➥ CASE SUMMARY OF:
Anthony Ibekwe v. Oliver Nwosu (2011) – SC
by Branham-Paul C. Chima
➥ COURT:
Supreme Court – SC.108/2006
➥ JUDGEMENT DELIVERED ON:
Friday, the 15th day of April, 2011
➥ AREA(S) OF LAW
Constructive Trust.
Revocation of land.
➥ PRINCIPLES OF LAW
⦿ TRUST
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.
⦿ CONSTRUCTIVE TRUSTS IS AN EQUITABLE REMEDY IMPOSED – NOT BASED ON PRIOR INTENTION
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.
⦿ SPECIFIC PERFORMANCE REQUIRES EXACT PERFORMANCE OF A CONTRACT
Specific performance is the remedy of requiring exact performance of a contract in the specific form in which it was made or according to the precise terms agreed upon. It is the actual accomplishment of a contract by a party bound to fulfill it. — A. Fabiyi, J.S.C.
⦿ ONCE LAND IS REVOKED, PARTY HAS CLAIM IN COMPENSATION ONLY
My lords, once Exhibit B is revoked, the appellant and respondent no longer have any rights to the Plot. All their rights stand extinguished. Their only remedy is compensation as provided by Section 44(1) of the Constitution. It is strange to suggest that with the revocation of Exhibit B the appellants interest therein is transferred to Exhibit A. That is not the position in Law or Equity. The appellant’s interest in Exhibit B died with the revocation. Consequently, the appellant forcefully entering Exhibit A confers on the respondent an enforceable cause of action. The respondent was right to go to court to seek redress and the court was correct to enter judgment for him. — Rhodes-Vivour, JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
A. Fabiyi, J.S.C.
➥ APPEARANCES
⦿ FOR THE APPELLANT
S. Nwankwo.
⦿ FOR THE RESPONDENT
E. Ezeuko (Jnr).
➥ CASE FACT/HISTORY
The respondent was allocated a state land of Otumoye Creek Road, Fegge Onitsha in 1965. The land was registered as 80/80/648 and referred to as Exhibit “B”. The respondent sold a portion (2/5th) of same to the appellant who paid five hundred pounds as consideration. He started to develop same pending the execution of an assignment to him by the respondent with the consent of the Governor or appropriate authority. In 1978, the State Government stopped all construction works on the land and invited application for compensation for works done on the plot – Exhibit ‘B’. The sum of N2,500.00 paid by the Government for compensation was paid into the Court Registry. In March 1979, the Government revoked the State Building Lease and allocated to the respondent another piece of land – plot R/81 at Niger Bridge Head, Onitsha registered as 37/37/1061 which is referred to as Exhibit A. The appellant showed interest in Exhibit A. During negotiation, the respondent asked for N60, 000.00 which was later reduced to N30, 000.00. The appellant who did not pay same, entered into Exhibit ‘A’ against the wishes of the respondent and commenced construction. The respondent sued the appellant for trespass, damages and injunction. The appellant, in his defence, counter-claimed for specific performance as he contended that the respondent’s constructive trusteeship in respect of exhibit B got transferred to the new plot R/81- Exhibit A. The learned trial judge garnered evidence and was properly addressed by learned counsel for the parties. In the considered judgment delivered on 6th July, 1987, the reliefs claimed by the respondent were granted while the appellant’s counter-claim for specific performance was dismissed. The appellant’s appeal to the court below was dismissed on February 26th, 2006. This is a further appeal to this court.
This is an appeal against the judgment of the Court of Appeal, Enugu Division (‘the court below’ for short) delivered on February 23rd, 2006 which affirmed the judgment of Awogu, J. (as he then was) delivered on 6th July, 1987 at the High Court of Anambra State, Onitsha.
➥ ISSUE(S) & RESOLUTION(S)
[APPEAL DISMISSED]
I. Whether the Court of Appeal was correct in holding that there was no basis in law or equity for the appellant to claim that his interests in Exhibit B (Otumoye Creek Road Plot) got automatically transferred to the newly allocated land Exhibit ‘A’ – R/81 Niger Bridge Head, Onitsha?
RULING: IN RESPONDENT’S FAVOUR.
A. THAT THERE IS NO CONSTRUCTIVE TRUSTS IN RESPECT OF EXHIBIT A
“It is not in dispute from the facts of this case that the appellant bought 2/5th of Exhibit B from the respondent. The respondent became a constructive trustee of same to the appellant. Thereafter the lease in Exhibit ‘B’ was revoked and exchanged with Exhibit ‘A’. – Plot R/81 at the Niger Bridge Head, Onitsha. The appellant then showed some interest in buying Exhibit A. During negotiation, the respondent at first asked for N60, 000.00 which was later reduced to N30, 000.00. When negotiation failed, the appellant then moved into Exhibit A without the respondent’s consent and started his construction works until when he was made to stop same by the trial court vide an order of interlocutory injunction. The appellant acted under a misconception that the respondent’s constructive trusteeship in respect of Exhibit ‘B’ moved to Exhibit A. As there was no contract between the parties in respect of Exhibit A, the appellant cannot unilaterally shift the trusteeship from Exhibit B to Exhibit A. This is so as it was not within the contemplation of the parties when entering into the agreement in respect of Exhibit B that an alternative land would be provided in the form of Exhibit A – in case of an eventuality. This apart, the constructive trusteeship imposed on the respondent was in respect of 2/5th of Exhibit ‘B’. It was not right to forcefully attempt to export same to claim the whole of Exhibit A. I agree that the doctrine of constructive trust cannot operate to give the defendant a whole for a portion.”
.
.
II. Whether the Court of Appeal was right in holding that the appellant’s interest died with the revocation of Exhibit B and therefore the appellant had no right to counter-claim for Exhibit A to be assigned to him by way of specific performance?
RULING: IN RESPONDENT’S FAVOUR.
A. THAT THERE IS NO AGREEMENT TO REST SPECIFIC PERFORMANCE ON
“The doctrine of specific performance is that where monetary damages would be an inadequate compensation for the breach of an agreement, the contractor or vendor will be compelled to perform specifically what he has agreed to do. He can, for example, be ordered to execute a specific conveyance of land. There was no agreement between the parties in respect of Exhibit A,thus there is nothing to rest an order of specific performance upon.”
“The appellant testified that the agreement to assign Exhibit A to him was oral. The two courts below were right in finding that the provision of section 4 of the Statute of Frauds, 1677 operates against such a stance. Section 4 of the Statute of Frauds which is a statute of general application provides as follows:- “No action shall be brought to charge any person upon any contract of sale of lands, tenements or hereditaments or any interest concerning them, unless either the agreement or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or some other person by him lawfully authorized.” There was no memorandum between the parties with respect to Exhibit ‘A’. None was put in evidence. The appellant attempted to enter into an agreement with the respondent but jettisoned the idea and erroneously backed on the idea that the constructive trust in respect of 2/5th of Exhibit B could be carried over to the whole of Exhibit ‘A’. Such turned out to be to no avail and counter productive; in the main. The learned trial judge was right in dismissing the counter-claim of the appellant. The court below acted in the right direction in confirming same.”
“The appellant, in a subtle manner, mooted the idea that the trial court should have ordered a non-suit instead of out-rightly dismissing his counter-claim. A non-suit denotes that the plaintiff failed to prove something which was essential to his case or that the case which he had proved was different from that which he had pleaded. The desire by the appellant to embark upon another trial of his counter-claim is most unwarranted in the prevailing circumstances of this matter. The appellant out-rightly failed to substantiate his counter-claim for an order for specific performance of assignment of Exhibit ‘A’ to him.”
B. THAT THE ORIGINAL AGREEMENT DIED WITH THE REVOCATION, AND DOES NOT FLOW INTO EXHIBIT A.
“It is not in dispute that the respondent assigned a parcel of land carved out of plot B, Otumoye Creek Allocated to him by the Anambra State Government to the appellant. It is also not in dispute that the said allocation was recovered and an alternative plot was allocated to the respondent, thereby extinguishing the right of the appellant on the original plot B, Otumoye Creek. The issue in controversy now stems out of the alternative plot which the respondent was allocated as an alternative plot to the original plot. It is on record that the transaction in respect of the original plot had been concluded and the appellant had expended some money towards the reclamation of the parcel of land he was assigned from the original plot. As far as the alternative plot is concerned, there was no such conclusion of the transaction for the assignment of a parcel of land before the appellant commenced construction on the land, under the guise that he was entitled to the parcel of land in exchange of the original plot he was assigned. As far as my understanding goes whatever transaction and or agreement between the appellant and the respondent was in respect of the original plot that was revoked, not the new alternative plot. The transaction did not flow into the new allocation. If the appellant wanted a piece of the new plot he would have had to commence a fresh negotiation, which the respondent said they were both not able to conclude, as is illustrated by his evidence which reads thus: ‘When I then got the allocation in Exh. A, the Defendants showed interest and we began to negotiate I asked for N60, 000.00 and following the intervention of P.W.1 I asked for N30, 000.00. I wrote to so inform him by letter dated 30/4/81. The Defendant did not pay. The Defendant then broke into Exh. A and began to build without my consent.’ In my opinion, the original contract or agreement died with the revocation of plot B, and whatever constructive trust imposed on the respondent by equity did not flow to a non-existent new contract that relates to the alternative plot R/81. If the appellant was desirous of acquiring a piece of plot R/81 he should have accepted the offer of the respondent and sealed the transaction before assuming possession. It is a completely different piece of land, and the constructive trust did not transfer to it. In this wise, I am satisfied that the lower court did not err when it held the following in its judgment: ‘However, with the revocation of Exhibit B the appellant and the respondent had their rights to that property extinguished and all they could claim was compensation for improvement on the land. I cannot see any bases in law or equity for the position of the appellant that the interest in Exhibit B should automatically transfer to the new allocation Exhibit A. The forceful entry of the appellant into that plot without the consent of the respondent established the respondent’s claim before the lower court.’ The above finding cannot be faulted and so are the other findings of the court below.”
.
.
.
✓ DECISION:
“Finally, this is a case where the two courts below made concurrent findings in many respects. The findings are not perverse. They are supported by ample evidence and adequately grounded on substantive law as clearly espoused in this judgment. I cannot see my way clear in tampering with same. See: Anaeze v. Anyaso (1993) 5 NWLR (Pt. 291) 1, Fajemirokun v. C. B. Nigeria Ltd. (2009) 5 NWLR (Pt. 1135) 588 at page 599. For the above reasons, I come to the conclusion that the appeal is devoid of merit. It is hereby dismissed as the judgment of the court below delivered on February 23rd, 2006 which affirmed the trial court’s decision entered on July 6th, 1987 is hereby confirmed. The appellant shall pay N50, 000.00 costs to the respondent.”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (STATUTE)
➥ REFERENCED (CASE)
⦿ 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.”
➥ REFERENCED (OTHERS)
