§ 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 § 623 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 § 623 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 § 623 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.