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Do I have a remedy in,"Constructive Trust", if the underlying claim contains conversion of real property and business?

Sanger, CA |

I along with my partner borrowed money secured by a First Trust Deed, notarized and recorded with a Promissory Note. The money was used for the purchase of the property. Both partners are Trustors of the TD. The Grant Deed was put in other partners name. The Lender, other partners Farther is the Beneficiary and holds, ""Naked Title". The TD has not been re-conveyed or foreclosed. Subsequent TD has been recorded in other partners name only with additional loans taken against the land. Title has transferred into the name of an LLC owned by other partner.

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Have you filed your complaint? What are your causes of action?


Yes, you might. As you recognize, constructive trust is a remedy, not a cause of action. A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner.

California Civil Code section 2223 provides that "[o]ne who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner."

Civil Code section 2224 states that "[o]ne 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."

Under these statutes and the case law applying them, a constructive trust may only be imposed where the following three conditions are satisfied:

(1) the existence of a res (property or some interest in property);

(2) the right of a complaining party to that res; and

(3) some wrongful acquisition or detention of the res by another party who is not entitled to it.

(Burlesci v. Petersen, (1998) 68 Cal.App.4th 1062, 1069.)

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult with your own attorney.

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