(107 A.) less the same are released from the lien of the said judgments herein before set forth; defendants were all creditors of the deceased. [ conveyance of the said lands and premises unThe question as to the priority as between the claims of McPherson & Co., Newton & Co., and Tobin & Shannon need not be discussed, because these three defendants have agreed to a pro rata distribution of the fund based on the amount of their judgments, in the event that the court decides that the judgments of McPherson & Co., Newton & Co., and Tobin & Shannon should be paid prior to the judgments of complainant and Union Trust Company of New Jersey. The will of the testator says: "I order and direct that all my just debts and funeral expenses be paid and satisfied as soon as can be conveniently done after my decease." He then devises and bequeaths everything to his wife, both real and personal, her heirs and assigns forever, and appoints her as sole executrix of the will. After verified proofs of claim had been served upon the executrix by the defendants who were creditors of the testator, prior to the expiration of the time limited for presenting claims, and to which no objection was made, judgments were obtained against her as executrix by the creditors of the testator. McPherson & Co., of course, admit that by its judgment against her as executrix it acquired no lien upon the real estate of which the testator died seized. 3 Comp. Stat. p. 2955, § 1. What became of the personal estate of George F. Schober is not known. Because of the actions of the executrix she was removed, and the substituted administrator was able to collect only the amount of $1,590.56, which was distributed among the creditors who filed claims. "And, whereas, it is considered by the parties the sale of the premises aforesaid are adequate, hereto that the said prices to be obtained for and that it is to the advantage of the parties hereto that said conveyances should be made and that the net purchase prices received therefrom should be held subject to the same priority and liens so far as judgments herein recited are concerned, and the claims or debts upon which said judgments are recovered, as are the lands hereinbefore described at the date of said conveyance, and to that end and for that purpose the holders of the said judgments have consented to release said lands aforesaid from the lien thereof; "That the net proceeds of sale when so received by him (Marshall Van Winkle) shall be subject to the same liabilities and priorities as are the lands herein before described at the date hereof, so far as the judgments herein before recited, and the claims or debts on which said judgments were recovered, are concerned; * "That any of the parties hereto may take such proceedings at law or in equity in respect to the net proceeds of sale in the lands of the said trustee as they might now take in respect to the lands hereinbefore described." The sale was then consummated, and releases given to the purchasers, and the net proceeds of sale deposited with Mr. Van Winkle as trustee, Pauline J. Schober giving deeds which cut off her dower right in the real estate. The complainant's contention is that by obtaining judgment against Pauline J. Schober individually on the debt owing by her individually and issuing execution thereon, levy being actually made, that under the law of this state it is entitled to be first paid, even as against actual creditors of the testator, the complainant itself being merely a creditor of the devisee, relying on Mott v. German Hospital, 55 N. J. Eq. 726, 37 Atl. 757; First National Bank of Freehold v. Thompson, 61 N. J. Eq. 188, 48 Atl. 333; Lippincott v. Smith, 69 N. J. Eq. 787, 64 Atl. 141. The widow, Pauline J. Schober, aliened the lands which came to her through her husband's will, but the purchasers refused to consummate the sale and pay the purchase price until the liens created by the judgments referred to were in some way adjusted and disposed of. To accomplish this, on the 23d day of October, 1913, an agreement was en- The opposing group of creditors, however, tered into between Pauline J. Schober, in- contend that they are entitled to be paid dividually and as executrix under the will first out of the trust fund in the hands of of the testator, Richard B. Tobin and George the trustee by virtue (first) of the filing of A. Shannon, partners trading as Tobin & their claims with the executrix within the Shannon, John A. McClosky, trading as New-time limited for preservation of claims, and ton & Co., Edward J. Fox and Simon Frank- which were not objected to; and (second) enstein, surviving partners of the firm of McPherson & Co., and the First National Bank of Jersey City, a corporation, and the Union Trust Company of New Jersey, a corporation, the significant portions of which agree ment read as follows: "Whereas, the said lands and premises hereinbefore described have been sold by the said Pauline J. Schober at public auction, and the title thereto is about to be conveyed by her individually and as executrix to the purchasers thereof, and the purchasers will not accept the 107 A.-38 of the judgments which they respectively obtained against the executrix based on those claims. They further contend that the effect of the entry of such judgments was merely to estabIlish the claims referred to, but not otherwise affecting the claims as presented to the exec utrix. Counsel for the respective parties have elaborately and ably presented and discussed a number of questions of the most interesting character as having a bearing upon the Where no distinct security is given vendor for payment of unpaid purchase price, a conered as trustee for vendor until payment in full, structive trust arises; purchaser being considand vendor having equitable lien upon land for purchase money, unenforceable only against purchasers for value, in good faith, and without notice that purchase money is unpaid. 4. VENDOR AND PURCHASER 250-CONVEY controversy between the two classes of [ 3. VENDOR and PURCHASER 239(4)—VENclaimants to the fund involved; but laying DOR'S LIEN-NOTICE-PURCHASER IN GOOD to one side most of them as being unnecesFAITH. sary to the decision of the main question presented by the record, I think it is sufficient to say that the decisions in this state are clear to the effect that where a will causes a debt to be a charge on the lands of a testator, there is an equitable estate in lands created thereby; and, the debt not be ing barred by limitations at the testator's death, it may be enforced within 20 years from his death against the lands as though it were a legal estate given by the will. McKinley v. Coe, 66 N. J. Eq. 77, 57 Atl. 1030. And that, as said by Mr. Justice Depue, speaking for the Court of Errors and Appeals in Morse v. Hackensack Savings Bank (47 N. J. Eq. 279, at page 286) 20 Atl. 961, at page 963 (12 L. R. A. 62): "The charge in the testator's will of his debts upon his estate created a trust which creditors could enforce ex debito justicia by compelling the executor to execute the trust." To the like effect are: Shreve v. Shreve, 17 N. J. Eq. 494; Suydam v. Voorhees, 58 N. J. Eq. 164, 43 Atl. 4; Roll v. Roll, 68 N. J. Eq. 229, 59 Atl. 296; Hetzel v. Hetzel, 74 N. J. Eq. 773, 71 Atl. 755. I shall therefore advise a decree that the fund of $4,547.43 in the hands of Marshall Van Winkle, trustee, be paid to the creditors, McPherson & Co., Tobin & Shannon, and Newton & Co., in accordance with the agreement entered into by them in case they prevailed, and that the bill of the complainant be dismissed. - ANCE OF LAND TO CEMETERY — VENDOR'S Vendor by conveying lands to cemetery associations dedicated them to public use for the burial of the dead, and is not entitled to vendor's lien as to land devoted to that purpose, but is entitled thereto as to land not used for cemetery purposes. 5. VENDOR AND PURCHASER 254(1)—VENDOR'S LIEN-NATURE OF. The very essence of a vendor's lien is that it follows the land and is to be made out of the lands, and if the remedy is not available it is because the right does not exist. 6. VENDOR AND PURCHASER 266(1)-CONVEYANCE OF LAND TO CEMETERY-VENDOR'S LIEN-PAYMENT OUT OF PLOT SALES. Vendor by conveying land to cemetery association under agreement to accept payment out of sales of burial plots waived his right to ven dor's lien. 7. RECEIVERS 154(1) -COSTS OF ADMINIS TRATION-LIENS-PRIORITY. When a court of equity takes possession of property for the purpose of protecting and preserving it for the benefit of the parties interest ed, the costs of administration are entitled to priority of payment, regardless of the nature of I will settle the terms of the decree on the the liens and claims thereon of the litigants. application of counsel. 8. RECEIVERS 154(1) PRIORITIES — COSTS CORPORATIONS. 5-QUASI PUBLIC SERVICE Cemetery corporations are in a sense quasi public service corporations. 10. RECEIVERS 154(1)-EXPENSES-PRIORITY OVER LIEN. Expenses of administration of receiver of cemetery corporation are entitled to priority over vendor's lien, since such corporation is in a sense quasi public, and receiver, in operating property, is discharging corporation's duty to the public. Proceedings by William Bliss and others against the Linden Cemetery Association and others. On motion by receiver of defendant cemetery associations for approval of his intermediate report and for allowances for (107 A.) operating expenses and services and for coun-["to ascertain what will be a reasonable sum sel fees. Report approved, allowances grant- to be paid to the grantor, or his assigns, for served, and conclusions drawn as to use to be ices and profit on the purchase and sale of said made of balance in hands of receiver. property, and their value to the grantee, less any See, also, 85 N. J. Eq. 501, 96 Atl. 1001; 90 that when such sum is ascertained it shall be credits to which the grantee is entitled. And N. J. Eq. 107 Atl. 53. Abram H. Cornish, of Newark, for complainants. Vail & McLean, of Elizabeth, for defend ants. BACKES, V. C. [1] These cemeteries Linden and Rosedale, have been administered by the receiver as a single trust. The receiver moves that his intermediate report be approved, and that allowances be made to him for his operating expenses and services and for counsel fees to his counsel. There is no opposition, and his report is approved, and the allowances asked for are granted. The receiver has not enough money to pay them, and he will be permitted to borrow on his certificates to supply the deficiency. The receiver has a balance on hand of, approximately, $2,500, and the controversy is over the use of this money toward defraying the administration expenses. $1,500 of this represents 10 per cent. of the appraisal of lands of the two cemeteries condemned by the Pennsylvania Railroad Company and paid into court, and recently paid to the receiver. For the purpose of this decision it may be said that the remaining $1,000 represents 10 per cent. of the proceeds of burial plots sold by the receiver. The representatives of Smith, the vendor of the lands to the cemeteries, claim that the receiver holds this balance in trust for them, that it is not available for the payment of the costs of administration, and they pray that it be awarded to them. They contend that 10 per cent. of sales made by the receiver, or by the corporations if restored to control, is impressed with a trust in the nature of a vendor's lien, and that it was so declared by the Court of Appeals in its opinion reported in 85 N. J. Eq. p. 501, 96 Atl. 1001. The appeals there under consideration were from decrees of this court striking out the second covenant in the deeds from Smith to the associations. By this covenant the associations promised "to pay semiannually in cash to said William F. Smith, his heirs, administrators, executors and assigns, one-tenth part of the gross proceeds of the sale, lease or loan of each burial plot or of any use thereof or interest therein made by said Linden Cemetery Association, party of the second part, from the land hereinafter conveyed to said association by this indenture." The covenant was part consideration for the conveyances, and was held to be void by this court because it violated the cemetery act. The Court of Appeals concurred, but formulated an equitable substitute which it defined in its remittitur requiring this court treated as unpaid purchase price of the land until extinguished by payment in gross or by percentage from the price of lots, as provided in the said covenant, which covenant is declared to be extrastatutory solely because the amount to be paid to grantor was unliquidated." In compliance, it has been determined that $51,914.07 is a reasonable sum to be paid by Linden and $28,419.20 by Rosedale (90 N. J. Eq. p. -) 107 Atl. 53. [2, 3] Claimants' counsel argues along the line that if these sums are "to be treated as unpaid purchase price of the land," as the appellate court decreed, vendors' liens are implied, and that, as the holders of such liens upon the land, the claimants have priority upon the proceeds of sales over the charges for administering the trust. I think he entertains too broad a view of his clients' rights. It seems to me that the vendor could have had no lien had this covenant been valid, and it is obvious that the Court of Appeals in recasting it conferred no greater privileges than the vendor would have had had the covenant been statutorily lawful. Considering the rights of the vendor upon the hypothesis of a valid covenant, what were they? It is not questioned that in the ordinary case of sales of land where the purchase money is unpaid the vendor has a lien. "It is well established in this court that where land is conveyed and the purchasemoney for it is not paid, and no distinct security for the payment of that money is taken in its stead, a constructive trust arises, and the vendee is considered as the trustee of the land for the vendor until the purchase money is paid. The vendor thus obtains an equitable lien upon the land for the purchase money, which is good against the vendee and his heirs and all persons taking from them as volunteers, and also against purchasers from them for value with notice that the purchase money is unpaid, and is unenforceable only against purchasers for value in good faith without such notice." Action v. Waddington, 46 N. J. Eq. p. 16, 18 Atl. 356. [4, 5] But here the vendor, by conveying the lands to cemetery associations, dedicated them to public use for the burial of the dead, and at least as to so much of the lands as is devoted to that purpose a lien could not attach. The trust in the vendees to the use of a public charity is repugnant to a use to the vendor. The very essence of a vendor's lien is that it follows the lands and is to be made out of the lands, and if the remedy is not available it is because the right does not, exist. In Spear v. Locust Wood Cemetery, 72 N. J. Eq. p. 821, 66 Atl. 1068, the vendor took a purchase-money mortgage, and upon default sought to foreclose it. His contractual and legal position was much stronger than that of the claimants, but Vice Chancellor Leaming held that the mortgage debt could not be recovered by a sale of the lands devoted to burial purposes, because they were exempt from execution by section 8 of the statute concerning cemeteries (C. S. p. 375). This disposes only of the claim to so much of the funds in the receiver's hands as was derived from the sales of burial plots. [6] The $1,500 received from the Pennsylvania Railroad Company, in the condemnation proceedings of lands not appropriated to cemetery uses, stands on another footing. In the case last cited it was held that lands not allotted to cemetery purposes were not immune to levy and sale for the payments of the mortgage debt. Consequently such lands are the subject of vendors' liens. But Smith, the vendor, waived his right to a lien by agreeing to accept the purchase money in the manner and from the source provided by the covenant above quoted. Payment was to be made out of the proceeds | of the sales of burial plots only, and by restricting himself to this single medium of payment he thereby indicated his intention to waive his right to the security of a vendor's lien upon lands not devoted to that purpose. The principles of waiver, and the adjudicated cases in this state upon the subject, are discussed at length in the opinion of Vice Chancellor Howell in Knickerbocker Trust Co. v. Carteret Steel Co., 79 N. J. Eq. p. 501, 82 Atl. 146. The status of the vendor was that of a common creditor of the cemetery association, with the right to a semiannual accounting; and it may be that upon habitual default equity would relieve by a specific performance of the covenant, compelling the association to set aside 10 per cent. of the proceeds of the sale of each burial plot. The Court of Appeals, in fashioning the cove nant so as to carry out, as nearly as possible, the intentions of the parties, left the vendor's contractual status undisturbed, and to this effect is its mandate that the consideration when liquidated "be treated as unpaid purchase price for the land until extinguished by payment in gross or by percentage from the price of lots as provided in the said covenant." But it is not essential to a decision to determine with exactness the privileges, if any, of the claimants as against the cemetery association. The immediate question is whether they have priority over the costs and expenses of a managing receiver administering a public charity, and this I feel is not open to serious discussion or consideration. [7, 8] The rule is thoroughly settled that when a court of equity takes possession of property for the purpose of protecting and preserving it for the benefit of the parties in terested, the costs of administration are entitled to priority of payment, regardless of the nature of the liens and claims thereon of the litigants. This is so fundamental to the administration of justice and so generally recognized, that citation of authority is unnecessary. The rule is especially applicable in this case. But for the management of these enterprises by the receiver the covenant of the claimants would be valueless. And it is not to be overlooked that the preferential right set up by them did not arise from any fixed lien upon the property at the time it came to the hands of the receiver, which will be displaced. Whatever rights they have were born of this litigation. Then too, beside conserving the rights of creditors, including the claimants, the operation of these cemeteries was indispensable to the maintenance of a sacred trust assumed by the corporations, and was also necessary for the protection of the public, for the public has an interest in them. [9] Cemetery corporations are in a sense quasi public service corporations. They have been so recognized. Of them Wymans, in his work on Public Service Corporations, § 69, says: "The absolute necessity of public cemeteries is obvious. This necessity may be met either by cemeteries owned directly by the government or by chartered corporations. Such corporations are rarely empowered to take private profit from the conduct of the cemetery, but are obliged to devote their receipts to the purposes of the cemetery. Such being the case, the law concerning them is mostly that relating to public charities, which is outside the scope of this treatise. may be noted, however, that it is common to exempt such cemeteries from taxation, and these exemptions are liberally construed in favor of the cemetery." It In addition to exemption from taxation cemetery corporations of this state in a limited way enjoy the power of eminent domain and the right to accept trust in perpetuity. In Evergreen Cemetery v. Henry Beecher, 53 Conn. 551, 5 Atl. 353, Judge Par dee said: "The safety of the living requires the burial of the dead in proper time and place. *** period extending indefinitely into the future that In order to secure for burial places during a degree of care universally demanded, the Legislature permits the associations to exist with power to discharge in behalf and for the benefit of the public the duty of providing, maintaining, and protecting them. The use of land by them for this purpose does not cease to be a public use because they require varying sums for rights to bury in different localities; not even if the cost of the rights is a practical exclusion of some. * It remains a public use as long as all persons have the same measure of right for the same measure of money." To the same general effect is Davis v. Coventry, 65 Kan. 557, 70 Pac. 583; Wolford v (107 A.) Crystal Lake, 54 Minn. 440, 56 N. W. 56; Close v. Greenwood, 107 U. S. 467, 2 Sup. Ct. 267, 27 L. Ed. 408. [10] Now, then, even if the claimant's so-called lien had been a fixed charge upon the property (if that were possible in cemetery promotions) when the receiver took hold, I would have been justified in subordinating It to the receiver's expenses in analogy with the rule in cases of insolvency of public service corporations, proper, where the receiver operates primarily to discharge the corporation's duty to the public and for the doing of which the corporate property and the lienholder's rights may be appropriated. Wallace v. Loomis, 97 U. S. 146, 24 L. Ed. 895. The principles underlying the rule are adverted to in Lockport Felt Co. v. United Box Board & Paper Co., 74 N. J. Eq. on page 690, 70 Atl. 980. The case, however, does not require that I go to this length. It is sufficient, as already pointed out, that the claimants are parties litigants, and that the possession and operation of the property by the receiver is, amongst other things, for the benefit of the claimants. PARKER, J. The attack is upon an ad. judication of the state board of taxes and assessment refusing to modify the amount of taxes assessed against the prosecutors and due, under the law, between November 1, 1918, and February 1, 1919, but payable in installments. C. S. 5268, 5269, § 454, being section 10 of the Railroad Tax Law of 1888 (P. L. p. 269). The modification was applied for on the ground that so far as second-class property, so called, assessable at local rates, was concerned, the local rates reported to the state board had been subsequently reduced, after being held invalid by the decision of this court in Garrison v. Jersey City, 105 Atl. 460, and that the tax on such second-class property should be correspondingly reduced by the board. As to first-class or main stem property, the claim was that such local reductions, if adopted, materially modified the average rate collectible under P. L. 1906, p. 121 (C. S. p. 5279), and that the prosecutors and other railroads affected were entitled to a reduction resulting from a new calculation of the average rate with the reduced local rates as factors. The state board refused The receiver will be permitted to use the both applications and reaffirmed its original fund to defray his allowances. (93 N. J. Law, 294) DIRECTOR GENERAL OF RAILROADS et al. v. STATE BOARD OF TAXES AND ASSESSMENT. impositions, and this writ was thereupon allowed. With respect to second-class property the case seems quite clear. By section 9 of the act of 1888 (C. S. p. 5268) "each company shall also pay * * a tax at the local rate as fixed and assessed for county and municipal purposes upon other property in each taxing district" on its second-class prop (Supreme Court of New Jersey. July 28, 1919.) erty as valued and assessed by the board. Certiorari by the Director General of Railroads and the Long Dock Company, heard with similar proceedings by the Lehigh Valley Railroad Company, by the Central Railroad Company, by the Morris & Essex Railroad Company, and by the New Jersey Junction Railroad Company, to review determinations of the State Board of Taxes and Assessment. Judgments for prosecutors. Necessarily this means the local rate as lawfully fixed and assessed against other property. It would shock the sense of justice to say that when an illegal rate uniformly affecting individual and second-class railroad property had been set aside in the courts and a revision made resulting in a lower rate, individuals should have the advantage of that rate and the railroad be denied it, mainly because, as apparently claimed in this case, the official reports from local authorities to the state board had gone forward, and the dates specified in the statute for their transmission to that board had gone by. As well might it be said that if the local officials should fail to send any report in due time, there could be no tax assessed against the railroads. The dates are mainly a time table, and not statutes of limitation. And if, for example, a wholly illegal tax were im Argued February term, 1919, before PAR- posed locally and sent forward to the board KER and MINTURN, JJ. Collins & Corbin, of Jersey City (Robert J. Bain, of Jersey City, on the brief), for prosecutors. and later set aside, the railroad would not be liable for it on second-class property. The judgment of this court in the Tumulty Case (unreported), based on the Garrison Case, affected the entire Jersey City assessment, Thomas F. McCran, Atty. Gen., for de- and removed the very foundation of the fendant. assessment for second-class property, leaving For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |