We dismissed an appeal from the judgment in this case because it was not final against Glass, and because, although it was so against Tumulty and the Middle States Petroleum Corporation, it would have resulted in great duplication of time and expense to go over the same issues twice. We suggested then that the parties might stipulate to delete those parts of the judgment that limited its finality as to Glass and to discharge him unconditionally.1 This they did, but in two other opinions, on January 15 and February 8, 1954,2 we concluded that such amendments must be approved by the district court under Fed.Rules Civ.Proc. rule 23(c), 28 U.S.C.A.; and we therefore remitted the cause to Judge Smith. On May 21, 1954, after hearing on notice to all parties he entered a judgment amending the judgment, from which, as amended, the original appellants have again appealed. The present judgment (disregarding the reversal of the dismissal of the counterclaim of the Middle States Petroleum Corporation against the executors of Cohen) now unconditionally declares (1) that Cohen’s executors, and Levy Brothers and Sophie D. Cohen individually “have failed to establish any right to surcharge against Joseph P. Tumulty and Joseph Glass, as Receivers of the United Oil Producers Corporation, or recovery against Middle States Petroleum Corporation in favor of the estate of United Oil Producers Corporation or any of those claiming through said estate”; (2) denies all motions to surcharge the receivers and approves their accounts; (3) discharges them as such receivers; (4) dismisses the “general charges of fraud and conspiracy”; and (5) dismisses nine “specific claims of fraud and conspiracy” which it describes severally in detail. The judgment leaves undisposed of all liabilities of Glass and Tumulty, as receivers of the Middle States Oil Corporation, or of any of its 35 and more subsidiaries. We need not decide many of the issues litigated at the trial, even though these related to the rights and liabilities of the United Oil Producers Corporation against, or to Middle States Oil Corporation, or any of its subsidiaries, save as decisions on these bear upon the value of the assets of United Oil Producers Corporation, sold in reorganization. Ordinarily, of course, it would be necessary to liquidate these claims as to both their validity and amount in order to appraise their value, and to decide whether the price at which they were sold to the Middle States Petroleum Corporation was “fair.” However, as we shall show, it is not necessary to do this in the case at bar because the intercorporate claims were complicated far beyond any possible liquidation with*597in the time allowed by the district court for that purpose. The only question is whether the price fixed and obtained was the best attainable in the circumstances. If it was, that was all for which the appellants can now demand the receivers of the United Oil Producers Corporation to account. For these reasons we shall not discuss any claims of Cohen’s executors, as shareholders of the Southern States Oil Corporation, or the claims of Sophie D. Cohen, individually, or of Levy Brothers, as such shareholders. These have no bearing upon the liability of Glass and Tumulty to the bondholders or creditors of United Oil Producers Corporation. Nor has the claim of Sophie D. Cohen, as a shareholder of the Oil Lease Development Company, any such bearing, because, even though we will assume for argument that she may have been entitled to prosecute the claims of that company, its only claim against the receivers of United Oil Producers Corporation, was as a pledgee of some of the bonds of that company, so that whatever disposes of the interest of Cohen’s executors, as holders of such bonds, applies equally to the interest of Sophie D. Cohen, as shareholder of Oil Lease Development Company.
We shall use the following abbreviations: The “Bondholders” will mean all those bondholders who did not deposit their bonds in reorganization; “U.O.P.” will mean United Oil Producers Corporation; “M.S.O.” will mean Middle States Oil Corporation; “M.S.P.” will mean Middle States Petroleum Corporation; the “Receivers” will mean Glass and Tumulty, as receivers of United Oil Producers Corporation. The appeal involves only three questions: (1) Whether the sale to “M.S.P.” in reorganization of the assets of “U.O.P.” was conducted as the law requires; (2) whether the plan of reorganization satisfied the Boyd Rule3 by giving to bondholders an “equitable equivalent” in “M.S.P.” of their former claims against “U.O.P.”; and (3) how far the “Receivers” are liable personally if either answer to the foregoing questions is negative. The claim against “M.S.P.” is that, as it was a party to the sale and to the consequent plan of reorganization, it was a grantee of a fraudulent conveyance. The charge against Glass rests more particularly upon the allegation that he actively promoted the reorganization fraudulently as part of a conspiracy to secure an interest for himself in “M.S.P.”; and that, even if not a party to any such actual fraud or conspiracy, he had such personal interests in transferring the assets of “U.O.P.” to “M.S.P.” as conflicted with his duty as receiver, and threw upon him the burden of justifying his conduct, a burden which he did not carry. Furthermore, the “Bondholders” charge that, even though Glass was not engaged in a conspiracy to defraud them, the “Receivers” were derelict in their duty as such, in the conduct of the sale of the assets, and that the burden of proof lay upon them to show the extent of the loss incurred and their profits therefrom.
After a long and warmly contested trial, Judge Smith handed down a comprehensive opinion, accompanied by 272 findings of fact, in which he decided that the “Bondholders” had failed to establish any liability against the “Receivers” or “M.S.P.”; but which dismissed the counterclaim of “M.S.P.” against Cohen’s executors. To the allegation that Glass and the committee that reorganized “M.S.P.” united in a conspiracy to secure the assets of “U.O.P.” in fraud of the “Bondholders,” Judge Smith found that the “general charges of fraud and conspiracy are not proved.” [124 F.Supp. 779.] Of Glass he said that “he gave the impression, during his extended testimony, of sincerity and honesty of purpose. He was unconvincing on two subjects, — the explanation of his erroneous testimony that his M.S.P. salary was not included in the overhead allocated to the corporations in receivership, and in his testimony as to the meaning of his statements on the Manning trial in Delaware. With these possible exceptions, he appeared through *598the long weeks on the stand, frank and honest in testimony and thoroughly convinced of the good faith of his every action in the receiverships. Moreover, many of the individual actions attacked by the objectants turned out to be convincing illustrations of Glass’ good faith in dealing with his trust. The readjustment of inter-corporate claims after reorganization, in May, 1930, for instance, operated to the disadvantage rather than to the advantage of M.S.P. The appraisals and the eventual realization by M.S.P.’s subsidiaries from the sales in the ancillary jurisdictions are convincing proof of meticulous care that the sellers be treated fairly. So also with the comparative prices paid receivership estates and outsiders for similar securities purchased by M.S.P. Some of Glass’ transactions may have been harmful to some of the receivership estates. If so, the Court is convinced that they were not the result of active fraud or attempts to despoil the receiverships for his own benefit or that of M.S.P.” Although it is of course true that such a finding is not exempt from review by us, “it is not enough that we might give the facts another construction, resolve the ambiguities differently, and find a more sinister cast to actions which the District Court apparently deemed innocent.” 4 We have again and again laid especial weight upon the importance of findings that touch the good faith and honesty of a witness, whom the judge has seen; for, as we have said, on such occasions the printed record does not preserve a part of the evidence, which on that issue is often crucial. To ascertain another’s motives we are of necessity driven to inferences, for they are never manifest to our senses; no one can see, hear or feel what has actuated someone else. Among the sensible facts on which we must rely is the manner in which the witness utters his testimony: i. e., his address and bearing, his frankness, his directness and freedom from evasion, his assurance as to what he has personally observed, and his readiness to admit his uncertainty as to what he has not: all these things are among the most convincing means of deciding whether to believe his testimony. And so, when a judge of tried experience has had the opportunity to observe a person through days of the most searching and provocative cross-examination; and when he has made findings and written an opinion that show the most painstaking and impartial solicitude to reach the truth, his decision about that person’s motives is nearly conclusive; and we should disturb it only when the objective circumstances make it clear that the un-preserved evidence could not have properly overbalanced the inherent improbability and inconsistency of his spoken words. We can find nothing in this record that would sustain such a conclusion as to Glass. The “Bondholders’ ” brief abounds in charges that gravely impugn his honesty, and impute to him a ruthless disregard of his duty to the creditors of “U.O.P.,” or of the other subsidiaries. Were they true, nothing could excuse him; but, so far as we have discovered, there are none that furnish any affirmative proof against him. It is quite true that, once one assumes that he was bent upon forcing all to join the reorganization, what he did was consistent with that purpose, but that is altogether irrelevant, if it was equally consistent with innocence, as it was.
It would take too long to go over in detail all that is mustered against him; but one or two illustrations may deserve notice. The brief repeatedly asserts that Glass had planned to become president of the new company a good while before the-sale of the “U.O.P.” assets in 1929; and that his letters covertly betray this wish. On the contrary, the letters bear every evidence of an unwillingness to be president, though they quite frankly declare-that he would like to be the lawyer for the reorganized corporation. Take for example this passage from a letter written in October, 1927, to one, Gilbert, a banker in Oklahoma: “I have personally *599reached the definite decision that I do not care to continue with the reorganized company in any executive capacity, as I do not feel that I would want to subordinate my professional practice to the daily necessities of a going business, and I feel that if I were to attempt it, the company’s interests would suffer. The only relationship on my part with the company in the future that will be possible, as far as I am concerned, will be a professional relationship, if my legal services should at any time be required.” Conceivably such language might have been used to disarm opposition while Glass was in fact intriguing to get the job; but on what imaginable ground can it be taken as affirmative evidence that he was doing so ? To take it as written in fulfillment of such a clandestine purpose is completely to pervert its natural meaning.
Again, take the agreement that the “Receivers” got from the reorganization committee in the following terms: “It is the understanding of counsel for the Reorganization Committee that the acts of any persons who are employees of the Receivers and are permitted by them to participate in such action of the Boards” (i. e. “resolutions authorizing the filing of answers admitting the allegations of the bills of complaint”) “shall not be deemed the action of the Receivers or action taken on their behalf; and that the action of the respective Boards * * * shall in all respects be without prejudice to the right of the Receivers to raise any question with respect to the subject matter of said suits or any of them in the event that the Reorganization Plan as now existing or hereafter amended shall fall through.” Of this the “Bondholders” say in their brief that it “of course * * * meant that these judgments and decrees, though absolute on their face, were subject to be vacated at the instance of the Receiver if the plan was not carried out. It is difficult to see, therefore, in view of all the circumstances, how this sale was not collusion or ‘hocus-pocus.’ ” As we understand this argument, it means that the “Reorganization Plan” would have “fallen through,” if an outsider had appeared at the sale and outbid the reorganization committee; and that in that event the “Receivers” had the option of vacating the decrees on which the sale was made. In the first place the “Plan” would not have “fallen through,” if that had happened, for it was a condition precedent of the “Plan” itself that they should be offered to outsiders, and that, if a bidder appeared, who should outbid the reorganization committee, the properties should pass to him. The “Plan” would not in that event have gone into effect, but the properties would have passed beyond the power of the court, exactly as it was intended they should. The “Plan” would not miscarry, if the prescribed alternative to it had been realized. In the second place even if we impose that meaning on the words, “fallen through,” the agreement did not give the “Receivers” the power to “vacate” the “judgments and decrees.” All it did was to provide that the “Receivers” should be free to take such action as seemed to them to be for the best interest of the defendant corporations, regardless of the fact that the “action of the Boards” in consenting to any “judgments and decrees,” might have required the votes of employees of the “Receivers.” It was plainly no more than a precaution —probably unnecessary — to retain whatever power they had had to provide for any occasion that might arise after a breakdown. How it can be thought to have been any evidence of conspiracy to seize the properties we cannot understand.
Finally, although we are prepared to make large allowances for the heat of advocacy in a litigation that has engendered so much feeling, we cannot pass without mention that part of the “Bondholders’ ” brief that imputes to Judge Smith a partiality in favor of the “Receivers.” For example: “The Trial Judge treated the Receivers with the utmost tenderness, resolving every question of fact, every adverse inference in favor of the Receivers and granting them a clean bill of health, where as the object-*600ants and their counsel were subjected to express and implied unwarranted criticism.” It is curious to find this charge supported by the amendment to the 79th Finding of Fact, from which at the “Bondholders’ ” demand the judge deleted the adjectives “reckless” and “careless” that he had originally used to characterize their conduct, and which, as it now stands, criticizes equally that of both parties. Again: “Yet we are compelled to submit most earnestly that he apparently had a blind spot when it came to judging the Receivers’ conduct, particularly Glass’.” It is indeed always proper for an appellant to show that the trial judge was guilty of partiality, or of any other judicial impropriety relevant to his decision, and, indeed, nothing can more justly move an appellate court.to reverse; but it is a charge that gravely miscarries when it is not made good; and it would be difficult to imagine less support for it than in the case at bar, where the record throughout shows a patience and will to do even-handed justice, that might serve as a model for imitation anywhere.
However, although we put aside, as we do, the charge that Glass was a party to any fraud or conspiracy, we agree with the “Bondholders” that the burden would nevertheless be upon him to prove that they had suffered no actionable loss by any of his acts or decisions in which he could have been actuated by a personal interest that conflicted with his duty to them. Moreover, in that event it would not relieve him of the burden even to prove, if he could, that his putative interest did not in fact influence him, for the law will not attempt to weigh how far such an interest may have played a part in the result, once it be shown to have existed. What we said on the first appeal we repeat with equal emphasis. Nevertheless, before the burden of proof shifts, the beneficiary must prove that there was such a conflict; it therefore rested on the “Bondholders” to prove that Glass had some personal interest in putting through the reorganization that conflicted with his duty as receiver. In considering that question we must at the outset distinguish between an occasion where the conflicting interest is personal! to the fiduciary, and one where it arises between two or more of his beneficiaries. For example, in the case at bar the “Bondholders” repeatedly complain that. Glass failed to pay the interest on the “U.O.P.” bonds at times when that company was in adequate funds to do so. This, they argue, was because he preferred the interest of “M.S.O.” which at the time he thought had more pressing need for the money. To a similar charge Judge Smith made what we regard as the proper answer; it might be true, he said, that “in some instances such as failure earlier to realize on the collateral behind, the Chatham-Phenix note he” (Glass)' “was unconsciously influenced by a desire to benefit the group o-f receiverships as a whole and later M.S.P., rather than to act solely for the benefit of the estate of Western. That was a danger incurred by the Court in order to avoid the expense of some thirty-eight additional re-ceiverships. If it did occur and cause damage to the estate of Western, some means must be found to rectify it.” [124 F.Supp. 779.] But he did not include among those means a surcharge of Glass-on the theory that he was a fiduciary subject to a conflict of interests. Similarly, assuming for argument that there were moneys of “U.O.P.” that Glass might have used to pay the interest on its bonds, his interest, as receiver of “M.S.O.,”' which owned directly or indirectly substantially all of “U.O.P.’s” shares, even if it conflicted with that of the “U.O.P.”' bondholders, was a conflict inevitable in the set-up of 38 or 39 receiverships all conducted as one. Glass owed the same duty to “M.S.O.” ás to “U.O.P.”; both duties had been imposed upon him by the court, and he was not only free, but. bound — if they conflicted — to decide which need was the more imperative. It must be remembered that the “U.O.P.”' bondholders had no legal interest in the' income as yet; as mortgagor, that company was free to use its income until the mortgagee, the indenture trustee, moved to sequester it for the bonds.
*601Nor was it necessary for the “Receivers” to procure an order of the court whenever a conflict of interest arose between any of the 38 corporations with custody of whose assets they had been entrusted. The interests of all were so enmeshed that countless transactions were likely to involve “U.O.P.” with “M.S.O.,” or with one of its subsidiaries, that the court would have been obliged constantly to intervene in the administration of the suits. That was exactly what Judge Knox meant to avoid, because as Judge Smith found: “During the re-ceiverships * * * temporary loans were made by the receivers * * * from one receivership estate to another. This was done without Court order in reliance upon the order of appointment requiring the properties and business of all the companies to be administered as an entirety.” Moreover, even if it had been a fault not to get an order, the “Bondholders” have not shown that Judge Knox would not have granted leave to use the money, so that no loss was shown; and they had the burden of proving that they were damaged, so long as the “Receivers” had no personal interest in the decision.
However, there were other occasions when the “Bondholders” assert that Glass had a personal interest that conflicted with his duty, which if they were right, would have shifted the burden of proof. The first of these is as follows. Glass had been a member of the firm that had represented Shivers, the plaintiff in a shareholders’ suit against “M.S.O.” commenced in 1924. All that was ever done in that suit was to move for a receiver, which was denied; and almost at once Phelan, a creditor of “M.S.O.,” filed the suit against “M.S.O.,” followed by the others of which the action at bar is one. The services of the firm in this shareholders’ suit could hardly have had any but a trifling value; but in any event they stand or fall with the services in the creditors’ suits themselves. All these were of the type common thirty years ago before the amendments to the Bankruptcy Act, 11 U.S.C.A. § 1 et seq., or the passage of the S.E.C. legislation. They were a variant of the long existent judgment creditors’ bill in equity, and were designed to effect an equal distribution of a corporate debtor’s property among its creditors. They usually alleged that if this was abandoned to a scramble of attachments and executions, the creditors generally would be losers; and the jurisdiction in equity rested upon this circumstance. Since originally such a bill lay only after judgment and was to reach assets not subject to execution, it was necessary before judgment for the debtor to consent to the appointment of a receiver. In the case at bar after the “Receivers” were appointed, the debtor’s creditors in all 38 suits formed committees, and Glass’s firm represented them in all, so long as Judge Mayer remained in office. After his death Glass was substituted in his place, and his firm at once ceased to represent any of the committees. The “Bondholders’ ” argument is that, since the firm’s allowance, as counsel for these committees, had not been fixed before the sale of “U.O.P.” assets in December, 1929, and since he therefore retained an interest in what should be allowed, he had a personal interest that was in conflict with his duty as receiver. Moreover, the firm had agreed with the succeeding counsel that its allowance should be a proportion of the allowance made to their successors so that Glass became directly interested, not only in what should be allowed for his firm’s services rendered before he became receiver, but for those rendered thereafter; and a successful reorganization would be likely greatly to enhance his allowance. A complete answer to this is that not only Glass, but Jackson, a member of the succeeding firm, swore that this agreement was made in 1930, after the sale of the “U.O.P.” assets, and after “M.S.P.” had undertaken to pay all expenses of the receivership. We can find no testimony to the contrary and Judge Smith’s general acceptance of Glass’s credibility serves in place of a finding. It was still true that all through his receivership and up to the sale, Glass’s allowance remained undetermined, but we cannot see that that created an interest with which a sale as op*602posed to a reorganization would conflict. The argument must be that Glass’s firm, as attorneys for the creditors' committees, performed services during the first year of the receivership, the allowance for which would in some measure depend upon whether five years later a reorganization went through. That appears to us too remote and speculative a conflict to fall within the doctrine invoked by the “Bondholders.” We shall deal more at large with the general question in a moment when we come to Glass’s hope to be counsel for “M.S.P.”
The second supposed conflict between Glass’s duty and his personal interest was this. His firm had retained one, Hamburg, to take charge of extensive tax claims against “M.S.O.,” of course including “U.O.P.” It was part of the agreement that Hamburg should assign a proportion of his allowance to the firm, in place of paying rent for the use of their offices. We cannot see that the amount of Hamburg’s allowance would have been larger if “M.S.O.” was reorganized, rather than if the properties were sold to an outsider. The allowance was an expense of administration and had to be paid in either event. Had it been liquidated before the sale, Glass would indeed have had an interest in not opposing it, but it was not. Moreover, even then the conflict would have tainted, so to say, only the allowance granted Hamburg.
The third alleged conflict is that Glass had a covert understanding that he was to be president of “M.S.P.” when formed; and, in default of that, that he hoped and expected to be its counsel. We have already indicated that Judge Smith’s findings as to the future presidency of “M. S.P.” are, not only not “clearly erroneous,” but that the attack upon them is without any support whatever in the evidence and is indeed positively contradicted by contemporaneous correspondence. It is not necessary to do more in disposing of this charge than to quote the findings themselves. “A month and a half after the organization of the new company, and after ascertaining that the Court had no objection” (to) “Glass’ serving as president of the new company, on an understanding with the company that, in any case in which the company’s interest conflicted with his position as receiver, he would act as receiver and not for the company, Glass accepted election as president of the new company. He had not actively sought election to the position, having made known his desire to terminate his management responsibilities although he hoped to continue to be associated in a legal capacity with the new corporation. Search on the part of the members of the reorganization committee for an experienced oil man to head up the new company was, however, unsuccessful and by the offer of a salary of $50,000 a year, with the right to continue his law practice, Glass was induced to continue as the executive head of the reorganized company.” [124 F.Supp. 734.]
The fourth and last supposed conflict was that Glass hoped and with good reason expected to be chosen counsel for “M.S.P.” when it was reorganized; and that he had no such expectation if the Eureka shares were knocked down to an outsider. True, it did not follow that such a putative outsider might not have wanted him as counsel, but that we disregard as too remote. Moreover, we agree that although he had no contract with the reorganization committee, he had good reason for thinking that “M.S.P.” when organized would follow the obvious preference of the committee and offer the job to him. Was that such a conflict as invokes the doctrine? It enables the beneficiary to hold the fiduciary liable for any profits he may make, or losses, he may cause, in order to deprive him of any inducement that will affect his absolute and disinterested loyalty; and there is no doubt that an expectation or hope of future advantage may do so, even though it is not secured to him as an existing legally protected interest. Therefore, if the doctrine be inexorably applied and without regard to the particular circumstances of the situation, every transaction will be condemned *603once it be shown that the fiduciary had such a hope or expectation, however unlikely to be realized it may be, and however trifling an inducement it will be, if it is realized. We do not understand that it is to be applied so rigidly, or to so literal a» extreme. The Restatement of Trusts5 states it in these words: the “trustee violates his duty to the beneficiary not only where he purchases trust property for himself individually, but also where he has a personal interest in the purchase of such a substantial nature that it might affect his judgment in making the sale.” And this has been incorporated in ipsissimis verbis into Scott on Trusts.6 That statement we accept, and the question at bar is whether Glass’s expectation of being counsel was an interest so “substantial * * * that it might affect” his promoting as much as he should have done, the sale of the Eureka shares in place of including them in the reorganization of “M.S. O.” It is true we cannot know that the chance of employment could not have had any influence upon his conduct; and it is of course true that, if the “Bondholders” had shown that in fact it did have any, he would not only have to disgorge any profits he had got, but to prove that what he did was an impeccable discharge of his full duty, or to make good any loss that it caused. But we are not dealing with such an occasion; we have to determine the scope of the implementary rule that dispenses with the need of proving that his personal interest had any part in determining the fiduciary’s conduct; indeed, with a rule that altogether forbids any inquiry whether it had any such part. We have found no decisions that have applied this rule inflexibly to every occasion in which the fiduciary has been shown to have had a personal interest that might in fact have conflicted with his loyalty. On the contrary in a number of situations courts have held that the rule does not apply, not only when the putative interest, though in itself strong enough to be an inducement, was too remote, but also when, though not too remote, it was too feeble an inducement to be a determining motive.
In Bullivant v. First National Bank, 246 Mass. 324, 334, 141 N.E. 41, 45, shareholders of a company who had deposited their shares in trust with a bank sought to enjoin it from voting the shares for a proposed reorganization of the company, because the bank, as a creditor, had a conflicting interest that disqualified it from voting. The court held otherwise, saying that the “facts reported by the master did not disclose any proposed violation of this rule” ; i.e. that a “trustee cannot become purchaser of property title to which he holds in his capacity as trustee.” In Anderson v. Bean, 272 Mass. 432, 446, 172 N.E. 647, 654, 72 A.L.R. 959, the trustee held all but three of the 6000 shares of a corporation— half, as trustee, half, individually. He sold 100 shares of those that he held as trustee; 25 to his son, 25 to each of the sons of a deceased brother, and 25 to the superintendent of the factory. The beneficiaries sought to charge the trustee with the value of the 100 shares above their sale price on the ground that by their sale he had gained a personal advantage: i.e. control of the corporation. The court disallowed the surcharge, saying that the “disturbance of the equal balance of holdings of stock by the trust and by the trustee as an individual is not as matter of law, apart from other circumstances, unconscionable advantage or disadvantage.” It agreed that a trustee “cannot derive any personal advantage at the expense of the estate, nor put himself in a position antagonistic to the beneficiaries of the trust”; but that that doctrine “simply is not applicable to the facts here disclosed.” Yet, surely voting control “might” very easily “affect” a fiduciary’s “judgment,” if we are dealing in all possibilities, however remote. In In re Harton’s Estate, 331 Pa.St. 507, 515, 516, 1 A.2d 292, 296, a trustee invested part of the fund in a participation in a mortgage; and at the same time *604“undertook the task of acting as rental agent for the mortgagor and received from him a commission of five per cent on rentals so collected.” As to this the court said: “The compensation received by the trustee as rental agent for the owner was not money which the participating trust interests would otherwise be entitled to. They would have belonged to the owner, or would have been paid out to some other rental agent as fair compensation for services rendered. It was not shown that the rental commissions were in any sense a profit; on the contrary, they were just charges for services performed by accountant in its required administration of the trust, and their receipt does not offend the admitted rule against a trustee’s obtaining a bonus or commission from dealings with specific trust property, as commented upon in American Law Institute, Restatement of Trusts, §§ 170 and 203, pp. 438 and 549.” Pike v. Camden Trust Co., 128 N.J.Eq. 414, 422-424, 16 A.2d 634, involved substantially the same situation and the decision was the same; indeed, it relied upon the passage from In re Harton’s Estate that we have just quoted. In Dabney v. Chase National Bank, 2 Cir., we said:7 “It is not every possibility, however remote, of a conflict of interest between a trustee and his beneficiary which will forbid his entering into a transaction with a third person. * * * there must come a point at which he is not bound to take against himself a future chain of events, each link of which carries a substantial coefficient of improbability. * * * The law ought not make trusteeship so hazardous that responsible individuals and corporations will shy away from it. As we said in York v. Guaranty Trust Co., 2 Cir., 143 F.2d 503, 514: ‘Of course, the courts should not impose impractical obligations on a trustee. Merely vague or remote possible selfish advantages to a trustee are not sufficient to prove such an adverse interest as to bring his conduct into question.’ ”
The trustee’s advantage in Dabney v. Chase National Bank, supra,7 was security for a loan, and the increase in its value was indeed very “substantial” ; but our decision rested on the unlikelihood that the increase would ever be realized. In the two Massachusetts cases the advantage was immediate and certain, but the court thought it too insignificant in value to count; and in the other two decisions the advantage was employment by the purchaser, just as it was here; and, indeed, the trustee had actually been engaged and thus had a legal right to the job. Moreover, as in the case at bar, the advantage was obtainable only by means of a quid pro quo — services to be rendered — which of course diminished its inducement. Finally, we should remember that, although Glass was indeed reasonably sure to be retained, nevertheless he had no contract and his employment depended upon what the administration of “M.S.P.” might decide. It appears to U3 most undesirable upon all possible occasions to forbid a purchaser of property from a fiduciary to continue him in its management, upon the assumption that the prospect of getting the job may taint the purity of his decision to sell. Again and again it must be in the interest of the purchaser to keep him; and that possibility may contribute to give the property a greater value than it otherwise would have. Taking the situation in the case at bar as a whole, we do not believe that the prospect of a retainer by “M.S.P.” was a “personal interest * * * of such a substantial nature” as was likely enough to cause Glass to fail in his duty to promote the sale of the Eureka shares, and to throw the burden of proof upon him; and we conclude, not only that the “Receivers” were not parties to any fraud or conspiracy against the “Bondholders,” as Judge Smith found; but also that the “Bondholders” had the burden of proving that they had lost through some dereliction of Glass in his duty to them as receiver of “U.O.P.” It was of course *605open to them to prove that the “Receivers” did default in the discharge of their duty, and what they did lose; but in a situation so extravagantly complicated and so impervious to analysis as the welter of legal rights and obligations left by Haskell and his fellows, the party that has the burden of proof is nearly sure to lose.
The “Bondholders” do allege that they showed affirmatively that the “Receivers” did fail to discharge their full duty, and that they have shown what was their loss and at least Glass’s profit. This they claim to have proved as to Glass in two respects: (1) that he was party to fixing the minimum prices of the “U.O.P.” assets too low; and (2) that he not only failed to give adequate publicity to the sale, but that he actually “chilled” the bids. We repeat what we said upon the first appeal, that a receiver “is ‘bound to act fairly and openly with respect to every aspect of the proceedings before the court. * * * The court, as well as all the interested parties,’ have ‘the right to expe’ct that all its officers,’ including the receiver, will not ‘fail to reveal any pertinent information or use their official position for their own profit or to further the interests of themselves or any associates.’8 A receiver has the ‘affirmative duty to endeavor to realize the largest possible amount’ for the assets of the estate.9 If he has vital information which, if disclosed, might bring a better price for property * * * he must fully disclose it ‘prior to the sale when the prospects (are) greater for successful bargaining.’ ”10 It is with these principles in mind that we will consider what the record discloses as to both the faults charged against Glass. First, as to the minimum prices that the reorganization committee — with the consent of Glass — fixed for the sale of the “U.O.P.” assets. These consisted (1) of all the shares in the Eureka company, which held 82.44% of the shares of the Turman Company, which in turn had three extremely profitable leases in the Oklahoma oil fields; (2) of a guaranty by the Imperial Oil Corporation, and (3) of the intercorpo-rate claims of “U.O.P.” against “M.S.O.” and a number of its subsidiaries, which, though not pledged to the bondholders, as were the Eureka shares, were nevertheless security for any deficiency under the mortgage because the bondholders were substantially the only creditors of “U. O.P.” The price fixed by the committee for the Eureka shares was $1,450,000, and Judge Smith found that it was “fair.” The “Bondholders” challenge this finding, and the question is whether his finding is “clearly erroneous.” In appraising the shares the judge adopted four possible approaches; of which, however, we need concern ourselves with only two, for he found that “of the various balance sheets in evidence, those entitled to most weight in determining value are those based on capitalized earnings and contemporaneous market values of stock.” There was no evidence of quotations of actual sales of Turman shares during 1929; only of the bid and asked quotations, and it is quite true that these are not very reliable sources for “contemporaneous market values of stock.” [124 F.Supp. 764.] Indeed, in New York apparently they are treated as wholly incompetent.11 However, under ‘Federal Rule 43(a) evidence, incompetent under the law of the state where the trial is had, may yet be received in a federal court; and we do not see why actual asked prices in accepted publications should be utterly incompetent as evidence at least of maximum values, in absence of evidence impeaching their good faith. True, bid and asked prices give us nothing but the extremes between which *606sales, if any, will take place, but it seems to us that the asked prices may be taken as some evidence that the value was no higher. The asked price for Turman shares, from April 10 to October 10, 1929, was between $4 and $8; and between October 10, 1929 and April 10, 1930, it was between $4 and $6. No doubt any attempted appraisal can be only approximate; but we cannot say that $4 was a “clearly erroneous” approximation, in face of the fact that throughout this year nobody appears to have been willing to offer more than $5 for the shares.
Be that as it may, in several decisions 12 the Supreme Court has treated as a particularly reliable method of appraising the value of corporate shares (we assume this to presuppose the absence of actual sales upon an open market) the capitalization of the “reasonably to be anticipated earnings” of the corporation; and we have read these cases as laying it down “that the best test of the value of a going commercial enterprise is its earning capacity.”13 What is the proper coefficient to apply to the earnings the Court naturally has never made any attempt to declare; obviously it must vary with the nature of the business, and in the case of a wasting asset, like an oil well, it will be much higher than in an ordinary industry, because the earnings then include part of the capital. The earnings of the Turman company for the five years preceding 1930 had varied greatly owing to the fact that in 1927 some new wells went into large production. The net income for the three years 1927, 1928 and 1929 (disregarding for the moment any “non-recurrent” disbursements) was about $1,057,000, or an average of $352,000. On the other hand the years 1925 and 1926 had shown a net loss of about $64,-000, so that if the whole five years are considered together, the average becomes what Judge Smith found it to be: $198,519.57. Moreover, the average income for the five years from 1929 to 1934 inclusive was $81,403.38. However, since the five years that followed 1929 were those of the Great Depression, the “Bondholders” with some warrant protest against their inclusion, for, although all values began to melt in October of 1929, no one in December “reasonably anticipated” the extent of the collapse that followed. On the other hand, it would be unfair to take the three productive years 1927-1929 inclusive as a proper measure of the future, for no one could know how long the new wells would last; and indeed, the income for the year 1928 was already only a little more than 75% of that for 1927, and that for 1929 was still less. The year 1925 resulted in a loss of over $111,000; and, if it be thought unfair to include it, certainly it would be permissible to take the four years 1926-1929 inclusive: which gives an average of about $276,000. At a coefficient of 10 this would of course make the value of the Turman shares $2,760,000 of which 82.44% owned by Eureka would be $2,275,000, of which $1,450,000 is less than 64%. On the other hand the average coefficient of appraisal in the case of nine oil corporations comparable with Turman was 19.31, and that, even though it were applied to the average earnings for 1926-1929 inclusive, gives a value of less than $1,430,000, of which 82.44% is only a little more than $1,100,000. Indeed, if the lowest coefficient of six of the nine companies— 15 — be taken, the value of the Eureka proportion is only about $1,500,000. Plainly therefore $1,450,000 was not a “clearly erroneous” figure to set as a “fair” price under this hypothesis.
The “Bondholders” complain of the omission from the computation of the average annual income of the Turman company of what they call the “non-recur*607rent” items appearing upon one of their exhibits — No. 170. Some of the items deducted appear to be such that they would have had, at least in part, some equivalents if the Eureka company had not been in receivership; from the face of the exhibit it is impossible to say that under another name they might not have been a usual corporate expense. However, suppose we accept them all as they stand, as “non-recurrent,” and take an average of income for five years, and, for a coefficient, the average, 19.31. At the average for five years — -$374,000— this would make the Turman shares worth substantially $1,800,000, of which 82.44% is $1,484,000. And even though we count only the four years, 1926-1929 inclusive, so that the average income was $414,500, the value of the Turman shares was less than $2,150,000, of which 82.-44% is $1,775,000, of which in turn $1,-450,000 is more than 80%. Certainly, 20% of the price that a seller would take at an unforced sale is not an unreasonable discount for a price at a forced sale at auction. Thus, even though we take the “non-recurrent” items at their face, the minimum price for the shares was “fair”; certainly it would be beyond any possible propriety to hold that a finding that it was “fair” was “clearly erroneous.” On the whole our guess is that it bordered on the high side.
The only other assets of “U.O.P.” were the guaranty of the Imperial Oil Company and its claims against “M.S.O.” and the other corporations in the Has-kell System. We shall include these together in our discussion, for the same considerations govern the disposition of each. Two orders were entered, one, on December 14, 1929, and the other, in May, 1930, professing to liquidate the intercorporate claims of the various enmeshed companies. The “Bondholders” protest that these orders are not conclusive; and, although we do not find it necessary to hold whether they were, we will assume for argument that they were not. They were nevertheless bona fide efforts to learn what were the mutual credits and debits; and we accept them as some evidence of what the claims were; certainly they are the best available. We need consider only the three largest claims of “U.O.P.”: that against “M.S.O.” for nearly $1,400,000; that against Reliable Securities Corporation for about $2,000,000; and that against Imperial Oil Corporation for about $2,-250,000 — a total of over $5,500,000. The first question is whether it was proper to sell these claims without some authoritative settlement of their validity and amount. In the ordinary case it might indeed be true that it was not proper, for obviously, until then bidders could not know what they would get if their bids were accepted. However, this was as far as possible from being the ordinary case. The receiverships had been going on for five years, during which the “Receivers” had been making continuous efforts to find out what were the mutual rights and liabilities of the maze of corporate entities. Judge Smith found that “the books of the companies were either non-existent or inaccurate. Advances had been made between the companies, proceeds from the sale of stock recorded as income from oil sales, and other irregularities existed.” As early as November, 1924, an accounting firm employed by an engineering firm, which in turn the “Receivers” retained, had reported that the part of their work “by far the most difficult of accomplishment” was to “develop a history of transactions affecting capital stock and bond issues, the acquisition of properties and securities, and establishing the considerations paid, as well as real intrinsic values thereof; ascertain dividends declared and paid, determine present ownership of leaseholds and if possible ascertain the earnings and expenses since incorporation in 1917.” To this the accountants prophetically added that “the possibility looms up that all the real facts will never be entirely disclosed.” In June of 1925 the “Receivers” reported to Judge Knox that the books, records and accounts of the Middle States Oil Corporation and its subsidiaries prior to the 1st of January, 1924, were so in*608complete, complicated and confused that it was impossible readily to ascertain approximately the financial condition of the companies or their true financial relation to one another.” It is quite true that in May, 1928, nearly three years later, they reported that “inventories of all physical equipment * * * have been completed” and that “valuation engineers are now at work completing their appraisals of all of the leaseholds” which “will be used as the basis for proper book entries as of January 1, 1928.” It was their purpose “to thereafter present recommendations to the Court for the disposition, without litigation, of these in-tercorporate accounts upon notice to all interested parties.” They felt it their duty, they said, to have the companies come out “with their affairs in order. To bring such a condition about, from the lack of record and the chaos as to existing record which the receivers found * * * has been a mammoth task.” “Fortunately the end is in sight. The complications which remain are few in number. The facts with respect to them have been clarified.” Nevertheless, they .added that the “solution depends in large part upon the common sense attitude of the parties involved, in working out adjustments as between themselves. If they fail to apply common sense, then they will have themselves only to thank for any delay in the resumption of the business affairs of these companies.” It turned out that the hopes of the “Receivers” that the parties would adopt “common sense attitudes” were not realized, .and Judge Knox had already become very restive at the continued delay, for beginning in March, 1928, he several times expressed his “grave concern” at the accumulating cost; and on March 3, 1929, he summoned the “Receivers” and the committee to appear before him on the 9th and discuss “various features of the case.” There followed a number of hearings at all of which Judge Knox pressed both the “Receivers” and the committee to prepare a plan of reorganization that might put an end to the extreme waste that kept on. Judge Smith found that the “Court pressed for action looking toward reorganization and termination of the receiverships, insisting in early 1929 that positive action be taken.” He also found that “delay in reorganization would have run the costs up so that the chance of any organization surviving would have disappeared.” [124 F.Supp. 736.]
It is against this background that the action of the committee with Glass’s concurrence is to be judged. We do not mean to intimate that Judge Knox was wrong in insisting that the Gordian knot must be cut at any cost; but we do mean that, right or wrong, as to Glass at any rate his decision was imperative; for it would be patently absurd to hold a receiver liable for complying with an order that was within the jurisdiction of the court that appointed him. Therefore, whatever were the consequences of selling the claims before they were liquidated, and however necessary liquidation ordinarily may be, Glass’s liability is to be judged by whether he did the best he could within the limited time granted him. Nor can we find any evidence that he concealed from Judge Knox anything that bore upon the situation. His reports, after he became receiver, were very full, and he was in constant communication with the judge. The chief basis of the charge of concealment is that he did not tell Judge Knox of his conflicting personal interests, and as we have seen, there were none such. Incidentally, Glass gave evidence of a proper sensitiveness upon the score of divided loyalty after he accepted the presidency of “M.S. P.,” though still a receiver. True, there was an inevitable conflict of interest between the corporations whose claims were being appraised, for any reduction in the credit of one was a release of debit to another; but, just as in the case of failing to pay interest upon the “U.O.P.” bonds, these were conflicts that the very nature of his duties required him to decide; and they can be charged to him as a fault only by a misconception of the meaning of the doctrine invoked.
*609We must therefore accept it as an inescapable condition that some value had to be set upon the claims of “U.O.P.” against “M.S.O.” and its subsidiaries within a period that did not allow any authoritative liquidation. We cannot see what more either the committee or Glass could do than to make the best approximation that was available; all that was open to them was a “solution” that depended “in large part upon the common sense attitude of the parties involved in working out adjustment as between themselves.” In short, they were bound to do the best they could within the time they had even though the result were no better than a guess. There is not the slightest evidence that this is not exactly what they did; although the claims due to “U.O.P.” on their face were for the very large amounts we have mentioned, they appraised them at only $300,015, of which they took $200,010 as a fair minimum price. This appraisal depended upon the labyrinth of cross claims between the corporations making up the “M.S.O.” system; and we do not know how they were reached, nor is it necessary that we should; they stand unless they are shown to have been incorrect and they have not been. Moreover, even were we to match our judgment against that of Judge Smith, it would be the height of presumption for us to say that his approval was “clearly erroneous.”
In one respect it is true that his finding does open a question for our review. A price was apparently first fixed at what was called the value of an asset for “reorganization purposes,” meaning its value to a going concern, and the minimum price was fixed at two thirds of that amount. In the case of the Eureka shares the question does not arise whether this was too large a discount because, as we have shown, there was ample evidence justifying at worst an appraisal of which the minimum price was 80% — ■ a discount too obviously proper to need any defence. In the case of the guaranty and the intercorporate claims, although there is indeed no such objective test, the nature of the property was such as to make a large discount inevitable. In order to judge the propriety of the appraisal for “reorganization purposes,” let us first assume that “U.O.P.” wished to dispose of all the intercorporate claims, being free to keep them, if it did not get a satisfactory price; but, nevertheless, desiring to do so without authoritative liquidation. Such was the occasion on which $300,015 was set as a fair price for the claims, which, as we have said, it was not “clearly erroneous” for Judge Smith to accept as “fair.” Let us then contrast this with the “fair” price at a forced sale at auction. “In business life forced sales for cash are such a last resort for obtaining money that a sale ‘under the hammer’ is synonymous with a sale at a sacrifice, and prices obtained at such sales have usually been rejected by courts when tendered as evidence of value.” 14 How then can we say what was a “fair” price when the seller was forced to sell at auction and without any opportunity to bargain? The truth is that any decision inevitably is a speculation, where no more may be demanded than an honest effort to decide questions of validity that have no available answer, and to measure values that are not measurable. That does not indeed mean that a figure could not have been put that was plainly wrong; but any guess that we might substitute would have as little likelihood of being right as the honest guess of those who were very much better informed. The discount of one third, used as to assets of this kind, was within permissible latitudes.
Therefore we conclude that both as to the Eureka shares and as to the guaranty and intercorporate claims Judge Smith’s findings that the minimum prices set were “fair” should not be reversed; and there remains only the question whether Glass was delinquent in his duties, as receiver, upon the sale. As we have already said, we can find nothing to warrant the charge *610that he concealed from Judge Knox any information that he had about the affairs of the company; so that this phase of the dispute depends upon (1) whether the sales of the U.O.P. assets were conducted in accordance with the decrees; and (2) whether the “Receivers” failed to discharge any additional duties to secure the attendance of bidders impliedly imposed on them as receivers. The Eureka shares were sold apart from the “un-pledged” assets under the decree of November 15, 1929, entered in a suit brought by the Chatham-Phenix Bank, as mortgagee, to foreclose the mortgage upon them and to enforce the guaranty of the Imperial Oil Company. The “un-pledged” assets — i.e. the intercorporate accounts — were sold under the decree of November 22, 1929, in one of the creditors’ suits brought by Phelan. The foreclosure decree directed the special master to publish a notice of the sale in certain specific newspapers, but the notice itself gave no information about the shares. The decree in the Phelan suit directed the sale of all the “unpledged” assets of U.O.P. as one out of four separate “parcels,” and later a sale of this “parcel" together with the three others; the master was to accept the aggregate bid, or the sum of the four bids, whichever was higher. Article Sixth of this decree required the special master to “file with the Clerk of the Court a statement showing and describing as definitely as practicable and made up to the latest day reasonably practicable, but in general terms,” the following information: (1) all the assets of the “Holding Companies”: i.e. “M.S.O.” “U.O.P., Imperial Oil Corporation and Oil Lease Development Company; (2) all liens and charges by pledge or deposit created by these four companies; (3) all tax claims against them, state or federal; (4) all unpaid liabilities including any executory contracts assumed, or executed, by the “Receivers”; and (5) all ex-ecutory contracts made by the companies themselves and still outstanding. The receivers filed such a “statement” in four parts: one for “M.S.O.;” one for Imperial Oil Company; one for “U.O.P.”; and one for Oil Lease Development Company. That for “U.O.P.” stated the cash on hand and the Eureka shares, both as being held as security for the bonds; next it stated certain claims, “amounts undetermined,” against the Haskell interests; next, it mentioned “miscellaneous accounts receivable securities and assets believed to be worthless and un-collectible”; next, it mentioned “claims against various subsidiary and affiliated companies for post receivership advances” ; next, the three “intercompany claims against subsidiary and affiliated companies” aggregating about $4,500,-000; next it set forth the mortgage securing the bonds; next, an “undetermined tax liability, if any”; and finally, it concluded by mentioning all the open allowances “to be fixed by order of the Court,” (“undetermined tax liability if any” — a repeat — ); “current office salaries and expenses,” “claims by various subsidiary affiliated companies for post receivership advances” ; no executory contracts of any kind. All the four statements contained the following addendum : “Further information with respect to the foregoing may be obtained upon request at the offices of the Receivers, Room 1401, 170 Broadway, New York, N. Y.” In their offices the receivers did have compete records of all the accounts and the results of their work for the five years that they had been in office; and, so far as appears, these would have been accessible to anyone who showed a genuine interest in bidding at the sale.
Judge Smith found that this statement “was wholly inadequate to inform bidders as to the assets to be sold, the receivers’ liabilities to be assumed by the bidders, and the status of the government tax claims, and receivers’ claims for tax refunds.” On the other hand, he also found that the “plan of reorganization available since June, 1929, had made it plain that all or almost all the tax claims were expected to be defeated and refunds of substantial amounts obtained.” [124 F.Supp. 765.] True, the statement itself was positively “mis*611leading in that it listed large government tax claims without reference to the favorable progress of the tax litigation”; but it was “unlikely that any prospective bidder would stop at the perusal of the statement without further inquiry of the receivers.” In general the “complexities of the inter-corporate relationships, and of bringing down to date the valuations of physical assets and adjusting them to their book listing for the intervening periods were so great that no prospective bidder could have obtained sufficient information to judge independently without assistance from someone in the receivers’ organization the value of the assets sold within the period from the filing of the statement to the sales.” It would have been wholly impossible within the time allowed to make anything approaching an adequate disclosure of the whole web of claims and cross-claims that a group of utterly unscrupulous stock jobbers had woven before 1924, and that had been continued as a single business by order of the court. Moreover, even if it had been possible, no reasonable bidder would have relied upon it without verification from the documents in the receivers’ offices. All that Article Sixth required was that the statements should declare enough to advise all who might be interested as to what was the general character of the property, claims and liabilities that were to be disposed of, in enough detail to send them to the original sources, if they had any serious purpose to buy. Indeed, the article itself required no more than a statement “in general terms.” Not only was it impossible to prepare more, but more would have been useless, if it had been prepared. The complaint that all the papers were not filed in the clerk’s office is too trivial to justify an answer. It may be true, as Judge Smith said, that as to the tax liability the statement was, not only inadequate but actually misleading, for taken by itself as it read, it gave no intimation, not only that any liability was unlikely, but that there would probably be a large refund. It does not appear how much of the whole tax controversy affected the interest of “U.O.P.,” with which we are alone concerned here; but we will not rest upon that, because we agree with the disposition made of it by Judge Smith: “it is inconceivable * * * that anyone seriously interested in bidding would not have made further inquiry of the receivers.”
Since the foreclosure decree required no more than the notice in fact published, the sales were in conformity with its directions, and the question as to the sale of Eureka shares is whether the “Receivers” should either have seen to it that the decree contained more specific publicity, or should, independently of the decree, have done more to procure the attendance of bidders, both as to the shares and the “unpledged” assets. We understand Judge Smith to mean that they did fail to perform their duty, when he said that “no intensive effort was made by the receivers to find outside bidders.” This understanding of his meaning is confirmed by the following additional passage: “unless therefore the receivers are to be required to make good an amount in excess of what could have been obtained on foreclosure and receivership sales had they completely fulfilled their duty of disclosure, and active seeking of prospective bidders, there is here no amount to be surcharged for their failure to fulfill that duty.” [124 F.Supp. 788, 790.] We agree that a receiver is ordinarily under such a duty, but it is one to be measured by the particular occasion; and the scope of any duty is a *- question of law, not of fact, which we are free to determine as res nova. Coming then to the measure of the duty to seek out bidders, we note that on September 25, 1928, June 1, 1929, and November 13, 1929, Glass did establish contact with corporations, American or Canadian, which might have been interested in merging with “M.S.O.”; and it does not appear that there were any other opportunities for disposal of the assets in whole or in part. The “Bondholders” reason as though the sale had been of a piece of real property, the contents of a house, a retail business, or a completely *612integrated mercantile, or industrial plant. That would be a completely delusive analogy; no casual bidder was conceivable for such property, either of the “Second Parcel” — the “U.O.P.” assets alone — or all four “Parcels” together. The only possible bidder for all four “Parcels” would have been some group or combination, already familiar with the oil business in Oklahoma; and it is extremely unlikely that such a group would not have known that for over five years “M. S.O.” had been in receivership. Moreover, they would have expected that the receivership would end in some sort of reorganization as a condition of which the assets would almost surely be offered for open sale at auction. It appears to us unreasonable to suppose that any such group would have needed notice of such a sale, involving as it did taking over the whole vast snarl of inter-related corporate transactions during seven years and more of stock juggling. So far as anyone could reasonably anticipate, there would be no market for such an aggregation of rights and liabilities; but, if there was any, the bidders did not need to be alerted. There was even less reason to suspect the existence of any bidders for the “U.O.P.” “unpledged” assets sold under the decree in the creditors’ suit, for the major part of these was the intercorporate accounts, whose purchaser would have merely bought into an incredibly complicated nest of law suits. Therefore, except as to the Eureka shares sold in foreclosure it seems to us that the “Receivers” cannot be said to have failed in their duty. As to this property the answer is certainly not plain. True, they were not the kind of property that would be picked up by a random purchaser looking for bargains. Nothing is more uncertain than the life of an oil well; and those who buy them would presumably be already familiar with the business and likely to be aware of new developments. The Seminole fields on which the value of the Turman, and of the Eureka, shares depended had been in rich production for three years, and it seems to us unlikely that any persons who would have been interested in acquiring them would not have learned who controlled them, and that they were to be sold.
If we thought it necessary to decide the question, we might, however, agree with what we understand to have been Judge Smith’s conclusion, although it is not a finding of fact, that the “Receivers” did not do their full duty as to the Eureka shares. On the other hand, since the “Bondholders” had the burden of proof to show that this default, if it was a default, resulted in loss to them, and since they have not shown that there were any bidders for the shares, it is not necessary to decide whether there was a default. As Judge Smith said, there was “no evidence, except the receiver’s own testimony, as to whether such outside bidders, if found and fully informed, would have made bids in excess of the reorganization committees’ bids”; and he accepted Glass’s testimony that the value “placed on the mongrel assets” (by which we understand the “unpledged” assets), “for reorganization purposes, was considerably higher than any outside interests could safely, or would, with any degree of probability, have bid.” Again in the same vein, he said: “Unless, therefore, the receivers are to be required to make good an amount in excess of what could have been obtained on foreclosure and receivership sales had they completely fulfilled their duty of disclosure, and active seeking of prospective bidders, there is here no amount to be surcharged for their failure to fulfill that duty.” [124 F.Supp. 788, 790.] It is true that the “Bondholders” deny that the burden rested upon them to show that some loss resulted from the “Receivers’ ” fault; they maintain that, as soon as a beneficiary proves that his fiduciary has failed in the discharge of any of his duties, he must clear himself by proving that it caused no loss. However they refer us to no decisions so holding; and of course the ordinary rule as to tortfeasors is the opposite. Moreover, the practice in equity was always to require the beneficiary to prove any “surcharges,” which he *613wished to impose upon a fiduciary; and so far as we have found, no distinction has ever been made between proof of the default and proof that some loss arose from it.15 We are to distinguish the well settled doctrine that, when the sufferer from a tort proves that it has caused him some loss, he is not bound to prove its precise amount.16 If the “Bondholders” had proved that, if the “Receivers” had searched for bidders further than they did, they would have secured one who would have outbid the reorganization committee, we will assume that that would have been enough; the “Bondholders” would not have been bound to prove by how much such a bid would not have paid the bonds; but they proved the existence of no such bidder. As res in-tegra, we can see no reason to extend the implementary rule to occasions, where although the fiduciary has been shown to be in default, the beneficiary has failed to show that it has caused him any loss. It is one thing to do that when the default involves disloyalty to the beneficiary, for that is a violation of the trust that lies at the very root of the relation, a relation that by its nature gives the fiduciary power to act for the beneficiary without his concurrence. But although the fiduciary engages to act in the sole interest of the beneficiary, he does not insure that he will always keep within the limits of his duties. He may misunderstand them; he may be forgetful; he may even be negligent; but he has not been truant to the good faith that he promised to devote to his undertaking. We see no reason why a lapse that does not involve such a breach should throw upon him the duty of disproving a loss that may not have happened at all, and bestow on the beneficiary a windfall to which he may not be en-
titled if the whole facts could be proved. In such a posture of the proof we can see no reason for not following the usual procedure.
There remains the question whether Glass is liable under the Boyd Rule.17 The argument is that the reorganization was illegal because the new securities to be issued against the new assets of “M. S.P.” were not equal in tenor and priority to the bonds of “U.O.P.” that the “Bondholders” were to surrender in exchange. The Plan proposed an exchange of the “U.O.P.” bonds (secured as they were, principal and interest, by the Eureka shares) for “M.S.P.” bonds for whose principal and interest all the property of “M.S.P.” was liable. Since that property included all the property of “U. O. P.,” and also all that of the three other “Parcels,” and since no added secured bonds were to be issued by “M.S P. ,” there could have been no complaint if the new bonds had been the same in tenor and priority as the old. This was however not true: the maturity of the new bonds was accelerated, the future interest was reduced from eight to six and one half per cent, and the accrued interest, amounting to nearly a million dollars, was refunded into a preferred stock — “Class A”- — an issue shared with two creditors of “M.S.O.”: i. e. the “Series Notes” and the “Gulf Coast Claim.” In deciding how far this violated the rule, we must of course consider its authoritative statement. At the outset the Court introduced a caveat in these words: “This conclusion does not as claimed, require the impossible, and make it necessary to pay an unsecured creditor in cash as a condition of stockholders retaining an interest in the reorganized company. His interest can be preserved by the issuance, on equitable terms, of income *614bonds or preferred stock” ;18 and in Kansas City Terminal Ry. Co. v. Central Union Trust Co., 271 U.S. 445, 456, 46 S.Ct. 549, 552, 70 L.Ed. 1028, the Court rephrased this as follows: “whenever assessments are demanded, they must be adjusted with the purpose of according to the creditor his full right of priority against the corporate assets, so far as possible in the existing circumstances.” Upon this variant in Case v. Los Angeles Lumber Products Co., 308 U.S. 106, 122, 60 S.Ct. 1, 10, 84 L.Ed. 110, the Court appended the following gloss: “where the debtor is insolvent, the stockholder’s participation must be based on a contribution in money or in money’s worth, reasonably equivalent in view of all the circumstances to the participation of the stockholder”; the final statement of the doctrine is in Group of Institutional Investors v. Chicago, Milwaukee, St. P. & P. R. Co., 318 U.S. 523, 565, 63 S.Ct. 727, 749, 87 L.Ed. 959, and reads thus: “It is sufficient that each security holder in the order of his priority receives from that which is available for the satisfaction of his claim the equitable equivalent of the rights surrendered. That requires a comparison of the new securities allotted to him with the old securities which he exchanges to determine whether the new are the equitable equivalent of the old. But that determination cannot be made by the use of any mathematical formula.” This was reaffirmed in Otis & Co. v. Securities & Exchange Commission, 323 U.S. 624, 639, 640, 65 S.Ct. 483, 89 L.Ed. 511.
Applied to the case at bar, the relevant inquiry is therefore whether the addition to the property of “U.O.P.” of the assets of the three other “Parcels” made the “M.S.P.” bonds when issued “an equitable equivalent” of the old bonds. In other words whether the added security so given to the principal of the old bonds was a fair substitute for reducing the future interest, accelerating the due date and refunding the past interest into A shares. Judge Smith found that it was, for he said that the “bondholders received * * * the substantial'equivalent of the debt owing to them, both principal and interest,” and if this is a finding of fact, certainly it would not be “clearly erroneous.” Assuming for argument that it is not such a finding, we must weigh the value of the old securities against that of the new, which it is impossible to do without a better appraisal than is possible of the assets contributed by the other “Parcels” : i.e. without a liquidation of the intercorporate claims. Thus, as to this question also the answer turns upon who had the burden of proof to show that the conveyance was fraudulent; and there is no reason to impose it upon Glass. To the argument that he was responsible for putting through the reorganization before these facts could be ascertained, we answer, as we did before, that the fault, if it was a fault, was not his, for his orders were peremptory. Considering the means of appraisal accessible to the committee within the time allowed them, there was adequate evidence to support Judge Smith’s conclusion, for the exchanges provided in the Plan were the result of an honest attempt to take into account the numerous factors that controlled values and, so far as appears, the values assumed were as near the truth as was possible in the circumstances.
It is true, as Judge Smith observed in his opinion, that the Plan was apparently unfair to the creditors of “M.S.O.” other than the “Series Notes” and the “Gulf Coast claim,” in that they received only shares of B stock in “M.S.P.,” part of which was distributed also to the shareholders of “M.S.O.” However, he was plainly right in refusing to allow the “Bondholders” vicariously to assert the wrongs of the other creditors. We do not forget that on the first appeal19 we said that “the surcharg*615ing is not limited to an amount measured by the interest of the particular person thus objecting to the receiver’s accounting, since the surcharge is for the benefit of all similarly situated persons. For the court, in administering the estate in its custody for all the beneficiaries, must see to it that none of them suffers because of the misconduct of its receiver, and the discharge of that obligation should not depend upon their appearance in court to voice their objections to that misconduct. Cf. Moon v. Wineman, 57 Minn. 415, 59 N.W. 494, 495. Thus, if the judge learned of the misconduct from a wholly neutral source (cf. Investment Registry v. Chicago & M. Electric R. Co., supra, 212 F. [594], at page 608), he should surcharge the receiver and distribute among all interested the money owing to the estate by the receiver because of that misconduct.” This was a note in support of the conclusion that the “Bondholders” should not be barred because of Cohen’s possible laches; it did not suggest that Glass could be held liable in this suit to creditors of “M.S.O.,” or of any other corporation. The question is not whether the conveyance, i.e. the reorganization, should be set aside (nobody asks that); it is whether Glass should be held liable because it is not set aside. His liability in the case at bar is as receiver of “U.O.P.,” and it is irrelevant that he was also receiver of other corporations in other suits. Any recovery in this suit would of course include all the bondholders of “U.O.P.”; but, even though we assume, arguendo, that unsecured creditors of “U.O.P.” would also be included, that would not serve the creditors of other corporations. Judge Smith’s ruling is in entire consonance with the note we have just quoted and we accept it.
The “Bondholders” further object that the option given them to exchange their bonds for the new ones was foreclosed on May 14, 1930. The original date had been five times extended, covering an aggregate extension of four and a half months. During that period, so far as appears, no bondholder asked for any extension, or suggested that he did not have the information necessary to make a choice; nevertheless, the complaint is that the option should have been held open until the dividend in distribution was determined. We answer that, as one extension after another was granted, it should have been evident that there was likely to be a limit, and that such bondholders, if there were any, as were delaying their choice until the distribution dividend was fixed, should have communicated with the committee or the “Receivers,” and are in no position to complain that their silence was taken as assent. But we go further. Judge Knox had decided that the receivership, already six years old, must be ended; and if “M.S.P.” was to have a start unhampered by the past, it was essential that it should know how many of the old bonds would be refunded and how many it must pay off in cash. That could not be known until the options had expired; and not till then could Judge Knox’s decision be put into effect.
Finally, we should not reverse the judgment on this record, even if the “Bondholders” had proved that the transfer violated the Boyd Rule, and that Glass had made himself a party to the conveyance by his share in preparing it and in recommending its adoption to the chairman of the reorganization committee. That a third party may make himself liable to the creditors of the grantor of a fraudulent conveyance is true;20 and apparently the original distinction — which we followed in Duell v. Brewer, 2 Cir., 92 F.2d 59 — that the complaining creditors must have a lien is no longer law; and in any event in the case at bar the “Bondholders” were lienors. Mr. Glenn says that a third person cannot be “charged under the statute of fraudulent conveyances because the *616sole aim of that- law is to nullify the grantee’s title. The meddling outsider becomes liable under principles that are easy to understand, but they do not flow directly from the Statute of Elizabeth or any modern substitute.”21 In the case at bar, even though Glass was one of those who took part in bringing about the conveyance of the property of “U.O.P.,” and though he therefore did fulfil one of the conditions of liability, he would not be liable unless he had known that the securities of “M.S.P.” which were offered for the “U.O.P.” bonds were not an “equitable equivalent”; or' unless he had been informed of facts from which a reasonable person would have supposed that they were not “equitable equivalent.” Suppose the new bonds were not in fact such an equivalent for the old; certainly there is nothing in the record to show that Glass thought so, or that from what he knew a reasonable person would have thought so. On the contrary, the only evidence is that he and the reorganization committee, which was more familiar with the facts than anyone else except perhaps Glass himself, thought that the exchange was of equivalents. Similarly, there was no evidence that “U.O.P.” itself had that “intent to defraud” which is a condition of any fraudulent conveyance under the Statute of Elizabeth, except in cases where no fair consideration whatever passes to the grantor,22 which was not the situation in the case at bar. “U.O.P.” was at the time of the transfer in the custody of the court, whose special master, as directed by the decree, executed the conveyance of the Eureka shares and of the guaranty and intercorporate claims. The only persons whose intent could have been relevant to this conveyance were the reorganization committee itself and Glass, and the same considerations that we have just mentioned touching Glass apply equally to the committee. The judgment in favor of Glass will be affirmed, and a fortiori that against Tumulty.
It is not necessary to discuss at length the “Bondholders’ ” claim against “M.S.P.” which was brought into the suit after they filed their motion in 1944 to compel the receivers to account. This claim is against “M.S.P.” as grantee of “U.O.P.,” on the theory that the sale was a fraudulent conveyance; and if there was no fraudulent intent there could be no recovéry against even the grantee. Hence the same considerations that dispose of the claim against Glass personally on the merits dispose of that against “M.S.P.” However, we cannot agree with the conclusion below that the “Bondholders’ ” claim is not barred by the New York Statute of Limitations under the doctrine of Guaranty Trust Co. of New York v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079. The jurisdiction of the District Court depended solely upon diversity of citizenship, and the substantive rights and liabilities probably depended upon the law of the place where the transfer was made; at any rate they depended upon the law of some state and not upon federal law. Although, as has appeared, the actual deed was made by a special master of the court under its direction, the “Bondholders” may not take the position that the transfer was illegal under federal law, for the court confirmed it and they did not appeal. They must argue that its validity depended upon the same state law that determines such a conveyance between individuals, and that the situation is as if “U.O.P.” had made the conveyance in the course of a reorganization out of court, in which event the Statute of Limitations of New York would apply. Nor is it material that the final decree in the main action enjoined all creditors from bringing any action against “M.S.P.” That did not toll the prosecution of its claims by the “Bondholders”; all it did was to compel them to assert their claims in the District Court. Again, it is not material that Glass and Tumulty, as receivers of the other corporations, had not been dis*617charged. As we said at the outset, the “Bondholders” had no interest in the guaranty or the intercorporate claims after their sale to “M.S.P.” Even if these had been sold at too low a price, they passed to “M.S.P.” whose title to them would not thereafter be affected by anything done in this action. Hence the defence of the statute would be a bar, even if the claim had been proved.
In what we have just said, we do not forget what we said on the first appeal regarding the claim against the “Receivers”; nor do we wish in any way to throw doubt upon it. This was what we did say, so far as it is relevant here. “But we think that, with respect to the obligations of a receiver appointed by a federal court, the New York rule should not control. A claim against a derelict receiver is not against an ordinary trustee but against a court’s officer. Who has the right to assert such a claim is a question affecting the integrity of the court itself. The federal courts, in holding their own officers to accountability, should not be hampered by state court decisions relating to ordinary trustees. When the United States issues a check, rights in that check (despite Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188) ‘are governed by federal rather than local law.’ Clear-field Trust Co. v. United States, 318 U.S. 363, 366, 367, 63 S.Ct. 573, 575, 87 L.Ed. 838. When a federal receiver incurs obligations through misconduct, the title thereto is, we think, similarly to be determined by ‘federal law.’ ” [154 F.2d 1000.] Had the action been against the special master who conveyed the property to “M.S.P.,” this language would have applied, just as it would have applied to Glass and Tumulty, had they “misconducted” themselves. But the “Bondholders” had no more claim against the special master than they had against Judge Knox of whom he was the instrument; and, to repeat, it is only on the theory that Judge Knox’s order did not validate the conveyance, but left it as it would have been if the conveyance had been out of court, that any claim can exist. Hence, the state law must govern, including its Statute of Limitations. The judgment dismissing the claim against “M.S.P.” must also be affirmed.
Judgment affirmed.
. Phelan v. Middle States Oil Corporation, 2 Cir., 203 F.2d 836.
. Phelan v. Middle States Oil Corporation, 2 Cir., 210 F.2d 360.
. Northern Pacific Railway Co. v. Boyd, 228 U.S. 482, 33 S.Ct. 554, 57 L.Ed. 931.
. United States v. National Association of Real Estate Boards, 339 U.S. 485, 495, 70 S.Ct. 711, 717, 94 L.Ed. 1007.
. § 170, Comment (c).
. § 170.10.
. 196 F.2d 668, 675.
. Crites, Inc., v. Prudential Co., 322 U.S. 408, 64 S.Ct. 1075, 88 L.Ed. 1356; Woods v. City National Bank & Trust Co., 312 U.S. 262, 263, 61 S.Ct. 493, 85 L.Ed. 820.
. Jackson v. Smith, 254 U.S. 586, 588, 41 S.Ct. 200, 201, 65 L.Ed. 418.
. Phelan v. Middle States Oil Corporation, 2 Cir., 154 F.2d 978, 991.
. Wildes v. Robinson, 50 App.Div. 192, 63 N.Y.S. 811; Beardsley v. Niobio Manufacturing Co., 231 App.Div. 152, 246 N.Y.S. 641.
. Galveston, H. & S. A. R. Co. v. State of Texas, 210 U.S. 217, 226, 28 S.Ct. 638, 52 L.Ed. 1031; Consolidated Rock Products Co. v. Du Bois, 312 U.S. 510, 525, 526, 61 S.Ct. 675, 85 L.Ed. 982; Group of Institutional Investors v. Chicago, M., St. P. & P. R. Co., 318 U.S. 523, 540, 63 S.Ct. 727, 87 L.Ed. 959.
. Dudley v. Mealey, 2 Cir., 147 F.2d 268, 270.
. Geddes v. Anaconda Copper Mining Co., 254 U.S. 590, 602, 41 S.Ct. 209, 213, 65 L.Ed. 425.
. Berner v. Equitable Office Building Corp., 2 Cir., 175 F.2d 218, 220; Pallma v. Fox, 2 Cir., 182 F.2d 895, 900; Pappathanos v. Coakley, 263 Mass. 401, 161 N.E. 804; Campbell v. Campbell, 2 Cir., 8 F. 460; McManus v. Sawyer, 2 Cir., 281 F. 231; Daniels Chancery Pleading & Practice, p. $ 1225; Bates Federal Equity Pleading, Vol. II, § 763.
. Eastman Kodak Co. v. Southern Photo Co., 273 U.S. 859, 47 S.Ct. 400, 71 L.Ed. 684; Story Parchment Paper Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 51 S.Ct. 248, 75 L.Ed. 544; Bigelow v. RKO Radio Pictures, 327 (U.S. 251, 66 S.Ct. 571, 90 L.Ed. 052.
. Northern Pacific R. Co. v. Boyd, 228 U.S. 482, 33 S.Ct. 554, 57 L.Ed. 931.
. Northern Pacific R. Co. v. Boyd, 228 U.S. 482, 508, 33 S.Ct. 554, 561, 57 L.Ed. 931.
. Phelan v. Middle States Oil Corporation, 2 Cir., 154 F.2d 978, 992, note 13.
. Adler v. Fenton, 24 How. 407, 413, 16 L.Ed. 696; Findlay v. McAllister, 113 U.S. 104, 111, 114, 5 S.Ot. 401, 28 L.Ed. 930.
. Glenn, Fraudulent Conveyances, § 56.
. Uniform Fraudulent Oonveyanees Act, §4.