25 Mass. App. Ct. 986 | Mass. App. Ct. | 1988
We recently considered language in a trust instrument similar to that last quoted, i.e., permitting persons dealing with the trustee to take his acts as conclusive evidence of lawful authority. See Penta v. Concord Auto Auction, Inc., 24 Mass. App. Ct. 635, 639 (1987). In the Penta case, we held that a party dealing with a trust had no duty to inquire as to the trustee’s authority but that the party dealing with the trust would be chargeable with actual knowledge of the trustee’s lack of authority. Id. at 640-641. Here the record discloses no suggestion that ITT was aware of any reservation in the authority of the trustee. Indeed, there appears to have been no such reservation. To the contrary, the guaranty was delivered in aid of the credit of the settlor’s business, Oakwood Mobile Home Park, which provided rental income for the trust. That ownership structure reflected a garden variety division of operating entity and land holding entity engaged in a common business venture. When persons choose to do business in trust form, take pains to give themselves maximum flexibility by granting themselves plenary
In view of the settlor’s power to amend and revoke the trust and to substitute beneficiaries, a power retained until death, summary judgment could also rest on the creditor’s right to reach the trust property as if it had been the debtor’s own. State Street Bank & Trust Co. v. Reiser, 7 Mass. App. Ct. 633, 636-639 (1979).
The judgment is to be modified by adding to it ITT’s reasonable attorney’s fees and costs incident to the appeal. As so modified, the judgment is affirmed.
So ordered.