Case Name: Anna Bade, Respondent, v. Ferncliff Cemetery Association, Appellant, and John C. Witte, Respondent
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1915-06
Citations: 91 Misc. 26
Docket Number: 
Parties: Anna Bade, Respondent, v. Ferncliff Cemetery Association, Appellant, and John C. Witte, Respondent.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 91
Pages: 26–29

Head Matter:
Anna Bade, Respondent, v. Ferncliff Cemetery Association, Appellant, and John C. Witte, Respondent.
(Supreme Court, Appellate Term, First Department,
June, 1915.)
Cemetery associations — issue of certificate of indebtedness by — services rendered — Membership Corporations Law, § 50.
The issuance of a certificate of indebtedness by a cemetery association to the promoter of its grantor for services rendered by him in his own behalf in looking up and acquiring land, for which he was apparently compensated by the receipt of stock in the grantor of the cemetery association, is ultra vires, for even if some part of the expenses might have been “ incidental expenses and liabilities ” of the association the one who rendered the services might have been paid out of the proceeds of the sale of the use of lots as provided by section 50 of the Membership Corporations Law.
Appeal from a judgment of the City Court of the city of New York, entered after a trial by the court without a jury.
Appell & Taylor (George H. Taylor, Jr., of counsel), for appellant.
Harry Dubinsky, for plaintiff-respondent.
Herman S. Goldstein, for defendant-respondent.
90 Mise. Rep. 202, reversed.—7 [Rep3.

Opinion:
Page, J.
This action was brought to recover upon a certificate of indebtedness of which the following is a copy:
" Number 47 Amount $1483.28
" Organized under the Laws of the State of New York
" Ferncliee Cemetery Association.
"A Membership Corporation.
" Home and Business Office: 27 East 125th Street,
" City, County and State of New York.
" Hereby certifies, that it is indebted unto John C. Witte in the sum of Fourteen hundred and eighty three 28/100 dollars, for money expended and on account of cemetery, which amount it hereby promises, covenants and agrees to pay at its office in said City of New York, five years from the date hereof, on presentation and surrender of this certificate, with the right, privilege and option, however, on the part of said Association, to pay the whole or any part of the sum hereby agreed to be paid* at any time prior to the expiration of said term of five years, without notice, and upon such payment in full, with interest, to demand delivery and cancellation hereof.
" This certificate is transferable only on the books of the Association by the holder thereof, in person- or by attorney, on the surrender of this certificate.
" In Witness whereof, Fern cliff Cemetery Association has caused these presents to be executed for it and in its name, by its president and treasurer, pursuant to a resolution of the Board of Directors of said Association, duly adopted.
" Feb. 8th, 1904.
" Ferncliee Cemetery Association.
" By John G-. Borgstede, President
" and By G-eorge J. Fernschild,
"Secretary."
Thereafter and on the 28th day of April, 1908, John C. Witte assigned to the plaintiff the certificate of indebtedness to the extent of $1,400, with interest from that date. Judgment has been given against this defendant, the Ferncliff Cemetery Association, in favor of the plaintiff for $1,985 and costs and in favor of defendant John C. Witte for $494.84.
'A cemetery association incorporated, as was the appellant, pursuant to the Membership Corporations Law (Laws of 1895, chap. 559, § 54) has power to issue certificates of indebtedness " if it be indebted for lands purchased for cemetery purposes, or for services rendered or materials furnished in preserving or improving its cemetery." In the case at bar, upon undisputed evidence, the certificate in suit was not issued for.either of the purposes authorized by the statute, nor, so far as the evidence discloses, was any service rendered or thing sold or money advanced to the defendant association by John C. Witte for which it was indebted to him. Witte and certain associates purchased property and founded the Ferncliff Realty Company, to which for $400,000 of the capital stock of said company they transferred the property. The Ferncliff Realty Company then transferred this property to the defendant association.
The services seem to have been rendered by Witte in his own behalf in looking up and acquiring the land, for which he was apparently compensated by the receipt of stock in the Ferncliff Realty Company, as for promotion expense of that company. Even if some part of the expenses may have been "incidental expenses and liabilities of the corporation" defendant, which might be paid out of the proceeds of the sales of the use of lots (Laws of 1895, chap. 539, § 50), there is no authority in the statute for issuance of a certificate of indebtedness for such liabilities of the association. " In providing for the issuance of certificates of a certain nature and for a certain purpose, the statute impliedly prohibited such an association from issuing any others. " American Ex. Nat. Bank v. Woodlawn Cemetery, 194 N. Y. 116, 127. The issuance of the certificate in suit was therefore ultra vires of the corporation. The plaintiff, as assignee, takes with no better rights than were possessed by the assignor as this certificate was a non-negotiable promise to pay money. American Ex. Nat. Bank v. Woodlawn Cemetery, supra, 127, 128.
As plaintiff failed to allege or prove facts sufficient to constitute a cause of action against the defendant, the judgment should be reversed, with costs to the appellant, and the complaint dismissed, with costs to the defendant association.
Guy and Bijur, JJ., concur.
Judgment reversed, with costs.