Constructive Trust

Question 1

Constructive Trust

Answer 1

imposed on improlerly acquired proiperty to which D has TITLE. D serves as a trustee and must return.

Question 2

Equitable Lien

Answer 2

Imposed on improperly acquire dporoperty to which D has title. pRoperty will be subject to a court directed sale. MOnies recived to P.

If proceeds are less than FMV, deficiency judgment will issue for the difference and go after D’s assets

Question 3

Look for Title

Answer 3

D must have title to the assets

Question 4

Rules

Answer 4

1. inadequate legal remedy because (i) D is insolvent or for constructive trusts, (ii) property is unique.
2. tracing is allowed.
3. BFP prevail over P. Thus only tracing is allowed here
4. P will prevail over unsecured creditors

Question 5

constructive remedy or equitable lien?

Answer 5

1. if property value goes up after taking, CONSTRUCTIVE TRUST
2. if property value goes down after taking, EQUITABLE LIEN
3. When D’s property cannot be traced soley to P’s property, only an equitable lien