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Opinion of the Court.

circumstances, justice and equity demanded. It really constitutes in itself nearly all the facts pertinent to the case. It certainly exhibits on the part of Mr. Barney a desire to deal fairly with the plaintiffs, and a vacillation on their part, which has a strong tendency to show that before making up their minds to accept his offer to refund the $10,000, and take the proceeds of the sales of the lands, they intended to wait and see whether it would prove a successful speculation. We have no desire to weaken or qualify in any way the wholesome doctrine laid down by this court in the case of Michoud v. Girod, 4 How. 503, that a trustee cannot legally purchase on his own account that which his duty requires him to sell on account of another, nor purchase on account of another that which he sells upon his own account—in other words, he cannot unite the two opposite characters of buyer and seller. So jealous is the law of dealings of this character by persons holding confidential relations to each other, that the cestui que trust may avoid the transaction, even though the sale was without fraud, the property sold for its full value, and no actual injury to his interests be proven. It does not follow, however, that the sale is absolutely void in the sense that the purchaser takes no title, which he can convey to a third person a bona fide purchaser without notice; nor that the cestui que trust may not, upon notice of all the facts, ratify and affirm the sale by his acquiescence or silent approval. Thus in Marsh v. Whitmore, 21 Wall. 178, 183, 184, where an attorney sold bonds of a client at a public sale, and bought them in himself, at their full value at the time, and the client was aware of the purchase and acquiesced in it for twelve years, it was held to be too late for him to attempt to impeach the validity of the sale. "Most undoubtedly," said the court, "that sale was voidable. The character of vendor and that of purchaser cannot be held by the same person. They impose different obligations. Their union in the same person would at once raise a conflict between interest and duty, and, constituted as humanity is, in the majority of cases duty would be overborne in the struggle. . The complainant could have treated the purchase made by the defendant as a

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Opinion of the Court.

But unfortunately for him there is more in the case. He has adopted and approved of the transaction. Had he at once denied the validity of the transaction, or by any declaration or proceeding indicated dissatisfaction with it, or even refrained from expressions of approval, he would have stood in a court of equity in a very different position."

So in Twin Lick Oil Company v. Marbury, 91 U. S. 587, it is said that the right of a corporation to avoid the sale of its property by reason of the fiduciary relations of the purchaser must be exercised within a reasonable time after the facts connected therewith are made known, or can by due diligence be ascertained, and that the determination of what is such reasonable time must be arrived at by a consideration of all the elements which affect that question.

In Hayward v. National Bank, 96 U. S. 611, a bank sold collaterals to three of its own directors, and applied the proceeds to the payment of a loan. The debtor, who was advised of the sale, and that enough had been realized to pay his indebtedness, made no objection; but nearly four years after the sale, the stocks having in the meantime greatly increased in value, notified the bank of his desire and purpose to redeem them; but on his subsequently filing a bill for that purpose, he was held not entitled to relief. To the same effect are Grymes v. Sanders, 93 U. S. 55, 62; Pence v. Langdon, 99 U. S. 578, 581; Mackall v. Casilear, 137 U. S. 556, 566. In cases of actual fraud or of want of knowledge of the facts, the law is very tolerant of delay; but where the circumstances of the case negative this idea, and the transaction is sought to be impeached only by reason of the confidential relations between the parties, and the cestuis que trust have ample notice of the facts, they ought not to wait and make their action in setting aside the sale dependent upon the question whether it is likely to prove a profitable speculation. As the question whether the sale should be vacated or not depends upon the facts as they existed at the time of the sale, so in taking proceedings to avoid such sale, the plaintiff should act upon his information as to such facts, and not delay for the purpose of ascer

Opinion of the Court.

taining whether he is likely to be benefited by a rise in the property, since that would practically amount to throwing upon the purchaser any losses he might sustain by a fall, and denying him the benefit of a possible rise. Hammond v. Hopkins, ante, 224.

This is not an ordinary case of a trustee buying the property of his cestui que trust for the purpose of gain. The deceased was associated with eight others in the construction of a railroad; they were to be paid in part, at least, by these lands or their proceeds. At Latham's death he left a large amount of property, of which his interest in these lands was but a small fraction, estimated at about one-eighteenth. At his request and that of two of the heirs, the defendant Barney undertook the settlement of the estate for the purpose of saving the expense of administration. Had Latham been alive and desirous of disposing of his interest in these lands, his first thought would have been to offer such interest to his associates, who, already owning thirty-six thirty-sevenths, could well afford to buy this trifling interest, and, naturally desiring to prevent a stranger from entering the syndicate, would be likely to pay as much or more for it than any one else. Failing to find a purchaser in Mr. Sykes, Barney offered it to the syndicate. He could not himself have expected to realize much by the transaction, since his interest was only an eighth of the whole purchase, which was itself only one thirty-seventh of the entire grant. There was no attempt on his part to conceal the real transaction, or to disguise the fact that he was one of the purchasers. By making the sale he was enabled to effect a distribution of the estate without delay. This he proceeded to do by sending to each heir a statement of his account and a check for his or her share of the proceeds, demanding at the same time a release from further liability.

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Apparently so little was thought of this interest in the lands that the release itself spoke only of "personal property, to be divided among his next of kin, whether in money, bonds, stock or other property." In short, his interest in these lands was treated as a mere incident to the personal estate, and unworthy of a separate consideration. It was

Opinion of the Court.

thought, and properly so, that it should be disposed of at once in order to secure a speedy settlement of the estate; if put up at auction, it would probably have proven unsalable.

There is absolutely nothing tending to show fraud or bad faith on the part of the defendant Barney; indeed, we are not satisfied that this not was the most prudent disposition to make of this interest, in view of the uncertainty regarding the title and value of this property. While the law pronounces a sale of this kind voidable at the election of the cestui qui trust, there was every reason for demanding prompt action upon their part in disaffirming it. Barney himself recognized the right of the plaintiffs to set aside the sale; gave them apparently a satisfactory statement of the facts, requesting only that a decision should be made at once, as it should not remain an open question. (September 11, 1872.) Nothing decisive having been done, he wrote W. H. Latham again, May 13, 1873, giving him the option of rescinding the sale if action were taken within thirty days, which was again extended by his letter of June 19. Nothing was done for nearly two years, when Latham reopened the correspondence by asking further particulars. Another correspondence of a year then ensued, the property in the meantime apparently having come into the market and largely increased in value. In view of the lapse of time, the organization of a new company and the change of circumstances, Mr. Barney was apparently unwilling to renew his first proposition, but submitted a new one, or rather a modification of the first, which the plaintiff's declined to consider, and in December, 1876, filed this bill. In the meantime Danford N. Barney and Judge Kelly, the two most material witnesses, who acted for the other heirs and advised the sale, have both died, and the parties have lost the benefit of their testimony.

Under the circumstances, we think the plaintiffs should have taken immediate action; they were fully informed of the facts of the transaction, or at least they were informed of enough to put upon them the necessity for further inquiry, and they must have known that delay, even for a year or two, might work a very great change in the value of their brother's

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interest. If the syndicate were successful in their litigation with respect to these lands, they would undoubtedly largely increase in value; upon the other hand, if they were unsuccessful, the interest might be comparatively worthless. No explanation is given for their delay, and none is suggested except an apparent intention to wait and see what the value of these lands was likely to become, and whether it would prove more profitable to set aside the sale or let it stand. While the delay in this case was not a long one, measured simply by the time which elapsed after the sale was made, we think, under the circumstances, it amounted to a ratification of such sale, and that the bill should have been dismissed. The decree of the court below is therefore

Reversed, and the case remanded with directions to dismiss the bill with costs.

MR. JUSTICE FIELD dissented.

MR. JUSTICE BREWER did not sit upon the argument of this case, and took no part in its decision.

HORNER v. UNITED STATES. No. 2.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.

No. 1473. Argued January 13, 14, 1892. Decided March 7, 1892.

On a complaint before a United States commissioner in New York, against H. for a criminal offence, in violation of § 3894 of the Revised Statutes, as amended by the act of September 19, 1890, c. 908, (26 Stat. 465,) prohibiting the sending by mail of circulars concerning lotteries, H. was committed to await the action of the grand jury. A writ of habeas corpus issued by the Circuit Court of the United States was dismissed by that court. H. appealed to this court in November, 1891. Held, (1) As the constitutionality of § 3894, as amended, was drawn in question, an appeal lay directly to this court from the Circuit Court, under § 5 of the act of March 3, 1891, c. 517, (26 Stat. 826 to 828, 1115;)

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