City of Hastings v. Jerry Spady
Supreme Court of Nebraska
212 Neb. 137 (1982)
Hastings (plaintiff) needed to buy a railroad right-of-way for its comprehensive development plan. Duane Stromer, Hastings's own attorney (who also represented Jerry Spady Pontiac-Cadillac, Inc. (defendant)), secretly negotiated to buy the property for himself, falsely telling the seller that Hastings was not interested, then arranged for the deed to go directly to a corporation Spady wholly owned, all without Hastings's knowledge or authorization. Hastings sued to impress a constructive trust on the property, and the trial court agreed.
Whether a purchaser who knows that he is acquiring property under suspicious circumstances resulting from a breach of fiduciary duty may be subject to a constructive trust.