By their Second Amended Complaint the plaintiffs, Antoinette Dangelo, Pauline Coletti and Paul A. Amendola, seek to have this Court declare void the conveyance by defendant, Mary A. Amendola, trustee, of a parcel of registered land on Adams Street in Newton, Middlesex County, to the defendant Jacqueline Dangelo, and the subsequent conveyance by Jacqueline to the defendant Mary A. Amendola, individually, and order the appointment of a new trustee of the Mary A. Amendola Trust and a conveyance to such trustee of the land in question. There are further prayers for an accounting and the assessment of costs and expenses. The Complaint, to summarize, alleges that Carlotta Amendola, the mother of the two female plaintiffs, at her death gave their father, the late Dr. Alfred A. Amendola, $7,500 to care for their three minor children; that the moneys were used by Dr. Amendola to purchase the real property in question; that he held title as trustee of a trust duly registered with the Middlesex South Registry District of the Land Court; that subsequently a Certificate of Title was issued by said Registry District to Mary A. Amendola, as trustee under a Declaration of Trust dated December 23, 1932 and registered as Document No. 122649 of which the settler was Hazel E. Morrin (the "Trust") ; that about October 9, 1951 Dr. Amendola executed his will in which he made no provision for the plaintiffs; that their father also acquired stocks and bonds which he told them were being held in trust for them by the defendant trustee; that they were both life beneficiaries and remaindermen of the Mary A. Amendola Trust; that they were never informed of their beneficial interest and learned of it accidentally about 1976; that the Trust provides for a Committee which was granted certain discretionary powers and which twice amended the Trust instrument, once before and once after Dr. Amendola's death on October 10, 1956; that in April of 1976 Mary A. Amendola, as trustee, conveyed the registered land for the consideration of one dollar and love and affection to her daughter, Jacqueline; that thereafter two members of the Committee ratified this action; that Jacqueline subsequently conveyed the property to Mary A. Amendola individually who holds title thereto as the registered owner named in Certificate of Title No. 150200; and that one of the affidavits of a member of the Committee was mistakenly executed and without appropriate formality.
The defendants in their answer deny that Dr. Amendola appropriated any funds or used funds from his first wife in the purchase of the Adams Street property; that any stock was given to the defendant Mary A. Amendola in trust; that she had any duty of disclosure; that the property was conveyed wrongfully and that the affidavits were improperly executed and affirmatively allege that the provisions of the Trust speak for themselves and that the conveyance was authorized by the Committee.
A trial was held at the Land Court on September 29, 1982 at which a stenographer was appointed to record and transcribe the testimony. Eight witnesses testified including three plaintiffs, a former attorney for Antoinette Dangelo, the notary public who took the acknowledgement of William Holdsworth, a member of the Committee of Three, Laura Holdsworth, his widow, a former attorney for Mary A. Amendola who drafted the instruments of conveyance and the Affidavits, and Mrs. Amendola. At the trial seventeen exhibits were admitted into evidence and after a further hearing, by order of Court, five additional exhibits were admitted. The deposition of Mrs. Amendola taken on November 20, 1981, also was introduced. All exhibits introduced into evidence are incorporated herein for the purpose of any appeal.
On all the evidence, I find and rule as follows:
1. The parcel of land concerned in this litigation is shown as Lot A on Land Court Subdivision Plan No. 6490C ("Locus''). Dr. Alfred A. Amendola was the father of the plaintiffs Antoinette and Paulin by his first wife who died on September 25, 1918, the husband of the defendant Mary, and the father by his second wife Mary of the plaintiff Paul, the deceased Alfred, the defendant Jacqueline, and non parties Joan and Anthony. Dr. Amendola had another son (by his first wife), Julius C. Amendola, who was killed in World War II.
2. Dr. Amendola was the settlor of the Alfred A. Amendola Trust dated October 7, 1929 and registered with the Middlesex South Registry District of the Land Court [Note 2] as Document No. 101249 (Exhibit No. 7) and the trustee thereunder to hold real estate referred to therein but not described [Note 3] in trust for the benefit of his then minor children. The terms of the Trust gave the trustee full and absolute control over the management and disposal of all the real estate held by him and power to alter, modify, terminate or amend the declaration of trust. There was no credible evidence as to the source of the funds used to purchase the trust real estate.
3. By instrument dated December 23, 1932 and registered as Document No. 122649, one Hazel E. Morrin conveyed Locus to Mary A. Amendola as trustee upon the trusts set forth in a certain deed dated December 23, 1932 and registered as Document No. 122649 (Exhibit No. 1). The Trust provided that during its term income was to be paid to the living children of Dr. Amendola's first marriage until each of them reached the age of 25 years or died, whereupon the income also was to be paid to the living children and the children of Mary A. Amendola. Upon termination of the Trust the principal was to go to all the living children in equal shares. The trustee was given the same power of disposition of and management over the trust property as if she were the absolute owner thereof. The Trust contained the following unique provisions:
CLAUSE THIRD: I hereby create in VIRGIL C. BRINK, of Watertown, Middlesex County, Massachusetts, WILLIAM S. HOLDSWORTH of said Water town and JAMES S. CANNON of Newton, hereinafter referred to as the Committee, a joint power exercisable at any time or times, or from time to time, by any two of said Committee by an instrument in writing executed, acknowledged and delivered to the trustee. No such writing affecting title to land shall be effective until recorded or registered in the county where is situated the land affected thereby. This committee by two of its members shall have the power so exercised to do the following and the following provisions, shall apply to them:
A. To change and alter any of the trusts of said fund and declare new trusts of the property in any way or manner and to change and alter any and all the provisions of this instrument including the power to revoke and cancel any and all of said trusts and any or all of said provisions. No exercise of this power shall exhaust it. (underlining added) It may, however, be released, extinguished, or restricted by a like instrument so signed and delivered by any two of the committee. Without limiting or qualifying the foregoing general joint power in any particular, it shall include the power to alter the number of, the powers of, and the succession among, the trustees, the power to remove any trustee hereunder, the power to appoint a successor to any trustee who dies, resigns, or is removed, and the power to appoint additional trustees; and shall include the power to alter the number of, the powers of, and the succession among, the committee.
B. Any of the persons in whom said joint power is vested may resign at any time by an instrument signed and delivered to any member of the committee or any trustee hereunder.
C. In case the number of the committee shall at any time be less than the number required by the provisions of the instrument then in force, vacancies shall be filled by an instrument in writing signed by a majority of the remaining members of the committee and delivered to any trustee. The person filling such vacancy shall have the same powers as if originally named. No personal liability shall attach to any member of the committee.
4. The Trust also provided that a certificate signed and acknowledged by a trustee or a beneficiary as to the identity of the trustee, a change of trustee or any other fact affecting the trust fund or trust instrument was to be conclusive evidence thereof, provided, however, that it was to be conclusive where land was concerned only upon the recording or registration of said certificate. Similarly, as set forth above in the quotation as to the powers of the Committee, any writing executed by its members which affected title to land was not to be effective until recorded or registered.
5. The Trust was amended twice by the Committee in accordance with Clause Third set forth above to revise the provisions as to the term of the Trust and those entitled to the trust income and principal. The amendment dated October 9, 1951 provided for the income to be paid to the three Amendola sons and the son of a deceased son during Dr. Amendola's life time and to his widow after his death. The income beneficiaries were to receive the principal also upon the death of Dr. Amendola and his wife. The second amendment of November 30, 1956 did not change the income provisions but amended the Trust to provide that the seven surviving Amendola children each would receive 3/28ths of principal and Michael, Julius' son, 7/28ths thereof. All such beneficiaries are now mature adults. Neither amendment was filed for registration; rather the executed instruments are in the Hale and Dorr Will and Trust Vault. In the 1951 amendment the two continuing members of the Committee appointed Frederic A. Crafts to fill the vacancy caused by the resignation of James S. Cannon, but there is no evidence as to whether Judge Crafts ever served in this capacity.
6. The Trust and the first amendments gave the trustee discretion to permit Dr. Amendola, his wife, or any one or more of the children to use and occupy the real estate with such charge for rent and expenses as the trustee in her discretion might deem proper.
7. The Locus originally was a two family house, but an opening was made in the wall at some time so it might be occupied as a one family residence. After Dr. Amendola's death it apparently resumed its duplex character with defendant Mary A. Amendola living on one side and her daughter, defendant Jacqueline and her family, on the other. When Mrs. Amendola recently underwent coronary by-pass surgery, the opening was again made so that Jacqueline and her husband (who is the brother of Antoinette's husband) might care for her.
8. While Mary A. Amendola held title as trustee, she was unable to obtain an abatement of the real estate taxes pursuant to the provisions of G.L. 59, §5 Clause Forty-first. She also suffered reverses in the stock market and was concerned about her ability to pay the real estate taxes. On two occasions the taxes were paid by Jacqueline. Mrs. Amendola, now in her eighties, testified that her only present income is from SSI.
9. An attorney whom Mary A. Amendola consulted, Francis X. O'Brien, corresponded in October of 1975 (Exhibit No. 15) with the two members of the Committee, William Holdsworth, who had been a bank officer and a friend of Dr. Amendola, and Virgil C. Brink, a partner in Hale and Dorr and Dr. Amendola's attorney, to secure approval of a conveyance by the trustee to her daughter Jacqueline free of the Trust. The Committee members were informed that Mrs. Amendola wanted, to amend the Trust so that it would pass to her daughter Jacqueline on Mrs. Amendola's death in order to repay her daughter for years of devoted service and her assistance with expenses, without which Mrs. Amendola believed she would have been unable to retain the Locus. The letter recognized the power of the Committee as set forth in the Trust, and asked if the Committee members agreed with the interpretation of their authority and the justification of the change. The problem as to an abatement was not mentioned.
10. By letters dated April 5, 1976 (Exhibit Nos. 16A and 16B) each Committee member was forwarded an affidavit to execute. The covering letter explained that either Mrs. Amendola would convey the Locus to Jacqueline so that she might obtain court approval of the conveyance or alternatively would convey the Locus to her mother who would devise it to her. The affidavits (Exhibit Nos. 2 and 3) recited the powers given the Committee in the Trust and gave the following authorization:
With the authority given me by the foregoing section, and because of the necessity in meeting the financial obligations of the property and to ensure Mary A. Amendola's continuing security as a resident on that property, I do hereby authorize Mary A. Amendola, Trustee, to convey the parcel of land with the buildings thereon as if she were the absolute owner thereof to her daughter Jacqueline as sole owner.
11. Mr. Holdsworth visited Mrs. Amendola to review her situation after he received Mr. O'Brien's request. Since both Mr. Brink and Mr. Holdsworth are now dead, there was no evidence as to whether they had conferred together before authorizing the distribution of the Locus.
12. Mr. Holdsworth had acknowledged the instrument before Ida Mary Napolitano who is now a branch manager of the bank (now Bay Bank Middlesex) with which he had been affiliated. She testified that she never notarized an instrument which Mr. Holdsworth had not signed in her presence. She identified Mr. Holdsworth's signature and hers on Exhibit No. 2, and testified, and I so find, that it was executed in her presence. On cross examination by counsel for the plaintiffs the witness testified, and I so find, that every time she saw Mr. Holdsworth which was as late as 1981, the year he died, he was in possession of his faculties.
13. The deed from Mary A. Amendola, trustee, to Jacqueline Dangelo, dated April 5, 1976 and registered as Document No. 544366 (Exhibit No. 4) referred to the power conferred by the Trust Deed and the concurrence of the "Trust Committee." The consideration recited was one dollar plus love and affection. The two affidavits (Exhibit Nos. 2 and 3) were registered simultaneously as Document Nos. 544364 and 544365.
14. Three months later Jacqueline conveyed the Locus to her mother by deed dated July 26, 1976 and registered as Document No. 549075 (Exhibit No. 5). The Registry District then issued to Mary A. Amendola, as registered owner, Certificate of Title No. 150200 (Exhibit No. 6) covering the Locus.
15. Dr. Amendola delivered to Mary A. Amendola securities in a substantial amount prior to his death, but there was no proof that these were not a gift but rather were intended to be added to the trust res. Neither is there any evidence before me as to whether there are assets remaining in the Trust other than the real property which is the subjet of this litigation.
During the trial the plaintiffs sought to attack the administration of the Trust by the trustee, but I ruled that such matters were more properly within the jurisdiction of the probate court where another action between the parties is pending. So far as the real estate is concerned, however, the Trust by its own terms permitted the trustee to hold the Locus (which indeed was conveyed by the same instrument which established the Trust) and to occupy herself or to permit other family members to do so at such rent as she in her discretion might fix. The trustee never charged any rent per se but paid all the expenses on the property, at times with the help of her daughter Jacqueline. Under the circumstances of the present family situation, I find and rule that the trustee's conduct as to occupation of the Locus and the terms thereof were not such that she should now be surcharged or removed as trustee.
The plaintiffs' case primarily is directed to the conveyance of Locus to Jacqueline and thereafter to Mrs. Amendola free of the Trust. The conveyances are attacked on several grounds including nominal consideration, perversion of the purposes of the Trust, preferential treatment of one of the beneficiaries over the others, lack of power in the Committee to revoke the Trust, failure of the Committee to act properly and invalid execution by the members of the Committee of their power, each having executed a separate instrument and allegedly not in the presence of a notary public. The plaintiffs do not wish to deprive the trustee of her right to occupy the Locus but merely to restore it to the Trust to be sold and the proceeds distributed equally to all the Amendola children at Mary's death. They argue that if the apartment in the property or the doctor's office in the cottage, had been rented, their stepmother (or mother in Paul's case) would have been able to pay the real estate taxes and would not have required the Clause 41 abatement.
Even when a trustee is given broad powers by the settlor, they still must be exercised with that soundness of judgment which follows from an appreciation of trust responsibility. The trustee's conduct must be both prudent and reasonable. Boyden v. Stevens, 285 Mass. 176 (1934). It is this standard which would negate the conveyance by Mrs. Amendola to her daughter Jacqueline if viewed as an exercise of her power of sale, for the consideration recited in the deed was nominal so far as monetary renumeration was concerned. Love and affection, the other consideration, is inappropriate for a trustee's conveyance. If a trustee is in fact to exercise his power of sale, he must receive adequate consideration.
I turn then to the powers of the Committee to see if the conveyance of Locus can be upheld on such ground. "The creator of a trust may reserve to himself or grant to others powers of revocation or modification." State Street Trust Co. v. Crocker, 306 Mass. 257 , 259 (1940); and cases cited. While the nominal settlor was Hazel Morrin, there can be little doubt that the actual settlor was Dr. Amendola. Rather than reserving the power to alter or modify to himself, he bestowed it upon his banker and his attorney [Note 4] in whom he apparently had confidence to shape his financial plan to meet the exigencies of the future. It has long been settled in Massachusetts that the donor may reserve an unequivocal power of modification and reservation as well as the right to receive income and withdraw principal without affecting the validity of a trust. Jones v. Old Colony Trust Co., 251 Mass. 309 (1925). And as noted above, he may grant this to others. The Massachusetts cases do not give any standards by which the actions of such third parties should be governed. A noted commentator states that in the case of a reservation of the right to revoke by a settler with the consent of a third party who is neither a beneficiary nor a trustee "it would seem that the third person can properly give or withhold his consent, unless there is a standard by which the reasonableness of his judgment can be tested and he acts beyond the bounds of a reasonabie judgment, or unless in the absence of such a standard he acts dishonestly or from an improper motive." IV Scott on Trusts (1967) §330.10. Scott then suggests that when such a power has been conferred on a third party rather than a trustee, it is easier to infer that the settlor intended to confer an unrestricted trust.
It has also been held that the unrestricted power to amend or modify includes the power to revoke. Stahler v. Sevinor, 324 Mass. 18 (1949) citing with approval comment h to section 331 of the Restatement of Trusts and 3 Scott on Trusts (1939) §331.2. (Now see IV Scott on Trusts (1967). Scott v. Dane, 346 Mass. 784 (1964)). Reading the Trust instrument as a whole as we must (see State Street Trust Co. v. Crocker, supra) the deep concern of Dr. Amendola for his children is apparent. Yet, the first amendment to theTrust executed during his lifetime added a provision for income after his death to be paid to his widow so it is apparent that he also was concerned with her future welfare as well as that of his and their children. Both parties have contended that the amendments were ineffective as to real estate since they have not been filed for registration. This would be the case should there be intervening rights of third parties who dealt with the land prior to the registration of an amendment. See Trager v. Schwartz, 345 Mass. 653 , 658 (1963). Here, however, the lack of registration hurt no one and is not a bar to a consideration of the provisions of the amendments. They are not void but merely a contract between the parties until filed for registration. In the original trust deed and the amendments, the principal of the Trust on its termination was to go to various of the children and a grandson of Dr. Amendola. Any interest of the remaindermen, however, was subject to be defeated by exercise of the powers reserved to the Committee. These included the power "to change and alter any of the trusts of said fund and declare new trusts of the property in any way and to change and alter any and all the provisions of this instrument including the power to revoke and cancel any and all of said trusts and any or a1l of said provisions." The plaintiffs argue that this language was intended to permit the amendment of the various provisions of the trust instrument including any power therein to revoke and cancel the trusts and that it did not itself constitute a power to revoke. This is a strained interpretation of the plain language of the Trust and one that I do not adopt. While I agree that the language is inartistic, it seems clear to me that it constitutes a broad grant of unrestricted authority to any two members of the Committee to change and alter the trust provisions including by its very language the power to revoke and cancel the trusts. Moreover, the power to change and alter any and all the provisions of the Trust is synonymous with the power to amend or modify and thus, on the authority mentioned above (and the very language of the Trust as well) to revoke any of its provisions. With the power to change and alter the trusts, the Committee was given the authority to mold the disposition of the Trust to changing circumstances. It is clear that neither committee member acted in bad faith, dishonestly, or from an improper motive.
Having found that the Trust gave broad power to the Committee to amend and to revoke the Trust, I am constrained to find and rule that the power was not properly exercised. I find it immaterial that the two members of the Committee each executed an instrument of amendment rather than the joint instrument which had been the previous pattern. It still may be joint action although found in two pieces of paper other than one. There is nothing in the affidavits which they executed, however, to suggest that they had consulted and were acting in concert as the Trust requires. Neither did the instruments follow the formal nature of the previous amendments. Admittedly the affidavits were not prepared by or at the direction of a member of the Committee, and the adoption of the language thereof by Mr. Brink and Mr. Holdsworth compels the conclusion that they did not use their own independent judgment. The Trust from the beginning had been designed to benefit the children of Dr. Dangelo and not his wife; it had been amended to provide her with the right to enjoy the income and to occupy the real estate for her life, but for the Committee to authorize a change by which the Locus went only to one of the children seems without the settlor's intention and not one which the Committee would have sanctioned when its members were younger, at least without more deliberation than is apparent from the face of the affidavits. At the very least a more thorough investigation of the circumstances of the family members [Note 5] and a conference between the two committee members should have been had. Moreover, it is unclear from the language of the affidavits as to how the conveyance to Jacqueline would reach the stated result of ensuring Mary A. Amendola's security as a resident on the property. Some effort to obtain a mortgage in order to pay the real estate taxes and make necessary repairs would appear to have been a preferred preliminary step. It is understandable that Mary A. Amendola would wish to reward her daughter Jacqueline, but Mrs. Amendola was not the settlor of the Trust, and this result is not in accordance with the Trust as envisioned by Dr. Amendola and as theretofore amended.
On all the evidence, I find and rule that the Committee had broad power to change and alter the Trust, to amend and modify its provisions and to revoke it in whole or in part; that the Committee was not bound by the same constraints as the trustee in exercising its authority; that Messrs. Brink and Holdsworth had the power to authorize the partial distribution of, or revocation of trust as to, the real estate; that the affidavits executed by said two members of the Committee were not a valid exercise of the joint power granted to the Committee by Clause Three of the Trust; that there is no evidence that the members of the Committee conferred before authorizing the conveyance of the principal, if not sole, asset of the Trust; that the amendments of October 9, 1951 and November 30, 1956 to the Trust are valid and enforceable as to the parties hereto but not as to non-family third parties until filed for registration; that the Trust has not terminated and any assets held by the trustee must be dealt with in accordance with the provisions of the Trust; that Mary A. Amendola is not to be removed as trustee at this time, but the Court suggests she may wish to resign as trustee in favor of a party acceptable to all beneficiaries; that Certificates of Title Nos. 150200 and 149038 issued by the Middlesex South Registry District of the Land Court are to be cancelled and prior Certificate of Title No. 35541 is to be revived and reinstated and that the original executed amendments of October 9, 1951 and November 30, 1956 are to be filed for registration.
The plaintiffs have filed sixty-one (61) "Requests for Conclusions of Law." I grant requests Nos 1, 4, 5, 6, 10, 11, 16, 17, 18, 21, 22, 23, 27, 28, 29, 31, 32, 35, 37, 38, 42, 45, 46, 51, 52, 53, 54, 55 and 59. I deny requests Nos. 2, 3, 7, 8, 9, 12, 13, 14, 15, 19, 20, 24, 25, 26, 30, 33, 34, 36, 39, 40, 41, 43, 44, 47, 48, 49, 50, 56, 57, 58, 60 and 61. I have denied certain of these requests as being unclear or as stating the law correctly in part only, or as assuming facts which I have not found.
[Note 1] Alfred Amendola was added as a party plaintiff by motion allowed on December 21, 1981. Subsequently a death certificate was filed as a suggestion of death which occurred on March 24, 1982.
[Note 2] Unless the context otherwise requires all registration references herein are to said Registry District.
[Note 3] Attached to the complaint (but not in evidence) was a copy of Certificate of Title No. 29841 in which Alfred A. Amendola, trustee as aforesaid, was named as the registered owner, of said Lot A.
[Note 4] The identity of the third member of the Committee is not clear, but he is said to have been a partner in the firm of Hale and Dorr.
[Note 5] I have noted in my findings that Mr. Holdsworth did visit Mrs. Amendola.