resulting trusts

Essentially, a resulting trust is a creation of equity and is regarded as the presumed intention of the settlor, testator or any other party and which is imposed from the circumstances of each case and not a trust expressly declared. A resulting trust can therefore be described as one which is presumed or implied from the conduct of the parties and the surrounding circumstances.

The characteristics of resulting trusts are as follows:

• a. The objects of resulting trusts need not be immediately identifiable.
• b. Resulting trusts they are exempted from the requirements for the creation of express trusts by their nature.

Resulting trusts are classified into “presumed” and “automatic” resulting trusts. Presumed resulting trusts will arise in cases where the intention of trust is presumed or implied from the circumstances on the part of one party in the transaction; while automatic resulting trusts relates to situations where trust is not the presumed intention of the settlor or testator but one which is an automatic consequence of the circumstances of the case.

Situations where resulting trusts could be presumed or imposed are as follows:

• a. Failure of Express Trust: Resulting trust can arise in cases where an express trust fails either totally or partially. For instance, a trust can fail totally where it was declared void by reason of uncertainty or that it offends against the rule of perpetuity and for any other reason, apart from those declared void on the grounds of illegality and public policy. In situations like these, there is a resulting trust to the settlor or testator except where the settlor or testator has indicated other purposes which the beneficial interest could be applied if the primary purpose fails. Hodgson v. Marks (1975) Ch. 892. Where a resulting trust is in respect of the residue of a will, there be a resulting trust in favor of the residuary devisee or legatee. Where there is no provision in a will as to who will be entitled to the estate’s residue and there is a failure of the trust, relatives or next-of kin can claim benefit. In the absence of eligible relatives, the trustee is to convey or transfer the trust property to the State as bona vacantia.
• b. Unexhausted Residue of a Trust: Where there is a surplus after the terms of a trust whether created by will or inter vivos, has been performed or the beneficial interests were not wholly exhausted or disposed, the remainder of what is left will result to the testator’ s estate or settlor. The exception is where a contrary intention was expressed.
• c. Purchase in the Name of Another: In situations where someone purchases a property in the name of another and the person in whose name the property was purchased gave no value or consideration for the same, equity treats such a person as holding on resulting trust for the person who advanced the purchase money, unless a contrary intention is shown. Coker v. Coker [1964] L.L.R. 188. The principle of equity under consideration here has been held applicable to varying situations, some of which are as follows:
• 1. Purchase in the name of another: This covers cases where someone provided money for the purchase of landed property in the name of another. Ukata v. Emembo [1963] 7 E.N.L.R. 137.
• 2. Joint purchase by two or more persons in the name of one person.
• 3. Joint purchase.
• 4. Joint mortgage.
• 5. Joint account.
• 6. Joint leases.
• 7. Voluntary transfer of land by one person to another, except the conveyance is expressed to be for the use of the transferee.

In certain cases of purchase in the name of another, there may be presumption of advancement where there is such level of intimacy between the person who advanced the purchase money and the person in whose name the property was purchased. In that case, it is presumed that the person who provided the purchase money wished to advance it for the benefit of the other. The transactions will advancement will be presumed are:

• a. Husband and wife.
• b. Father and child.
• c. Persons in loco parentis.

In spite of the presumption of advancement, it is possible to rebut such presumption. Evidence admissible in rebuttal of presumption of advancement are the acts and declarations of the parties before or at the time of purchase. Subsequent acts are only admissible as evidence against the party who made the advancement and not in his favor. Shephard v. Cartwright (1955) A.C. 431.