Constructive Trusts

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’s Civil Code establishes two principal circumstances when this occurs: under Section 2223, a trust is imposed when someone “wrongfully retains a thing” & under Section 2224, a trust is imposed when someone “gains a thing by fraud, accident, mistake undue influence, the violation of a trust or other wrongful act.” A constructive trust only exists if there is proof that the property was wrongfully acquired or detained by someone not entitled to its possession.

As stated by a California appellate court in Communist Party v. 522 Valencia, Inc., 35 Cal.App.4th 980 (1995): “a constructive trust may only be imposed where the following three conditions are satisfied the existence of a res (property or some interest in property); the right of a complaining party to that res; & (3) some wrongful acquisition or detention of the res by another party who is not entitled to it.'”