Frederick G. Bourne, a resident of Suffolk county, N.Y., died on the 9th of March, 1919, leaving a will which was admitted to probate on the *Page 344 17th of the same month and letters testamentary issued to the executors therein named. This proceeding was instituted for the purpose of settling their accounts. The respondents interposed certain objections, only one of which is necessary to be here considered. This objection sought to have the executors' accounts surcharged with the amount received by them from the sale of certain property, real and personal, known as Dark Island. The objection was overruled, but on appeal the decree in this respect was reversed (two of the justices dissenting) and the executors' accounts surcharged with the amount of this item. The present appeal followed.
Mr. Bourne left him surviving as his heirs at law and next of kin seven children, three sons and four daughters. The eldest son, Arthur, and decedent's secretary, Mr. Vail, were the executors named in the will. The youngest daughter, Marjorie, and another daughter, Mrs. Strassburger, are the respondents above named. Mr. Bourne left a large estate, upwards of $41,000,000 of personalty, besides valuable real estate, so that after the expense of administration, inheritance and transfer taxes were paid, each of the children received more than $5,000,000 — the estate, after payment of certain specific legacies, being divided equally among them.
Besides the Dark Island property, located in the St. Lawrence river, the deceased at the time of his death owned valuable real estate on Long Island, and on Jeckyl Island, Georgia. The Dark Island property and other real estate connected with it, including the furnishings of a residence which he had there built, and other personal property, had cost him approximately $389,000. The 8th paragraph of his will reads as follows: "I hereby authorize and empower my executors hereinafter named, their survivor and successors, in their discretion, either for the purpose of a partial or complete division or otherwise, to partition, on valuations determined by them to be just, which shall be binding upon all concerned, or to *Page 345 sell, either at public auction or private sale, my personal effects and my real estate, or any part thereof, * * * and to make and execute and deliver all proper assignments, deeds, conveyances, mortgages, leases and other necessary instruments in writing."
Three days after his death a meeting took place between the children and the executors and a written request was then made by the former that the latter maintain and keep up Mr. Bourne's residence and farm at Oakdale, the establishment at Dark Island, and Jeckyl Island "in the same manner as heretofore kept up and maintained by him, charging the expense thereof to the residuary estate for a period of three months hereafter and continuing thereafter until we revoke this authority in writing."
About the 11th of April following a meeting took place between the respondent Marjorie Bourne and her brother Arthur, in which, according to her testimony, he told her he had an offer of approximately $500,000 from a Mr. Peacock for the Dark Island property; that she then told him she did not want that property to go out of the family; that her father loved it, and she wanted to keep it; that Arthur then told her she could not afford to buy it, to which she responded she could not help that, but she would not see Mr. Peacock get it, because her father did not like him; that when her brother told her she could not afford to buy it, she said she would see if she could not get her sister, Mrs. Strassburger, to go in with her and make the purchase.
On the 19th of May, 1919, another meeting between the children and the executors took place. At this meeting it was agreed by the children that certain pieces of real estate should be sold to some of them at prices which approximately represented the cost to their deceased father, as shown by his books. As to the Dark Island property, real and personal, it was agreed the executors should endeavor to sell the same "for the best price *Page 346 possible, but before making any contract for its sale, that they should report the amount that they had been offered and were willing to take, to Mrs. Strassburger and Miss Marjorie Bourne, giving them, or either of them, the privilege of buying the property first at such figure."
On the day following this meeting, Marjorie Bourne testified, on the hearing before the surrogate, that she became very much worried lest the Dark Island property should go out of the family, which she did not want done; that she did not want it offered for sale to the public and so stated to her brother-in-law, Mr. Strassburger; that he advised her not to buy it, but she told him she wanted it, and would like to acquire it before it was offered to any one outside the family; that he said to her possibly her sister, Mrs. Strassburger, would help her buy it; that she asked her sister if she would, and she consented to do so under an arrangement with her that she would buy it back within a certain time; that she then asked her brother-in-law to go to Mr. Vail and make an offer of $370,000 for the property, but not to let her brother Arthur know who was making the offer until the meeting, called between the children and executors for the 26th of May, 1919, took place. The property had, prior to this time, been placed in the hands of a broker to sell and the price put upon it by the executors was $500,000; and the property had been offered by the broker for sale, the attention of several wealthy people being called to it.
The meeting called for the 26th of May took place, all of the children and the executors being present. Marjorie Bourne and Mrs. Strassburger then offered to buy the Dark Island property and pay therefor $389,120.97, which was approximately the amount it had cost their father, as shown on his books. All of the children except one sister consented in writing that the property be sold to them for that figure, and she thereafter orally agreed *Page 347 to such sale. On the same day a written contract was entered into between the executors, on the one hand, and Marjorie Bourne and Mrs. Strassburger, on the other, by which the former agreed to sell and convey, and the latter agreed to purchase, the Dark Island property at the price heretofore named — $100 being paid down and the balance, $389,020.97, agreed to be paid on or before the 26th of June, 1919, when deeds of conveyance and bills of sale were to be delivered — possession being given immediately. Thereafter, the property was duly transferred and conveyed, the consideration being the price stated in the contract. Immediately following the signing of the contract, Marjorie Bourne and Mrs. Strassburger went into possession, occupied the property for the seasons of 1919 and 1920, and Marjorie Bourne for 1921, and Mrs. Strassburger for a portion of that season.
On the 26th of September, 1921, Mrs. Strassburger transferred and conveyed her interest in Dark Island to Marjorie, who, having ascertained that the property had been appraised for the purpose of transfer and inheritance taxes at between $40,000 and $50,000, sought to have the executors take back the same at the price which she and Mrs. Strassburger had paid. This they refused to do, inasmuch as the other brothers and sisters, with the exception of Mrs. Strassburger, refused to consent thereto. Marjorie thereupon brought an action in the Supreme Court to set aside the deed of conveyance, on the ground of fraud and misrepresentation as to the value, but before that action was tried, the hearing in this proceeding came on and the whole question was tried out in the Surrogate's Court, with the result as before indicated.
The surrogate found "that the said executors in their administration of the estate of said decedent, have acted throughout in good faith and as prudent and intelligent men would act in the management of their own affairs, and with due regard to the best interests of the said estate, and have exercised their best judgment and have *Page 348 not acted negligently. * * * That the said executors in selling to May B. Strassburger and Marjorie Bourne the so-called Dark Island property * * * acted in good faith and fairly and properly and without any inducements or unfair or improper representations to the said May B. Strassburger and Marjorie Bourne, or either of them, and that said sale was validly made and is in all respectsvalid and that no grounds exist for setting the same aside."
The findings of the surrogate were unanimously affirmed by the Appellate Division "except as to the matter of the sale of the so-called Dark Island property by the executors to the appellants Marjorie Bourne and May Bourne Strassburger and that as to said matter the finding of the said surrogate that said sale wasvalidly made and is in all respects valid and that no groundsexist for setting the same aside is contrary to the evidence and said finding is hereby reversed and annulled by a majority of this court."
The Appellate Division made two findings of its own, viz.:
"1. That the amount paid by Marjorie Bourne and May Bourne Strassburger for the so-called Dark Island property was grossly excessive and that said fact was well known to the executors at the time the sale was made.
"2. That such sale to said Marjorie Bourne and May Bourne Strassburger was intended and was made as a partial distribution of the decedent's estate, pursuant to paragraph eighth of his will, and was unjust and unfair."
It will be observed that the finding of the surrogate that the executors, in the administration of the estate, had, in the exercise of their best judgment, acted in good faith and as prudent and intelligent men would act in the management of their own affairs, was not reversed, nor was the finding as to the sale of the Dark Island property, to the effect that in making such sale they also acted in good faith and no inducements or unfair or *Page 349 improper representations were made to the purchasers to bring about such sale. The only part of the finding relating to the sale of the Dark Island property which was reversed were the words which I have italicized in the findings quoted, which, as I construe them, is more of a conclusion of law than a finding of fact. Such conclusion is not justified so long as the findings in relation to such sale remain undisturbed, that the executors not only acted "in good faith" but fairly and properly, and made no improper or unfair representations to bring about the sale.
It is doubtless true, as found by the Appellate Division in the first finding made by it, that the price paid for Dark Island was excessive and was so considered by the executors. Indeed, one of them, according to Marjorie Bourne's own testimony, had advised her not to purchase it, as did her brother-in-law. The value of property of this character is largely problematical. It rarely can be sold in the open market for what it cost, and it probably could not, to-day, be replaced for that sum. The price fixed upon Dark Island, as upon the other pieces of real estate sold, was what they had approximately cost as shown by the books of the deceased. The residuary legatees all agreed to this method of procedure, and this was the method adopted in each instance. Marjorie Bourne was of full age. She was at least as familiar with the Dark Island property as any of the other children. She was very much attached to her father and spent most of her time with him and especially when he occupied Dark Island. She knew he was very fond of that property and for that reason, as well as others best known to herself, she also was very fond of it. She wanted the property herself and was willing to pay, in order to gratify her wishes in this respect, what it had cost. She was not deceived in any way in making the purchase. She did not rely upon anything the executors told her, for if she had, she would not have purchased it. *Page 350
But it is suggested that the executors occupied a fiduciary relation to Marjorie Bourne as residuary legatee, and for that reason ought not to have permitted her to acquire the property at a price in excess of its value. I know of no rule of law which imposes upon executors any such duty. If it be true, as contended, that they occupied a fiduciary relation as to Marjorie Bourne, they occupied a similar relation as to the other residuary legatees. They were obligated, as executors, to act for the best interest of the estate. That required them to sell the property at the best price obtainable. Respondents' counsel, appreciating this, seeks to escape the force of it by urging that this was not a sale, but a partial distribution of the decedent's estate, and in this connection calls attention to the second finding made by the Appellate Division. Such finding is not only unsupported by the evidence, but is contrary to it. The evidence clearly establishes it was a purchase and sale and nothing else, and so understood. The testimony of Marjorie Bourne shows it, as does the agreement of the residuary legatees and the written contract to sell, followed by the deed of conveyance. In the face of such evidence, the transaction cannot be tortured into a partial distribution of the estate.
The order of the Appellate Division, therefore, is reversed and the decree of the Surrogate's Court affirmed, with costs payable out of the estate to all parties appearing and filing briefs.