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Real Property Law
Contract Satisfies Statute of Frauds
Metropolitan Lofts of NY LLC v. Metroeb Realty 1, LLCContract Vendee Failed to Perform
Liberty Equity Restoration Corp. v. YunQuestions of Fact Preclude Dismissal of Constructive Trust Claim
Jaffer v. Hirji Comment Although the Court of Appeals has indicated in dictum that constructive trusts are fraud rectifying devices rather than intent-enforcing devices, New York courts have frequently upheld complaints alleging constructive trusts in the absence of explicit allegations of fraud. In , 49 N.Y.2d 939, the decedent had purchased life insurance policies naming his brother as the beneficiary. Decedent then married, and never changed the beneficiary to his pregnant wife before his death. The court found the brother's assurances to “do the right thing,” and “take care of” the surviving spouse were insufficient “to establish the promissory element” essential to proof of a constructive trust, especially because the brother's statements never referred to the policies themselves. But in finding the absence of a promissory element, the court opined that “the constructive trust doctrine serves as a 'fraud-rectifying' remedy rather than an 'intent-enforcing' one.” The notion that a constructive trust must rest on a finding of fraud is inconsistent with holdings in a variety of New York cases. For instance, in , 235 N.Y. 245, the Court of Appeals reversed dismissal of a constructive trust claim against the supposed beneficiary's sister, who held title to property in her own name. The beneficiary, a court employee who was hounded for money, had transferred his interest in property to his sister to make it appear as if he didn't own the property. After the property was sold, the sister acquired other property in her own name, and wrote a letter indicating that she would not lease the property without talking to the brother because the brother was as much interested in the houses as she was. When, after the brother died, the sister refused to give his niece and caretaker any of the proceeds from sale of the property, the court held that the niece had stated a constructive trust claim because a jury could conclude that the brother would not have transferred his sole property to his sister without reliance on her honor it would be returned. The court never discussed fraud. Similarly, in , 40 N.Y.2d 119, court enumerated four factors common to most constructive trust claims — a confidential relation, a promise, a transfer in reliance, and unjust enrichment — without mentioning fraud. In Sharp, the court held that the former owner of a farm had adequately stated a constructive trust claim even without an express promise when he alleged that his former companion would be unjustly enriched by retaining a farm he had transferred to her after proposing marriage to her. The court held that a factfinder could determine that the companion had abused a confidential relationship by refusing to reconvey the property. In both and , the court's focus was on abuse of a confidential relationship to frustrate the intent of the original title holder. In the absence of fraud or abuse of a confidential relationship, courts typically reject constructive trust claims. For instance, in , 146 A.D.2d 663, the court rejected the constructive trust claim of a brother who had made longtime use of a house he and his younger sibling had inherited from their mother. In holding that the younger sibling was entitled to partition, the court emphasized that the brother had alleged neither fraud nor a relationship of trust with his sibling. Although the brother claimed that his mother intended for the house to be his, the court held that unrealized expectations are not enough to impose a constructive trust.Questions of Fact About Scope of Mortgage
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