➥ CASE SUMMARY OF:
M. A. Jolugbo & Anor. V. Mrs O. A. Aina & Anor. (CA/L/362/14, 30 March 2016)
by Branham Chima (LL.B.)
➥ SUBJECT MATTER(S)
Trust (husband and wife);
Property of title;
Nemo day quod non habet;
Constructive trust.
➥ CASE FACT/HISTORY
The consolidated action that culminated in this Appeal started as a simple case of recovery of possession, and snowballed into a tug of war between a married but estranged couple as to who owned the property – a three bedroom flat at Flat 5, Block A78, Phase 4, LSDPC Low Cost Housing Estate, Anikantamo, Lagos. The husband, the 2nd Appellant, moved out of the matrimonial home in 1990, and sold the property to the 1st Appellant in 1991. The 1st Appellant perfected his title and was recognized by the 2nd Respondent [LSDPC] as the new owner. The wife, who is the 1st Respondent, let the property to one Mr. Ferreira, and collected 4 years rent from him after she moved out of the house in 1990. He was in possession when the sale between the two Appellants was effected. It was an attempt to gain vacant possession from the said Mr. Ferreira that led to Suit NO.LD/3275/94 filed by the 1st Appellant at the Lagos State High Court wherein he claimed to be owner of the property through the purchase from the 2nd Appellant and backed by title documents issued by the 2nd Respondent.
The 1st Respondent applied to be made a party in Suit NO.LD/3275/94, and she was joined as 2nd Defendant on 2/6/1995. She later applied to have the 2nd Appellant, who sold the flat to the Claimant, joined as the 2nd Claimant. Mr. Ferreira as 1st Defendant was struck out as a Party on 18/9/2001 because he was no more relevant as his lease expired and he had vacated the property. Processes were amended and further amended in said Suit NO.LD/3276/94. While this was on, the wife [1st Respondent] filed Suit NO.LD/769/97 – that was pending before another Judge against her husband [2nd Appellant], Mr. Jolugbo [1st Appellant] and LSDPC [2nd Respondent].
Suit No. LD/3276 and Suit No.LD/769/97 were subsequently consolidated, and the trial commenced before Hon. Justice D. F. Akinsanya, J., on 4/11/1999.
At the close of trial, counsel submitted and adopted their Written Addresses, and in his Judgment delivered on 19/11/2004. Akinsanya, J. held as follows – “Having considered the evidence of the 1st Defence Witness and 2nd Defence Witness, and perceived the conduct of the 2nd Claimant in attempting to sell the flat above the head of his entire family is to say the least on unconscionable Act. The 2nd Defendant has had to carry the responsibility of a single parent even though the 2nd Plaintiffs Witness is alive. Viewed against this back ground and the documents tendered coupled with the submission of the Counsel, I am inclined by the weight of evidence proffered by the 2nd Defendant to accept her evidence as credible, I do, therefore, hold that a trust ensues for the benefit of the 1st Defendant, who from all the circumstances of the matter is the beneficiary of that trust and consequently the owner of the flat even though the documents are in the name of the 2nd Claimant, Mr. Olayinka Aina. Consequent to this finding, the 2nd Claimant is not competent to pass title to the 1st Claimant while that trust existed. I therefore grant to the 2nd Defendant (Mrs. Aina) those declaratory reliefs endorsed in paragraph 23 of her statement of Claim in Suit No. LD/769/97 item Nos. 1, 2, 3, 4, 5, 6, 7 and 8 thereof, Claims 9, 10 and 11 are refused. The Claims of the Claimants in Suit NO. LD/3276/94 are refused and therefore dismissed, Cost to the Plaintiff in LD/769/97 in the Consolidated Suits is N20,000 against the 2nd Claimant”.
➥ ISSUE(S)
I. Whether the Lower Court was right to hold that a trust ensues for the benefit of the 1st Respondent?
II. Whether it was right to conclude that 2nd Appellant is not competent to pass title to 1st Appellant while that trust existed?
➥ RESOLUTION(S) OF ISSUES
[APPEAL DISMISSED]
↪️ ISSUE 1: IN RESPONDENT’S FAVOUR.
[TRUST APPLIES;
‘In this case, the evidence indicates that the 2nd Appellant was actually content, as the 1st Respondent said, with staying at his parents’ house at Bariga, Lagos – he lived there before he married; he lived there with his wife after marriage; and he returned to his parents’ house after he deserted his wife and children. Civil matters are decided on the balance of probabilities; it is not enough for the Party, who has to establish a particular fact, to say that his evidence is just as good as that of his opponent, he must provide the Court with evidence, which convinces the Court, of the probability of his case rather than that of his opponent on the point in issue. In this case, 1st Respondent’s testimony that his parents’ house was not convenient for her, which is why she persuaded him to purchase the flat, is more likely to be true than his evidence to the contrary. The 2nd Appellant also said that he moved to his parents’ house because -‘[he] was very sick and was not getting the proper attention from [his] wife”. He explained that he could only tender copies of his Exhibits because she had “carted away at [his] valuable documents”, including the letter of allocation. The 1st Respondent as DW1, however, stated as follows in evidence in chief – “[He] left home because he owed many people and they come home to harass us so because of the molestation of these creditors – [he] ran away from the house to his parents’ home. I took [his] clothes and personal properties to him – (his clothes).” Under cross-examination by 2nd Appellant’s counsel, she testified as follows – “[He] left the home but he did not state he won’t come back – he left in 1989. Later when I wanted to let the house – I packed [his] properties to his parents’ house. I pack out everything. I took his properties to him before I moved out. I met [him] in his parents’ house and told him what I wanted to do. The property documents have always been with me at all times. All expenses made on the property were so spent on the belief the property is mine. I did not require his consent to do renovation”. No attempt whatsoever was made to challenge the evidence of 1st Respondent that he left their matrimonial home because of the molestation by creditors, and not because she did not take care of him when he was sick, as he alleged. The 2nd Appellant also claimed that he paid mortgage for the property, but he said that after 2nd Respondent “brought his load and left it at the door?, he told his father, and they both went to the flat and found it empty; and that- “We saw one of our neighbours – one Alhaji, who told me everything about what my wife was doing – the story she told me then was that because we owe LBIC and it was this Alhaji, who asked my wife not to sell the house for only N10,000 but can let it to Ferreira, who will pay her N10,000 to offset LBIC outstanding. We went to LBIC and found that truly N10,000 was paid. In fact, we were owing more thon N10,000 – so I went home and sourced N1,000+ to settle our outstanding”. In her evidence in chief, the 2nd Respondent testified as follows on this issue – “It is true that I wanted to sell the property outright but I was advised by Alhaji Olorunfemi not to sell as he would get me a tenant, who would pay rent with which I can pay my mortgage debt. It is not correct as alleged by 2nd Plaintiff because he has never gave me (sic) money to pay the mortgage, he is a gambler and he has lost his job – so he could not get any money to give me”. On the issue of the children he left behind, the 2nd Appellant stated as follows- “When I decided to sell the house – I did not inform my wife – – We have 3 children. They are in my wife’s custody. They are ages 21, 19 and 17 years old now. [We] have been living apart since 1990. The children were aged 9, 7 and 5. We have both been together carrying on responsibility of schooling, clothing and feeding the children”. On this issue, his wife (1st Respondent) and his daughter (DW2) say otherwise. I reproduced what his wife said earlier, but his daughter, DW2 had this to say- “As I was growing up, the reality dawned on me that for economic reason – we moved to Ketu, into a small room and parlour. It was our Mum, who was looking after us – feeding us, clothing us, funding our education and the payment of rent for our new place. It was the rent she collected from the property that she used to look after us. Our father had abandoned us and Mum did not receive any help from anybody”. These are some of the evidence adduced by the 1st Respondent that made the Lower Court decide that his conduct “in attempting to sell the flat above the head of his entire family is to say the least on unconscionable act”, and made it “inclined by the weight of evidence proffered by [her] to accept her evidence”. Its decision cannot be faulted; it is sound in law, and also very well-grounded.’
‘The Lower Court considered this case vis-a-vis resulting or implied trust; but in my estimation, this trust is more of constructive trust than anything else. As Cardozo, J., said in Beatty v. Guffenhein Exploration Co. 225 N.Y. 380 (1919), “a constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him to a trustee – see Anyaegbunam v. Osoka (supra). However, Lord Denning, M. R. made it clear in Hussey v. Palmer (supra) that they both run together; a resulting or implied trust and constructive trust are trusts imposed by law whenever justice and good conscience require it, and they are applied in the cases where the Defendant cannot conscientiously keep the property for himself alone – see also Anyaegbunam v. Osoka (supra). In this case, whether it is a resulting or implied trust, as the Lower Court held, or constructive trust, as I see it in this appeal, the outcome remains the same. In the circumstances of this case, the Lower Court was right to conclude that a trust ensues for the 1st Respondent, who is a beneficiary, and owner of the flat.’]
.
.
↪️ ISSUE 2: IN RESPONDENT’S FAVOUR.
[THE APPELLANT DID NOT HAVE WHAT HE PURPORTED TO TRANSFER
‘Evidently, the various arguments canvassed by Parties on this Issue 2, were hinged on the premise that Issue 1, may or may not be in their favour. Now that the said Issue 1 has been resolved in favour of the 1st Respondent, my take on this issue is simple; this Court cannot give with one hand and take away with the other. 2nd Appellant did not have what he purported to grant. The law recognizes that there are circumstances in which a seller may purport to sell goods or property, which he does not have any right to sell, and the law has to decide which of two innocent parties to favour: buyer or original owner, which is when the nemo dat quod non habet rule comes into play. This rule is that a transferor of goods cannot pass a better title than he himself possesses. It has been derided as an unfair rule since it is an innocent party buyer that will suffer and also because it is not necessarily in keeping with the needs of modern commerce and trade; but the law is what it is, and we must apply it. The Appellants based their claims on title documents in 2nd Appellant’s name but 2nd Appellant did not have it to give, and had no right to sell the property. He is nothing but a trustee, and the 1st Respondent is a beneficiary of the trust. We cannot somersault and give over the reins of the property to 2nd Appellant.’]
.
.
.
✓ DECISION:
‘The end result of the foregoing is that this Appeal lack merit it fails and is dismissed. The decision of the Lower Court in its Judgment of 19/11/2004 is hereby affirmed and the 1st Respondent is awarded costs of N100,000.00.’
➥ FURTHER DICTA:
⦿ NATURE OF A TRUST PROPERTY
In its legal sense, “a trust”, has been defined as an equitable obligation, binding a person (a trustee) to deal with property over which he has control (trust property) for the benefit of persons (beneficiaries or cestuis que trust), of whom he may himself be one, and any one of whom may enforce same – see Underhill’s Law of Trusts and Trustees 13th Ed. Other legal writers have defined it as a certain kind of right that the beneficiary has against the trustee, or a certain kind of interest that the beneficiary has against the trustee, or a certain kind of interest that the beneficiary has in the trust property, thus looking at it from the point of view of the beneficiary. However, the most satisfactory definition is that of Professor Keeton in Law of Trust 9th Ed. Thus: “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.” In other words, the trustees are the legal owners of the trust property but they are obliged to hold the property for the benefit of one or more individuals or organizations, usually specified by the settlor. The trustees, therefore, owe a fiduciary duty to the beneficiaries, who are the “beneficial” owners of the trust property. The significant feature of the trust is its separation of the legal ownership of the trust property from its equitable or beneficial ownership. — A.A. Augie JCA.
⦿ DIFFERENT CLASSIFICATION OF TRUST
There are different classifications of trusts-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 Trusts arise from the presumed intention of the owner; 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 own benefit.? see Equity and Trust in Nigeria. 2nd Ed., by J. O. Fabunmi. — A.A. Augie JCA.
⦿ WHERE IMPLIED TRUST ARISES
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 on 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 JCA.
⦿ A PRESUMPTION OF RESULTING TRUST MAY BE DEFEATED BY THE PRESUMPTION ON ADVANCEMENT
It is also settled that a presumption of a resulting trust may be defeated by the presumption of advancement, which is a presumption in trust, contract and family law, which suggests that property from a parent to a child, or spouse to spouse, is a gift and would defeat any presumption of a resulting trust see duhaime-org. See also Ugbutevbe v. Shonowo (2004) 16 NWLR (Pt.899) 300. However, the law also makes a distinction between the husband and the wife – when a wife buys a property, and conveys it in the name of her husband, there is no presumption of advancement infavour of her husband; he holds in trust for his wife. However, if the husband purchases a property in his wife’s name, this is prima facie a gift to her – see Silver v. Silver (1958) 1 All E. R.523. — A.A. Augie JCA.
⦿ CONSTRUCTIVE TRUST IS APPLICABLE IN THIS CASE
I agree with my learned brother that in the circumstances of the present appeal, constructive trust is more applicable. The conduct of the 2nd appellant (husband) was obviously unconscionable. He abandoned his wife and children when the children were quite young. The 1st respondent (the wife) continued to live with the children in the ‘matrimonial home’ paying the mortgage and other outgoings. There is no doubt that any purported sale of the house by the 2nd appellant while the 1st respondent and her children were still living in the house would have been struck down by any Court. The 1st respondent and her children were forced out of the house because she could no longer afford to pay the mortgage. She rented it out in order to use the rent money to pay the mortgage, the rent in the small room and parlour they moved into in Ketu, school fees and maintenance of her three children. The 2nd appellant in his evidence testified that he went to LBIC found that the wife had indeed paid N10,000.00 leaving a balance of N1,000.00. He immediately went off to ‘source’ the N1,000.00, paid it and proceeded to sell off the house to the 1st appellant without a word to his wife. The trouble he took to ‘source’ for the one thousand naira balance is evidence that he could not have been paying the mortgage at any point in time. No Court of law will support this brazen and unconscionable act of the 2nd appellant. Even though the title document is in his name, he cannot in good conscience retain the beneficial interest in the property. It is right in the circumstances to deem him a constructive trustee of his wife. After all, constructive trust is the formula through which the conscience of equity finds expression. It is also a discretionary remedy. The Lower Court in the instant case exercised the discretion judicially, judiciously and very soundly. There is no reason whatsoever to interfere with the exercise of the discretion. EFETIROROJE v. OKPALEFE II (1991) 5 NWLR (PT.193) 517. — C.E. Iyizoba JCA.
⦿ RESULTING, AS WITH CONSTRUCTIVE TRUST, HAS NO FORMAL REQUIREMENT FOR CREATION
My lords, a resulting trust arises in situations where, by the quasi-operation of law, a trust is implied from the conduct of parties or all the circumstances of the case. Resulting trusts, as with constructive trusts, arises by operation of law and without the concerted actions of a grantor to constitute an express trust. It does not come to being by design, but arises only where equity stipulates that a trust should be imposed on account of the particular circumstances. Consequently, there are no formal requirements for its creation. As M. HALEY and L. MCMURTRY, in EQUITY AND TRUSTS, 2nd Edition, London: sweet and Maxwell, 2009, 257 puts it, “the essential characteristic of the resulting trust is that the settler is also the beneficiary (and) its fundamental function is to ‘re-direct’ the beneficial ownership of trust property back to the former title owner.” — A.O. Obaseki-Adejumo JCA.
➥ LEAD JUDGEMENT DELIVERED BY:
Amina Adamu Augie, J.C.A.
➥ APPEARANCES
⦿ FOR THE APPELLANT(S)
Oladele Ojogbede, Esq.
⦿ FOR THE RESPONDENT(S)
Chief A. A. Aribisala (SAN) and Sunday Adara, Esq.
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
