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IMPLIED TRUSTS DOES NOT REQUIRE AGREEMENT BETWEEN THE SETTLOR & TRUSTEE

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An implied trust founded upon the unexpressed intention of the settlor and same is raised and created by implication of law from the surrounding circumstances of the case. It does not require agreement between the settlor and trustee. See Adekeye v Akin Olugbade (1987) 3 NWLR (Pt. 60) 214 at 227; Kotoye v Saraki (1994) 2 NWLR (Pt. 357) 414 at 443 Paragraph H. Constructive trust is neither granted nor accepted, but it is foisted upon the parties by the operation of law. To that extent, the question of whether the Appellant produced evidence of the resolution of the Board of the Respondent authorizing such a trust does not arise at all.

— P.A. Galumje, JSC. Huebner v Aeronautical Ind. Eng. (2017) – SC.198/2006

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CERTAINTIES IN A TRUST

I do agree the test for express trust is the existence of the three certainties set out by Chief Fagbohungbe, that is when a trust is created intentionally by the act of the settlor. There is also implied trust. This is where the legal title to property is in one person and the equitable right based on the beneficial enjoyment of the same property in another, a court of equity will from those circumstances infer an implied trust. Therefore an implied trust is a trust founded upon the unexpected, but presumed intention of the settlor. Under certainty of intention the words used must be examined to see whether the intention was to impose a trust upon the donee. The intention must also be genuine and not a stain as to where the settler did not intend the trust to be acted upon but entered into it for same ulterior motive such as deceiving creditors. Under certainty of objects, the trust must be for ascertainable beneficiaries.

– Nwodo, JCA. OLAM v. Intercontinental Bank (2009)

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ONCE THERE IS A VALID CONTRACT FOR SALE, THE VENDOR BECOMES A TRUSTEE

Jessel, MR in Lysaght v. Edwards (1876) CH.D 499 stated the following on the doctrine of constructive trust:- “What is that doctrine? It is that the moment you have a valid contract for sale, the vendor becomes in equity a trustee for the purchase of the estate sold and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase money, and a right to retain possession of the estate until the purchase money is paid in the absence of express contract as to the time of delivering possession … If anything happens to the estate between the time of sale and the time of completion of the purchase, it is at the risk of the purchaser; if it is a house to be sold and the house is burnt down, the purchaser looses the house. He must insure it himself if he wants to prevent such an accident. If it is a garden and river overflows its bank without any fault of the vendor, the garden will be ruined, but the loss will be the purchaser’s.”

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CONSTRUCTIVE TRUSTS – EQUITY WILL NOT ALLOW LEGAL OWNER RETAIN BENEFICIAL INTEREST

A constructive or implied trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstance that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee. See Beatty v Guggenheim Exploration Co. 122 N.E 378, Black’s Law Dictionary 7th Edition, Page 1513.

— P.A. Galumje, JSC. Huebner v Aeronautical Ind. Eng. (2017) – SC.198/2006

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TYPES OF TRUST – WHERE IMPLIED TRUST WILL ARISE

To this end, there are Express Trusts, Implied or Resulting Trusts and Constructive Trusts. Express Trusts arise when the owner declares himself a trustee of the property for the benefit of another person or vests property in another person as trustee for the benefit of another person. Implied or Resulting Trust arise from the presumed intention of the owner, and the presumed intention arises by operation of law not by agreement of parties Constructive Trusts are trusts imposed by equity regardless of the intention of the owner of the property, where it will be unconscionable for the “apparent beneficial owner” or trustee to hold the property for his benefit- see Equity and Trust in Nigeria 2nd Ed. by J. O. Fabunmi. We are concerned with implied or resulting trusts, which may arise in the following circumstances – (i) Where an express trusts fails (ii) Where the beneficial interest under an express trust is not fully disposed of or exhausted. (iii) Where there is a purchase in the name of another or where a person makes a voluntary conveyance of his property to another.

— A.A. Augie, JSC. Huebner v Aeronautical Ind. Eng. (2017) – SC.198/2006

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WHAT CONSTITUTES A RESULTING TRUST – CANNOT RELY ON RESULTING TRUST IF NOT PLEADED

For the definition of what constitutes resulting trust see the case of Shephard vs. Cartwright (1995) AC 431 at 445. See also Black’s Law Dictionary, 6th edition at page 1315. As clearly illustrated in the leading judgment of my learned brother, Tobi, JSC, there are no hard and fast rules about what amounts to resulting trust especially as it relates to land. Where it arises, the claimant of the piece of land must prove by hard and concrete evidence that he actually owned and/or was entitled to the land but voluntarily or involuntarily opted that the Title Deed or Deed of Assignment be made in favour of another in anticipation of a marriage of whatever the case may be. Where a party as in the instant case, fails to properly plead the issue of resulting trust (or any other trust) he cannot raise the issue at the address stage or on appeal as the evidence or arguments or submissions on facts not hitherto pleaded, go to no issue.

— Onu, JSC. Ezennah v Atta (2004) – SC.226/2000

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STRANGER LIABLE AS CONSTRUCTIVE TRUSTEE

If a stranger to a trust (a) receives and becomes chargeable with some part of the trust fund or (b) assists the trustees of a trust with knowledge of the facts in a dishonest design on the part of the trustees to misapply some part of a trust fund, he is liable as a constructive trustee (Barnes v Addy ((1874) LR 9 Ch App 244 at 251–252) per Lord Selborne LC).

— Buckley LJ. Belmont v Williams [1980] 1 ALL ER 393

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