Case ID: barb_45/html/0356-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court, Leonard, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Wardens and Vestry of St. James’ Church vs. The Rector, Vestry and Wardens of the Church of the Redeemer.
    When the same person acts in a double capacity as agent or trustee, he must see to it that the transaction is fair and unexceptionable, as regards the rights of either of the parties whom he represents. If any motive of personal convenience or interest has been subserved, it will constitute a badge of fraud.
    A majority of the trustees in one religious corporation were also trustees of another. Acting as such trustees, they conveyed certain real estate from one corporation to the other, without the payment of any price, hut for the sole purpose of affording pecuniary assistance, gratuitously. Held that these facts alone, established the fraudulent character of the transaction.
    
      Held, also, that, the order of the Supreme Court, granting leave to the corporation to convey its real estate, did not constitute an estoppel in favor of the grantee.
    Such an order merely gives the deed regularity of form, and renders additional proof necessary, to overthrow it, as in other cases where an objection is raised to the validity of a deed.
    The order is not an adjudication between the parties, and has not the effect of res adjudicata.
    
    APPEAL from a judgment of the special term, setting aside a deed as fraudulent and void. The material facts appear in the opinion of the court.
   By the Court, Leonard, J.

Certain persons, in February, 1853, became vestrymen in both of the church corporations, which are the parties, plaintiff and defendant, in this action. Without any consideration paid to the corporation of St. James, the majority of these vestrymen caused and procured certain real estate which belonged to that church to be conveyed to the Church of the Redeemer. The simple ^statement of these facts, so found by the court, without the support of other facts also found, .establishes the fraudulent character of the conveyance.

Stating the case with more precision, the Church of St. James had two wardens and seven vestrymen ; the Church of the Redeemer two wardens and eight vestrymen. Of these one of the wardens and six of the vestrymen of St. James were also vestrymen of the Church of the Redeemer. And one of the wardens and six of the vestrymen of the Church of the Redeemer were also vestrymen of the Church of St. James. One of the wardens and two of the vestrymen of St. James only abstained from participating in the wrong. These church officers were the trustees of the temporal affairs of the respective corporations. It is a well settled principle that no man can deal with himself in two capacities. The conveyance to the Church of the Redeemer relieved those trustees who preferred to attend that church from some part of the expense of sustaining it, and promoted the temporal welfare of the church which they found it most convenient for them to attend. By causing this conveyance to be made they thereby to some extent promoted their own personal convenience and interest.

When the same person acts in a double capacity as agent or trustee, he must see to it that the transaction is fair and unexceptionable, as regards the rights of either of the parties which he so represents. If any motive of personal convenience or interest has been subserved it will constitute a badge of fraud.

Several persons acting for the Church of the Redeemer, as trustees, presented an application to themselves as trustees of the Church of St. James, for pecuniary aid, and the same persons acting for the last named church granted the application, and caused to be conveyed to the applicant church real estate producing nearly two thirds of the whole income of the Church of St. James, without the payment of any price, but for the sole purpose of affording pecuniary assistance gratuitously. The statement proves the transaction to be destitute of honesty.

[New York General Term,

November 6, 1865.

The order of this court permitting the conveyance constitutes no estoppel in favor of a grantee who has parted with nothing as the consideration for the deed. Without the authorization of the court, the grant of the real estate of a religious corporation is of no more value than waste paper, and the party injured would require no proof in such a case to establish its invalidity. The order of the court gives the deed merely regularity of form, and renders additional proof necessary to overthrow it, as in other cases where an objection is raised to the validity of a deed. The order is not an adjudication between the parties, and has not the effect of res adjudicata.

The statute of limitations was referred to at the argument of the appeal as a defense, but on an examination of the pleadings it appears that no such defense has been set up. The statute of limitations must be pleaded, or it is not available as a defense.

I see nothing to warrant the court in holding the cause of action to be stale.

The judgment should be affirmed, with costs.

Ingraham, Leonard and Geo, G. Barnard, Justices.]