Also known as: trusts ex maleficio · ex maleficio trust · constructive trust
Written by attorneys · grounded in primary & secondary sources — see below
An equitable remedy that imposes a constructive trust on property acquired through wrongful conduct or unjust enrichment. The trust prevents the wrongdoer from retaining the benefit and restores the property or its value to the victim. Equity imposes the trust only when the acquisition involves misconduct such as fraud, undue influence, breach of fiduciary duty, or similar maleficium.
Thomas Thompson and Tyler Taylor held their home as tenants by the entirety. While divorce proceedings were pending, Thomas executed a will attempting to devise the home to his sister. Thomas died before the divorce was final and the tenancy remained intact. Title passed by operation of law to Tyler. Because Thomas engaged in no wrongful conduct or unjust enrichment, equity imposed no constructive trust on the home.
Talia Torres promised her aunt she would execute a new will benefiting her cousins. Talia's brother Thaddeus Tran used force and misrepresentations to prevent the aunt from signing the new will and later murdered her. The existing will left everything to Thaddeus. A court imposed a constructive trust on the estate assets in favor of the cousins to prevent Thaddeus from retaining the benefit obtained through his wrongdoing.
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Tanya Tang, an officer of Talon Security, learned material nonpublic information and sold shares before the information became public. The corporation suffered harm from the breach. A court imposed a constructive trust on the trading profits in favor of the corporation to prevent Tanya from retaining the benefit obtained through her fiduciary breach.
Tara Tran and her partner formed Trailblazer Airlines. Tara learned of an adjacent airport slot opportunity during partnership negotiations and took it for her own LLC without disclosure. The partnership sued. A court imposed a constructive trust on the slot and resulting profits in favor of the partnership to prevent unjust enrichment from the breach of loyalty.
Torchlight Media and its officers engaged in a pattern of racketeering to obtain advertising contracts. The victim company sued under RICO. A court imposed a constructive trust on the contract proceeds in favor of the victim to prevent the defendants from retaining benefits obtained through the unlawful conduct.
Thaddeus Tran, an officer of Trinity Pharmaceuticals, learned of a promising drug formula during his duties and developed it through his own company. The corporation sued for breach of fiduciary duty. A court imposed a constructive trust on the formula and licensing revenues in favor of Trinity to prevent Thaddeus from retaining the benefit obtained through the usurpation.
A court imposes the trust when the title holder acquired the property through wrongful conduct such as fraud, undue influence, breach of fiduciary duty, or murder that prevents a testator from executing a new will. The remedy prevents unjust enrichment and restores the property to the intended beneficiary.
No. The trust arises by operation of law from the wrongful conduct itself and does not depend on any agreement or writing. Equity imposes it to prevent the wrongdoer from retaining the benefit even when the statute of frauds or statute of wills would otherwise bar enforcement of an unwritten arrangement.
The court may order an accounting of profits and impose the constructive trust on the property or profits obtained through the breach. The partner must surrender the entire benefit to the partnership rather than retain any portion.
…The first, for declaratory relief, asks the court to determine her contract and property rights; the second seeks to impose a constructive trust upon one half of the property acquired during the course of the relationship. Defendant demurred unsuccessfully, and then answered the complaint. (2) (See fn. 2.) Following extensive…