Constructive Trust (2014 caselaw snips)

THE EQUITABLE REMEDY OF CONSTRUCTIVE TRUST 

A constructive trust is an equitable remedy created by the courts to prevent unjust enrichment. Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.-San Antonio 2007, pet. denied) (internal citations omitted).

"A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another, on the ground that his acquisition or retention of the property is wrongful and that he would be unjustly enriched if he were permitted to retain the property." Id. (quoting Talley v. Howsley, 142 Tex. 81, 176 S.W.2d 158, 160 (1943)).

As an equitable remedy, the decision to impose a constructive trust, along with its scope and application, is within the trial court's discretion. Id.; see Carr v. Weiss, 984 S.W.2d 753, 767 (Tex. App.-Amarillo 1999, pet. denied) (suggesting a jury finding is not necessary to support imposition of a constructive trust).

SOURCE: SAN ANTONIO COURT OF APPEALS - 04-13-00239-CV - 8/29/2014

The Equitable Remedy of Constructive Trust

What is Constructive Trust as a form of relief in a lawsuit?

CONSTRUCTIVE TRUST DEFINED

A constructive trust is a legal fiction, a creation of equity to prevent a wrongdoer from profiting from her wrongful acts. Procom Energy, L.L.A. v. Roach, 16 S.W.3d 377, 381 (Tex. App.-Tyler 2000, pet. denied). Such trusts are remedial in character and have the broad function of redressing wrong or unjust enrichment in keeping with basic principles of equity and justice. Id.; see also Hubbard v. Shankle, 138 S.W.3d 474, 485 (Tex. App.-Fort Worth 2004, pet. denied).

 

ESSENTIAL ELEMENTS THAT MUST BE SATISFIED TO STAKE CLAIM FOR IMPOSITION OF A CONSTRUCT TRUST

 

To obtain a constructive trust, the proponent must prove (1) the breach of a special trust, fiduciary relationship, or actual fraud, (2) unjust enrichment of the wrongdoer, and (3) tracing to an identifiable res. Troxel v. Bishop, 201 S.W.3d 290, 297 (Tex. App.-Dallas 2006, no pet.); Hubbard, 138 S.W.3d at 485. "`A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another, on the ground that [her] acquisition or retention of the property is wrongful and that [she] would be unjustly enriched if [she] were permitted to retain the property.'" Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.-San Antonio 2007, pet. denied) (quoting Talley v. Howsley, 176 S.W.2d 158, 160 (Tex. 1943)).

SOURCE: SAN ANTONIO COURT OF APPEALS – No. 06-13-00043-CV – 2/20/2014

 

 

What is a constructive trust? When may a court impose it as a remedy?

THE EQUITABLE REMEDY OF CONSTRUCTIVE TRUST

A constructive trust is a legal fiction, a creation of equity to prevent a wrongdoer from profiting from her wrongful acts. Procom Energy, L.L.A. v. Roach, 16 S.W.3d 377, 381 (Tex. App.-Tyler 2000, pet. denied). Such trusts are remedial in character and have the broad function of redressing wrong or unjust enrichment in keeping with basic principles of equity and justice. Id.; see also Hubbard v. Shankle, 138 S.W.3d 474, 485 (Tex. App.-Fort Worth 2004, pet. denied).

ELEMENTS OF CONSTRUCTIVE TRUST

To obtain a constructive trust, the proponent must prove (1) the breach of a special trust, fiduciary relationship, or actual fraud; (2) unjust enrichment of the wrongdoer; and (3) tracing to an identifiable res. Troxel v. Bishop, 201 S.W.3d 290, 297 (Tex. App.-Dallas 2006, no pet.); Hubbard, 138 S.W.3d at 485.
  
A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that her acquisition or retention of the property is wrongful and that she would be unjustly enriched if she were permitted to retain the property. Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.-San Antonio 2007, pet. denied) (quoting Talley v. Howsley, 142 Tex. 81, 86, 176 S.W.2d 158, 160 (1943)).

DISCRETIONARY EQUITABLE REMEDY

Whether a constructive trust should be imposed at all is within the discretion of the trial court. Troxel, 201 S.W.3d at 297; Hubbard, 138 S.W.3d at 485. The proponent of a constructive trust must strictly prove the elements necessary for the imposition of the trust. Troxel, 201 S.W.3d at 297; Hubbard, 138 S.W.3d at 485.
   
SOURCE: 12-07-00022-CV (Tyler Court of Appeals) (2/26/10)