Opinion
Argued October term, 1947.
Decided May 13th, 1948.
Proof of fraud or bad faith is not required to bring trustees within the rule that fiduciaries are not to deal in their own behalf with respect to matters involved in the trust. This rule operates irrespectively of the good or bad faith of such dealing.
On appeal from the Court of Chancery.
Mr. Morgan E. Thomas and Mr. Edward Fishman, for the exceptants-appellants.
Messrs. Endicott, Dowling Endicott ( Mr. William Elmer Brown, of counsel), for the petitioners-respondents.
The appeal is from two orders in Chancery (1) dismissing appellants' exceptions, approving the accounts of the trustees, directing the method and manner of making distribution of and otherwise winding up the fund in the hands of the trustees and allowance of counsel fees to respondents; and (2) denying application of appellants for allowance of counsel fees and costs.
We concur in the result reached by the Court of Chancery. We do not approve, however, that portion of the opinion of the learned Vice-Chancellor wherein he implies that proof of fraud or bad faith is required to bring trustees within the rule that fiduciaries are not to deal in their own behalf with respect to matters involved in the trust. This rule "operates irrespectively of the good faith or bad faith of such dealing." In re Bender, 122 N.J. Eq. 192; affirmed, 123 N.J. Eq. 171.
The orders appealed from are affirmed. For affirmance — BODINE, DONGES, WACHENFELD, EASTWOOD, BURLING, WELLS, DILL, McLEAN, JJ. 8.
For reversal — THE CHIEF-JUSTICE, HEHER, COLIE, FREUND, SCHETTINO, JJ. 5.