Constructive trusts-trusts laws and accounts, Financial Accounting

Assignment Help:

CONSTRUCTIVE TRUSTS

A constructive trust is a trust imposed by equity regardless of the intention of the owner of the property: it arises by operation of law.  The concept has been applied in a number of situations:
 
1. It is a rule of equity that a trustee must not permit his interests to conflict with his duties: note particularly, a trustee may not profit from his trust:  where he does so he holds the gains on a constructive trust (Keech v Sandford);

2. If a person who is not a trustee obtains information with the help of a trustee which enables him to make a profit, he holds the proceeds on constructive trust: (Boardman v Phipps);

3. If a person receives trust property with knowledge (actual or constructive) that it is trust property, and it is transferred to him in breach of trust, he holds the property as trustee;

4. A person who does not actually receive trust property but assists a trustee to fraudulently dispose of it is liable as a trustee.
 
Note:
Strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, e.g a solicitor who creates a fraudulent document on the instructions of the trustee. They will be liable only if:-

  • They receive the trust property; or
  • Act in a manner consistent with that of a trustee; or
  • Assist with knowledge in a dishonest and fraudulent design on the part of the trustees.

Related Discussions:- Constructive trusts-trusts laws and accounts

What is the cost recovery deduction, Tim purchased a used office building o...

Tim purchased a used office building on May 15, 2001, for $2,000,000. $500,000 of the purchase price was allocated to the land. On November 1, 2010 the building was sold. What is t

3 Column Cash Book Transaction, I have tried to answer this assignment wit...

I have tried to answer this assignment with no luck. Balance brought forward : Cash in Hand : $5000 Cash at Bank : $ 90,000 March 2 Received Cash loan of $25 ,0

Illustrations of changes in accounting estimates, Illustrations of Changes ...

Illustrations of Changes in accounting estimates B Ltd., bought an item of plant at a total cost of £100,000. The estimated useful life commencing from 1st January 2000 was 10

What is goodwill, Find the heading Goodwill. What type of an asset is goodw...

Find the heading Goodwill. What type of an asset is goodwill? Does Amazon write off this asset? Explain what the company does

Uncertainty of cash flows, Individuals commonly prefer possession of cash i...

Individuals commonly prefer possession of cash immediately or in the present moment quite than the same amount at any time in the future. Such time preference is fundamentally due

What is the journal entry to record the first interest, On January 1, 2010,...

On January 1, 2010, Jacob issues $800,000 of 9%, 13-year bonds at a price of 96½. Six years later, on January 1, 2016, Jacob retires 20% of these bonds by buying them on the open m

Compare solvency of the two company, $in million Pepsi Coca cola Net c...

$in million Pepsi Coca cola Net cash provided by operating activities $6,796 $8,186 Average current liability 8,772 13,355 Average total liability 22,909 21,491

Qualitative characteristics of the accounting information, PURPOSE The ...

PURPOSE The purpose of this assignment is to provide learners opportunity to discuss the significance of the significance of the accounting principles and the qualitative chara

Compute the total of amount of assets, Balance Sheet Classifications and Re...

Balance Sheet Classifications and Relationships: Shelley and Co. has the following balance sheet elements as of December 31, 2012. Land. . . . . . . . . . . . . . . . . . . . . . .

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd