Wed, May 20th, 2009
A Resulting Trust Where an Express Trust is Not There
I’ve written about the “constructive trust” lately, and here I’m switching gears slightly to talk about a resulting trust. I say slightly, because most lawyers still liken a resulting trust to a constructive trust. But the two are different. A constructive trust is a remedy that is put in place to rectify a fraud or other improper act on the part of the “trustee”. A resulting trust, instead, is utilized by the courts as a remedy to enforce the intentions of the parties. Difference? A resulting trust carries out the (somewhat) good intentions of the trustee and requires him/her to hold it as the trustee for the person who should hold title.
There are several old cases dealing with mining claims where the parties had difficultin in transferring title to the property, or the mining claims. One 1800s case sprung from a mining claim in Nevada County (Grass Valley). Many of the cases, whether involving mining claims or not, address the failure of an “express trust”. That is, a trust that was written to transfer property from one person/entity to another. In these cases, the trust may fail for some reason, such as an illegal purpose or an improperly executed document. In order to achieve the transfer where the “trustee” is not cooperating, the beneficiary must bring an action to enforce a “resulting trust”, to carry out what the “result” should have been.
I’ll give an example or two where a court DID NOT allow a resulting trust in my next post.
Posted by Nick Yonano at 04:34
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Labels: constructive trust, fraud, land, real estate, trust
Sat, May 2nd, 2009
Constructive Trust for Profits from Property
In my series of posts about constructive trusts, I thought it would be a good idea to focus on the profits of a trust. One case that I can recall from earlier days of practice involves the theft of jewelry molds by a partner in a jewelry business. Those molds ended up making some money for the embezzling partner after the breakup, but they belonged, in part or in full, to the innocent partner. There was a lawsuit, and the court found on appeal that the profits that resulted from the use of the mold, though not made by the efforts of the innocent partner, belonged to the innocent partner and not the embezzler.
The theory is this: a constructive trust attaches to not only the thing being held by a person as a trustee for another, but the profits realized from that thing.
When I (they) say “that thing”, remember we’re also talking about real property. If real estate produces a profit, not just in general appreciation, but in other ways, such as mineral or oil profits, in most cases those profits belong to the person who truly owns the property. The idea here is to avoid “unjust enrichment” for the trustee, so that he/she cannot be able to profit, in any way, from his/her actions.
Posted by Nick Yonano at 10:46
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Labels: constructive trust, fraud, property value, real estate
Fri, March 13th, 2009
What’s so Constructive about this Type of Trust?
Unlike the living trust most people are familar with, there is a legal remedy out there which the courts have to declare to be valid. Known as a Constructive Trust, this is a judicial remedy which holds that person A holds title or possession of property that truly belongs to person B, and person A obtained it wrongfully, so person A holds it in trust for person B. It’s known as a “fraud-rectifying” trust, which means that it’s in place only to make up for the fraud that a person commits to get the property in the first place.
Most of the property involved in an action to impose a constructive trust is real property. But the trust could also apply to personal property, such as stock accounts or checking accounts. I’ll present some examples in my next post.
Posted by Nick Yonano at 08:48
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Labels: constructive trust, fraud, land, real estate, title dispute, trust
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