Opinion ID: 1483018
Heading Depth: 1
Heading Rank: 8

Heading: Breach of the Trustees' Duties.

Text: As seen, Hanson and Bean each had the duty of refraining from dealing with the subject matter of the trust in any way which may inure to his personal profit. In 1 Restatement of the Law, Trusts 531, § 201, it is said: A breach of trust is a violation by the trustee of any duty which as trustee he owes to the beneficiary. We think it is clear here that there was a violation by Hanson and Bean of their duties as fiduciaries. The conflict of interest was present. Individually their normal action would be to obtain as much of the stock in the Arizona company as they could for their claims, while as fiduciaries their duty would be to bargain for as little of such stock as they could. While technically there was no sale in the sense that money was paid for property (see 23 C.J. 185, § 1), we doubt if that was necessary, for there was a dealing with the subject matter of the trust. In addition, the whole purpose of the rule would be destroyed if the heirs were protected when the trustee paid money for property, but were not protected when the trustee used the simple device of releasing his claim for a particular amount of money for property. No doubt that reasoning led to the decision, so holding, in Re Estate of Blackinton, supra. There the heir conveyed property to the wife of the administrator for a promise of support and maintenance, which, in the last analysis, meant for services to be rendered, and the court held the transaction within the statute, if the administrator obtained an interest in the property. Here, appellants conveyed property to Hanson and Bean for their services rendered and to be rendered. We hold the transaction to be one forbidden by the statute.