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TRUST SIMPLICITER

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Dictum

Trust, simpliciter, is the right enforceable solely in equity to the beneficial enjoyment of property to which another person holds the legal title. It is a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary). For a trust to be valid, it must involve specific property. Certainty of subject matter is an important element in trust. It should reflect the settlor’s intent and be created for a lawful purpose.

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

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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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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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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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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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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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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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