It is useful and indeed necessary to state initially the distinction between the two recognized categories of constructive trustees. Ungoed-Thomas J. in Selangor United Rubber Estates v. Cradock (No. 3), [1968] 1 W.L.R. 1555, [1968] 2 All E.R. 1073 at 1095, makes (correctly, I find) that distinction in these words: “It is essential at the outset to distinguish two very different kinds of so-called constructive trustees. (i) Those who, though not appointed trustees, take on themselves to act as such and to possess and administer trust property for the beneficiaries, such as trustees de son tort. Distinguishing features for present purposes are (a) they do not claim to act in their own right but for the beneficiaries, and (b) their assumption to act is not of itself a ground of liability (save in the sense of course of liability to account and for any failure in the duty so assumed), and so their status as trustees precedes the occurrence which may be the subject of claim against them. (ii) Those whom a court of equity will treat as trustees by reason of their action, of which complaint is made. Distinguishing features are (a) that such trustees claim to act in their own right and not for beneficiaries, and (b) no trusteeship arises before, but only by reason of, the action complained of.”
"The most advanced legal research software ever built."
The above passage should not be considered legal advice. Reliable answers to complex legal questions require comprehensive research memos. To learn more visit www.alexi.com.