208 A.D. 567 | N.Y. App. Div. | 1924
The action is brought by Cecelia L. Slater, the widow and principal life beneficiary under the last will and testament of John Slater, deceased. The plaintiff seeks to set aside as null and void a sale of 250 shares of stock in J. & J. Slater, a corporation, made in February, 1904, to the defendant John Slater. It is claimed by the'respondent that such sale was upon an inadequate consideration and was violative of certain trusts set forth under the last will and testament of John Slater, deceased. The defendant John Slater is a son of Thomas Slater, a deceased brother of the testator. The aforesaid sale was made pursuant to an agreement bearing date on January 6, 1904, which agreement was intended to adjust and settle certain controversies between the estate of John Slater, deceased, and James Slater, who was the surviving partner of the firm of J. & J. Slater, a copartnership, and also certain differences which had arisen among the various parties interested. The copartnership of J. & J. Slater was formed in 1859 for the purpose of engaging in the shoe business in the city of New York. Since that time the firm transacted business in New York city and had large assets which included the firm name. The firm was composed of the decedent, John Slater, and his brother, James. After the death of John Slater the business was carried on for a short time and was apparently under the direct management of the defendant John Slater, who had been the manager of the copartnership's business for some time. Prior to the making of the aforesaid agreement an action had been brought by the present plaintiff, Cecelia L. Slater, and John J. Slater, a son of said decedent, the
It is alleged in the complaint that the defendant Title Guarantee and Trust Company is now the substituted trustee under decedent’s will; that J. & J. Slater has been since 1904 a domestic corporation; that in or about the month of “ February, 1904, the entire business of the said J. & J. Slater, together with all of its property rights and obligations were sold and turned over to defendant J. & J. Slater, corporation;” that 500 shares of the capital stock of such corporation at the time of its organization were issued to the estate of John Slater, deceased, and “ thereupon became a part of said trust created by the said John Slater, deceased, as aforesaid, for the benefit of plaintiff; ” that since August 1, 1907, the defendant Title Guarantee and Trust Company, as trustee of said estate, has owned and held 250 of said shares of stock so issued to said estate; “ that this plaintiff at the time of the transfer of said 250 shares of stock to said John Slater, as hereinafter set forth, was advanced in years, in poor health and was not familiar with business matters, and was not familiar with her rights under said last will of John Slater, deceased, and in the trust therein created; ” that the transfer of one-half of said stock originally issued to the estate of John Slater, deceased, to the defendant John Slater was “ for a grossly inadequate consideration, and was contrary to the intention of said testator as expressed in said will and was in contravention of the trust created by said will, and was null and void; ” that “ the sale of said 250 shares of the stock of J. & J. Slater as herein-before set forth resulted in a partial nullification of said trust contained in the will of said John Slater, deceased, contravened the same, and as a result thereof said estate and the trust created as hereinbefore set forth, was thereby caused to lose large income and profits earned in the business of said J. & J. Slater which would otherwise have been earned and would have enured to the benefit of this plaintiff as the sole beneficiary under said will, but which
While the complaint alleges that the plaintiff, offered, on return by the said defendant John Slater, of the stock so received by him, to repay him the sum of $25,000 paid therefor, it is quite apparent that the defendant Slater could never be restored to the position which he occupied at the time of entering into the agreement of 1904. The complaint contains no allegations of fraud, and the defendant Slater has acted as manager of the corporation for the best period of his life. The large dividends alleged to have been declared by the corporation were earned while he was manager. The estate must, have received similar dividends and likewise dividends must have been paid to the other stockholders. While the complaint alleges that the plaintiff nineteen years ago was in poor health and not familiar with business matters, it is quite evident that such allegations could not apply to the other executors, one of whom was the plaintiff’s son. There is no allegation of conspiracy nor that the plaintiff was overreached. The statement that the consideration paid for the stock was inadequate is a mere conclusion. The complaint contains no allegation that any arrangement was made between the estate and the surviving partner whereby any one representing the estate should continue' he business with the surviving partner ás a partner. The action which was brought by the plaintiff and finally decided by the Court of Appeals was for an accounting. The court will take judicial notice of its own decisions. The action was against the surviving partner and was to compel the liquidation of partnership assets. The court decreed a sale and the complaint alleges in paragraph 10 that the entire business of the copartnership was sold to the new corporation. It, therefore, follows that the parties to the agreement of January 6, 1904, were represented by counsel; that they were
“Fifth. It is my will and desire but I do not so direct that the business now carried on by my brother James and myself as copartners be continued for the benefit of my Estate so long as it may be practicable and profitable so to do.”
The' aforesaid paragraph is the only reference in the will to the testator’s business, and even had the testator directed his personal representatives to continue the partnership business, they could neither have been compelled to do so by the surviving partner nor could such personal representatives have compelled the surviving partner to admit them as partners.
Even if it might be inferred from the allegations of the complaint that the defendant Slater occupied the position of agent, such inference would not be sufficient to raise any presumption of unfair dealing. (Cowee v. Cornell, 75 N. Y. 91; Doheny v. Lacy, 168 id. 213; Nesbit v. Lockman, 34 id. 167; Matter of Smith, 95 id. 516; Kelly v. Ashforth, 47 Misc. Rep. 498; affd., 111 App. Div, 922; Ten Eyck v. Whitbeck, 156 N. Y. 341; Hunter v. McCammon, 119 App. Div. 326.) The court held in the above cases that there is no presumption of undue influence from the mere relationship of the parties.
While it is true that a trustee, an attorney or any other person acting as a fiduciary or in a confidential relationship cannot be permitted to retain profits obtained through the undue use of such relationship, such rule does not apply to the facts in the case at bar. Moreover, the agreement of January 6, 1904, was not an agreement whereby the plaintiff individually sold shares of stock to the defendant Slater, but was an agreement entered into between all of the parties for the purpose of settling their disputes and differences. The surviving partner under this agreement sold to Slater one more share of stock than was transferred to him by the
If, as the respondent contends, the sale made pursuant to the agreement of January 6, 1904, was null and void, the agreement itself must be null and void. The respondent would not be entitled to the benefits under such agreement if such is the case. In order to give the respondent the relief asked it would, therefore, be necessary to rescind the agreement in toto and to hold that the same was absolutely null and void. The respondent does not allege in her complaint any offer to restore the other parties to the agreement to their original status. She cannot, therefore, be permitted to rescind in part. (Hayward v. Wemple, No. 1, 152 App. Div. 195; affd., 206 N. Y. 692; Chipman v. Montgomery, 63 id. 221; Francis v. N. Y. & B. El. R. R. Co., 108 id. 93; McNaught v. Equitable Life Assurance Society, 136 App. Div. 774.)
As the complaint and the exhibits annexed thereto state clearly the entire transactions between the parties, the plaintiff should not be permitted to amend. The order appealed from should be reversed, with ten dollars costs and disbursements, and defendant’s motion to dismiss the complaint be granted, with ten dollars costs to the appellant.
Dowling, Smith, Finch and McAvoy, JJ., concur.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.