Cuthbert v. McNeill

• Decision Date: 18 August 1928
• Parties: CUTHBERT et al. v. McNEILL et al.
• Court: New Jersey Court of Chancery

142 A. 819

CUTHBERT et al.

v. McNEILL et al.

Court of Chancery of New Jersey.

Aug. 18, 1928.

Suit by J. Blair Cuthbert and others against Arthur Y. McNeill and others. Decision in accordance with opinion.

See, also, 142 A. 667.

Philip Wendkos, of Camden, for complainants.

Louis B. Le Due, of Camden, for defendant McNeill.

Frank T. Lloyd, of Camden, for Grace Church, Haddonfield.

LEAMING, Vice Chancellor. Well; I am very clear as to what my duty is, and I wish to discharge it, although it will involve me in considerable more trouble and time, and possibly a great deal more labor; but I think in the present situation it is my duty to see that the church file an answer in this case in order that it may receive any benefits that by any possible theory of the law can fall to it in the event of a decision, which now looks to me as though it might be possible. I therefore think I ought to have the present solicitor for the church file an amended answer of that nature and require that it be done at once, and that the case be finished at a day to be at this time fixed so there will be no delay of more than a week or so by reason of the adjournment and by reason of the amendment. It is quite possible that at the subsequent hearing no testimony will be needed that has not already been introduced, but with a new answer on file every one should have an opportunity to introduce new testimony to meet the averments of the new answer, if they desire.

Now, in order that all counsel may see what I have in mind at this time that impels me to take this course, aside from the fact that the answer which is now on file was prepared by the same counsel who represents Mr. McNeill with the understanding that the interests of him and the church were identical, and that the present counsel of the church is the substituted counsel, appointed since the answer was filed— aside from that fact, which would seem of itself to call for an amended answer— my thoughts are these, which I only express in a tentative way:

The early and leading case in our Court of Apt>eals, Stewart v. Lehigh Valley Railroad Co., 38 N. J. Law, 505, touching the duties of a board of management, whatever board that may be, a board of directors of a corporation, or, I apprehend, any board of a church that has charge of the business affairs of a church, when dealing with the affairs of the corporation, are trust duties of a very high and a very important and serious nature by reason of the trust that is imposed upon such managing officers. In this connection I would suggest that it might be best for proofs to be made in this case showing exactly what the duties of the vestry of a church may be in the management of its business affairs. Perhaps we all know, but we do not know authoritatively; but it will be necessary, possibly, to prove it unless counsel can agree upon it.

Stewart v. Lehigh Valley Railroad Co. held in effect that a director of a corporation cannot deal with the corporation which he represents. It does not matter how much good faith may have been exercised on his part, his contracts with his corporation are voidable at the instance of the corporation; they will not stand if repudiated as contracts. The reason for that is perfectly plain. One...