TRUSTS -- SELF-DEALING PURCHASE OF SECURITIES BY CORPORATE FIDUCIARY FROM ITS OWN BOND DEPARTMENT

The will of Henry Binder, deceased, probated in 1909, created a testamentary trust of which the Guardian Savings & Trust Company, later the Guardian Trust Company, was appointed trustee. Several years later; the corporate trustee invested part of the trust fund in various land trust certificates. In 1933 when the trust company was taken over by the superintendent of banks, the final accounting of the Binder trust, filed in the probate court, listed the land trust certificates as part of the trust assets. The land trust certificates were purchased by the corporate trustee for the trust from a syndicate of which the trustee was a member, directly from the bond department of the trust company, and from other sources.

Held, that the purchases from the syndicate and from the trustee's own bond department were illegal because of self-dealing. In re Binder's Estate, 137 Ohio St. 26, 27 N. E. (2d) 939 (1940).