
    Anna T. Geyer, App’lt, v. Edward L. Snyder et al. Ex’rs, Resp't.
    
    
      (Court of Appeals,
    
    
      Filed December 19, 1893.)
    
    
      1. Executors and administrators—Sale of assets—Fraud.
    One of several executors has authority to make a sale of the assets, and the fact that the other executors who joined in the transfer were members of the purchasing firm cannot destroy the efficacy of the transfer.
    2. Same.
    In the absence of proof of actual fraud, or a suppression of the truth, or of any undue advantage taken of the beneficiary the rights of the parties would not be affected by the fiduciary relation.
    3. Same.
    Defendants’ testator was interested in business with his two sons and another, in which business the bulk of his estate was invested. His sons and a son in law were his executors. In 1878, by an agreement consented to by all the legatees, the legatees sold the interest of testator in the firm to the surviving partners for $120,000, and subsequently plaintiff received her portion estimated on that sum and executed a general release. In an action to set aside the sale and for an accounting on the ground of fraud, it appeared that testator’s interest was stated on the firm books to be $138,000; that the discrepancy between that sum and the price paid was not such as to show an inadequacy of price; that the sale was neither void nor voidable, and that from plaintiff’s long silence there was a presumption of fair dealing which overrides any presumption of wrongdoing arising out of the trust relations of the parties.
    Appeal from judgment of the supreme court, general term second department, affirming judgment in favor of defendants.
    
      Edward B. Merrill, for app’lt; Lewis Hurst and Arthur Hurst, for resp’ds.
    
      
      Affirming 53 St. Rep., 53.
    
   Maynard, J.

The plaintiff was entitled to a one-twenty-eighth share of the estate of her grandfather, Phillip W. Engs, who died May 19th, 1875. The executors of his will, who qualified, were his sons Samuel F. and George Engs, who were each entitled to one-seventh of the estate, and his son-in-law, Henry A. Bostwick, whose wife was also entitled to one-seventh. Apparently the bulk of the,-- estate was invested in a business carried on' by the testator and the two sons and a nephew, Henry Snyder, Jr., who was also entitled to a share of the estate under the will. By an agreement made April 28th, 1876, to which the executors and the surviving partners were parties, the interest of the testator in the firm was fixed and liquidated at the sum of $120-000, upon the payment of which, in specified instalments, the surviving partners who had formed a new firm for the continuance of the old business became the owners of his share in the partnership business and property. Annexed to this agreement and forming a part of it was the written consent and approval of every legatee under seal, witnessed and acknowledged, including the plaintiff and her husband, by the express terms of which they ratified and confirmed it.. May 7th, 1879, the plaintiff executed to the executors a general release and discharge under seal, and acknowledged, of all claims and demands against them as executors, and of her interest in the estate. The consideration of this release was the payment in money of $5,852 by the executors, of which a balance of eighty-four dollars was paid at the time of its execution, and the instrument recited that this sum had been accepted and received by the plaintiff in full payment and settlement of the balance due her from the estate or the executors, and that such payment and settlement' should have the same force and effect as if made pursuant to a decree of the surrogate upon a final accounting by the executors. Thirteen years after the execution of the release and sixteen years after the execution of the agreement of sale and of plaintiff’s consent thereto, and after the death of all the executors; the plaintiff brings this action against their personal representatives, to set aside all of these instruments and to have an acoounting of the estate of Philip W. Engs, upon the ground that she was overreached" in the transaction; that the consideration paid by the surviving partners for the interest of the testator was grossly inadequate to the value of the interest conveyed; and that the executors perpetrated a fraud upon her by misrepresenting the value of such interest and concealing from her the true condition of the estate. ' The material allegations relating to the fraud and fraudulent concealment and inadequacy of price are all denied in the answer of the defendants.

The plaintiff entered no proof in support of the allegations of her complaint except the original articles of co-partnership to which the testator was a party, and the articles entered into by the surviving partners for the formation of a new firm, the execution of which was not denied by the defendants. The defendants offered no evidence except the general release executed by the plaintiff, and the receipt which the executors gave the new firm for the $120,000 paid upon the sale of the testator’s interest in the old firm ; and they admitted that his interest in the assets and business of the firm at the time of his decease, as stated in the books of the firm, was $138,242. In this situation of the pleadings and proofs the plaintiff insists that she was entitled to judgment for the relief demanded. The court below has held otherwise, and, as we think, correctly. Upon the facts disclosed by this record it must be held that the agreement for the sale of the testator’s interest in the old firm to the surviving partners was neither void nor voidable. Its efficacy as a legal transfer of title was not destroyed because two of the surviving partners were also executors. Upon the death of the testator the title to the firm property vested in the surviving partners for the purposes of liquidation. From that time the testator’s interest therein was limited to his share of the net proceeds after liquidation. One of the executors was not a member of the firm. As his wife was a legatee his interest was adverse to that of his co-executors in the transaction. He had the strongest of motives for not consenting to a sacrifice of the property, and for endeavoring to obtain its full value, and the best possible price. In this case there was no conflict between self-interest and duty, and the legal presumption is that he was faithful to his trust. This executor alone had authority to make the sale ; for it has been held that one of two or more executors has power to dispose of the assets of the estate even if his co-executors do not join in the transfer. Williams on Executors, 851-2.

His signature, therefore, to the agreement of sale was sufficient to pass a title, which cannot be questioned solely upon the ground that the other executors unnecessarily made themselves parties to the instrument. But this transaction was in effect a sale by the legatees, including the plaintiff, to the surviving partners of property which must be disposed of in order to effect a settlement and distribution of the estate. They united in the agreement of sale, and made themselves parties to it; and the purchasers thereby acquired an unimpeachable title. It is true that two of the purchasers were executors of the estate; but in the absence of proof of actual fraud, or a suppression of the truth, which is equivalent to it, or of any undue advantage taken of the beneficiary, the rights of the parties would not be affected by the fiduciary relation.

The plaintiff, in the brief of counsel submitted, seems to assume that upon the bare proof of a transaction with the executors, by virtue of which, for an apparently good consideration, her interest in the estate was released or transferred to them, fraud will be presumed, and that the burden -is at once cast upon them to show that no undue advantage was taken of her. This position is not supported by any principle of law or rule of equity which we have been able to find. If the beneficiary is competent to contract, the trustee may deal with him without necessarily incurring the suspicion of bad faith. But if he buys an interest in the trust property, or secures from the beneficiary a release to himself, and it is shown that the price was inadequate, or that he has made a profit out of the transaction, the law presumes fraud, or concealment, or undue influence, or some conduct inconsistent with loyalty to his trust, and places upon him the burden of proving that he disclosed to the beneficiary every circumstance relating to the condition of the property which he ought to know in order to form a correct judgment of its value; and that he exerted no undue influence to obtain the assent of the beneficiary to the bargain. It is here that the fatal weakness of plaintiff’s case is to be found. She gave no proof of inadequacy of price, or tending to show that the executors had made a large profit out of the property purchased. Had she shown that they obtained property of the estate worth $280,000 for $120,000, as she now alleges; or that for $5,000 she released an interest in the estate which was of the value of $10,000, that fact alone would have given rise to a very strong presumption that she had been defrauded by the executors, from the consequences of which they could not escape, except by very satisfactory proof that no material information was withheld, and that the sale was her own free, intelligent and deliberate act.

The plaintiff insists that the articles of copartnership entered into between the executors and other surviving partner, afford some evidence that the actual value of the testator’s interest was $280,000. Such an inference cannot, we think, be justly drawn from the recitals in this instrument. On the contrary, it appears that the value of the interest was then unknown and uncertain, and that it would for some time be unascertainable. The parties, therefore, fixed upon a sum which each should be regarded as contributing to the capital out of the estate of the deceased partner for the purposes of the capitalization of the new firm and the distribution of dividends. As each had an interest in the estate, and the addition made to each share was in proportion to such interest, it is evident that the actual value of the estate was not important. It is further urged that the finding of the trial court that the nominal and unliquidated share of the testator’s interest as stated on the books of the firm was the sum of $138,242, is some evidence of inadequacy of price, and that the executors made a profit of upwards of $18,000 by the purchase. .But this is not a finding that the sum named was the cash value of the testator’s share. The contrary is to be inferred. It is oa statement of the nominal and unliquidated amount of his share. It would be subject to the payment of debts and the shrinkage which almost inevitably occurs upon the conversion of firm assets into money. The disparity between this sum and the actual amount paid is not such as to indicate that the testator’s interest was sold for less than its true value.

The trial court has refused to find that the executors made any profit out of the estate by the purchase of this interest, and there is no sufficient evidence in the record to support such a finding if it had been made. The plaintiff is not entitled to a strict application of the equitable rule, which she might have invoked if she had moved with some degree of diligence to set aside the agreement and release, and to demand an accounting. An acquiescence for sixteen years requires some explanation. If it was due to. an ignorance of the facts for which the executors were responsible, it should have been shown. The newly discovered facts should also have been proven.

From her long silence, there is a presumption of fair dealing which overrides any presumption of wrongdoing growing out of the trust relation of the parties.

The judgment must be affirmed, with costs.

All concur.  