Constructive Trusts, Statute of Frauds, and Judicial Lethargy

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Cooper, Duncan B. III

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1968

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INTRODUCTION|Suppose A conveys land to B upon a verbal promise to hold the land in trust for A. If B refuses to honor his obligation, the express trust cannot be enforced because the Statute of Frauds bars proof of the parol agreement. Nonetheless, a constructive trust can still arise. According to the rule currently in force in a majority of jurisdictions in the United States, certain limited patterns of conduct will create a trust obligation implied by law. For example, if B has procured the conveyance through fraud, duress, undue influence or by means of a confidential relationship, he will become a constructive trustee for the benefit of A. But if B's conduct does not fall within these patterns, he will then be able to retain the land. A small number of courts in the United States would, nonetheless, follow the English rule and require a reconveyance of the land whenever a transferee has been unjustly enriched. According to the courts of England, unjust enrichment has become the test to be employed in determining whether a trust should be implied by law. Thus, even if B has not procured a conveyance by means of any inequitable conduct, his unjust enrichment would be a sufficient basis for the imposition of a constructive trust obligation. The United States majority rule of strict classification and the minority rule of unjust enrichment are the polestars of American law. Their principles have been instrumental in developing a hybrid body of law which is followed by some courts. The two polar rules and the hybrid rules are discussed in Section II...

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1 Creighton L. Rev. 95 (1968)

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Creighton University School of Law

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