Goldmann, Freund and Conford. The opinion of the court was delivered by Freund, J.A.D.
The Fairview Cemetery Company was incorporated in 1901. By 1926 its control had passed to one Rutherford H. Walker, who was also in control of the Hudson Heights Realty Company. In 1926 the defendant herein, the Fairview Mausoleum Company, was incorporated for the purpose of acquiring from the Mausoleum Company of America, Inc., land contiguous to the Fairview Cemetery for the erection thereon of a public mausoleum. The consideration was to be 1,000 shares of the capital stock of the Fairview Mausoleum Company. The Mausoleum Company of America, Inc., was then in the hands of receivers who, by court order, were bound to convey the premises in question to Walker and his company, the Hudson Heights Realty Company.
The mausoleum structure was erected at a cost of approximately $1,000,000. Crypts were sold and bodies interred therein. Then, in 1936, both the Fairview Cemetery Company and the Fairview Mausoleum Company became insolvent, and James D. Moore and William F. Burke were appointed receivers and trustees for both corporations. Walker went bankrupt a few days later. Thereafter, there was litigation regarding the cemetery corporation, Burke v. Gunther , 128 N.J. Eq. 565 (Ch. 1941), affirmed 133 N.J. Eq. 609 (E. & A. 1943).
Since 1936 the receivers have continued to operate the Fairview Mausoleum Company, have succeeded in paying off all creditors, secured the conveyance of the land which had not previously been done, and upon the filing of their fifteenth and final account, petitioned to be discharged. Their account was approved and allowances made. However, to ensure a proper determination of the interests of all parties, crypt owners as well as stockholders, it was deemed necessary that the receivers be continued pending the report of a master appointed to make an investigation and to duly report thereon.
The petition filed by the receivers for settlement of their final account revealed that although the Fairview Mausoleum
Company, in consideration of the issuance of 1,000 shares of its capital stock, was to have had conveyed to it the land upon which the mausoleum was erected, the stock had never been issued nor the land conveyed; that corporate records had not been maintained; further, and most important, there had been no compliance with the statutory requirement that a trust fund be set up for the perpetuation of the mausoleum structure.
The pertinent statute, R.S. 26:6-46, provides;
"No structure constructed or erected under the provision of this article shall be used for the interment or depositing therein of a dead body until a trust fund shall have been established and set apart in accordance with the laws regulating trust funds in this state, of not less than ten per cent of the total cost of the structure. The interest on the trust fund, and the interest only, shall be used for the perpetuation of the structure. This section shall not apply to private mausoleums or temporary receiving vaults."
The master reported that the board of directors of the Fairview Mausoleum Company had shown a complete disregard of the interests of crypt owners, of the general public, and of the requirements of the laws of New Jersey. He recommended that the corporation be dissolved and, further, the establishment of a trust fund of $400,000, sufficient at today's investment return to yield the $12,000 per annum which he considered necessary for proper maintenance and repairs to the mausoleum structure; that the remaining assets of the mausoleum company, consisting of unsold crypts, be sold at public sale for not less than $400,000 to create such a trust fund, any excess to be paid to the stockholders; that if no such bid was forthcoming, the assets be conveyed to and administered by a crypt owners' association to be formed; and that from the proceeds of sale of unsold crypts, after payment of expenses and fees incurred in the pending cause, the trust fund of $400,000 be first created, any moneys thereafter accruing in excess of operating expenses to be payable to the stockholders. The master's report was approved, and the present appeal was taken from the order duly entered thereon.
The appellants, stockholders of the defendant corporation, argue that a trust fund of only 10% of the cost of the mausoleum, i.e. , approximately $100,000, is required to be set aside to satisfy the statutory requirement; that the rights of the crypt owners are not paramount to the rights of the stockholders, and that hallowed ground cannot be sold at public sale.
It is well settled that a cemetery dedicated for the burial of the dead is a charitable or public trust. Atlas Fence Co. v. West Ridgelawn Cemetery , 110 N.J. Eq. 580 (E. & A. 1932); Parker v. Fidelity Union Trust Co. , 2 N.J. Super. 362, 388, 390 (Ch. 1944); East Ridgelawn Cemetery v. Winne , 11 N.J. 459 (1953). Here involved is a building where human remains are placed in crypts or niches. Such a method of disposing of human remains is not so disconnected from the function of a cemetery as to be a non-cemetery use. R.S. 26:6-42 et seq.; Moore's Ex'r v. Moore , 50 N.J. Eq. 554, 558 (Ch. 1892); Ewing Cemetery Ass'n, Inc., v. Ewing Twp. , 126 N.J.L. 610 (Sup. Ct. 1941). The operation and maintenance of defendant's mausoleum ...