Constructive trusts Flashcards
Basic principles
a. Constructive trust is not a trust. Not based on party’s express or presumed intent
b. It’s an Equitable remedy—NOT a trust.
i. to protect unjust enrichment.
ii. Equity turns holder of title into a TE when he may not in good conscience retain the beneficial interest in the property
SOF does not apply
c. MUST BE REQUESTED in a court action
d. Requires particular property—must be able identify the particular property as the trust res. The mere proof that a ∆ has been guilty of wrongdoing is not a sufficient basis.
e. π must do equity to receive constructive trust remedy
i. For ex. there was some fraud over a property. We have grounds for constructive trust. ∆ has made mortgage payments, and π has to pay for those mortgage payments and property improvements
f. Duty of TE is merely to convey.
Grounds to impose constructive trust
3 primary categories
a. Fraud—for ex. because of fraud, will remains unsigned. So property goes to heirs. Court will impose constructive trust because of heirs’ bad conduct. Can even impose constructive trust remedy on the innocent heirs because they wouldn’t have received property but for the acts of the evil heirs. Courts have power to do complete justice.
i. Even though no valid will b/c no signature.
b. Abuse of confidential relationships—atty-client, doctor patient, biz partners, family, friends.
unconsccionability, undue influence, misrepresentation
c. Promises made in contemplation of death—secret trust. OR executed will leaving home to beneficiary. Victor then claimed that OR an dbeneficiary had oral agreement that beneficiary would hold the home in trust for victor’s benefit. This is a secret trust, a will which purports an absolute gift, but where there is actually an agreement that beneficiary would hold the property in trust.
