Harry S. Gordon died leaving a will which was admitted to probate by the surrogate of Ulster county December 15, 1908, .and on that day letters testamentary were issued to the appellant, the executor therein named. By the 5th clause of the will Edith R. Gordon was bequeathed $2,500. This legacy was subject to an inheritance tax of $118.70. On the 1.5th day of May, 1909, the executor advanced to the legatee $1,700 of his own money and took her receipt for $300, the price of a colt belonging to the estate purchased either by her or her husband. The executor testified that the legatee at that time offered to take $2,000 for the legacy, and that sometime thereafter she executed and delivered to him an assignment in blank of the legacy, and a power of attorney, authorizing him to pledge or transfer it for the sum of $2,000; that he did not assign or pledge the legacy, but returned the papers to her on the 20th day of January, 1910, when he went to Rope’s Creek, Md., where the legatee resided, and paid her the sum of $381.25, the balance of her legacy, and took her release. The surrogate found that at that time he had paid her $381.25 in cash, and that “Edith Gordon immediately handed back to said. *496executor $381.00 of the. same moneys so paid her, which said executor retained and still retains,” and “ That said moneys were so paid to and received and retained by said executor because, of his having advanced said legatee said sum of $2,000’ for her said legacy. ”
As a conclusion of law the surrogate found that the sum of $381 retained by the executor belonged to the estate and that he should be changed with that sum in the decree. The executor contends that if he is in the wrong in retaining the moneys, the wrong is against the legatee, and that in the absence of an objection by her the surrogate was hot called .upon to 'decide that question or to surcharge his account with the amount retained by him.
There is no statutory requirement or general rule requiring the filing of specific objection by a party contesting an account. The surrogate has. the power on his own motion, with or without a petition or suggestion from any one, to require a judicial settlement of the accounts of an executor or administrator, and after obtaining jurisdiction of the person, to proceed and examine into the account and to settle and adjust the same.
In Wigand v. Dejonge (8 Abb. N. C. 260) it was held that the act of passing the account of an executor is a judicial act on the part of the surrogate, even when no objections are made to the account, and in doing so he exercises that power over trusts formerly exercised by the old Court of Chancery, and where infants ate interested, in the accounts he is bound to investigate and take charge of their interests as their ultimate guardian.
The only question presented, therefore, is whether or not the account should be surcharged with the moneys which were paid or delivered by the executor to the legatee, and immediátely thereafter returned by her to him.
The appellant has cited cases which support his contention, that a voluntary gift is as much protected by law as is a transfer for a full consideration, and. that it can be assailed only by parties interested in a court of equity for fraud, undue influences or unfairness. This is, without doubt, the rule, but it is not applicable to the present case, because there was no evidence tending to show that the transaction between the legatee *497and the executor was a gift to the executor. On the contrary, the evidence was of such a character as to justify the surrogate in finding that the money was paid to and received by the executor on account of the advancement.
All the evidence as to the transaction between the executor and the legatee was given by the executor himself. He testified that he told the legatee “ at the time she was entirely too liberal and magnanimous, and offered to pay it back. She stated that was what she was willing to pay any one else; that I had befriended her and was glad that I got the benefit, and under those circumstances I accepted it. * * * I do not know what she paid me for: There were some other consultations and matters of importance I went over with her, but I did not charge her and never intended to, but she did what I have told you for my trouble, my expenses, my favor and by accommodating her by advancing this $2,000 myself and the trouble I had had * * *. It was paid to me as I understand. for the use of my $2,000, for the trouble and expense that I had been to at her request and for her accommodation, and for advice and information possibly, that I had given her in reference to the estate and its condition; what should be done or what she desired done in behalf of her children with the farm and matters of that kind.”
The question as to whether an executor is bound to account for money received under such circumstances is not an open one, and it matters not that no actual fraud was found. It was said in Fulton v. Whitney (66 N. Y. 555) that “The object of the rule which precludes trustees from dealing for their own benefit, in matters to which their trust relates, is to prevent secret frauds by removing all inducement to attempt them,” The rule prohibiting an executor or other trustee from managing the affairs of the trust or dealing with the trust property so as to gain any advantage directly or indirectly for himself beyond his lawful compensation is well supported by the decisions of the courts of this State. In the case of McClure v. Law (161 N. Y. 78) it was held that money received from an outsider by a director and president of an assessment life insurance company, for procuring the outsider and his friends *498to be elected directors and given the control and management, is money obtained by virtue of his office for which he must account to the corporation. The court there cited with approval Perry on Trusts ([4th ed.] § 427): “Trustees hold a position of trust and, confidence. The legal title of the trust property is in them, and generally its whole management and control is in their hands. * * * They cannot use the trust property nor their relation to it for their own personal advantage. All the power and influence which the possession of the trust fund, gives must be used for the advantage and profit of the beneficial owners and not for the personal gain and emolument of the trustee. * * * So, where a trustee retired from the office in consideration that his successor paid him a sum of money, it was held that the money so paid must be treated as a part of the trust estate^ and that the trustee must account for it as he could make no profit directly or indirectly from the trust property or from the position or office of trustee.”
The court also said: “In Cook on Corporations, section 650, it is said: It is a well-established principle of law that a director commits a breach of trust in accepting a secret gift or . secret pay from a person who is contracting or has contracted with the corporation, and that the corporation, may compel the director to turn over to it all the money or property so received. by him.’”
In the case of Carpenter v. Taylor (164 N. Y. 171) the Court of Appeals said: “ A trustee who holds the title to property for the benefit of others cannot use his position for his personal advantage. He cannot make profit for himself in the execution of his trust. He cannot ordinarily deal with the beneficiaries or parties interested in the estate so as to acquire the ownership of the trust property. * * * In such cases the trustee occupies the dominant position, and the beneficiary or person interested in the estate is, in some respects, subject to his power and influence. For obvious reasons the disability of the trustee to bargain with the beneficiary for a share or interest, in the property, whether in the: form of compensation or otherwise, is absolute in order to avoid the possibility of fraud. In such cases the law acts upon the principle that the temptation of self-interest is too powerful and insinuating to be trusted.”
*499In Matter of Schroeder, No. 1 (113 App. Div. 217) the court said that this rule is most salutary. “ Persons holding fiduciary positions in the many trust relations which modern society has produced, should he held to the" strictest accountability. The community should he given to understand that the courts of this State will hold trustees to the highest standard of straight conduct, and will not permit them to make hy virtue of their trusts a private and personal profit beyond the compensation allowed hy law.”
Any other rule would permit an executor to purchase legacies bequeathed by his testator at a discount, and profit by paying himself in full. Such a practice would open the door to the greatest fraud. The only proper and safe rule to follow is to hold that an executor shall not make any profit by the discount of a legacy and, if he does, it shall inure to the benefit of the estate whether the legatee complains of unfair treatment or not.
It is to he observed, however, that all of the $381 with which the executor was charged was not personal gain or profit. He was without the use of the $1,700 advanced by him from May 15, 1909, to January 20, 1910. We think that he had a right to receive the lawful interest thereon during that period, which amounts to the sum of $69.70. It follows that his account should have been surcharged with only the sum of $311.30, and that the decree of the surrogate should, therefore, be modified accordingly and as so .modified affirmed, without costs to either party.
All concurred, except Betts, J., dissenting in opinion.