Terwilliger v. Graceland Memorial Park Ass'n

• Decision Date: 30 June 1961
• Docket Number: No. A--118,A--118
• Parties: Robert R. TERWILLIGER, trading as Kenngott-Terwilliger Co., Plaintiff-Respondent, v. GRACELAND MEMORIAL PARK ASSOCIATION, a corporation of the State of New Jersey, Graceland Management Corporation, a corporation of the State of New Jersey, Defendants, and Hollywood Memorial Park, Inc., a corporation of the State of New Jersey, Rosedale and Linden Park Cemetery Association, a corporation of the State of New Jersey, Rosedale and Linden Park Company, a corporation of the State of New Jersey, and David D. Furman, the Attorney General of the State of New Jersey, Defendants-Appellants.
• Court: New Jersey Supreme Court

Page 259

35 N.J. 259

173 A.2d 33

Robert R. TERWILLIGER, trading as Kenngott-Terwilliger Co., Plaintiff-Respondent, v. GRACELAND MEMORIAL PARK ASSOCIATION, a corporation of the

State of New Jersey, Graceland Management

Corporation, a corporation of the State

of New Jersey, Defendants,

and

Hollywood Memorial Park, Inc., a corporation of the State of

New Jersey, Rosedale and Linden Park Cemetery Association, a

corporation of the State of New Jersey, Rosedale and Linden

Park Company, a corporation of the State of New Jersey, and

David D. Furman, the Attorney General of the State of New

Jersey, Defendants-Appellants.

No. A--118.

Supreme Court of New Jersey.

Argued April 24 and 25, 1961.

Decided June 30, 1961.

Edward J. O'Mara, Jersey City, for defendants-appellants (O'Mara, Schumann, Davis & Lynch, Jersey City, attorneys).

David Landau, Deputy Atty. Gen., for the Attorney General (David D. Furman, Atty. Gen., attorney).

Howard Stern, Paterson, for plaintiff-respondent (Hofstra & Hofstra, Paterson, attorneys).

The opinion of the court was delivered by

FRANCIS, J.

The defendant Hollywood Memorial Park, Inc., operates a public cemetery in the Township of Union, New Jersey. Defendant Rosedale and Linden Park Company, a corporation, conducts the same kind of cemetery in the City of Linden, New Jersey. Each defendant also engages at its cemetery in the sale of bronze markers or memorials to be installed on the graves of persons buried there. At the behest of plaintiff Robert R. Terwilliger, a local dealer in memorials, the Chancery Division of the Superior Court enjoined defendants from continuing to sell such articles on the ground that the activity is beyond their corporate power and contrary to public policy. 59 N.J.Super. 205, 157 A.2d 567 (Ch.Div.1960). We certified defendants' appeal from the restraint before argument in the Appellate Division.

The cemetery in the Township of Union was established in 1909 when the Union Cemetery Association was incorporated under the Rural Cemetery Act, R.S. 8:1--1 to 22, N.J.S.A. The land to be used was dedicated as a place of sepulture and the required permit to operate the cemetery was obtained. N.J.S.A. 8:3--2, N.J.S.A. Subsequently the Association became involved in financial difficulties which persisted over a long period, and its continued operation became subject to certain decrees of the Court of Chancery. See Fidelity Union Trust Co. v. Union Cemetery Ass'n, 136 N.J.Eq. 15, 40 A.2d 205 (Ch.1944), affirmed o.b. 137 N.J.Eq. 455, 45 A.2d 670 (E. & A. 1946).

In July 1937 defendant Hollywood was incorporated under the General Corporation Act, R.S. 14:2--1, N.J.S.A. In June 1938 it entered into a contract with Union Cemetery Association (this apparently being the reason for Hollywood's organization) to purchase the remaining land which, although dedicated for the purpose, had not yet been actually put to cemetery use by Union. The agreement is not in evidence but enough is revealed by the record to indicate that as part thereof Hollywood undertook to conduct the cemetery subject to a contract Union had with the Township of Union under which a past due and future real property tax liability (imposed on land not yet actually used for burial purposes and so not exempt from taxation) was to be liquidated as lots were sold for interment. Whatever may have been the full scope of the arrangement, it came into question in Fidelity Union Trust Co. v. Union Cemetery Ass'n, supra, and evoked some comments by the Court of Chancery which bear repetition here:

'The contract hereinbefore referred to between it and the Union Cemetery Association was entered into with knowledge of the court's decrees, and is amenable to the court's jurisdiction. (Citations omitted.) The cemetery lands constitute a trust fund, the terms of which trust are defined by the statute. Hollywood having bought with knowledge of the trust and its terms is bound thereby, and is compelled to account. * * * Hollywood has no cemetery permit and is a corporation organized under the General Corporation Act. * * * It is a selling agent for Union. Here is a situation where Union has not received the full proceeds and allows 90% Of the proceeds of sale to be retained by this corporation. This arrangement deprives the certificate holders of their share of the proceeds of sale under the decrees and statute and permits Hollywood to make a profit which it may not do in the operation of a cemetery. (Citations omitted.) The rights of Hollywood are subject to those of Fidelity Union Trust Company, trustee, and the trustee is entitled to an accounting from Hollywood. Neither the trustee nor the certificate holders are parties to the arrangement described and neither consented thereto. Even if it were true that some of the certificate holders consented thereto, it would be a breach of the statutory trust and against the decrees and it would be the duty of the court to rectify the situation.' 136 N.J.Eq. at pp. 27, 28, 40 A.2d at p. 212.

Thereafter a final decree was entered which recited:

'That in order to accomplish the object of the dedication of Union's lands for cemetery purposes and to assure the preservation of the cemetery, the rights of bondholders, certificate holders, plot owners and the public, it is necessary that this court assume jurisdiction of the trust resulting from the dedication of said lands and the court does hereby assume jurisdiction for the purpose of preserving the trust and effectuating the plan formulated by this court and hereinafter set forth.'

Then followed a precise and elaborate plan under which Hollywood was to operate the cemetery and to which the contracts between Hollywood and Union, and Union and the Township of Union, were to be subject. So rigorous was the control that no deed for a cemetery plot could be delivered to a purchaser unless the trustee joined in it. After outlining the plan of operation, the decree also dismissed the petition of Union for instructions as to its contract of June 1938 with Hollywood.

This historical summary makes it plain that Hollywood took over a cemetery created under the Rural Cemetery Act, Title 8, and assumed to operate it as such under the various contracts and Chancery decree, and subject to all of the public policy and trust implications inherent in the statute. No appeal was taken from the decree and Hollywood concedes that the cemetery is still being conducted thereunder. See also Fidelity Union Trust Co. v. Union Cemetery Ass'n, 138 N.J.Eq. 50, 52, 46 A.2d 728 (Ch.1946), affirmed 139 N.J.Eq. 309, 50 A.2d 875 (E. & A. 1947).

Rosedale and Linden Park Company was incorporated under the General Corporation Act and succeeded by means of contract to the operation of the cemeteries of Linden Cemetery Association and Rosedale Cemetery Association. The incorporation took place in 1942 for the purpose of acquiring the remaining dedicated land of the associations and of continuing the cemeteries pursuant to that agreement. The instrument is not in the record nor were the details furnished (although this defendant unsuccessfully offered the proof at the hearing). There is no proof that it ever was granted a permit for a burial ground. Cf. George Washington Memorial Park Cemetery Ass'n v. Memorial Development Co., 141 N.J.Eq. 47, 65, 55 A.2d 675 (Ch.1947).

Linden Cemetery Association was organized under the Rural Cemetery Act in 1899 and received a permit to operate a public burial ground. (See Attorney-General ex rel. Bliss v. Linden Cemetery Ass'n, 85 N.J.Eq. 501, 96 A. 1001 (E. & A. 1916).) Subsequently, it ran into monetary troubles. See Bliss v Linden Cemetery Ass'n, 81 N.J.Eq. 394, 87 A. 224 (Ch.1913); Bliss v. Linden Cemetery Ass'n, 83 N.J.Eq. 494, 91 A. 304 (Ch.1914), modified sub nom. Attorney-General ex rel. Bliss v. Linden Cemetery Ass'n, 85 N.J.Eq. 501, 96 A. 1001 (E. & A. 1916); Attorney-General ex rel. Bliss v. Linden Cemetery Ass'n, 90 N.J.Eq. 398, 111 A. 224 (Ch.1917), modified 89 N.J.Eq. 192, 107 A. 874 (E. & A. 1918); Attorney-General ex rel. Bliss v. Linden Cemetery Ass'n, 90 N.J.Eq. 400, 107 A 53 (Ch.1919); Attorney-General ex rel. Bliss v. Linden Cemetery Ass'n, 90 N.J.Eq. 404, 107 A. 594 (Ch.1919), affirmed sub nom. Bliss v. Linden Cemetery Ass'n, 91 N.J.Eq. 329, 109 A. 500 (E. & A. 1920). Its financial condition in 1942, when defendant Rosedale and Linden Park Company took over, does not appear.

Rosedale Cemetery Association was also created under the Rural Cemetery Act. The date of origin is not in the record but obviously it was prior to 1906. See Rosedale Cemetery Association v. Linden, 73 N.J.L. 421, 63 A. 904 (Sup.Ct.1906). The subsequent history of the Association down to 1942, when defendant assumed control under the contract referred to above, is not shown by the testimony or by any other reported cases.

Thus it is apparent that the cemeteries now under operation and control by defendants came into being originally through the three associations organized and empowered to act by virtue of the Rural Cemetery Act. The lands then dedicated by the associations as burial grounds became indelibly stamped with that purpose. As section 1 of the act says, the associations were incorporated for the 'purpose of procuring and holding lands to be used exclusively for a cemetery or place for the burial of the dead.' R.S. 8:1--1, N.J.S.A.

Burial grounds have always been considered as necessary adjuncts of the community. The need stems from spiritual considerations associated with the departed, as well as material considerations relating to the health and welfare of the survivors. Such places have been regarded as hallowed ground and held in reverence from ancient times.

The common need of places of sepulture has resulted in their classification by the judiciary as quasi-public service institutions. Attorney-General ex rel. Bliss v. Linden Cemetery Ass'n, 90 N.J.Eq., at p. 408, 107 A. 594; Emmerglick v. Vogel, 131 N.J.Eq. 257,...