Source: http://masscases.com/cases/sjc/315/315mass274.html
Timestamp: 2019-04-20 00:18:28+00:00

Document:
NUVART ARONIAN, administratrix, vs. BEDROS ASADOORIAN & others.
A valid trust was presently created when the true owner of real estate standing in the name of a straw caused the straw to execute and deliver to him, and he accepted, a deed conveying the property to him as trustee upon a trust for his sons to terminate at his death, when title was to vest in the sons, although the deed was not recorded until after his death and the sons had no notice of the trust during his lifetime.
In a suit to set aside a trust as invalid, a decree in effect declaring the trust valid should also have contained a provision formally dismissing the bill.
BILL IN EQUITY, filed in the Superior Court on May 26, 1942.
The suit was heard by Baker, J., who ordered the entry of a final decree, from which the plaintiff appealed.
J. T. O'Callahan, (M. L. Sherin with him,) for the plaintiff.
H. F. R. Dolan, (A. Brooks with him,) for the defendants.
prosecutes this bill to set aside a trust of the premises which the defendants Aron Aronian and Krikor Aronian, sons of the deceased, claim their father created for their benefit before his death.
The determinative facts found by the trial judge are these: The deceased had acquired the property because there was a drug store upon it. He planned to educate his sons as druggists and intended that they should take over and operate the store. He caused the property to be purchased in the name of the defendant Asadoorian, who held the title as a "straw" upon a dry trust for the deceased. In pursuance of his original purpose, the deceased, about three months before his death, which occurred on November 25, 1940, caused Asadoorian to execute and deliver to the deceased a deed of the premises, in the habendum of which it was expressly set forth that the deceased was to hold the premises as trustee for the benefit of his two sons; that the trust should terminate upon the death of the trustee; and that upon such termination the title should vest in the two sons. The deceased accepted the deed and the trust, but the deed was not recorded until after his death. We assume, as the parties have assumed, that this deed is to be construed as conveying the legal title in fee to Aronian and not merely a life estate with remainder to the sons. See G. L. (Ter. Ed.) c. 183, Section 13.
The plaintiff contends that no complete and valid trust was created for the benefit of the sons. We see no sound basis for this contention. The deceased was the equitable owner of the property. He could have demanded an outright conveyance from Asadoorian to himself and could then have conveyed to another in trust for the sons or could have declared himself to be trustee for their benefit. Instead, he preferred to have Asadoorian convey the legal title to him upon an express trust for the benefit of his sons. This was an equally effective method. It is difficult to see how an express trust in real estate can be any more effectually created than by a deed with an habendum in trust setting forth the terms of the trust in detail, delivered to and accepted by the grantee.
The trust came into existence before the recording of the deed. The recording statute, G. L. (Ter. Ed.) c. 183, Section 4, does not affect the validity upon delivery of an unrecorded deed as between the parties to it or as to persons with notice. Earle v. Fiske, 103 Mass. 491. It merely protects subsequent purchasers or attaching creditors without notice. Pomroy v. Stevens, 11 Met. 244, 247-248. Smythe v. Sprague, 149 Mass. 310, 312. Philadelphia & Reading Coal & Iron Co. v. Boston, 211 Mass. 526, 531. Lamson & Co. (Inc.) v. Abrams, 305 Mass. 238, 244. Tilton v. Haverhill, 311 Mass. 572, 578-579.
of such a transfer. Guarded language in a number of the cases previously cited seems to leave transfers to another to hold in trust outside the scope of the rule. We think that the United States Circuit Court of Appeals for the First Circuit correctly interpreted the law of this Commonwealth when it held in In re Pilot Radio & Tube Corp. 72 Fed. (2d) 316, at pages 318-319, that the rule does not apply in such cases.
In the case at bar Asadoorian, who held the legal title, conveyed it by formal and adequate deed to the deceased upon an express trust. But even if the deceased, who held absolute equitable title, and not Asadoorian be regarded as the settlor, the execution and delivery of the formal instrument of conveyance transferring the legal title rendered notice to the beneficiaries unnecessary to the completion of the trust. Notice might likewise have been unnecessary if the deceased had held the legal title in his own name and had merely made a formal written declaration of trust; but we need not decide that point. Nor need we decide whether in view of the statute of frauds, G. L. (Ter. Ed.) c. 203, Section 1, there is ever sufficient reason for applying the rule requiring notice to the cestui to trusts of real estate.
The plaintiff further argues that an unsuccessful attempt to make a gift by transfer cannot be made effectual by calling it a declaration of trust, citing the well known case of Milroy v. Lord, 4 De G., F. & J. 264. Loring v. Hildreth, 170 Mass. 328, 331. Silbert v. Equitable Life Assurance Society, 314 Mass. 406, 408. But this principle has no application to the case. The deed was valid for its intended purpose.
No complaint is made of the form of the decree, which merely declared that the title passed to the sons by virtue of the trust deed. We think, however, that a clause should be added formally dismissing the bill.
Decree as modified affirmed with costs.

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