***IV. RESULTING AND CONSTRUCTIVE TRUSTS

Question 1

A. PURCHASE MONEY RESULTING TRUST

31. [Feb. 2003] A pays the purchase price for land, and causes the title to be taken in B’s name. A and B are not related. Thereafter, A brings suit seeking to impose a resulting trust in his favor, contending that he did not intend to make a gift to B, but had some other reason for taking title in B’s name. Presumption:

Answer 1

PMRT: purchase money resulting trust
hypo is the rule

A can compell reconveyance anytime unless the presumption is rebutted

Evidence is admissible to show: 1, loan; or 2, loan of purchase price to rebutt the presumption
(B need to repay the loan)

Question 2

A pays the purchase price for land, and causes the title to be taken in B’s name. A and B are not related. Thereafter, A brings suit seeking to impose a resulting trust in his favor, contending that he did not intend to make a gift to B, but had some other reason for taking title in B’s name, except that A is B’s father (or sister). Presumption:

Answer 2

gift not PMRT

Evidence is admissible to rebut the gift presumption, and show: PMRT

Question 3

32. [July 1988] Define constructive trust and give a short example.

Answer 3

A constructive trust is not a trust. It is an equitable remedy whose object is to disgorge unjust enrichment. [July 2004] Benefit of constructive trust: Enables injured party to recover the very property in dispute; doesn’t have to settle for judgment for money damages.
Two elements: (1) wrongful conduct; leads to (2) unjust enrichment

Trust Code explicitly provides it doesn’t apply to CT, because they are not really trusts.

Question 4

33. [July 1988] Fred is the insured under an insurance policy that names as beneficiary “my son Sam if he survives me,” and his daughter Donna as alternate beneficiary. After a heated family argument, Sam kills his father to death with an axe. Fred, who left no will, was survived by Sam, Donna, and Sam’s son Jr. Who takes what?
    Fred’s intestate estate?

Answer 4

Life insurance proceeds: BY STATUTE [meaning constructive trust remedy not necessary], if the beneficiary willfully brings about the death of the insured, proceeds are distributed as though killer predeceased the insured victim. Therefore, the proceeds are distributed to Donna as alternate beneficiary.

If no alternate beneficiary was named, proceeds are paid to insured’s estate.

Fred’s intestate estate: Daughter Donna takes 1/2, of course. As to other 1/2:
Step 1: Apply the law: Under the Estates Code, Sam inherits 1/2 of Fred’s estate.
Step 2: Apply equity: wrongful conduct plus unjust enrichment = CT
Sam Jr. takes the 1/2 by representation

Question 5

34. [July 1991] Tammy has a will that devises all her property to Ann and Ben. Now in her last illness, Tammy asks a friend to have a lawyer prepare a new will that revokes Tammy’s present will and devises all her estate to Donna. Several days later, the friend and lawyer return with the new will. The lawyer begins to explain the new will’s provisions. Ann and Ben are visiting Tammy that day; as soon as they learn what is happening, they create a disturbance and physically prevent poor Tammy from executing the new will. Highly agitated, Tammy lapses into a coma; she dies three days later. Who takes what?

Answer 5

Step 1: Apply the law: Can the new will be probated? No, because it was not signed and witnessed. Was the old will validly revoked? No, because second will (with revocation clause) wasn’t executed.
Under the Estates Code, then, Ann and Ben take the entire estate under Tammy’s “last will.” Step 2: Apply equity: (1) wrongful conduct + (2) unjust enrichment equals constructive trust in favor of Donna