➥ CASE SUMMARY OF:
Gerhard Huebner v. Aeronautical Industrial Engineering and Project Management Company Limited (2017) – SC
by Branham-Paul C. Chima
Supreme Court – SC.198/2006
➥ JUDGEMENT DELIVERED ON:
Friday, the 7th day of April, 2017
➥ AREA(S) OF LAW
Purchase of land by alien.
➥ NOTABLE DICTA
⦿ 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.
⦿ 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.
⦿ 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.
⦿ 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.
⦿ DISSENTING JUDGEMENT IS NOT BINDING
Learned counsel for the Appellant has urged this Court to adopt the dissenting view of Agbaje JSC as it is more in accord with the law that creates trust. In alternative learned counsel invited this Court to look further into this matter and if necessary depart from the relevant holding, especially the dictum of Olatawura JSC. I wish to state clearly that the views expressed by my lord Agbaje JSC was raised in a dissenting judgment. A dissenting judgment, however powerful, learned and articulate is not the judgment of the Court and therefore not binding. The judgment of the Court is the majority judgment which is binding. See Orugbo v Una (2002) 16 NWLR (Pt. 792) 175 at 208 Paragraphs B-C. The law under which the case of Ogunola & Ors v Eiyekole (supra) was decided, that is the Land Use Act 1978, has not been repealed or altered. It is still the extant law that regulates land administration in this country. The call therefore on this Court to depart from the said decision is without merit. — P.A. Galumje, JSC.
⦿ COURT MUST CONFINE ITS DECISION TO THE PARTIES AND CLAIMS
The law is settled that a Court can only exercise its jurisdiction or power over parties before it and strictly in respect of the case between them upon issues raised and reliefs sought. It cannot do so concerning, and to the extent it may affect persons who are not parties before it and must resist the temptation to make pronouncement to that end. The Court must confine its decision to the parties and their claims. See Ojogbue v Nnubia (1972) 1 ALL NLR (Pt.2) 226; Ochonma v Unosi (1965) NMLR 321; Labide v Regd. Trustee Cherubim & Seraphim (2003) FWLR (Pt. 142) 89 at 105 Paragraphs G-H; Intercontractors (Nig) Ltd v UAC of (Nig) Ltd (1988) 2 NWLR (Pt. 76) 303; Green v Green (1987) NWLR (Pt 61) 481. — P.A. Galumje, JSC.
⦿ COURT OF LAW WILL NOT ENFORCE AN ILLEGAL CONTRACT OR ALLOW ITSELF TO BE USED AS AN INSTRUMENT OF FRAUD
As at 1981 when he commenced negotiation to purchase the land, he held no title, customary or statutory which he could validly pass to the respondent. Any agreement reached between the appellant and the respondent which enabled the latter to hold the legal estate in the land for the benefit of the appellant would be unenforceable since the appellant could not pass any title to the respondent. A Court should not enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal provided the illegality is brought to the notice of the Court and the person invoking the aid of the Court is himself implicated in the illegality. The illegality disclosed here is the attempt by the appellant to circumvent the provisions of the Land Use Act and this is against public policy and a contract may be against public policy either from the nature of the acts to be performed or from the nature of the consideration. Where a transaction is on the face of it, or from the facts adduced in evidence or the surrounding circumstances, apparently illegal, the Court must act to enforce and protect the law of the land. See: Sodipo v. Lemminkainen OY (1985) 2 NWLR (Pt. 8) 547. — K.B. Aka’ahs, JSC.
⦿ 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.
⦿ 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.
➥ LEAD JUDGEMENT DELIVERED BY:
Paul Adamu Galumje J.S.C.
⦿ FOR THE APPELLANT
⦿ FOR THE RESPONDENT
A. Adenira, Esq.
➥ CASE HISTORY
Sometimes in 1975, the District Head of Kajuru District in Kachia Local Government Area of Kaduna State, acting on the instruction of the Emir of Zaria granted permission to the Appellant to build a temporary weekend hospitality resort on a hilltop in Kajuru Village. The Appellant initially built a temporary structure. Later he built a permanent structure which he named “The Kajuru Castle”. As a result of the desire to expand the business, the Appellant sometimes in 1981 commenced negotiation through the agency of the District Head to purchase the land surrounding the said hill measuring 70 hectares. He was in the final stages of the negotiation, when in 1986 he was appointed the Managing Director of the Respondent. Being a German, the Appellant was advised to buy the land in the Respondents name as it was unlawful for him to hold a legal estate in Kaduna State. The Appellant heeded the advice and purchased the land in the name of the Respondent. The receipt which evidenced the purchase of the said land was issued in his name and the name of the Respondent. Subsequently a certificate of occupancy dated 1st of January, 1997 was issued to the Appellant by Kachia Local Government. This certificate was used in applying for a statutory certificate of occupancy from Kaduna State Government. The application was successful and a certificate of occupancy dated 6th March. 1999 was issued by Kaduna State Government. Both certificates were issued in the name of the Respondent and were admitted in evidence at the trial Court as Exhibits A1 and A3 respectively.
The main thrust of the Appellant’s case is that there is between him and the Respondent a relationship based on constructive trust in relation to the disputed property.
The Appellant herein was the plaintiff at the Kaduna State High Court (hereinafter to be referred to as the trial Court). At paragraph 19 of his statement of claim dated 17th of May, 1995 and filed on the 24th of October, 1996, the appellant claimed against the Respondent, the following relief, inter alia:- “i) A declaration that the Defendant holds the legal estate in the land at Kajuru bought by the plaintiff in its name upon a resultant trust to the benefit of the plaintiff.”
At the end of the trial which spanned slightly over 6 years and in a reserved and considered judgment delivered on the 5th of November, 2002, the appellant’s claims were dismissed in its entirety for lack of merit. The Appellant’s appeal to the Court of Appeal was equally dismissed on the 11th May, 2006. The appeal herein is against the decision of the Court of Appeal (henceforth to be referred to as the lower Court).
➥ ISSUE(S) & RESOLUTION
I. Whether the lower Court was right when it dismissed the Appellant’s appeal for failure to adduce sufficient evidence in proof of his claim that the Respondent is holding the legal estate upon an implied trust in respect of the disputed property for his benefit by implication of law?
A. “I entirely associate myself with the decision of my learned brothers in Ogunola & Ors v Eiyekole (Supra) and hold that the Appellant being an alien had no legal capacity to hold interest in land in Kajuru Local Government Area of Kaduna State. This being so and by virtue of the Latin Legal Maxim, Nemo dat quod non habet, the Appellant cannot benefit from property which he was incapable of owning.”
B. “Finally, Kajuru Nigeria Ltd is not a party to this appeal, and was not made a party to this case at the trial. The law is settled that a Court can only exercise its jurisdiction or power over parties before it and strictly in respect of the case between them upon issues raised and reliefs sought. I therefore agree with the learned counsel for the Respondent that the lower 16 Court was right when it upheld the refusal of the trial Court to compel the Respondent to comply with the Appellant’s instructions concerning the transfer of the legal estate in the land to Kajuru Nigeria Limited.”
“Based on the reasons I have set out in this judgment, the sole issue formulated by me for determination of this appeal is resolved against the Appellant. In the result, this appeal shall be and it is hereby dismissed I make no order as to costs.”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (STATUTE)
Section 132 Evidence Act 2011.
➥ REFERENCED (CASE)
⦿ CONSTRUCTIVE TRUSTS IS NOT BASED ON THE PRIOR INTENTION OF THE PARTIES
In Kotoye v Saraki (1992) NWLR (Pt. 264) 156, (1992) 11/12 SCNJ 26, this Court held that constructive trust, as in this case, imposed by equity on the ground of conscience and is not based on the prior presumed intention of the parties. See Ughtevbe v Shonowo (supra); Ibekwe v Nwosu (2011) 9 NWLR (Pt. 1251) 1 at 5 Paragraphs A-C.
Chief S.O Ogunola & 6 Ors v. Hoda Eiyekole & 9 Ors (1990) 4 NWLR (Pt. 146) at page 632) pp. 647
➥ REFERENCED (OTHERS)