EQUITY - CONSTRUCTIVE TRUSTS - THIEVES AND EMBEZZLERS AS CONSTRUCTIVE TRUSTEES

Authors

Jacob L. Keidan, University of Michigan Law SchoolFollow

Abstract

During the last hundred years the constructive trust has been extended from its original sphere of operation, that of the express trust, into a variety of situations where the wrong consists of tort or crime. This important extension of remedial principles has been facilitated in some cases by describing as confidential or fiduciary certain legal relations which would not ordinarily be so considered. In other cases any requirement of a confidential or trust relationship has been wholly discarded. The process of extension has gone so far that Justice Cardozo, in Beatty v. Guggenheim Exploration Co., felt justified in declaring broadly that "When property has been acquired under such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee. . . . " It has been increasingly recognized in modern cases that the constructive trust in many situations is purely a remedial device, "the formula through which the conscience of equity finds expression." The argument that has been most persuasive in making this extension has been that which appeared in Newton v. Porter;" one of the first theft cases to award the constructive trust: "It would seem to be an anomaly in the law, if the owner who has been deprived of his property by a larceny should be less favorably situated in a court of equity, in respect to his remedy to recover it, or the property into which it has been converted, than one who, by an abuse of trust, has been injured by the wrongful act of a trustee to whom the possession of the trust property has been confided . . . . "

Recommended Citation

Jacob L. Keidan, EQUITY - CONSTRUCTIVE TRUSTS - THIEVES AND EMBEZZLERS AS CONSTRUCTIVE TRUSTEES, 35 Mich. L. Rev. 798 (1937).
Available at: https://repository.law.umich.edu/mlr/vol35/iss5/7