Mackey v. Santander Bank, N.A: Yes, but applicable trust law lurks not just in the Uniform Trust Code

Charles E. Rounds, Jr.

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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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Charles E. Rounds, Jr.

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