RESTITUTION-CONSTRUCTIVE TRUST ON RECISSION FOR FRAUD WILL NOT DISPLACE LIEN FOR REPAIRS ON VESSEL

Authors

William H. Yager, University of Michigan Law School

Abstract

The Maryland Dry Dock Company sued to enforce its statutory maritime lien for converting a cargo vessel owned by the Republic Steamship Corporation into a passenger ship, and the International Refugee Organization contested the action on the ground that the money used to purchase the vessel was obtained by Republic from IRO by fraud. IRO argued that Republic did not have authority to bind the vessel because the vessel was impressed with a constructive trust in IRO's favor, and that if Republic did have authority the trust took preference over the lien. Held, a constructive trust on rescission for fraud is a remedy which does not affect the ownership of the wrongdoer, and any claim the defrauded person has will not displace the valid maritime lien. International Refugee Organization v. Maryland Dry Dock Co., (4th Cir. 1950) 179 F. (2d) 284.

Recommended Citation

William H. Yager, RESTITUTION-CONSTRUCTIVE TRUST ON RECISSION FOR FRAUD WILL NOT DISPLACE LIEN FOR REPAIRS ON VESSEL, 49 Mich. L. Rev. 150 (1950).
Available at: https://repository.law.umich.edu/mlr/vol49/iss1/21