Thursday, June 06, 2013


Had to share another great email from Peter Dean, in response to my post on the AAMD letter about Detroit the other day:


There is such a lack of clear thinking on this issue.  It appears that many people just reach into their briefcases or file drawers and pull out a comforting slogan in the hope or belief that it will cure the problem, rather than looking at the real issues.  It is rather like medicine back in the 18th century when doctors might prescribe their favorite remedy for any number of ailments - regardless of likely effect.

One of the woolliest concepts is that of a “trust”, and its derivative a “public trust”.  What has been lacking is sustained legal analysis.  You might say that it is easy for a lawyer to claim that lawyers must have a say in this controversy, but in fact that kind of analysis is what is required.

Legal usage.  You and I know what the word “trust” means in the legal context (at least in the common law system, as I don’t think the Napoleonic Code really deals well with trusts).  It is a very powerful concept that imposes strict obligations on a trustee, but for there to be a trust there must be some intentional act that creates the trust, some defined property that is affected, and a trustee – and usually a defined beneficiary.  Sometimes the trust may arise as a matter of law when someone behaves very badly in a way that that leads to the imposition of a constructive trust, but I don’t think that applies in this case.

Other usage.  The term “trust” is also used frequently in other relationships, and, especially, one hears increasingly often of a “public trust”, but what is meant by that?

·       Sometimes it is an aspirational goal related to a transaction, but not necessarily creating legally enforceable rights and obligations.

·       Sometimes it is a relationship that arises as a result of legislative action (such as the creation of a national park).

·       Sometimes it reflects the residual power of the government (often exercised by an attorney-general) to ensure that assets donated for a charitable purpose continue to be used for a similar purpose of the first one fails or is completed.

·       Sometimes it is just a slogan.
Express trust.  There’s no doubt that one can create an express trust to encompass an art collection, and that the law will protect that.  Where the Wedgwood Museum failed was in not taking the necessary steps to make sure that the Wedgwood pottery collection was in fact conveyed to it under a legally enforceable trust.  Certainly that could have been done; but it was not.  I do not know the facts of the DIA situation, but if what I read is correct - that several decades ago the DIA transferred its collection to the City of Detroit in exchange for a promise of financial support – that arrangement could also have been set up as an express trust, that would now protect the collection from sale.  Was that done?  It sounds like it was not.

If a legally recognized trust is not created then the game is very different.  Of course, as you have noted many times, if a legally recognized trust were in fact created by the creation of a museum, then many de-accessioning sales could not occur, even if the proceeds are to be used for new acquisitions, unless the trust deed expressly permits that.  You really cannot have your trust cake and eat it too, at least not without careful planning and drafting.

When it comes to the hard issues of meeting obligations and paying bills, it is the law that will govern, not an aspirational slogan or policy.  Those who brandish the phrase a “public trust” as a cure-all against an evil, are not doing anyone a favor, but are confusing the issue  It would be better to explain what is actually required to create a trust.