Plaintiff commenced this action to impose a constructive trust upon property transferred to defendant on the ground that the retention of the property and the subsequent ejection of the plaintiff therefrom was in violation of a relationship of trust and confidence and constituted unjust enrichment. The Trial Judge dismissed plaintiff’s complaint and his decision was affirmed without opinion by the Appellate Division.
Upon the death of his wife of 32 years, plaintiff, a 56-year-old dairy farmer whose education did not go beyond the eighth grade, developed a very close relationship with defendant, a school teacher and a woman 16 years his junior. Defendant assisted plaintiff in disposing of his wife’s belongings, performed certain domestic tasks for him such as ironing his shirts and was a frequent companion of the plaintiff. Plaintiff came to depend upon defendant’s companionship and, eventually, declared his love for her, proposing marriage to her. Notwithstanding her refusal of his proposal of marriage, defendant continued her association with plaintiff and permitted him to shower her with many gifts, fanning his hope that he could induce defendant to alter her decision concerning his marriage proposal. Defendant was given access to plaintiff’s bank account, from which it is not denied that she withdrew
In September, 1971, while the renovations were still in progress, plaintiff transferred his remaining joint interest to defendant. At the time of the conveyance, a farm liability policy was issued to plaintiff naming defendant and her daughter as additional insureds. Furthermore, the insurance agent was requested by plaintiff, in the presence of defendant, to change the policy to read "J. Rodney Sharp, life tenant. Jean C. Kosmalski, owner.” In February, 1973, the liaison between the parties was abruptly severed as defendant ordered plaintiff to move out of his home and vacate the farm. Defendant took possession of the home, the farm and all the equipment thereon, leaving plaintiff with assets of $300.
Generally, a constructive trust may be imposed "[w]hen property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest” (Beatty v Guggenheim Exploration Co.,
Most frequently, it is the existence of a confidential relationship which triggers the equitable considerations leading to the imposition of a constructive trust (see Bogert, Trusts and Trustees [2d ed], § 482, p 132; 61 NY Jur, Trusts, § 146, pp 303-304). Although no marital or other family relationship is present in this case, such is not essential for the existence of a confidential relation (see Muller v Sobol,
Unquestionably, there is a transfer of property here, but the Trial Judge found that the transfer was made "without a promise or understanding of any kind.” Even without an express promise, however, courts of equity have imposed a constructive trust upon property transferred in reliance upon a confidential relationship. In such a situation, a promise may be implied or inferred from the very transaction itself. As Judge Cardozo so eloquently observed: "Though a promise in words was lacking, the whole transaction, it might be found, was 'instinct with an obligation’ imperfectly expressed (Wood v. Duff-Gordon,
"Here was a man transferring to his sister the only property he had in the world * * * He was doing this, as she admits, in reliance upon her honor. Even if we were to accept her statement that there was no distinct promise to hold for his benefit, the exaction of such a promise, in view of the relation, might well have seemed to be superfluous” (Sinclair v Purdy, supra, p 254).
More recently, in Farano v Stephanelli (
The salutary purpose of the constructive trust remedy is to prevent unjust enrichment and it is to this requirement that I now turn. The Trial Judge in his findings of fact, concluded that the transfer did not constitute unjust enrichment. In this instance also, a legal conclusion was mistakenly labeled a finding of fact. A person may be deemed to be unjustly enriched if he (or she) has received a benefit, the retention of which would be unjust (Restatement, Restitution, § 1, Comment a). A conclusion that one has been unjustly enriched is essentially a legal inference drawn from the circumstances surrounding the transfer of property and the relationship of the parties. It is a conclusion reached through the application of principles of equity. Having determined that the relationship between plaintiff and defendant in this case is of such a nature as to invoke consideration of the equitable remedy of constructive trust, it remains to be determined whether defendant’s conduct following the transfer of plaintiffs farm was in violation of that relationship and, consequently, resulted in the unjust enrichment of the defendant. This must be determined from the circumstances of the transfer since there is no express promise concerning plaintiffs continued use of the land. Therefore, the case should be remitted to the Appellate Division for a review of the facts. In so doing I would emphasize that the conveyance herein should be interpreted "not literally or irrespective of its setting, but sensibly and broadly with all its human implications” (Sinclair v Purdy,
Accordingly, the order of the Appellate Division should be reversed and the case remitted to that court for a review of the facts, or, if it be so advised, in its discretion, to order a new trial in the interests of justice.
Order reversed and the case remitted to the Appellate Division, Fourth Department, for further proceedings in accordance with the opinion herein, with costs to abide the event.