Opinion ID: 2074942
Heading Depth: 1
Heading Rank: 13

Heading: constructive trusts: nature, generally

Text: General Nature of a Constructive Trust. A constructive trust is imposed when one has acquired legal title to property under such circumstances that he or she may not in good conscience retain the beneficial interest in the property. In such a situation, equity converts the legal titleholder into a trustee holding the title for the benefit of those entitled to the ownership thereof. Ford v. Jordan, 220 Neb. 492, 494, 370 N.W.2d 714, 716 (1985); Evertson v. Cannon, 226 Neb. 370, 411 N.W.2d 612 (1987). A constructive trust is a relationship, with respect to property, subjecting the person who holds title to the property to an equitable duty to convey it to another on the ground that his acquisition or retention of the property would constitute unjust enrichment. Knoell v. Huff, 224 Neb. 90, 97-98, 395 N.W.2d 749, 755 (1986). Also, this court observed in In re Estate of Lienemann, 222 Neb. 169, 177, 382 N.W.2d 595, 601 (1986): Generally, a court, sitting in equity, will not impose a constructive trust and constitute an individual as a trustee of the legal title for property, unless it be shown, by clear and convincing evidence, that the individual, as a potential constructive trustee, had obtained title to property by fraud, misrepresentation, or an abuse of an influential or confidential relationship and that, under the circumstances, such individual should not, according to the rules of equity and good conscience, hold and enjoy the property so obtained. As a fraud-rectifying remedy, a constructive trust, even in the absence of the trustee's participation in fraud, is available on the basis of the principle that one who accepts a product of fraud, knowing the means by which the fraud-caused product was achieved, is liable to the defrauded party, although the recipient of the product did not personally participate in the fraud. Malakul v. Altech Arkansas, Inc., 298 Ark. 246, 766 S.W.2d 433 (1989); Commercial Credit v. Beebe, 123 Vt. 317, 187 A.2d 502 (1963); Walters v. Maloney, 758 S.W.2d 489 (Mo.App.1988); Beaton & Assoc. v. Joslyn Mfg. & Supply, 159 Ill. App.3d 834, 111 Ill.Dec. 649, 512 N.E.2d 1286 (1987); Hruska v. First State Bank of Deanville, 727 S.W.2d 732 (Tex.App. 1987).