Legal Dictionary of Pakistan

constructive trust

A trust imposed by a court on equitable grounds against one who has obtained property by wrongdoing, thereby preventing the wrongful holder from being unjustly enriched. ( Such a trust creates no fiduciary relationship. - Also termed implied trust; involuntary trust; trust de son tort; trust ex delicto; trust ex maleficio; remedial trust; trust in invitum. Cf. resulting trust. "A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee." Beatty u. Guggenheim Exploration Co., 122 N.E. 378, 380 (ICY. 1919) (Cardozo, J.)."It is sometimes said that when there are sufficient grounds for imposing a constructive trust, the court 'constructs a trust.' The expression is, of course, absurd. The word 'constructive' is derived from the verb 'construe,' not from the verb 'construct.' ... The court construes the circumstances in the sense that it explains or interprets them; it does not construct them." 5 Austin W. Scott & William F. Fratcher, The Law of Trusts § 462.4 (4th ed. 1987).