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)

Lawsuit involving a trust: Statute of Limitations and Accrual

Civil Actions involving Trusts: Statute of Limitations and the Discovery Rule

A suit involving a trust is governed by the four-year statute of limitations. Hicks v. Hoover, 422 S.W.2d 613, 614 (Tex. Civ. App.--Waco 1967, writ ref'd n.r.e.). The statute of limitations begins to run when the all assets have been distributed. See In re Estate of McGarr, 10 S.W.3d 373, 376 (Tex. App.--Corpus Christi 1999, pet. denied). The discovery rule, however, tolls the running of the statute of limitations until the plaintiff discovers or should have discovered the nature of the injury. Houston Endowment, Inc. v. Atlantic Richfield Co., 972 S.W.2d 156, 159 (Tex. App.--Houston [14th Dist.] 1998, no pet.). In order for the discovery rule to apply, the injury must be inherently undiscoverable and objectively verifiable. Id.

SOURCE: SAN ANTONIO COURT OF APPEALS - 04-08-00601-CV (7/8/09)