A trustee can not, without the consent of the beneficiaries, or the court, acquire an interest in the trust property. If he attempts to do so without disclosing his identity and obtaining their consent, he is still held as trustee,1 even if he pays a fair and adequate price therefor,2 and still more if he pays an inadequate price therefor.3 Thus a trust company can not buy at its own sale as trustee.4 A trustee who buys at his own sale and resells at a profit must account to the beneficiaries for the profits.5 The trustee acquires the legal title at such sale subject to the equitable rights of the beneficiary.6

If the trustee discloses his identity and obtains the consent of the beneficiaries to his acquiring interests in the trust property, he must make full and complete disclosure of all material facts, and must make a fair and reasonable contract with the beneficiaries.7 The acquiescence of a beneficiary who does not know of the value of the property sold is not sufficient to ratify a purchase by the trustee at a value much below the price at which he resells it.8 If the trustee makes a complete disclosure of all material facts and if the contract is fair and reasonable, and especially if the beneficiaries have independent advice, the transaction is valid.9

Even after the trusteeship has ended the former trustee can acquire an interest in the trust property from the beneficiary only on full disclosure of material facts.10 Where under such circumstances the trustee bought trust property after the termination of the trust without disclosing to the beneficiary the existence of mines thereon and for a price inadequate in view of the existence of such mines, the sale was set aside.11

1California. Plant v. Plant, 171 Cal. 765, 154 Pac. 1058.

Delaware. In re Wheeler's Estate, - Del. - , 101 Atl. 865.

Kentucky. Clay v. Thomas, 178 Ky. 199, 1 A. L. R. 738, 198 S. W. 762.

Minnesota. Mareck v. Trust Co., 74 Minn. 538, 77 N. W. 428.

Missouri. Newman v. Newman, 152 Mo. 398, 54 S. W. 19.

Nebraska. Shelby v. Creighton, 66 Neb. 485, 91 N. W. 369.

New Jersey. Bohle v. Haseebroch, 64 N. J. Eq. 334, 51 Atl. 508 [reversing 61 N. J. Eq. 470, 48 Atl. 916].

West Virginia. Board of Trustees v. Blair, 45 W. Va. 812, 32 S. E. 203; see Transactions Between Trustees and Beneficiaries, by James Crabb Watt, 14 Juridical Review, 141.

2Smith v. Miller, 98 Va. 536, 37 S. E. 10.

3Clay v. Thomas, 178 Ky. 199, 1 A. L. R. 738, 198 S. W. 762.

4St. Paul Trust Co. v. Strong, 85 Minn. 1, 88 N. W. 256.

5Clay v. Thomas, 178 Ky. 199, 1 A. L. R. 738, 198 8. W. 762.

7Reeder v. Meredith, 78 Ark. 111, 115 Am. St. Rep. 22, 93 S. W. 558; Clay v. Thomas, 178 Ky. 199, 1 A. L. R. 738, 198 S. W. 762.

8Clay v. Thomas, 178 Ky. 199, 198 S. W. 762.

9Reeder v. Meredith, 78 Ark. 111. 115 Am. St. Rep. 22, 93 S. W. 558; Wood-bridge v. Bockes, 170 N. Y. 596, 63 N. E. 362; Brownfields Estate, 193 Pa. St. 151, 44 Atl. 246; Brown v. Brown, 107 Tenn. 349, 65 S. W. 413.

10Tate v. Williamson, L. R, 2 Ch. App. 55.

If a trustee makes a fair and valid sale of trust property to a stranger, the fact that the trustee subsequently purchases such property from such stranger for his own personal benefit, does not make him a trustee as to such property.12

In matters outside the trust, the trustee and beneficiary may deal with each other as with parties not in confidential relations.13 Thus a trustee of one tract may buy the interest of the beneficiaries in a distinct tract at execution sale;14 and one who is trustee of one undivided half and owner of the other in his own right may, to protect his own interests, buy at partition sale.15

If the trustee does not control the sale,16 or if the court holds specifically that such trustee may purchase at such sale,17 a purchase by the trustee can not be set aside.

The trustee can not make profit for. himself out of the trust estate.18 A trustee who buys in a claim against the trust estate can be credited only for the amount that he has actually paid therefor.19 If a trustee is a member of a firm which does business as brokers, such firm can not charge a commission for handling such trust funds, even though such commissions were no greater than the trust estate would have had to pay to some other broker.20 Under some special circumstances, however, courts have upheld transactions between the trust estate and the trustee personally, where such transactions were shown to be fair and honest.21 It has been held that if a trustee is also an insurance broker, he is entitled to the regular commissions for insuring the property of the estate.22

11Tate v. Williamson, L. R. 2 Ch. App. 55.

12McNac v. Jones, 38 Okla, 321, 132 Pac. 1088.

13Fuller v. Abbe, 105 Wis. 235, 81 N. W. 401.

14Kern v. Kern, 36 Or. 5, 58 Pac. 527. 15Corbin v. Baker, 167 N. Y. 128, 60

N. E. 332.

16Calvert v. Woods, 246 Pa. St. 325, 02 Atl. 301.

17Plant v. Plant, 171 Cal. 765, 154 Pac. 1058.

18United States. Sunny Brook Zinc & Lead Co. v. Metzler, 231 Fed. 304.

Iowa. In re Carmody's Estate, 163 la, 463; 145 N. W. 16.

Kansas. Frazier v. Jeakins, 64 Kan. 615, 57 L. R. A. 575, 68 Pac. 24.

Kentucky. Clay v. Thomas, 178 Ky 199, 198 S. W. 762.

Maryland. Whitelock v. Dorsey, 121 Md. 497, 88 Atl. 241.

North Carolina. Rouse v. Rouse, 167 N. Car. 208, 83 S. E. 305.

19Lovewell v. Schoolfield, 217 Fed. 689, 133 C. C. A. 449.

20Magruder v. Drury, 235 U. S. 106. 59 L. ed. 151 [reversing Magruder v, Drury, 37 D. C. App. 519].

21Whitelock v. Dorsey, 121 Md. 497. 88 Atl. 241.