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WHEN TRUST RELATIONSHIP ARISES

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In its legal sense, “a trust” is the relationship, which arises wherever a person called the trustee is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons (of whom he may be one and who are termed cestuis que trust) or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustee but, to the beneficiaries or other object of the trust – Professor Keeton in Law of Trust, 9th Ed.

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

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IMPLIED TRUSTS DOES NOT REQUIRE AGREEMENT BETWEEN THE SETTLOR & TRUSTEE

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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CONSTRUCTIVE TRUSTS ON VALIDITY OF TITLE DOCUMENTS

Trust is defined at page 1513 of the Blacks Law Dictionary, 7th Edition as the right enforceable solely in equity to the beneficial enjoyment of property to which another person holds the legal title. Where a party claims certain property that is held in constructive trust for his own benefit, he has a duty to prove that the title document in possession of the trustee is valid and in proper custody. The moment he successfully contradicts and renders the title document in the name of the trustee invalid, his claim automatically fails, since the success of his claim depends largely on the validity of the documents of title in the name of the trustee.

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

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IMPLIED TRUST

RE: KAYFOLD LTD (In liquidation) 1975 1 All E.R. In that case the Managing Director of the company concerned about protecting customers who had send in money was advised to open a special account called a “customers Trust Deposit Account” into which such customers money will be deposed. The manager rather than open the account, the “Managing director agreed with his Banker to use an existing formal deposit account. After the customers funds had been deposited in the said account for the agreed purpose only, the Bank sought to apply those funds to other purposes. The court held that a trust had been created in favour of the customers of the company as the three certainties were present to create a trust.

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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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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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THE THREE ELEMENTS OF A TRUST

Trust involves three elements, namely:- 1. A trustee, who holds the trust property and is subject to equitable duties to deal with it for the benefit of another. 2. A beneficiary to whom the trustee owes equitable duties to deal with the trust property for his benefit. 3 Trust property, which is held by the trustee for the beneficiary. See Black’s Law Dictionary, Page 1513.

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

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