Constructive Trust California – Higgins v. Higgins

Higgins v Higgins (2017) 11 CA5th 648

Unjust Enrichment and Constructive Trust Issues

Restatement (Third) Restitution and Unjust Enrichment §1: “A person who is unjustly enriched at the expense of another is subject to liability in restitution.”

Civil Code §2223: One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.

Civil Code §2224: One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.

“Thus, it has been pointed out that ‘a constructive trust may be imposed in practically any case where there is a wrongful acquisition or detention of property to which another is entitled.” Martin v Kehl (1983) 145 CA3d 228, 238.

Even if an express trust is found to be unenforceable, a constructive trust may be imposed to prevent unjust enrichment. “Orella v Johnson (1952) 38 C2d 693, 696-698 [oral promise to hold real property in trust may be unenforceable under the statute of frauds, but a constructive trust may be imposed on the property to prevent unjust enrichment.]

Searchable version of California Law Revision Commission 1985 Proposal of “The Trust Law”:

http://www.clrc.ca.gov/pub/Printed-Reports/Pub153.pdf.