LEGAL PRINCIPLE: EQUITY AND TRUSTS — Constructive Trusts — Nature and Imposition by Equity on Ground of Conscience
PRINCIPLE STATEMENT
A constructive trust is imposed by equity on the ground of conscience and is not based on the prior or presumed intention of the parties. The parties are presumed conscionable people. A constructive trust is a trust to be made out of the circumstances.
RATIO DECIDENDI (SOURCE)
Per Kutigi, JSC, in Kotoye v. Saraki & Anor (1994) NLC-1471993(SC) at p. 8; Paras A–B.
"We must not forget that a 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. I would like to believe that the parties herein are conscionable people. A constructive trust is a trust to be made out of the circumstances."
EXPLANATION / SCOPE
Constructive trust arises from equitable principles based on conscience, not party intention. It is imposed by law from the circumstances, not created by agreement. The principle applies to equity and trusts. The rule prevents unconscionable retention of property. The court examines the circumstances to determine whether a constructive trust exists. It operates regardless of the parties’ actual intentions.
