The constructive trust is a tool developed by equity to assist the judiciary in temporarily securing property that is the source of someone’s unjust enrichment, pending transfer of the property to its rightful owner. One who procures property by fraud, duress, or undue influence, or acquires it due to mistake is unjustly enriched. One who acquires property by virtue of someone else’s fraud, duress, undue influence, or mistake also is unjustly enriched, unless he is a BFP.

The judicial imposition of a resulting trust, on the other hand, facilitates the return of legal title from the purported trustee of a trust that has failed ab initio back to the would-be settlor. In the case of a failure in mid-course, the express trustee morphs into a resulting trustee charged with returning legal title to the settlor, reversionary interests, whether legal or equitable, always being vested.

The constructive trust and the resulting trust are said to be “involuntary” trusteeships. As we discuss in the material featured in the appendix immediately below, sometimes it is not all that clear whether the constructive trust or the resulting trust is the appropriate procedural equitable remedy, especially when it comes to innocent unjust enrichment.

Let us assume that ex-wife deeds a parcel of real estate to ex-husband with the present intention that ex-husband take the legal title, as trustee, not outright. No mention, however, is made of that intention in any property-transfer documentation. Is the trust enforceable or does the property belong to the transferee outright and free of trust? On similar facts, one Washington appellate court, looking only to the state’s statutory trust law, answered outright and free of trust in that the ex-wife had not formally memorialized her entrustment intentions at the time of transfer, nor had the ex-husband formally declared himself an express trustee of the property. See K & W Children’s Trust v. Estate of Fay, 503 P.3d 569 (Washington 2022).

I dissent. There had been a transfer of legal title. There was/is credible extrinsic evidence that ex-wife had had a present intention to have a trust impressed on the real estate at the time of transfer. By taking title to the real estate as if it were free of trust in contravention of what the ex-wife had intended, the ex-husband had been unjustly enriched. The regimes of constructive trust and resulting trust, each a creature of equity, not statute, have traditionally been exempt from the statute of frauds’ application to land entrustments, specifically its requirement that there be a memorializing writing. Ergo: With or without ex-husband’s consent, by operation of law as enhanced by equity, he at the time of transfer had taken legal title to the real estate as a constructive trustee, and in so doing, had been saddled with a duty to transfer it on to a willing and able express trustee of the court’s selection.

The other possibility was that he had been a resulting trustee of a trust that had failed ab initio. That being the case, the trial court should have ordered that the legal title be transferred back to the ex-wife outright and free of trust.

The constructive trust and the resulting trust are compared/contrasted in §7.2.3.1.6. of Loring and Rounds: A Trustee's Handbook (2022), which section is reprinted in its entirety in the appendix immediately below. The Handbook’s 2022 Edition is available at https://law-store.wolterskluwer.com/s/product/loring-rounds-a-trustees-handbook-2022e-misb/01t4R00000OVWE4QAP.