1. A cemetery company was incorporated in 1854 by an act of
Congress which authorized it to purchase and hold ninety acres of
land in the District of Columbia, and to receive gifts and bequests
for the purpose of ornamenting and improving the cemetery, enacted
that its affairs should be conducted by a president and three other
managers, to be elected annually by the votes of the proprietors,
and to have power to lay out and ornament the grounds, to sell or
dispose of burial lots, and to make bylaws for the conduct of its
affairs and the government of lot holders and visitors, fixed the
amount of the capital stock, to be divided among the proprietors
according to their respective interests, and provided that the land
dedicated to the purposes of a cemetery should not be subject to
taxation of any kind and
Page 107 U. S. 467
no highways should be opened through it and that it should be
lawful for Congress thereafter to alter, amend, modify or repeal
the act. Presently afterwards, thirty of the ninety acres were laid
out as a cemetery, the cemetery was dedicated by public religious
services, and a pamphlet was published containing a copy of the
charter, a list of the officers, an account of the proceedings at
the dedication, describing the cemetery as "altogether comprising
ninety acres, thirty of which are now fully prepared for
interments," and the bylaws of the corporation, which declared that
all lots should be held in pursuance of the charter. No stock was
ever issued. But the owner of the whole tract, named in the charter
as one of the original associates, and in the list published in the
pamphlet as the president and a manager of the corporation, knowing
all the above facts and never objecting to the appropriation of the
property as appearing thereby, for more than twenty years managed
the cemetery, sold about two thousand burial lots, and gave to each
purchaser a copy of the pamphlet and a deed of the lot, signed by
himself as president, bearing the seal of the corporation, and
having the bylaws printed thereon. In 1877, Congress passed an act
amending the charter of the corporation, providing that its
property and affairs should be managed so as to secure the
equitable rights of all persons having any vested interest in the
cemetery, by a board of five trustees to be elected annually, three
by the proprietors of lots owned in good faith upon which a burial
had been made and two by the original proprietors, and that, of the
gross receipts arising from the future sale of lots, one-fourth
should be annually paid by the trustees to the original proprietors
and the rest be devoted to the improvement and maintenance of the
cemetery.
Held that the act of 1877 was a constitutional
exercise of the power of amendment reserved in the act of 1854;
that the owner of the land was estopped to deny the existence of
the corporation, the setting apart of the whole ninety acres as a
cemetery, and the right of the lot holders to elect a majority of
the trustees, and that he was in equity bound to convey the whole
tract to the corporation in fee, and to account to the corporation
for three-fourths of the sums received by him from sales of lots
since the act of 1877, and the corporation to pay him one-fourth of
the gross receipts from future sales of lots.
2. Pending a bill in equity against the owner of land to compel
a conveyance of the title subject to certain rights of his in the
rents and profits, a receiver appointed in another suit against
him, and to whom he had by order of court in that suit assigned his
interest in the land, applied to be and was made a defendant, and
answered and also filed a cross-bill against both the original
parties, which was afterwards ordered to be stricken from the
files, with leave for him to apply for leave to file a cross-bill;
but he never applied for such leave. The case was heard upon
pleadings and proofs, and a final decree entered ordering the
original defendant to convey to the complainant, and the
complainant to account to him or his assigns for part of the rents
and profits, and that this decree be without prejudice to the
rights of the receiver.
Held that the receiver was not
aggrieved.
Page 107 U. S. 468
MR. JUSTICE GRAY delivered the opinion of the Court.
This is a bill in equity, filed on the 25th of October, 1877, by
the Glenwood Cemetery, claiming to be a corporation established by
act of Congress, against Joseph B. Close, William S. Humphreys,
Randolph S. Evans, and George Clendenin, praying for a conveyance
of the legal title in a tract of land containing ninety acres,
situated in the District of Columbia, known as the Glenwood
Cemetery, and for an account. The bill was afterwards dismissed by
consent as against Humphreys and Evans. The material facts, as
shown by the proofs, are as follows:
In June, 1852, Humphreys, for the sum of $9,000, bought of
Junius J. Boyle the tract of land in controversy and took from him
a deed of it, and immediately set about preparing it for use as a
cemetery. He enclosed with a high fence and laid out with drives
and walks, and improved and embellished thirty acres of it, leaving
the other sixty acres in their original unimproved condition, and
in March, 1853, put Clendenin in charge as superintendent.
Humphreys conveyed to Close an undivided half of the premises in
April, 1853, and the whole tract in June, 1854. The two deeds were
absolute in form, but were in fact intended as security: the first
for the repayment of $20,000 advanced to Humphreys by Close for the
purpose, as Close knew, of converting the estate into a cemetery,
and the second for the repayment of other advances to the amount of
$7,000 already made to him by Close for the same purpose and of
subsequent like advances of the amount of which there is no
evidence but Close's own vague and unsatisfactory testimony,
unsupported by books or vouchers, and the parties agreed in writing
that if Humphreys should meet his obligations, he should have back
one-half of the land. Humphreys thenceforward managed the property,
acting for himself and Close, through Clendenin as superintendent,
until September,
Page 107 U. S. 469
1859, when, having failed to meet his engagements, he
relinquished all his interest in the property to Close and Close
became sole owner and assumed control of the property, retaining
Clendenin as his superintendent to manage the cemetery.
On the 27th of July, 1854, Congress passed an act entitled "An
act to incorporate the proprietors of Glen wood Cemetery," by which
twelve persons named, eight of them residents of the District of
Columbia and the other four being Close and William Phelps (since
deceased), residents of New Jersey, and Humphreys and Evans,
residing in New York, were created a corporation by the name of
"The Proprietors of Glenwood Cemetery, in the District of
Columbia," and were empowered
"to purchase and hold not exceeding one hundred acres of land in
the District of Columbia north of the limits of the City of
Washington; to sell and dispose of such parts of said land as may
not be wanted for the purpose of a cemetery, provided that at least
thirty contiguous acres shall be forever appropriated and set apart
as a cemetery, with authority to said corporation to receive gifts
and bequests for the purpose of ornamenting and improving said
cemetery,"
and it was enacted that the affairs of the corporation should be
conducted by a president and three managers, to be "elected
annually by a majority of the votes of the proprietors," and "each
proprietor entitled to one vote for each share held by him," and
that until the first election, the four last-named persons should
be managers; that the president and managers should have power,
among other things, "to lay out and ornament the grounds," "to lay
out and sell or dispose of burial lots," and
"to make such bylaws, rules, and regulations as they may deem
proper for conducting the affairs of the corporation, for the
government of lot holders and visitors to the cemetery, and for the
transfer of stock and the evidence thereof;"
that
"the capital stock of said company shall be represented by two
thousand shares of fifty dollars each, divided among the
proprietors according to their respective interests, and
transferable in such manner as the bylaws may direct;"
that
"no streets, lanes, alleys, roads, or canals of any sort shall
be opened through the property of said corporation exclusively used
and appropriated to the purpose of a cemetery, provided that
nothing herein
Page 107 U. S. 470
contained shall authorize said corporation to obstruct any
public road or street or lane or alley now actually opened and used
as such;"
that any person willfully destroying, injuring, or removing any
tomb, monument, gravestone, fence, railing, tree, or plant within
the limits of the cemetery should be considered guilty of a
misdemeanor; that
"each of the stockholders in the said company shall be held
liable in his or her individual capacity for all the debts and
liabilities of the said company, however contracted or
incurred;"
that
"burial lots in said cemetery shall not be subject to the debts
of the lot holders thereof, and the land of the company dedicated
to the purposes of a cemetery shall not be subject to taxation of
any kind;"
that a certificate, under seal of the corporation, of the
ownership of any lot should have the same effect as a conveyance of
real estate, and that "it may be lawful for Congress hereafter to
alter, amend, modify, or repeal the foregoing act." 10 Stat.
789.
On the 2d of August, 1854, the ceremony of dedicating the
cemetery by appropriate religious services and addresses was
performed on the spot, in the presence of a number of people.
Immediately afterwards, a pamphlet was published and generally
circulated containing a copy of the charter, a list of the
officers, including Close, Phelps, Humphreys, and Evans, managers;
Close, president; Humphreys, treasurer, and Clendenin,
superintendent; a full account of the proceedings at the dedication
in which the property was spoken of as set apart and consecrated
for the burial of the dead, and as "altogether comprising ninety
acres, thirty of which are now fully prepared for interments;" and
the bylaws of the cemetery, of which the first was, "All lots shall
be held in pursuance of "An act to incorporate the proprietors of
Glenwood cemetery," approved July 27, 1854, and shall be used for
the purposes of sepulture alone."
Close soon after received a copy of this pamphlet from
Humphreys, and from that time to the filing of the bill never
objected to the appropriation of the property in the manner
appearing thereby. In the course of the next twenty years about two
thousand lots were sold, and each purchaser was given a copy of the
pamphlet and a certificate or deed of his
Page 107 U. S. 471
lot, signed by Close as president, bearing the seal of the
company and having the bylaws printed thereon. The gross receipts
from the time of the opening of the cemetery to 1876 were $160,000.
No stock was ever issued as provided in the charter.
No taxes were ever paid on any part of the ninety acres. At
different times from 1871 to 1876, taxes were assessed, or proposed
to be assessed, by the municipal authorities upon the sixty acres
which had not been improved. But Close and Clendenin, by
representing to the assessors and collector that the whole tract
had been dedicated to burial purposes in accordance with the
charter, and by exhibiting to them the charter and the pamphlet
containing the account of the dedication, induced them to recognize
the exemption of the whole tract from taxation.
On the 28th of February, 1877, Congress passed an act amending
the act of the 27th of July, 1854; changing the name of the
corporation to "The Glenwood Cemetery;" providing that its property
and affairs should be under the control of a board of five
trustees, any three of whom should be a quorum, to be elected
annually, "three by the proprietors of lots in said cemetery" (each
to be "entitled to one vote for each lot owned by him in good
faith, upon which a burial has been made") "and two by the original
proprietors," and to have authority to fill temporary vacancies in
the board; that these trustees should so conduct the affairs of the
cemetery
"as to secure the equitable rights of each and every person
having in any way any vested interest in the said cemetery, and the
cemetery shall be amenable and subject to the jurisdiction of the
equity courts of the District of Columbia for any disregard of the
rights or interests of any person whatsoever;"
that
"the words 'the proprietors,' where they occur in the original
act of incorporation hereby amended, shall be interpreted and
construed to mean and shall signify the proprietors of lots in said
cemetery, and which is hereby now declared by this amendment to be
the true intent and meaning of said words;"
and that of the gross receipts arising "from the sale of lots
hereafter sold of the ground now dedicated to burial purposes,"
one-fourth should be annually paid by the trustees to the
original
Page 107 U. S. 472
proprietors and the rest be devoted to the improvement and
maintenance of the cemetery. 19 Stat. 266.
Pursuant to this act, the owners of lots chose three trustees,
who, on the refusal of Close to recognize the corporation as
existing or to appoint two other trustees, filled up the vacancies
in the board and, on the refusal of Close, and of Clendenin as his
agent, to deliver up possession to them, filed this bill to compel
a conveyance of the legal title and a delivery of possession of the
whole tract and an account of the proceeds of any lots sold since
the organization under the act of 1877.
The defenses set up by Close and Clendenin in their answers and
at the argument are that there never was any acceptance of the act
of 1854 or formal organization of the corporation under it, but the
property remained the private property of Close except such lots as
had been sold, for which he was ready to give a legal title to the
holders; that the act of 1877 was unconstitutional and void as
depriving him of his property without adequate compensation, and
that no part of the sixty acres not enclosed was ever dedicated to
the purposes of a cemetery in such a way as to interfere with his
absolute control over it.
After Close and Clendenin had put in their answers, Charles
Borcherling filed a petition to be admitted as a defendant to the
bill, alleging that he had been appointed receiver under a decree
for alimony rendered in a suit for divorce brought against Close by
his wife in the Court of Chancery of New Jersey, and that, in
obedience to an order of that court, Close had executed to him, as
such receiver, an assignment of all his personal estate, the rents
and profits of his real estate, and
"especially the capital stock of the Glenwood Cemetery in
Washington, in the District of Columbia, and all profits,
dividends, or other moneys to me coming therefrom, or from any
office thereof."
This petition of Borcherling was granted, and he filed an answer
to the original bill setting up these facts. He also filed a
cross-bill praying that Close convey the title in the cemetery to
the corporation and that the corporation issue and deliver to
Borcherling, as receiver as aforesaid, stock to the amount of
$100,000. On motion of Close and Clendenin, the court afterwards
ordered the cross-bill of
Page 107 U. S. 473
Borcherling to be stricken from the files with leave to him to
apply for leave to file a cross-bill. He never applied for such
leave. But the corporation filed a general replication to the
answers of Close, Clendenin, and Borcherling, proofs were taken,
and the case was heard and decided upon the merits.
By the final decree of the court below, it was adjudged that
Close convey the whole tract of ninety acres to the plaintiff
corporation in fee simple; that Close and Clendenin deliver to the
plaintiff all books, plans, records, and personal property
belonging to or used in connection with its business and be
perpetually enjoined from interfering with or obstructing the
plaintiff in the possession and management of the cemetery, and the
court being further of opinion that Close was entitled to be
compensated for the transfer of his title in the land as the
original proprietor thereof, and that the provision made for this
object by the act of Congress of 1877 was an equitable adjustment
of the rights of Close, and a reasonable compensation for his title
and interest in the property, both in amount and in mode of
payment, regard being had to the needs of the cemetery, it was
further adjudged that the plaintiff annually hereafter account for
and pay to him or his assigns one-fourth of the gross receipts from
sales to be made of lots in the cemetery, and that an account be
taken of his receipts from the cemetery since the act of 1877 took
effect, and that he be charged in favor of the plaintiff with all
sums over and above one-fourth of the gross receipts from sales of
lots, which had been applied to his own use and not properly
disbursed on account of the cemetery, and that he pay the costs of
suit, and that this decree be without prejudice to the claims of
Borcherling, as receiver as aforesaid.
From that decree appeals have been taken and argued by Close and
Clendenin, and by Borcherling.
The appeal of Borcherling may be briefly disposed of. The order
striking his cross-bill from the files reserved leave to him to
apply to the court for leave to file a cross-bill. He never made
any such application, but, after replication filed to the answers
of himself and of the other defendants, suffered proofs to be taken
upon the issues so made up, and the case to proceed
Page 107 U. S. 474
to a final decree, and the final decree is expressed to be made
without prejudice to his rights as receiver. Under these
circumstances, there is nothing in the proceedings of the court
below prejudicial to those rights, or which entitles him to a
reversal of the final decree and to a reopening of the whole
case.
Upon the merits of the case, as presented by the appeal of Close
and Clendenin, it will be convenient to consider first the question
whether, assuming that the charter granted by Congress in 1854 must
be held to have been duly accepted by the corporation, and the
corporation to have been legally organized under it, the act of
1877 is within the power of alteration, amendment, and repeal
reserved to Congress in the original charter.
The terms of that charter show that it was not intended to
create a mere land company for the exclusive benefit of the
original associates and their successors holding shares in the
stock of the corporation, but that the ultimate and principal
object was to establish and permanently maintain a cemetery for the
burial of the dead which, if not a strictly charitable use, is in
some aspects a pious and public use and was evidently so regarded
by Congress. If the corporation were to be exclusively a private
business corporation, created for the sole benefit of the original
associates and their successors as holders of shares, Congress
would hardly have inserted in the charter the provision authorizing
the corporation to receive gifts and bequests for the purpose of
ornamenting and improving the cemetery, or the provisions exempting
the property from all taxation and prohibiting the future laying
out of any public ways through it.
At first, indeed, the whole immediate benefit derived from the
property would be that resulting to the shareholders from the sale
of lots, by way of dividend out of so much of the moneys received
as might not be needed to be expended or reserved for the laying
out, ornamenting, and maintenance of the cemetery. But as fast as
lots are sold, the property and interest of those purchasing and
holding the land for its ultimate use of the permanent burial of
the dead would increase and the interest of the original associates
would diminish. The
Page 107 U. S. 475
profits to be derived from the sale of the land would cease, as
to each parcel, as soon as it was sold for a burial lot. When the
lots were all sold, the pecuniary interest of the associates or
shareholders would disappear, but the duty to keep up the cemetery
would remain, and the owners of lots would be the only persons
having a peculiar interest in keeping it up. The corporation, in
short, was established to secure and maintain not merely the right
of sale, but the right of burial, and was the representative not
only of the original proprietors of the land, but also of the
subsequent purchasers of lots therein.
At the beginning, before any lots were sold, the owners of
shares, divided among the proprietors according to their respective
interests, would necessarily be the only persons concerned, or who
could elect the officers of the corporation and managers of the
cemetery. But with the gradual change of interest resulting from
the sale of lots, it was in full accord with the provisions of the
charter, and best tended to carry out the main purpose of
permanently maintaining a cemetery for the burial of the dead, that
the holders of lots should take part in the election and so have a
voice in the management.
After the cemetery had been laid out, improved, and used for the
burial of the dead for more than twenty years and two thousand
burial lots had been sold, it was a reasonable exercise of the
reserved power of Congress to authorize the owners in good faith of
lots upon which burials had been made, to elect a majority of the
trustees, in whom should be vested the control and management of
the cemetery, with a due regard to the equitable rights of all
persons having any vested interest therein, and to provide that a
portion only of the receipts arising from the future sale of lots
should be paid to the original proprietors, and the rest be devoted
to the improvement and maintenance of the cemetery. Every
legislative act is to be presumed to be a constitutional exercise
of legislative power until the contrary is clearly established, and
there is nothing in the record before us to show that the
proportion of one-fourth of the gross receipts from future sales of
lots, which is fixed by the act of Congress of 1877 and by the
decree of the court below, as a compensation for the title and
interest of the original proprietors and associates, is not a
reasonable one.
Page 107 U. S. 476
It follows that the act of Congress of 1877 must be deemed
constitutional and valid within the principle affirmed by this
Court in the case of
The Holyoke Dam that a power reserved
to the legislature to alter, amend, or repeal a charter authorizes
it to make any alteration or amendment of a charter granted subject
to it, which will not defeat or substantially impair the object of
the grant, or any rights vested under it, and which the legislature
may deem necessary to secure either that object or any public
right.
Commissioners on Inland Fisheries v. Holyoke Water Power
Co., 104 Mass. 446, 451;
Holyoke Company v.
Lyman, 15 Wall. 500,
82 U. S. 522.
In the exercise of such a power by the United States, as was
observed by the Chief Justice in delivering the opinion of the
Court in the
Sinking Fund Cases,
"It is not only their right but their duty as sovereign to see
to it that the current stockholders do not, in the administration
of the affairs of the corporation, appropriate to their own use
that which in equity belongs to others."
99 U.S.
700,
99 U. S.
725.
The question, then, recurs whether, as against Close, the
corporation must be held to have been duly organized under the act
of Congress of 1854.
Upon this question, the facts are these: Close knew that the act
of incorporation had been granted by Congress in which he was named
as one of the original associates; that the cemetery had been
dedicated and set apart by public religious ceremonies for the
burial of the dead; that a pamphlet had been published containing a
full account of those ceremonies, the names of a full board of
officers, including himself as president and one of the managers,
and Clendenin as superintendent, and a code of bylaws, by the very
first of which all the lots were to be held in pursuance of the act
of incorporation and to be used for the purposes of sepulture
alone. With full knowledge of these facts, Close, for more than
twenty years, exercised through Clendenin the sole management of
the cemetery, and issued deeds and certificates of burial lots to
the number of more than two thousand, bearing the corporate seal
and his own signature as president of the corporation and having
the bylaws printed on them. Being himself the owner of the whole
land, he dealt with it in all respects as if it belonged to
Page 107 U. S. 477
the corporation, and so represented it to the purchasers of
lots. As no other person owned any part of the land or was entitled
to a share in the corporation, the fact that no stock has been
issued or divided is immaterial.
One who deals with a corporation as existing in fact is estopped
to deny as against the corporation that it has been legally
organized. And in a court of equity, at least, the owner of land,
who stands by and sees it conveyed as belonging to another cannot
afterwards set up his own title against the grantee. The present
case is yet stronger. Close did not merely deal with the
corporation and permit the corporation to convey parts of his land
to purchasers of lots. But he himself assumed to act as the
corporation, and himself made the conveyance and the accompanying
representations to every purchaser.
By his acts, he represented to the purchasers of lots that the
cemetery had been created and the land was owned by the corporation
under the charter of 1854, and, as a necessary consequence, that
the corporation and all rights derived from it were subject to the
provisions of that charter, including the reservation to Congress
of the power of alteration, amendment, or repeal. It is upon these
representations that the purchasers of lots have acquired their
title and have parted with their money, and the corporation, whose
existence he, at least, cannot deny, has the right and the duty, as
the representative and in behalf of all the purchasers of lots, to
enforce against him the obligation which he has thereby assumed. He
holds the fee of the cemetery in trust for the corporation, and is
entitled to nothing, as against the corporation and those whom it
represents, but such compensation for his interest as original
proprietor or stockholder as is consistent with the state of things
which he has represented to exist.
It is argued by the learned counsel for the appellants that the
estoppel and the obligation of Close cannot extend beyond the
thirty acres which had been actually laid out. This argument
appears to us to be fully met and answered in the able and thorough
opinion of the court below delivered by Mr. Justice Cox, who
says:
"It was held out to the lot holders not only that the ground
immediately available for burial
Page 107 U. S. 478
should remain set apart for that object, but that the cemetery
should be forever under the protection of a perpetual corporation,
charged with the duty of laying out and ornamenting the grounds,
capable of receiving gifts and bequests, and empowered to make
bylaws for the regulation of the affairs of the corporation, and
the whole property was described as dedicated to the purposes of
the cemetery, not necessarily that the whole should be laid out
into lots, but that it should all belong to the institution and be
available for its general objects. This was not to be a mere
graveyard in which each lot holder acquired a piece of ground in
which to bury his dead and at the same time become chargeable with
the sole care of his particular lot, but the lot holders themselves
became subject to bylaws and regulations having reference to the
institution as an entirety, and the perpetual preservation of the
cemetery as an ornamental and convenient place for interment, and
for resort by the relatives of the dead."
Glenwood Cemetery v. Close, 7 Washington Law Reporter
214, 218.
Decree affirmed.