2006 New York Code - Cemetery Indebtedness.

 
  § 1511. Cemetery indebtedness.
    (a)   Certificates of indebtedness.  (1)  If a cemetery corporation be
  indebted for lands purchased for  cemetery  purposes,  or  for  services
  rendered  or  materials  furnished  in connection with the necessary and
  proper preservation  or  improvement  of  its  cemetery  or  for  moneys
  borrowed  exclusively  for  payment  of  such services or materials, the
  directors, by the concurring vote of a majority of their  whole  number,
  with the consent of the creditor to whom such indebtedness is owing, may
  issue certificates under the corporate seal, signed by the president and
  secretary,  for  such  amount,  payable  at the times and at the rate of
  interest agreed upon but  not  to  exceed  six  per  centum  per  annum;
  provided,  however, that there be first obtained from the cemetery board
  an order approving the issuance of such certificates.   In the  case  of
  certificates  of indebtedness issued for moneys borrowed exclusively for
  payment for services rendered or materials furnished in connection  with
  the necessary and proper preservation or improvement of its cemetery the
  consent  of the creditor to whom such indebtedness is owing shall not be
  required.  (2)  Such approval shall be given by the cemetery board  only
  if  it  determines  that  the  amount of the certificates proposed to be
  issued does not exceed the fair and reasonable  value  of  the  services
  rendered  or  materials furnished or the purchase price of real property
  as fixed in accordance  with  subdivision  (b)  of  this  section.    No
  certificate  issued shall be valid or enforceable unless there has first
  been issued by the  cemetery  board  an  order  of  approval  as  herein
  provided.    No  certificate shall be for less than one hundred dollars.
  The certificate  shall  be  transferable  by  delivery,  unless  therein
  otherwise  provided.    (3)   The directors shall keep an account of the
  number and amount of such certificates, the persons to whom issued,  the
  date  of  maturity,  the  rate of interest and the purpose for which the
  same were issued.    Each  cemetery  corporation  shall  file  with  the
  cemetery  board  a  verified statement setting forth all changes in such
  account during the previous calendar or fiscal year.  (4)  The directors
  shall set aside from the proceeds of sales  of  lots,  plots  and  parts
  thereof  such  sums  to  pay  such certificates at maturity as they deem
  necessary.  Until the certificates are paid the holders thereof shall be
  entitled at all meetings of the corporation, to one vote  for  each  one
  hundred  dollars  of  indebtedness  remaining  unpaid, except that those
  certificates of indebtedness issued for moneys borrowed exclusively  for
  payment  of  services  or  materials  shall  have no voting power.   The
  certificates shall not be a lien upon any  lot,  plot  or  part  thereof
  belonging to a lot owner.
    (b)  Application of proceeds of sales of lots.  (1)  At least one-half
  of  the proceeds of sales of lots or the use thereof remaining after the
  deductions for the portion thereof  required  to  be  deposited  in  the
  permanent  maintenance  fund  and current maintenance fund together with
  the expenses of sale shall be applied by a cemetery corporation  to  the
  payment  of the purchase price of the real property acquired by it.  The
  remainder of such proceeds  shall  be  applied  by  the  corporation  to
  preserving,  improving  and  embellishing  the  cemetery grounds and the
  avenues and roads leading thereto, and to  defraying  its  expenses  and
  discharging  its liabilities.  After the payment of such purchase price,
  and the expense of surveying  and  laying  out  the  cemetery,  all  the
  proceeds of such sales shall be applied to the improvement, preservation
  and  embellishment of the cemetery and to such expenses and liabilities.
  (2)  Where a corporation has agreed with a person  from  whom  any  such
  lands  were  purchased  to  pay therefor a specified share not exceeding
  one-half of the proceeds of sales of lots therein or  the  use  thereof,
  such  corporation  may  continue to make payments as so agreed, provided
  however that there be first deducted from said  proceeds  of  sales  the
  amount  required  to  be deposited in the permanent maintenance fund and
  current maintenance fund as aforesaid  together  with  the  expenses  of
  sale.   The balance of such proceeds shall continue to be applied by the
  corporation to the preservation, improvement and  embellishment  of  the
  cemetery,  and  the  expenses and liabilities of the corporation.  Where
  the corporation has heretofore agreed to pay a specified  share  of  the
  proceeds  as  aforesaid  in  payment  of the purchase price of land, the
  prices of lots or the use thereof in force when such purchase was  made,
  shall  not  be changed, while the purchase price remains unpaid, without
  the written consent of a majority in interest of the persons  from  whom
  the  lands  were  purchased  or  their  legal representatives.   (3)   A
  corporation which has hertofore issued certificates of land shares which
  entitle the owner to a specified share in the proceeds of  the  sale  of
  lots,  may  purchase such certificates with its surplus or reserve funds
  and hold such certificates for the benefit of  its  surplus  or  reserve
  funds, but such certificates may not thereafter be sold or reissued.
    (c)      Certificates  of  stock  formerly  issued.    If  a  cemetery
  corporation,  incorporated  under  a  law  repealed  by  the  membership
  corporations   law,   prior   to   September   first,  eighteen  hundred
  ninety-five, converted its outstanding indebtedness or  certificates  of
  indebtedness  into  certificates  of  stock,  in  pursuance  of  law, no
  interest shall accrue to the holders  of  such  stock,  but  they  shall
  receive   annually   or  semi-annually  a  dividend  thereon  for  their
  proportional  part  of  the  entire  surplus  or  net  receipts  of  the
  corporation over and above current expenses; or if the proportion of the
  net  receipts or surplus which stockholders shall be entitled to receive
  shall have been fixed by agreement at the time of  issuing  such  stock,
  such  stockholders  shall be entitled to receive dividends in accordance
  with such agreement.  Such certificates of stock shall  be  transferable
  only   on  the  books  of  the  corporation  on  the  surrender  of  the
  certificate, unless otherwise provided on the face thereof, and on every
  such surrender a new certificate of stock shall be issued to the  person
  to  whom  the  same  has been transferred; and the holders of such stock
  shall be entitled, in person or by proxy, to one vote  for  every  share
  thereof,  at  each  meeting of the corporation.  A register of the stock
  issued by the corporation shall be kept by  its  directors  showing  the
  date  of issue, the number of shares, the par value thereof, the name of
  each person to whom issued, the number of the certificates therefor; and
  all transfers of such stock shall be noted and entered in such register,
  and the certificates surrendered shall be deemed canceled by  the  issue
  of   a  new  certificate,  and  the  surrendered  certificate  shall  be
  destroyed.  Any director may become the holder  or  transferee  of  such
  stock  for  his own individual use or benefit.  No such stock shall be a
  lien on the lot of any individual lot owner within the cemetery  limits;
  and  no other or greater liability of the corporation issuing such stock
  shall be created or deemed to exist than may be necessary to enforce the
  faithful application of the surplus or net receipts of  the  corporation
  to  and  among  the  holders  of  the  stock  in the manner hereinbefore
  specified.  A cemetery which has heretofore issued such certificates  of
  stock is a membership corporation and not a stock corporation.
    (d)     Retirement  of  certificates  of  stock  of  certain  cemetery
  corporations.   If a cemetery  association,  incorporated  under  a  law
  repealed  by  chapter  five  hundred  fifty-nine of the laws of eighteen
  hundred  ninety-five  has  changed  certificates  of  indebtedness  into
  certificates of stock, pursuant to chapter one hundred seven of the laws
  of  eighteen  hundred  seventy-nine,  and such stock remains unimpaired,
  such association may retire such stock and issue  in  exchange  therefor
  certificates  of  indebtedness representing the par value of such stock,
  such certificates of  indebtedness  to  bear  interest  at  a  rate  not
  exceeding  six  per centum per annum from the date of the last preceding
  dividend  payment;  provided,  however,  the  exchange of such stock for
  certificates of indebtedness  shall  be  authorized  at  a  duly  called
  meeting  of  such  association  by  the  affirmative  vote  of  at least
  two-thirds  of  the  stock  issued  and  outstanding  and  of  at  least
  two-thirds  of all votes cast at such meeting in favor of such exchange.
  Any holder of such stock not voting in favor of  the  exchange  of  such
  stock for certificates of indebtedness may at any time prior to the vote
  upon  such  exchange,  or  if  notice  of  the meeting to vote upon such
  exchange was not mailed to him at least twenty days prior to the  taking
  of  such vote, then within twenty days after the mailing of such notice,
  object to such exchange and demand payment for his stock  and  thereupon
  such stockholder or the corporation shall have the right, subject to the
  same   conditions  and  provisions  contained  in  section  six  hundred
  twenty-three of  the  business  corporation  law,  to  have  such  stock
  appraised  and paid for as provided in such section.  Such objection and
  demand must  be  in  writing  and  filed  with  the  corporation.    The
  provisions  of this section relating to certificates of indebtedness and
  the rights of  the  holders  thereof  shall  apply  to  certificates  of
  indebtedness  issued  as  provided  in this subdivision.   The stocks so
  retired shall not be reissued by such association and it shall  have  no
  right thereafter to issue any certificates of stock.
    (e)    Purchase,  retirement  and exchange of stock.   (1)  A cemetery
  corporation which has issued certificates of stock, pursuant to  chapter
  one  hundred  seven  of  the  laws  of eighteen hundred seventy-nine, or
  chapter  two  hundred  sixty-seven  of  the  laws  of  eighteen  hundred
  ninety-four, may purchase such certificates of stock with its surplus or
  reserve funds, and hold such certificates for the benefit of its surplus
  or  reserve  funds,  but such certificates of stock so purchased may not
  thereafter be sold or reissued.  (2)  A cemetery corporation  which  has
  issued  certificates  of  stock  may  also effect the retirement of such
  stock as follows:   The board of directors  of  such  corporation  shall
  adopt  by  vote  of  a majority of the entire number of such directors a
  plan for such retirement which shall include the fixing of a price which
  the corporation will pay for all shares of stock then outstanding, which
  price shall, in the opinion of such directors, represent the fair  value
  of  such  stock.    The  said  plan  shall be submitted to a duly called
  meeting of the members of such  corporation  and,  if  approved  by  the
  affirmative  vote  of  at  least  two-thirds  of  all votes cast at such
  meeting, including the affirmative vote of the holders of record  of  at
  least  two-thirds  of  all  shares  of stock issued and then outstanding
  exclusive of any shares of stock held by the corporation,  shall  become
  binding  upon  all  stockholders, and they shall proceed to transfer and
  surrender to the corporation their certificates of stock and to  receive
  payment  therefor in accordance with the terms of such plan.  Any holder
  of shares of such stock not voting in favor of such plan may at any time
  prior to the vote approving such plan, or if notice of  the  meeting  to
  vote  upon such plan was not mailed to him at least twenty days prior to
  the taking of such vote, then within twenty days after  the  mailing  of
  such  notice,  but in any event within ten days after the taking of such
  vote, by written notice filed with such corporation, object to such plan
  and demand appraisal of his shares.  Thereupon, such stockholder or  the
  corporation  shall  have  the  right, subject to the same conditions and
  provisions contained in section six hundred twenty-three of the business
  corporation law, to have such stock appraised and paid for  as  provided
  in  such  section.    (3)    A  cemetery  corporation  which  has issued
  certificates of stock may also effect the  exchange  of  such  stock  as
  follows:    The  board of directors of such corporation shall adopt by a
  vote of a majority of the entire number of such directors a plan for the
  exchange  of  all  shares of stock then outstanding for a like number of
  participating  certificates.    Such  participating  certificates  shall
  entitle  the  owners  to  a specified share not exceeding, collectively,
  one-half of the proceeds of sales of lots therein  or  the  use  thereof
  after  first deducting from such proceeds of sale the amount required to
  be deposited in the permanent maintenance fund and  current  maintenance
  fund  as  provided in and pursuant to subdivision (a) of section fifteen
  hundred seven of this article, together with the expenses of sale.  Such
  plan shall then be submitted to the cemetery board for its approval.  In
  making its determination the  cemetery  board  shall  consider  and  may
  condition  its approval on the purposes of this section.  Thereafter, if
  the cemetery board approves such plan, or  in  the  event  the  cemetery
  board  conditioned  its  approval  and  the conditions imposed have been
  accepted by a vote of a majority of the entire board of directors of the
  corporation, such plan shall be submitted to a duly  called  meeting  of
  the  members  of  such  corporation, and, if approved by the affirmative
  vote of at least two-thirds of all votes cast at such meeting, including
  the affirmative vote of the holders of record of  at  least  ninety  per
  centum  of  all shares of stock issued and then outstanding exclusive of
  any shares of stock held by the corporation, shall become  binding  upon
  all  stockholders.   The stockholders shall then proceed to transfer and
  surrender to the corporation their shares of stock  and  to  receive  in
  exchange  therefor  participating  certificates  in  accordance with the
  terms of such plan.  Any holder of shares of such stock  not  voting  in
  favor  of  such  plan  may  at any time prior to the vote approving such
  plan, or if notice of the meeting to vote upon such plan was not  mailed
  to  him  at  least  twenty  days  prior to the taking of such vote, then
  within twenty days after the mailing of such notice, but  in  any  event
  within  ten  days after the taking of such vote, by written notice filed
  with such corporation, object to such plan and demand appraisal  of  his
  shares.    Thereupon, such stockholder or the corporation shall have the
  right, subject to  the  same  conditions  and  provisions  contained  in
  section  six  hundred  twenty-three  of the business corporation law, to
  have such stock appraised and paid for  as  provided  in  such  section.
  Each  such  participating  certificate issued in exchange for a share of
  stock shall entitle the holder thereof to one vote for each  certificate
  at  all  meetings  of  the  corporation.   The prices of lots or the use
  thereof at the time when such exchange is made  shall  not  be  changed,
  while  such  participating  certificates remain outstanding, without the
  written consent of a majority in interest of the holders thereof  except
  as now or hereafter authorized by law.  The shares of stock so exchanged
  shall  not  be  reissued  by such corporation and it shall have no right
  thereafter to issue any shares of stock.
    (f)  Exchange of certificates for shares.  The directors of a cemetery
  corporation, which has issued certificates for shares, from time to time
  by resolution, may fix the value of each of such  shares  and  authorize
  the  acceptance  by the corporation of such certificates at the value so
  fixed in payment for land.    All  certificates  so  accepted  shall  be
  immediately cancelled and shall not be again issued.