§ 1511 — Cemetery indebtedness

§ 1511. Cemetery indebtedness.\n (a) Certificates of indebtedness. (1) If a cemetery corporation be\nindebted for lands purchased for cemetery purposes, or for services\nrendered or materials furnished in connection with the necessary and\nproper preservation or improvement of its cemetery or for moneys\nborrowed exclusively for payment of such services or materials, the\ndirectors, by the concurring vote of a majority of their whole number,\nwith the consent of the creditor to whom such indebtedness is owing, may\nissue certificates under the corporate seal, signed by the president and\nsecretary, for such amount, payable at the times and at the rate of\ninterest agreed upon but not to exceed six per centum per annum;\nprovided, however, that there be first obtained from the cemetery board\nan order approving the issuance of such certificates. In the case of\ncertificates of indebtedness issued for moneys borrowed exclusively for\npayment for services rendered or materials furnished in connection with\nthe necessary and proper preservation or improvement of its cemetery the\nconsent of the creditor to whom such indebtedness is owing shall not be\nrequired. (2) Such approval shall be given by the cemetery board only\nif it determines that the amount of the certificates proposed to be\nissued does not exceed the fair and reasonable value of the services\nrendered or materials furnished or the purchase price of real property\nas fixed in accordance with subdivision (b) of this section. No\ncertificate issued shall be valid or enforceable unless there has first\nbeen issued by the cemetery board an order of approval as herein\nprovided. No certificate shall be for less than one hundred dollars.\nThe certificate shall be transferable by delivery, unless therein\notherwise provided. (3) The directors shall keep an account of the\nnumber and amount of such certificates, the persons to whom issued, the\ndate of maturity, the rate of interest and the purpose for which the\nsame were issued. Each cemetery corporation shall file with the\ncemetery board a verified statement setting forth all changes in such\naccount during the previous calendar or fiscal year. (4) The directors\nshall set aside from the proceeds of sales of lots, plots and parts\nthereof such sums to pay such certificates at maturity as they deem\nnecessary. Until the certificates are paid the holders thereof shall be\nentitled at all meetings of the corporation, to one vote for each one\nhundred dollars of indebtedness remaining unpaid, except that those\ncertificates of indebtedness issued for moneys borrowed exclusively for\npayment of services or materials shall have no voting power. The\ncertificates shall not be a lien upon any lot, plot or part thereof\nbelonging to a lot owner.\n (b) Application of proceeds of sales of lots. (1) At least one-half\nof the proceeds of sales of lots or the use thereof remaining after the\ndeductions for the portion thereof required to be deposited in the\npermanent maintenance fund and current maintenance fund together with\nthe expenses of sale shall be applied by a cemetery corporation to the\npayment of the purchase price of the real property acquired by it. The\nremainder of such proceeds shall be applied by the corporation to\npreserving, improving and embellishing the cemetery grounds and the\navenues and roads leading thereto, and to defraying its expenses and\ndischarging its liabilities. After the payment of such purchase price,\nand the expense of surveying and laying out the cemetery, all the\nproceeds of such sales shall be applied to the improvement, preservation\nand embellishment of the cemetery and to such expenses and liabilities.\n(2) Where a corporation has agreed with a person from whom any such\nlands were purchased to pay therefor a specified share not exceeding\none-half of the proceeds of sales of lots therein or the use thereof,\nsuch corporation may continue to make payments as so agreed, provided\nhowever that there be first deducted from said proceeds of sales the\namount required to be deposited in the permanent maintenance fund and\ncurrent maintenance fund as aforesaid together with the expenses of\nsale. The balance of such proceeds shall continue to be applied by the\ncorporation to the preservation, improvement and embellishment of the\ncemetery, and the expenses and liabilities of the corporation. Where\nthe corporation has heretofore agreed to pay a specified share of the\nproceeds as aforesaid in payment of the purchase price of land, the\nprices of lots or the use thereof in force when such purchase was made,\nshall not be changed, while the purchase price remains unpaid, without\nthe written consent of a majority in interest of the persons from whom\nthe lands were purchased or their legal representatives. (3) A\ncorporation which has hertofore issued certificates of land shares which\nentitle the owner to a specified share in the proceeds of the sale of\nlots, may purchase such certificates with its surplus or reserve funds\nand hold such certificates for the benefit of its surplus or reserve\nfunds, but such certificates may not thereafter be sold or reissued.\n (c) Certificates of stock formerly issued. If a cemetery\ncorporation, incorporated under a law repealed by the membership\ncorporations law, prior to September first, eighteen hundred\nninety-five, converted its outstanding indebtedness or certificates of\nindebtedness into certificates of stock, in pursuance of law, no\ninterest shall accrue to the holders of such stock, but they shall\nreceive annually or semi-annually a dividend thereon for their\nproportional part of the entire surplus or net receipts of the\ncorporation over and above current expenses; or if the proportion of the\nnet receipts or surplus which stockholders shall be entitled to receive\nshall have been fixed by agreement at the time of issuing such stock,\nsuch stockholders shall be entitled to receive dividends in accordance\nwith such agreement. Such certificates of stock shall be transferable\nonly on the books of the corporation on the surrender of the\ncertificate, unless otherwise provided on the face thereof, and on every\nsuch surrender a new certificate of stock shall be issued to the person\nto whom the same has been transferred; and the holders of such stock\nshall be entitled, in person or by proxy, to one vote for every share\nthereof, at each meeting of the corporation. A register of the stock\nissued by the corporation shall be kept by its directors showing the\ndate of issue, the number of shares, the par value thereof, the name of\neach person to whom issued, the number of the certificates therefor; and\nall transfers of such stock shall be noted and entered in such register,\nand the certificates surrendered shall be deemed canceled by the issue\nof a new certificate, and the surrendered certificate shall be\ndestroyed. Any director may become the holder or transferee of such\nstock for his own individual use or benefit. No such stock shall be a\nlien on the lot of any individual lot owner within the cemetery limits;\nand no other or greater liability of the corporation issuing such stock\nshall be created or deemed to exist than may be necessary to enforce the\nfaithful application of the surplus or net receipts of the corporation\nto and among the holders of the stock in the manner hereinbefore\nspecified. A cemetery which has heretofore issued such certificates of\nstock is a membership corporation and not a stock corporation.\n (d) Retirement of certificates of stock of certain cemetery\ncorporations. If a cemetery association, incorporated under a law\nrepealed by chapter five hundred fifty-nine of the laws of eighteen\nhundred ninety-five has changed certificates of indebtedness into\ncertificates of stock, pursuant to chapter one hundred seven of the laws\nof eighteen hundred seventy-nine, and such stock remains unimpaired,\nsuch association may retire such stock and issue in exchange therefor\ncertificates of indebtedness representing the par value of such stock,\nsuch certificates of indebtedness to bear interest at a rate not\nexceeding six per centum per annum from the date of the last preceding\ndividend payment; provided, however, the exchange of such stock for\ncertificates of indebtedness shall be authorized at a duly called\nmeeting of such association by the affirmative vote of at least\ntwo-thirds of the stock issued and outstanding and of at least\ntwo-thirds of all votes cast at such meeting in favor of such exchange.\nAny holder of such stock not voting in favor of the exchange of such\nstock for certificates of indebtedness may at any time prior to the vote\nupon such exchange, or if notice of the meeting to vote upon such\nexchange was not mailed to him at least twenty days prior to the taking\nof such vote, then within twenty days after the mailing of such notice,\nobject to such exchange and demand payment for his stock and thereupon\nsuch stockholder or the corporation shall have the right, subject to the\nsame conditions and provisions contained in section six hundred\ntwenty-three of the business corporation law, to have such stock\nappraised and paid for as provided in such section. Such objection and\ndemand must be in writing and filed with the corporation. The\nprovisions of this section relating to certificates of indebtedness and\nthe rights of the holders thereof shall apply to certificates of\nindebtedness issued as provided in this subdivision. The stocks so\nretired shall not be reissued by such association and it shall have no\nright thereafter to issue any certificates of stock.\n (e) Purchase, retirement and exchange of stock. (1) A cemetery\ncorporation which has issued certificates of stock, pursuant to chapter\none hundred seven of the laws of eighteen hundred seventy-nine, or\nchapter two hundred sixty-seven of the laws of eighteen hundred\nninety-four, may purchase such certificates of stock with its surplus or\nreserve funds, and hold such certificates for the benefit of its surplus\nor reserve funds, but such certificates of stock so purchased may not\nthereafter be sold or reissued. (2) A cemetery corporation which has\nissued certificates of stock may also effect the retirement of such\nstock as follows: The board of directors of such corporation shall\nadopt by vote of a majority of the entire number of such directors a\nplan for such retirement which shall include the fixing of a price which\nthe corporation will pay for all shares of stock then outstanding, which\nprice shall, in the opinion of such directors, represent the fair value\nof such stock. The said plan shall be submitted to a duly called\nmeeting of the members of such corporation and, if approved by the\naffirmative vote of at least two-thirds of all votes cast at such\nmeeting, including the affirmative vote of the holders of record of at\nleast two-thirds of all shares of stock issued and then outstanding\nexclusive of any shares of stock held by the corporation, shall become\nbinding upon all stockholders, and they shall proceed to transfer and\nsurrender to the corporation their certificates of stock and to receive\npayment therefor in accordance with the terms of such plan. Any holder\nof shares of such stock not voting in favor of such plan may at any time\nprior to the vote approving such plan, or if notice of the meeting to\nvote upon such plan was not mailed to him at least twenty days prior to\nthe taking of such vote, then within twenty days after the mailing of\nsuch notice, but in any event within ten days after the taking of such\nvote, by written notice filed with such corporation, object to such plan\nand demand appraisal of his shares. Thereupon, such stockholder or the\ncorporation shall have the right, subject to the same conditions and\nprovisions contained in section six hundred twenty-three of the business\ncorporation law, to have such stock appraised and paid for as provided\nin such section. (3) A cemetery corporation which has issued\ncertificates of stock may also effect the exchange of such stock as\nfollows: The board of directors of such corporation shall adopt by a\nvote of a majority of the entire number of such directors a plan for the\nexchange of all shares of stock then outstanding for a like number of\nparticipating certificates. Such participating certificates shall\nentitle the owners to a specified share not exceeding, collectively,\none-half of the proceeds of sales of lots therein or the use thereof\nafter first deducting from such proceeds of sale the amount required to\nbe deposited in the permanent maintenance fund and current maintenance\nfund as provided in and pursuant to subdivision (a) of section fifteen\nhundred seven of this article, together with the expenses of sale. Such\nplan shall then be submitted to the cemetery board for its approval. In\nmaking its determination the cemetery board shall consider and may\ncondition its approval on the purposes of this section. Thereafter, if\nthe cemetery board approves such plan, or in the event the cemetery\nboard conditioned its approval and the conditions imposed have been\naccepted by a vote of a majority of the entire board of directors of the\ncorporation, such plan shall be submitted to a duly called meeting of\nthe members of such corporation, and, if approved by the affirmative\nvote of at least two-thirds of all votes cast at such meeting, including\nthe affirmative vote of the holders of record of at least ninety per\ncentum of all shares of stock issued and then outstanding exclusive of\nany shares of stock held by the corporation, shall become binding upon\nall stockholders. The stockholders shall then proceed to transfer and\nsurrender to the corporation their shares of stock and to receive in\nexchange therefor participating certificates in accordance with the\nterms of such plan. Any holder of shares of such stock not voting in\nfavor of such plan may at any time prior to the vote approving such\nplan, or if notice of the meeting to vote upon such plan was not mailed\nto him at least twenty days prior to the taking of such vote, then\nwithin twenty days after the mailing of such notice, but in any event\nwithin ten days after the taking of such vote, by written notice filed\nwith such corporation, object to such plan and demand appraisal of his\nshares. Thereupon, such stockholder or the corporation shall have the\nright, subject to the same conditions and provisions contained in\nsection six hundred twenty-three of the business corporation law, to\nhave such stock appraised and paid for as provided in such section.\nEach such participating certificate issued in exchange for a share of\nstock shall entitle the holder thereof to one vote for each certificate\nat all meetings of the corporation. The prices of lots or the use\nthereof at the time when such exchange is made shall not be changed,\nwhile such participating certificates remain outstanding, without the\nwritten consent of a majority in interest of the holders thereof except\nas now or hereafter authorized by law. The shares of stock so exchanged\nshall not be reissued by such corporation and it shall have no right\nthereafter to issue any shares of stock.\n (f) Exchange of certificates for shares. The directors of a cemetery\ncorporation, which has issued certificates for shares, from time to time\nby resolution, may fix the value of each of such shares and authorize\nthe acceptance by the corporation of such certificates at the value so\nfixed in payment for land. All certificates so accepted shall be\nimmediately cancelled and shall not be again issued.\n