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Zullo Redux 1 Year Later- New Appeal Re Motion To Record Assignment Regarding "Registered Land"

Last July, this Firm received a ruling for Summary Judgment in our client's favor regarding the protracted litigation involving Mr. Zullo's residence in Wayland, see Zullo v. HMC Assets, as Trustee for CAM III Trust, 16 MISC 00413 (RBF) (2017) See our blog post about this here. This was an important ruling, as it was one of the first [if not only] matter to examine the prospective effect of the SJC ruling in Eaton v Fed. Nat'l Mortgage Ass',n, 462 Mass. 569 (2012). The Land Court Judge based his ruling in our favor upon the fact that the Defendant could not provide any supporting documentary indicia that its claimed "lost note affidavit" complied with UCC 3-309. Prior to the holding in Eaton, the Court was only required to examine the identity of the "holder of the mortgage", and made no inquiry as to the claimed note owner. Unlike most jurisdictions, the mortgage does not automatically follow the note in Massachusetts, see U.S. Bank Nat'l Ass'n, 458 Mass. 637, 652-653 (2012)

This matter involves Massachusetts unique Land Registry System entitled "Registered Land" that only may be heard in Massachusetts Land Court (the only other state to have a specialized "land court is Hawaii).

When land becomes "registered" within the Commonwealth, the state guarantees the unassailability of title to the real property so registered under G.L. c. 185, section 101, section102, and 103.

The concept of land registration was borrowed from the Australian “Torrens System”, which in turn was based upon the registration of ships under maritime law[1]. “Land registration” involves a central registry in which are recorded in one place all of the documents affecting title, see Deacy v. Berberian, 344 Mass. 321 (1982) Morehardt v. Dearborn, 313 Mass. 40 (1943); McMullen v. Porch, 286 Mass. 383 (1934); see also Mass. Prac.; Eno & Hovey vol. number 28, at §22.1. In fact, the Massachusetts Land Registration system follows the Australian Torrens System, and the Commonwealth also features an additional “insurance element”, whereby the Commonwealth guarantees and insures the unassailable state of title to land that is registered within the Commonwealth, under G.L. c. 185, §110.[2]

The purpose of land registration proceedings under G. L. c. 185, Sections 26-56A, is "to provide a method for making titles to land certain and indefeasible." McMullen v. Porch, 286 Mass. 383, 388 (1934). See Studley v. Kip, 245 Mass. 244 (1923); State St. Bank & Trust Co. v. Beale, 353 Mass. 103, 107 (1967); Tetrault v. Bruscoe, 398 Mass. 454, 459 (1986).[3]

As succinctly explained by the Massachusetts Appeals Court, in Feinzig v. Ficksman, 42 Mass.App.Ct. 113 (1997), at page 116:

“The purpose of the statute (G. L. c. 185) that establishes the Land Court and the land title registration system is to provide a method for making titles to land certain, indefeasible, and readily ascertainable. Tyler v. Judges of the Court of Registration, 175 Mass. 71, 73 (1900). McMullen v. Porch, 286 Mass. 383, 388 (1934). Morehardt v. Dearborn, 313 Mass. 40, 47 (1943). State St. Bank & Trust Co. v. Beale, 353 Mass. 103, 107 (1967). McDonnell v. Quirk, 22 Mass. App. Ct. 126, 129 (1986). "The finality and unassailability of registered title is a cornerstone of the registered land system." Ibid. On the basis of that policy, our decisions have, for example, held that it lay beyond the jurisdiction of a probate court judge to determine the existence of an easement that existed before registration over registered land. Tetrault v. Bruscoe, 398 Mass. 454 , 460-461 (1986). The point made in these decisions is that a person examining a certificate of title in the land registry is entitled to the conclusion that the property is not encumbered by anything that does not show on the certificate.

However, subsequent to last June's ruling in favor of our client, the losing Defendant filed a Motion to record assignment [transferring mortgage from previous trust to new trust. We Opposed that Motion on the basis that the named Defendant could not show ownership of our client's note, and where it was also not any "agent" of a note owner, we referenced Eaton v. Fed. Nat'l Mortgage Ass',n 462 Mass. 569, n.10 (2012), for the proposition that a mortgage holder by itself could not undertake any "affirmative act" [such as assigning a mortgage], and that a "holder of a mortgage" without connection to a note, is in possession of "nothing of value".

The Land Court Judge disagreed with our position, and granted the Defendant's Motion to record assignment [on registered land]. We have filed an appeal of this decision at the Massachusetts Appeals Court under Zullo v. HMC Assets, et. al.,Ca. No. 2018-P-0383, where we filed our Opening Brief on July 06, 2018.

This is an important appeal as it involves first impression issues regarding the claim that a mortgage holder could purport to "assign" a mortgage without any authority from any note owner, or agent thereof. This matter also involves MERS claim within the title to Plaintiff's registered land

We will keep you updated as this matter progresses


[1] In 1858, Sir Robert Torrens developed the Australian Torrens System, which was modeled by after the method for recording ownership interest in ships, that Torrens routinely encountered in his work as an Australian customs administrator. The Torrens system differs from traditional recording systems, in that it establishes a legal procedure whereby the state guarantees the owner’s title.

[2] See Mass. Prac. v. 28, at §22.1, p. 610, and at n.2

[3] Governor Wm. E. Russell’s 1891 Address to the Massachusetts General Court recommending a Torrens system is apparently the legislative history of the 1898 Act that instituted it. Governor Russell advised that one purpose of a Torrens system was for the protection of “the small land owners and the borrowers upon mortgage”. The resulting statute is therefore a consumer protection law. Governor Russell declared its purposes to include: “the ownership by the people, to the greatest possible extent, of the homes in which they live ... so obviously desirable that I need not dwell upon [it].” This Address set out key characteristics of this system. These include: the principle of ‘no transfer except upon the books’… by which is meant that a subsequent transfer takes no effect upon the title until registered, no subsequent act or proceeding is allowed to affect the title once registered, unless it is brought to the attention of the registrar and a proper memorandum stating its effect is endorsed on the certificate. The policy reason is straightforward: “It is therefore possible under the Torrens system to ascertain the state of the title to any piece of land brought under it simply by inspecting the certificate on record.” This was explicitly codified in G.L. c. 185, §67, part of the Commonwealth’s original Torrens statute.