Opinion
03-24-1911
EAST RIDGELAWN CEMETERY CO. v. FRANK et al.
John R. Hardin, of Newark, for demurrant Adam Frank. George P. Rust, of Passaic, and Michael Dunn, of Paterson, for defendant Cemetery, etc.
Suit by the East Ridgelawn Cemetery Company against Adam Frank and others. On demurrer to amended bill. Demurrer allowed.
John R. Hardin, of Newark, for demurrant Adam Frank.
George P. Rust, of Passaic, and Michael Dunn, of Paterson, for defendant Cemetery, etc.
STEVENS, V. C. The original bill filed in this cause was demurred to and the demurrer sustained. East Ridgelawn Cemetery Co. v. Frank, 77 N. J. Eq. 36, 75 Atl. 1006. The complainant has amended its bill, and the bill as amended has again been demurred to. The amendments consist largely in a more detailed statement of what was before matter of inference.
In the original bill it was inferred from what was stated that the two companies, the East Ridgelawn and the West Ridgelawn Cemetery Companies, had joined in issuing certificates for 13,500 shares of proceeds of sale of cemetery lots. This is now distinctly alleged and the certificate set forth. It certifies that the holder is to receive his pro rata share of the proceeds of sale by the two companies of sublots or plots after deducting certain expenses, etc. The certificate is plainly open to the objections mentioned in my former opinion, and I shall not here repeat them. Its issuance is not a valid consideration for a promise. The Cemetery Act (1 Comp. St. 1910, p. 372) does not authorize a single company to issue such a certificate, and still less does it authorize two companies to join in issuing it. The policy of the law is to restrict cemetery companies to the ownership of 135 acres. If this scheme is valid, any number of companies may be organized to join in one certificate and form what would be, virtually, a consolidated companypossessing as many acres of land as their organizers might see fit to acquire.
One of the causes of demurrer is that the action, if sustainable, is legal and not equitable. If the defendant Frank has, contrary to agreement, failed to cancel the mortgages upon parts of the cemetery property, the remedy is plainly a suit at law for breach of contract. If he has, or in so far as he has, failed to procure enough land to enable the cemetery company to straighten its lines, such failure on his part (there being a valuable consideration for the promise) would also entitle the company to sue at law. It is, however, alleged that four tracts of land, containing 6.25 acres, stand in the name of either Gruber or Howe, who hold for Frank (Pond having released his interest), and it is prayed that Frank be compelled to convey these, as he agreed to when he received the 13,500 shares. It is not alleged that this part of the agreement is in writing. A bill for specific performance must show a written agreement to convey. Fry on Sp. Per. § 332; Titus v. Taylor (N. J. Ch.) 65 Atl. 1003. Aside from this, it appears that the only consideration for the promise was the illegal issue of the 13,500 shares. No rule is better settled than that specific performance of an agreement, not founded on valuable consideration, will not be enforced in equity. I cannot understand how the certificates in question, plainly illegal and unauthorized, can be said to constitute such a consideration.
If there was an agreement between the Passaic Trust & Safe Deposit Company and the cemetery companies other than that which related to the issuance of share certificates, it is not set forth. If there was any agreement between Frank and that company, other than the receipt to which I am about to refer, the bill does not show it. The deposit company received from Frank 2,500 shares of the 13,500 issued and gave him a paper writing, called a "receipt," declaring that:
"Said shares are absolutely his property and as such subject only to a voluntarily created lien to secure the payment of certain mortgages of Herbert B. Gruber referred to in a certain declaration of trust of the Passaic Trust & Safe Deposit Company * * * in favor of the shareholders in East and West Ridgelawn Cemeteries."
The declaration of trust is not set forth. The receipt then goes on to say that the shares, or any money deposited in lieu thereof, shall not be considered subject to any other liens, except by agreement of the pledgor until the mortgages are first paid; that any shares may be withdrawn on a deposit of $40 for each share; that moneys deposited by him under receipt shall be subject to his order when drawn for the payment in whole or in part of any existing mortgage above referred to or when drawn in favor of or for the benefit of either cemetery. If he paid any of the mortgages in whole or in part, he was also at liberty to withdraw shares to the extent therein mentioned, as he might also do by consent of the cemetery companies.
Whether this was the private agreement of the pledgor and pledgee only, or whether, by the declaration of trust or other writing, the cemetery companies had an interest in it, we are not informed. Its terms are not shown to have been violated, and how it could be enforced, except according to its terms, is not evident. The pleador does not seem to make it the basis of any claim to relief, although he does charge generally that the trust company refuses to aid complainant by enforcing "said trust" so that the mortgage aforesaid may at least be paid and satisfied. The bill seems to proceed upon the theory, somewhat vaguely stated, that the court itself can create a lien of some sort upon the shares, both those in the trust company's hands and those in the defendant's hands, or can direct a part of them to be canceled. I can find nothing in the bill that would justify such relief, even on the assumption that the court could treat the shares as creating a legal obligation.
I think the demurrer should be allowed.