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nullity.

the case.

Opinion of the Court.

But unfortunately for him there is more in

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

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

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

Opinion of the Court.

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

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

Apparently so little was thought of this interest in the lands that the release itself spoke only of "personal property, to be divided among his next of kin, whether in money, bonds, stock or other property."

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In short, his interest in

these lands was treated as a mere incident to the personal estate, and unworthy of a separate consideration. It was

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Opinion of the Court.

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

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

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

Syllabus.

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

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

MR. JUSTICE FIELD dissented.

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

HORNER v. UNITED STATES. No. 2.

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

No. 1473. Argued January 13, 14, 1892.

- Decided March 7, 1892.

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

tion, an appeal lay directly to this court from the Circuit Court, under § 5 of the act of March 3, 1891, c. 517, (26 Stat. 826 to 828, 1115;)

Opinion of the Court.

(2) Under such an appeal, this court acquires jurisdiction of the entire case, and of all questions involved in it, and not merely of the question of constitutionality;

(3) This court ought not to review the question whether the transaction complained of was an offence against the statute, because the commissioner had jurisdiction of the subject matter involved, and of the person of H.;

(4) The statute is constitutional;

(5) A statute is a law equally with a treaty, and, if subsequent to and conflicting with the treaty, supersedes the latter.

THE case is stated in the opinion.

Mr. Alfred Taylor and Mr. Herman Aaron for appellant.

Mr. Solicitor General for appellee.

MR. JUSTICE BLATCHFORD delivered the opinion of the court.

On the 10th of August, 1891, a post-office inspector of the United States made complaint on oath before John A. Shields, a United States commissioner for the Southern District of New York, that, on the 29th of December, 1890, Edward H. Horner, of New York City, unlawfully deposited, and caused to be deposited in the post-office at that city, in the State of New York, and in the Southern District of New York, a certain circular, to be conveyed and delivered by mail, which, in the contents thereof, thereafter set forth in the complaint, concerned a lottery, and which was then and there addressed to Joseph Ehrman, 70 Dearborn Street, Chicago, Illinois, and was enclosed in an envelope, with postage thereon prepaid, and carried by mail, and that the circular contained, among other things, what is set forth in the margin,1 the further contents of the complaint being also set forth therewith.

1538.

666

Banking-house of E. H. Horner, No. 88 Wall street.

"NEW YORK, December 27, 1890.

"Austrian State Bonds of 1864.

"110th redemption, December 1st, 1890, at Wien. The following 26 series were called in:

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