In Mackey v. Santander Bank, N.A, 98 Mass.App.Ct. 431 (2020), the court gropes for the applicable trust law in all the wrong places. Husband (H) declares himself express trustee of marital home for benefit of himself and his wife. H later purports to resign express trusteeship. Purported vacancy is ineffectively filled. Later H purports to re-assume the express trusteeship. During hiatus H takes out a commercial loan purportedly secured by a mortgage on marital home. Divorce proceedings ensue. Battle erupts between wife and commercial mortgagee, the former asserting that the mortgage is invalid. What the issues actually are: Was H a constructive trustee of the real estate during the hiatus (see Loring and Rounds: A Trustee’s Handbook §3.3) or, perhaps, a trustee de son tort of it during that time (see L & R §8.15.35, which section is reproduced in the appendix below)? If so, could he have effectively conveyed the legal title to a bona fide purchaser for value (BFP) (see L & R §3.3)? If so, was the commercial mortgagee a BFP (see L & R §8.3.2)? The Uniform Trust Code (UTC) expressly declines to regulate all this core equity doctrine implicating the law of trusts. See UTC §102. That did not stop the court from essentially limiting its inquiry to the UTC.
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