pro rata application of moneys received from the sale of lots to her certificates?

[1] After a review of all our statutes applicable to cemetery corporations, I am of the opinion that an action in equity for an accounting and its incidental reliefs is the only remedy. Chapter 133 of the Laws of 1847 is the first act of the Legislature which we need refer to. It provided for the incorporation of cemetery associations, and gave them power to purchase land to be used exclusively for the burial of the dead, not to exceed 200 acres. Authority was also given to hold personal property not exceeding $5,000. Section 7 provided:

‘All lots or plats of ground designated on the maps filed as aforesaid, and numbered as separate lots by the incorporation, shall be indivisible, but may be held and owned in undivided shares. One-half at least of the proceeds of all sales of lots or plats shall be first appropriated to the payment of the purchase money of the lands acquired by the association, until the whole purchase money shall be paid, and the residue thereof to preserving, improving, and embellishing the said cemetery grounds and the avenues, or roads leading thereto, and to defraying the incidental expenses of the cemetery establishment. And after the payment of the purchase money and the debts contracted therefor, and for surveying and laying out the land, the proceeds of all further sales shall be applied to the improvement, embellishment and preservation of such cemetery, and for incidental expenses and to no other purpose or object.’

Section 10 reads:

‘The cemetery lands and property of any association, formed pursuant to this act, shall be exempt from all public taxes, rates, and assessments; and shall not be liable to be sold on execution, or be applied in payment of debts, due from any individual proprietors.’

This was followed by chapter 122 of the Laws of 1853, by adding to the Act of 1847 the following section:

‘Associations formed under this act may also agree, with the person or persons from whom cemetery lands shall be purchased, to pay for such lands, as the purchase price thereof, any specified share or portion, not exceeding one-half, the proceeds of all sales of lots or plots made from such lands; in which case the share or portion of such proceeds so agreed upon, not exceeding one-half thereof, shall be first appropriated and applied to the payment of the purchase money of the lands so acquired, and the residue thereof shall be appropriated to preserving, improving and embellishing the said cemetery grounds and the avenues or roads leading thereto, and to defraying the incidental expenses of the cemetery establishment. In all cases where cemetery lands shall be purchased and agreed to be paid for in the manner hereinbefore last provided, the prices for lots or plots, specified in the by-laws, rules and regulations first adopted by any such association, shall not be changed without the written consent of a majority in interest of the persons from whom the cemetery lands were purchased, their heirs, representatives or assigns.’

Then came chapter 163 of the Laws of 1860, giving authority to the cemetery associations to issue certificates of indebtedness. This was also by amendment of the act of 1847. ‘It shall be lawful,’ says section 1, ‘for the trustees * * * to fund any outstanding indebtedness, for lands purchased for cemetery purposes, or for moneys actually expended in preserving, improving and embellishing the cemetery grounds, and to provide for the payment of such funded debt, in the manner hereinafter provided.’

Then follows:

‘Sec. 2. Whenever the trustees, by a vote of two-thirds of all the trustees elected, shall desire to fund such indebtedness, it shall be their duty to ascertain the amount of obligations outstanding for the purchase money of the lands acquired by the association, and the amount of obligations outstanding for preserving, improving and embellishing the cemetery grounds, and thereupon, with the consent of any creditor to whom such indebtedness, or any part thereof, may be due and owing, the said trustees shall have power to issue certificates for the amount thereof, in sums of one hundred dollars each, payable at such time, and drawing such interest as may be agreed upon, in satisfaction and discharge of such indebtedness, or such part thereof, but no certificate shall be issued for any fractional part of one hundred dollars, nor drawing any higher rate of interest than seven per cent per annum. The said certificates shall be sealed with the corporate seal of the association, and signed by the president and treasurer thereof. They shall be deemed personal property, and shall be transferable by delivery, unless otherwise provided on the face thereof, and an exact and true...