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Terwilliger v. Graceland Memorial Park Association

Decided: June 30, 1961.

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



For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None. The opinion of the court was delivered by Francis, J.

Francis

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 (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. 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. 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 (Ch. 1944), affirmed o.b. 137 N.J. Eq. 455 (E. & A. 1946).

In July 1937 defendant Hollywood was incorporated under the General Corporation Act, R.S. 14:2-1. 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.

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 (Ch. 1946), affirmed 139 N.J. Eq. 309 (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 ...


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