In 1923 the trust company entered into a transaction with the land company by which the land company borrowed $130,000 with which it purchased a city property for slightly less than that amount and gave title to the trust company as security for the loan. Through a series of loans later negotiated the trust company came to have an investment of $150,000 in the property. In 1926 the trust company made an agreement with the land company pursuant to which the trust company declared itself trustee of the property at an appraised value almost fifty per cent above the purchase price, and then sold participating mortgage trust certificates to the general public for the full amount of its loan investment. Plaintiff, one of the purchasers of the certificates, brought a class action against the superintendent of banks after the trust company had been declared insolvent, asking for judgment in the amount of the money paid for the certificates, for a declaration to the effect that the trust was void, and for a judgment setting aside the sale of the property to the trust, and holding the money invested in the property for the benefit of the certificate holders. Held, relief granted as prayed. Haggerty v. Squire, 137 Ohio St. 207, 28 N. E. (2d) 554 (1940).
Michigan Law Review,
BANKS AND BANKING -TRUSTS - RIGHT OF BANK TO SELL PARTICIPATING TRUST CERTIFICATES IN SELF-OWNED PROPERTY,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol39/iss3/10