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CONSTRUCTIVE TRUSTS IS AN EQUITABLE REMEDY IMPOSED – NOT BASED ON PRIOR INTENTION

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On the other hand, a constructive trust is an equitable remedy that a court imposes against one who has obtained property by wrong doing. It is imposed to prevent unjust enrichment and creates no fiduciary relationship. It is also termed implied trust, involuntary trust, trust ex delicto; trust ex maleficio, remedial trust, trust in invitum; trust de son tort. A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holders of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee: Beatty v. Gygenheim Exploration Co. 122 N. E 378, 380 (N.Y 1919). See: Black’s Law Dictionary Ninth Edition, page 1649. In Kotoye v. Saraki (supra) at page 443, this court pronounced that constructive trust, as in this case, is imposed by equity on the ground of conscience and it is not based on the prior or presumed intention of the parties. See: also Ughutevbe v. Shonowo (2004) 16 NWLR (Pt. 899) 300; (2004) WRN (vol. 32) 27.

— A. Fabiyi, J.S.C. Ibekwe v. Nwosu (2011) – SC.108/2006

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FORECLOSURE PROCEEDING IS FOR EQUITABLE MORTGAGE – MORTGAGOR HOLDS LEGAL ESTATE IN TRUST

In considering the scope of the rights of an equitable mortgagee (not by way of charge) it should be borne in mind that the general rule is that foreclosure (and not sale) is the proper remedy of an equitable mortgagee (See James vs James (1873) L.R. 16 E. 153 citing with approval Pryce vs Bury at 154); and when an equitable mortgagee by deposit of title deeds and agreement to give a legal mortgage if called upon to do so takes foreclosure proceedings to enforce his security, the court usually decrees that the deposit operates as a mortgage and that in default of payments due under the mortgage the mortgagor is trustee of the legal estate for the mortgagee and that he must convey that estate to him.

– Idigbe JSC. Ogundiani v. Araba (1978)

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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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STATE LANDS ARE FOR PUBLIC PURPOSES – SUCH LANDS ARE HELD IN TRUST

Their powers under the law are limited to leasing them to diverse persons, and accepting forfeitures and surrenders of leases. There appears to be substance in this contention. State lands in Nigeria invariably originate from compulsory acquisitions of such lands from individuals or communities for public purposes. Such lands are held in trust by the acquiring government for use for the public purpose for which the land was acquired and in accordance with the public policy of the state as enshrined in the laws of the state.

– Nnaemeka-agu, JSC. Ude v. Nwara (1993)

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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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WHEN TRUST RELATIONSHIP ARISES

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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WHAT IS A RESULTING TRUST

Now, what is resulting trust? An implied trust or resulting trust is a trust founded upon the unexpressed intention of the settlor. One example of such a situation is where a purchased property is conveyed into the name of someone other than the purchaser or where, as in this case, a person applies for leasehold of a right of occupancy in the name of another person. The clear result of such cases is that the benefit accrues to the person who advances the money. Further, the same situation would arise even if the advancement of money is indirect, as where one party pays expenses which the other would otherwise have had to pay.

– Musdapher, JSC. Atta v. Ezeanah (2000)

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