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Start →E. APPLICATION OF EQUITABLE PRINCIPLES Actions a) in which a party seeks a declaration i) imposing (a) a resulting or (b) constructive trust 1) were historically a) actions in equity. Thus, most equitable principles are applicable. 1. Party Claiming as Beneficiary Must Not Have "Unclean Hands“ The party a) claiming to be the beneficiary i) of such a trust 1) may be denied relief 2) if he has "unclean hands" 3) (i.e., a) his conduct i) regarding the matter at issue has been i) unlawful or ii) inequitable, iii) e.g., if he has made misrepresentations to other parties). 2. Party Claiming as Beneficiary Must Be Willing to "Do Equity“ The party a) claiming to be the beneficiary i) of such a trust and b) seeking relief i) in equity 1) must himself "do equity." For example, if the alleged trustee has a) in good faith b) paid taxes on the property, c) paid for sewer lines and the like, or d) constructed improvements on the land, 1) the beneficiary must agree a) to make reasonable reimbursement to the trustee. 3. Exception -Adequate Remedy at Law Does Not Preclude Relief While most equitable principles apply a) to actions seeking to impose i) a resulting or ii) constructive trust, 1) there is one important exception: a) These remedies are generally available b) even though the one claiming to be the beneficiary has i) an adequate remedy at law (e.g., a suit for damages). In answering a question a) on constructive or b) resulting trusts, 1) you should expressly state that a) an adequate remedy at law ordinarily does not preclude such type of equitable relief. However, as noted above, an adequate remedy in damages at law may preclude a constructive trust (i.e., back to the original doctrine) a) in two particular instances: (i) breach of oral promise (a) to make a will; and (ii) breach of oral promise (a) to hold property purchased (i) at a foreclosure sale (ii) for the benefit of the promisee. ← End
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