Generally, equity means fairness, justness and impartiality. In its technical sense, equity is a branch of law that was developed to mitigate the harshness of common law and it is concerned with providing legal relief different from but not particularly incompatible with those of common law. Equity as a legal system is a body of law that addresses concerns which fall outside the jurisdiction of common law. Equity by applying what is fair and just primarily seeks to eliminate the harshness of common law.

Equity dates back to the 11th century in 1050 when ‘Williams the conqueror’ conquered the English. As soon as England was conquered, he divided the country into ‘shires’ and sent his subjects at the palace of Assize to administer justice round the shires. Before long, it was discovered that they were likely to be faced with difficulty as to the type of law to be administered for the sake of justice. It was also discovered that at each shire, the people had similar issues and complaints and they also had similar customs. The above mentioned similarities birthed the ‘Common law’.

Having set the system in motion, the itinerary judges created writs for several complaints. Thus, anyone who approached the common law court for relief must do so within the specified writ. This implies that, no writ, no right and subsequently no judgment. Moreover, the only form of remedy the common law had to offer was Damages. Soon enough, things got out of hand and the system became so corrupt such that justice which was the main course was frustrated. Subsequently, the people started petitioning the King and the king being too occupied with other matters of the State referred all the petitions to ‘his hand’ also called the ‘ keeper of the king’s conscience’. The Court ordained by the king known as the court of chancery started hearing complaints and started granting injunctions and specific performance which made the court of chancery much more popular than the Common law court. The chancellor, in exercising his powers, was guided by the ideas of ‘good conscience, ‘natural justice’ and ‘good faith’. The objective of the chancellor was not only to grant relief where the common law denied one, but also in cases where the common law was defective.

By virtue of the fact that the chancellor extended and made his jurisdiction more dependable, conflict ensued between the two courts. In Neath v Rydley, the rule that where any matter was properly traceable at common law, the court of chancery should be prohibited from interfering in such matter was established. Also in Courtney v Glanvil, Lord Coke held that where a court of common law had decided a case, the court of chancery was powerless to interfere in the matter and he even threatened to imprison any party to such a suit who after losing at common law appealed to the court of chancery for relief. The conflict was however manifested in the Earl of Oxford’s case where the plaintiff assignee of a lease had built a house on the parcel of the land which was the subject matter of the assignment and had also planted trees in the garden. The defendant forcefully ejected him from the land and the plaintiff sued the defendant in the common law court for wrongful ejection. The court gave judgment in favour of the defendant which spurred the plaintiff to present the matter before the court of chancery praying the court to grant a common injunction to restrain the defendant from ejecting him from the house he had built on the leased land. Lord Ellesmere delivered a powerful judgement where he stated that by the law of God, he that builds a house must live in it and yet the defendant in this case would have the houses, gardens and orchards which he did not build or plant. Therefore he argued that equity and good conscience were in favour of the plaintiff. He stated further that when a judgment is obtained by oppression, wrong and hard conscience, the chancellor would frustrate and set it aside not due to any error or defect but for the hard conscience of the party. Lord Coke, the chief justice of the court of the King’s bench protested that the chancellor should stop frustrating the rules of common law but the chancellor denied that he was frustrating common law rules but was only applying his own rules to effect justice. The conflict was referred to King James 1 who resolved it in the favour of the chancery. It was implicit in the judgement that if in any situation there was a direct clash between the two systems, the rule of equity would prevail.


Equity was first received into Nigeria by ordinance no.3 of 1863, then Supreme court ordinance 1914. The position is that the rules of common law, doctrines of equity and statutes of general application that were in force in England as at the first of January, 1900 have been received in Nigeria.

Maxims of equity are legal maxims that serve as a set of general rules which govern the operations of equity. What an equitable maxim does is to illustrate the qualities of equity in contrast to the common law as a more flexible and responsive approach to the needs of the people while taking into consideration the actions, inactions and worthiness of the parties concerned. There are twelve (12) of these maxims and they would be discussed one after the other:

  1. Equity will not suffer a wrong without a remedy: This is the basis of equitable jurisdiction as the court of chancery through equity sought to provide relief to litigants where the common law denied them. Where there is a right, there must be a remedy (Ubi jus ibi remedium) therefore, it is the duty of the court to provide remedy for the party deserving even if none has been prescribed in the book of law. This highlights the jurisdiction of equity as it has been established that the inability or refusal of the common law courts to offer relief where wrongs had been done led to the establishment of the court of chancery. However, such wrong must be suitable for judicial enforcement such that not every moral wrong were remedied by the court of chancery. Equity has helped with the enforcement of trusts whereas at common law, the rights of beneficiaries under a trust were not recognized. However, equity compelled the trustees to hold the property for the benefit of the beneficiaries who can now enforce their right not only against the trustees but also against third parties into whose possession the trust property has come except such person is a bonafide purchaser of the legal estate for valuable consideration having no knowledge or notice of the trust.

Equity also provided certain remedies which would assist the court in deciding a case. Naturally at common law, discovery of facts within the knowledge of the defendant or plaintiff or of documents or other things in their possession or power could not be ordered. However with the aide of the auxiliary jurisdiction, the court of chancery could order any of the parties to make discovery on his oath. This was established in the case of Anton Pillar KG v Manufacturing Processes where permission was granted to the plaintiff to search the defendant’s premises to help him discover facts and evidence that would help him prove his case.

  1. Equity follows the Law: The rules of equity didn’t come to abolish the law. Rather, they were developed to supplement the rules of common law and mitigate the harshness of the rules. Kayode Eso Jsc stated in Trans Bridge co Ltd v Survey International Ltd that: “Surely, equity should not be treated as a tyrannous phenomenon threatening the law. It does not exist in vacuo or supposedly roaming about pouring water on the fire of the law. Equity is not a warlord, determined to do battle with the law. It is part of the legal system which has been mixed with the law and the mixture is for the purpose of achieving justice.”

The court of chancery in developing rules of equity never claimed to undermine the powers of the common law court. A man’s legal right is duly respected by equity unless it would be unconscionable on his part to enjoy such rights as illustrated in Savannah Bank v Ajilloh where the litigants evaded paying back the loan he took because the governor’s consent was not sought.

Equity and common law should not be seen as sworn enemies as equity gives recognition to common law. Equity accepts the common law ownership of the trustee but compels the trustee to exercise that legal ownership for the benefit of the beneficiary. Also, estates and interests in land which existed at common law also exists in equity. Just like common law interests, an equitable interest can devolve on intestacy. Equity was however not free to accept or reject provisions of statute, which implies that a court of equity is just as bound by a statute as a court of common law. However there are instances where equity has refused to follow the law especially if doing so would amount to injustice. For example, although equity is bound to follow the law, it will not allow such law to be used as an instrument of fraud. This has given rise to the doctrines of concealed fraud, part performance and secret trusts. We must note that equity is part of the legal system whose aim is the attainment of Justice.

  1. Where the equities are equal the law prevails: This maxim deals with the priority of competing interests in property, one of which is legal and the other equitable. Where two competing interests are equal in the eye of equity, then the legal interest prevails over the equitable interest except the legal encumbrancer had notice of an equitable interest in the property before purchase (notice may be express or implied). In addition, where there has been fraud, duress or misrepresentation in connection with the acquisition of legal title and where a court of competent jurisdiction has set the transaction aside.

In Pilcher v Rawlins where the legal estate in trust property was conveyed to the defendant by was of legal mortgage. The court held that since the defendant was an innocent purchaser for value and had no notice, his legal title would prevail the beneficiary’s equitable interest in the property. Also in Joseph V Lyons where ‘A’ assigned his after acquired stock to ‘B’ and later pledged the same to ‘C’. The court held that ‘C’ being a bonafide purchaser for value without notice had priority over ‘B’.

It should however be stated that in the development of the concept of notice, equity had modified the conditions governing the transfer of interest in land. For instance, a pirchaserbis expected to investigate the title of his vendor before accepting a conveyance and parting with his money. Consequently, a purchaser is bound by all equities which he discovers during his investigation or that which he would have discovered if he had applied due diligence. In the same vein, if he engages the services of an agent to act for him, he is bound by all equities which the agent discovers while investigating and those which he would have discovered if he had acted with reasonable diligence.


  1. Where the equities are equal, the first in time prevails: Equitable interests are ranked in order of their creation. An earlier equitable interest in the property will take precedence over a later equitable interest in the same property except the prior holder is guilty of fraud or gross negligence. In Rice V Rice, the court noted that issuance of purchase receipts without collecting payment created a subsequent equity thereby postponing the vendor’s equity due to his negligence. Subsequently, the purchaser deposited the conveyance with Y, who had no knowledge of the vendor’s equitable lien. The issue for determination was who was entitled to priority between Y and the Vendor. It was held that Y had priority over the vendor and that although the vendor’s equity was earlier in point in time, nonetheless the equities were not equal since the conduct of the vendor (negligence) facilitated the creation of the later equity.

Under the rule in Dearle V Hall, a subsequent equitable encumbrancer can have priority over an earlier equitable encumbrancer. In Dearle V Hall, the court noted that priority in assignment of choses in action was to be determined by the order in which notice reached the debtor.

  1. He who seeks equity must do equity: This means equity in its basic sense of what is just and right. A plaintiff who desires to have an equitable relief or remedy must be prepared to do what is fair and just towards the person against whom he seeks such relief or remedy, otherwise Equity will not avail him. In Brown V Adebanjo, a trespass was committed by the defendant against the plaintiff’s land and it was agreed that the vendors of the defendant would give the plaintiff another land as a substitute for the one trespassed upon by the defendant, because the plaintiff had built on part of the land, the defendant’s vendors changed their mind and suggested that the defendant should compensate the plaintiff monetarily which the plaintiff agreed to. The defendant failed to pay the agreed compensation which made the plaintiff bring an action against them. The trial judge raised suo moto the equitable doctrine of representation and estoppel by election. Upon appeal, the court of appeal held amongst other things that there was nowhere in the record of proceedings where the defendant in order to show his good faith made any specific offer of monetary compensation to the plaintiff for his encroachment upon the plaintiff’s land which the defendant himself admitted, the court also held that if the defendant wanted any equity from the court, he himself ought to have displayed some equity to the plaintiff.
  2. He who comes to equity must come with clean hands: A person seeking an equitable relief must show that he has conducted himself in a fair and proper manner vis-a-vis the third person in relation to the transaction, giving rise to the relief sought. He must also show that his past records in the transaction are clean for he who has committed iniquity will not have equity. It is not to say that it is expected of a party to have led a completely blameless life it is only expected for his record to be clean in relation to the equity claimed. In Viatonu V Odutayo, a sale of a mortgaged property was set aside because the mortgagee in exercising his power of sale did not act bona fide (in good faith). In Craig v Craig, the petitioner who had sought dissolution of marriage with the respondent on the ground of the latter’s adultery and cruelty had been guilty of adultery herself but refused to make the confession. She was held to have acted in good faith and therefore not entitled to the dissolution of marriage.

Also, equity will not assist a party who has benefitted from a transaction to plead illegality in such transaction to prevent the other party from benefiting from same.

  1. Delay defeats equity or equity aids the vigilant and not the indolent: (vigiilantibus non dormientbus jura subveniunt) A person who sleeps on their right or who allows certain conducts to affect their legal rights for a long time cannot seek redress in equity. This is because the court of chancery can only be brought into activity by conscience, good faith and reasonable diligence. The delay that will be sufficient to prevent a litigant from evoking equitable jurisdiction is known as “Laches”. Section 24 English Real Property Limitation Act 1833 provided that an action to recover land or rent in equity must be brought within the same time as a legal claim. Section 31 of the Limitation Act 1966 provides that an action to recover money or other property or in respect of any breach of Trust shall not be brought against a trustee or any persons claiming through him after the expiration of 6 years from the date on which the right of action accrues. However, this limitation will not apply to an action against trustee or any person claiming through him where the claim is founded on any fraud or fraudulent breach of trust to which the trustee was a party or privy or the claim is to recover trust property or the proceeds still retained by the trustee and converted to his own use.
  2. Equality is equity: This maxim stems from the very notion of equity as regards impartiality. It proceeds in the principle that a right or a liability should be shared among the parties involved as equal as possible. Unless there is sufficient reason to the contrary, people who are entitled to property should have the certainty and fairness of equal division because equity delights in equality. Equity proceeds in the principle that a right or liability should as far as possible be equalised among all interested. Where two or more persons may form a partnership to engage in business with a view to making profit, the property is divided among the partners proportionately according to their shares and contributions in the partnership.

Also, where property is to be divided among certain people and there is no basis for such a division, the rule of equal division will apply. The balance in joint account of husband and wife will be divided equally between the two spouses. In Jones v Maynard, where there was no special agreement governing the account, it was held on the dissolution of marriage that the wife was entitled to one half of the balance and one half of the investment in accordance with the maxim equality is equity.

  1. Equity looks on the intent rather than the form: Equity insists that what is important is the substance and not the form and will therefore not allow a matter of form to defeat that of substance. In Parkin v Thorold the court said: ” Courts of equity made a distinction in all cases between that which is a matter of substance and that which is a matter of form and if it finds that by insisting on the form, the substance will be defeated, it holds it to be inequitable to allow a person to insist on such form, and thereby defeat the substance.”

Equity does not favour technicalities and so may refuse to decree specific performance of a voluntary agreement even if it is under seal and so enforceable at law.

  1. Equity looks on that as done which ought to be done: This maxim lies more in the areas of property law. The division of property into personalty and realty is important when question of distribution of property arises. For example, if property is directed to be converted from one form to another, the property in equity Is regarded as converted from one form to another, the property in equity is regarded as converted in form from the moment the direction becomes effective. Equity treats a contract to do a thing as if the thing were already done, though only in the favour of the person entitled to enforce the contract specifically and not in favour of a volunteer. In the case of Dr N.A Iragunima v Rivers State Housing and Property Development Authority & Ors, where the Supreme court contended that since okoro has done all that he was required to do and that what remained was for the 2nd defendant to execute the new lease in favour of okoro which was not done, the Supreme Court concluded equity regards that as done which ought to have been done.
  2. Equity imputs an intention to fulfill an obligation: if a person is under an obligation to do a certain thing and he does some other act which is capable of being regarded as a fulfillment of that obligation, what he does will be regarded as a fulfillment of his obligation. This maxim is the basis of the doctrine of performance and satisfaction.
  3. Equity acts in personam: This maxim governs how equity is administered in law. To act in personam means it acts upon a person’s conscience. This is as opposed to acting in rem (which is acting against a thing such as a property) which is an attribute of common law where it acts upon the property that is subject to the suit. It was established in the earl of oxford case that in the event of dispute between common law and equity, equity shall prevail. Lord Ellesmere insisted that equity was not competing with common law rather equity acts upon the conscience of the parties to a suit. There are grounds on which this maxim can be applied and they are:
  • The defendant must be within the jurisdiction
  • The maxim cannot be relied on to grant an order in person when such will violate legal rules of another country
  • The maxim will not be relied upon to grant an order which would not be enforceable since equity does not act in vain.

In Norris v Chambres, Lord Campbell stated that a court ought not give an order which is not applicable without the intervention of a foreign court as it would be considered brutum fulmen (an empty threat) and a court should not give an order if it will be seen to violate the legal rules of another country.

A person can either die testate or intestate. Simply put, a person can die with or without a Will. The probate registry under the supervision of the High court is vested with exclusive jurisdiction to issue grants of probate or letters of administration in respect of the estate of someone who has passed away. There are three (3) main types of Grants which deal with the administration of the estate of a deceased person and they are:

  1. Grant of Probate (Will + Executor): This is issued where the deceased died testate that is, died leaving a valid will with Williing executors.
  2. Grant of administration with Will annexed: This is issued where the deceased died testate but failed to appoint executors under the will or the executors so appointed in the will renounce probate (they are not interested in being executors) or they are incapable of applying for probate . Where circumstances like the above arise, the court is mostly concerned with the grant of letters of administration to persons interested in administering the estate for the testator.
  • Grant of simple administration: This is granted where the deceased died intestate or where some part of his estate is not covered by the will and there is no residuary clause or even where the will is declared invalid.

Probate is the document obtained in the case of testate succession while a letter of administration is that which is obtained with respect to intestate succession. While it is not impossible to obtain a letter of administration for testate succession, it is impossible to obtain probate for intestate succession. Administration of estate simply deals with the estate of person who died without leaving a will. We must however state at this point that the importance of writing a will cannot but be over emphasized as it makes it really easy for the beneficiaries to receive the intended gift of the testator without stress. It also saves the court unnecessary drama on who has the most legitimate claim to the property and who doesn’t.

Thankfully, Modern laws on the administration of estate which assist the court in interpreting the laws on how estates are to be administered in the absence of a will have been adopted by many states in Nigeria. For the purpose of this discussion, The Lagos Administration of Estate Law would be our reference. Section 2 of The Administration of Estate law of Lagos state 2004 defines an intestate person to be one who dies without making a will or who whether by omission or commission excluded some properties while making a will.

When a person dies testate, it is not stressful to identify personal representatives of such people as opposed to when a person dies intestate where all manner of persons can claim to be related to the deceased person. However those who consider themselves to be personal representatives of the deceased are advised to apply for letter of administration.

Section 49 of the Administration of estate laws of Lagos state makes provision for persons who are entitled to the grant of letter of administration in this order of priority:

  1. a) Surviving spouse.
  2. b) Children of the deceased (even those conceived out of wedlock) or issues of the children of the deceased.
  3. c) Parents of the deceased.
  4. d) Brothers and Sisters of full blood and their surviving Children.
  5. e) Brothers and Sisters of the deceased that are of half-blood and their surviving children that are Sui Juris (of age).
  6. f) Grandparents of the deceased.
  7. g) Uncles and aunties of whole blood and their surviving children.

Any of the persons listed above can be approved by the Court and any such person approved shall be deemed ‘Administrator of Estate’. Every application for letter of administration is usually published in a Gazette to enable any other person interested in being the administrator enters the appropriate caveat. Consequently, letter of administration shall not be granted until a specified period of time usually determine by relevant laws or rules of court in the state of application. Where there is a caveat the letter of administration shall not be granted during the period of the caveat unless such caveator refuses to respond or neglects citation.


A Will is a legal document in which a person known as the testator declares how they would like their assets and properties to be distributed when they die. It is a document that states the wishes of the testator on how their properties are to be administered after their death. The individuals designated to receive any of the properties of the testator are known as beneficiaries and the person(s) vested with the duty of managing the property until its final distribution is known as the executor(s).

A will may also create a testamentary trust (Mortis Causa) which only takes effect after the death of the testator. Where a person has written a will, upon their death, the will must be respected to the letter.


Provisions of Law that Govern Testate Succession

  1. The Wills Act 1837(statute of general application)
  2. Wills Amendment Act 1852(statute of general application)
  3. Married women’s property Act 1893
  4. Wills law 1958 (applicable in states that constituted the whole western region)


A will by nature is ambulatory which means that a will only takes effect from the death of the testator and can never take effect while the testator is alive. Property acquired after a will has been made will be affected by such will however property disposed before the will not be affected by it. We must also note that a will is Revocable and whoever makes the will can revoke it as long as he is alive. In addition, a will must be made with the intention of the testator without any form of manipulation or coercion. That the will was the intention of the testator (Animus Testandi) must be exhibited.


The general rule is that every person has the capacity to make a will. However, it is a well-known fact that to every general rule there’s always an exception or exceptions as in this case:

  • The first exception is that people below the legal age (18) cannot make a will except such person is in active military service.
  • Also, persons of unsound mind do not have the capacity to make a Will unless there’s a medical report attesting to the fact that such will was made while the person was lucid.
  • Furthermore, a blind person cannot make a will unless a blind jurat is included in the will and this is because they are more susceptible to fraudulent activities.
  • An illiterate person who is illiterate in the language of the Will cannot make a Will except the content is read and explained to them before they sign or make their mark on the document. An allegation of fraud or coercion can make a will invalid.


These are wills that are not required by law to necessarily conform in form and capacity to the requirements of making a will. It is an informal will which remains valid even though it does not fulfil the usual legal requirements. It is usually written but can be oral which further proves that normal formalities are not followed. It is applicable to men and women who are in active military service that is, officers who are imminently likely to be posted into an operational area or who are in activities connected with military trainings. This is provided for by Section 11 Wills Act 1837 and Sec 9 Wills Law 1958. This form of will can be made by officers under 18 years who ordinarily would not have had the capacity to make a conventional will.

The will remains valid after the war and even after the maker of the will has left the armed forces.


  1. The will must be in writing but there’s no special format for writing one.
  2. The will must be signed by the testator or by someone in his presence and under his authorization and direction. Thumbprint is sufficient for an illiterate after the will has been properly read to him and where it is clear that he understands the document.
  3. The testator’s signature or acknowledgment must be in the presence of two or more witnesses and those witnesses must also attest the document.
  4. The witnesses must attest the will by signing after the testator and not before him and they must attest the document in the presence of the testator.


All alterations made after the will must be done the same way as the original will. Testators and witnesses are obliged to sign at the margin opposite the alteration. Obliteration on the other hand means destruction or an eradication of written words in a will. It is a method of revoking a will or a clause within a will. Obliteration can be constituted where lines are drawn through the signature of witnesses even if the names can still be deciphered. Testators and witnesses are obliged to sign at the margin opposite the alteration.


Revocation may be expressly done or may be implied. Express revocation occurs when a latter will is made while following the formal requirements. The revocation is to be expressly stated or implied in the wording of the will. Implied revocation often occur where the provisions of an earlier Will is inconsistent with the content of the latter will.

Revocation can also occur by destruction; where the testator tears up the Will or burns or authorises someone to destroy the will in his presence. The destruction must however be backed up by the intention to revoke such will.

Wills can be revoked by marriage. Marriage under the Act deems the property to belong to both the husband and the wife. Marriage celebrated under customary law will however not have effects on the will.

Property Disposable

All properties that the testator owns or is entitled to whether real or personal are disposable under the will. However real or personal property that cannot be disposed testamentarily under the applicable customary law cannot be disposed by a will say for instances Family properties.


The disposition of property is a principle that is given recognition under customary law. Most customary law wills are made orally making them non-cupative. They are oral declaration made voluntarily by the testator. The testator must possess full mental capacity while making the will. It is important to know that the burial arrangements may be determined by the testator.

Also, the declaration of the Will must be made in the presence of disinterested persons who have no interest in the properties. This was established in Ayinke v Ibidunni. It is good if the Will is in writing, however what the testator said orally must not be altered but strictly followed. See Rotibi v Savage.

A chose in action at common law is basically the right to sue. It is an intangible personal property right that is recognized and protected by the law. It doesn’t exist outside of the recognition given to it by law and that recognition does not confer present possession of a tangible object which is what distinguishes it from a chose in possession which is an actual possession of tangible things capable of being held, seen or moved. The distinction between a Chose in action and a chose in possession is clearly shown in the definition given by Channel J in Torkington v Magee where he stated that “a chose in action is a known legal expression used to describe all personal rights or property which can only be claimed or enforced by action and not by taking physical possession.”  To simplify the distinction, money at hand is a chose in possession while money in the bank is a chose in action.

The Black’s Law dictionary defines the term chose in action to mean a proprietary right in personam such as a debt owed by another person, a share in a joint-stock company or a claim for damages in Tort. It could also mean the right to bring an action to recover a debt, money or thing.  Chose in action includes right which are enforceable by action. It could be to recover debts of any kind, to recover unpaid wages (not salary), to sue for damages for an injury, rights of action on a contract or right to damages for the breach of such contract and right to recover the ownership or possession of property whether real or personal. The rights by extension but with some restrictions cover documents such as bills, bonds, notes, cheques and policy of insurance.

A chose in action is a personal intangible right which can only be enforced by taking legal proceedings and not by taking physical possession.

What then is an Assignment of Choses in Action?

Assignment means a transfer of a right or benefit from one person known as the assignor to another person known as the assignee. The general claim was that choses in action were not eligible for assignment and this was partly because it was conceived that such an assignment was an intrusion of a third party into affairs of other persons on matters that were really personal. However by virtue of the supreme court Judicature Act of 1873-75 the doctrine of non-assignability at common was removed. Section 25(6) of the Act provides that any debt or legal things in action may be assigned at law. By this provision, it became possible to assign choses in action both at law and in Equity. In the case of assignment of a debt, the assignee of the chose in action (debt) will be able to proceed against the debtor of the assignor as though the debt was originally owed to him. In other words, an assignee of a debt or other choses in action can in his own name bring an action in court for the recovery of such debt or the enforcement of the entitlement.

Types of Assignments

Assignment of choses in action could either be statutory/legal or equitable. A statutory or legal assignment of choses in action is one basically done in strict compliance to certain conditions embedded in Section 25(6) of the Judicature Act. There are three of such conditions and they are:

  1. The Assignment must be absolute: This implies that the entirety of the underlying rights or interest must be assigned. If for example it is a debt, the assignor cannot assign just a part of the debt or split it among several persons (assignees). It must be an absolute transfer of interest to just one assignee. In Western Nigeria Finance Corporation v West Coast Builders Ltd & Ors (1971) it was held that an assignment of a part of a debt was not absolute and therefore not legal or statutory. Thus, the assignee could not sue the debtor in his name without joining the assignor as a co-plaintiff or claimant.
  2. The Assignment must be in writing: This means that the assignment must be evidenced by some sort of writing however sketchy or inelegant the draft may appear. There must however be an existing debt or legal thing in action over which the assignor may exert his right to assign. It must be noted that it is not a necessity for the writing to be by deed or to be supported by any valuable consideration from the assignee to the assignor. In Udukason Enterprises Nig Ltd v Robinson L Olisa(1972), the defendant debtor had a balance debt of #5,320 to pay to the plaintiff when it was partnership establishment. The plaintiff was previously a partnership before it became a limited liability company. When the partnership was dissolved all its assets and liabilities were assigned to the plaintiff. The plaintiff also wrote a letter to the defendant informing him if the transformation and assignment of assets and liability; including the debt to itself. When the plaintiff sued the defendant for the balance of the debt, the defendant claimed there was no proper legal assignment and that the notice to him did not meet the requirements of a valid statutory assignment of a chose in action under the Act. The court held amongst others that an assignment of a legal chose in action is valid if it is absolute, in writing under the hand of the assignor and where a due notice is given to the debtor.
  3. A written notice must be given to the debtor (particularly where the chose in action is a debt): An assignment will be statutory where the debtor or relevant person is given due notice of such assignment by the assignor. Until the notice is given, it would be wrong to say that the right has been validly assigned. It must be noted that the right of action only commences from the date that the notice is properly given. This is illustrated in Dovat v Louis Orcel (1931). We must also note that a notice only begins to take effect from the date of due receipt by the debtor, as was established in Holt v Heatherfield Trust Ltd (1942). An assignee of the chose in action can give a valid notice to the debtor.

An equitable assignment on the other hand is any assignment that falls short of the strict conditions provided by the Act. However it is not to say that the inadequacies can be fundamental such as absence of a right. Equitable assignments can be generally recovered by an action in Equity. An equitable assignment will arise where the equitable interest of a chose in action is assigned to the assignee or where a purported legal assignment falls short of the requirements of a legal assignment.

The law is that, where there’s a failure to comply with either of the last two conditions under statutory assignment, or if the compliance with the first is impossible say for instance, where the assignment is conditional instead of being absolute, equity will not allow the transaction to be completely void. It is only unenforceable as a legal assignment but still stands as a solid equitable assignment. This merely requires that for the assignee of the legal chose in action to bring an action in respect of the assignment, he has to join the assignor as co-claimant or co-defendant as the case may be. In Performing Right Society Ltd v London Theatre of Varieties Ltd, where the subject of the dispute was the right to be paid a debt which was due the assignor and where he equitably assigned to the appellants, it was held that the assignor out to be made a party in order for the suit to be successful.

That is however an old provision of the law before the Judicature Act. The position of the law now is that an absolute assignment of an existing chose in action whether legal or equitable is complete as soon as the assignor has finally and unequivocally indicated that it should henceforth belong to the assignee.


It must be noted that a legal interest can only be assigned once. This is to say that a legal interest cannot be legally assigned by the same person to different persons. One single valid assignment extinguishes all the right the assignor has in the interest thus making the possibility of having competing or successive legal assignment by the same person to different persons is very rare. So, the idea of a competing or successive assignment is more applicable to equitable assignment of choses in action. Therefore, where there are several competing equitable assignments, certain equitable doctrines usually apply to issue of ranking or priority. Generally, where the equities are equal, the first in time prevails.

However, with reference to competing equitable assignment of choses in action to different and competing assignees, the applicable rule is that decided in the case of Dearle V Hall (1828) popularly referred to as the rule in Dearle V Hall which states that whenever there are competing equitable assignment of choses in actions to different assignees, priority will be given in accordance to the order of issuance to and receipt of notice in writing by the debtor. In Merchant v Morton (1910), two different partners in a firm of partnership assigned debt to the partnership in two different assignees. One of the two assignees gave notice of the assignment to the debtor before the other did. Channel J held that there were competing equitable assignments and that the plaintiff who first gave notice of his own assignment to the debtor before the defendant did was entitled to be given priority over the defendant.

In conclusion, it must be emphasized that in all cases of equitable assignment, it is mandatory that the assignee joins the assignor either as a co-claimant or as a co-defendant before bringing any action against the creditor or any concerned person.

These are equitable defences available in equity shield for a defendant to possibly defeat the legal claim of a Plaintiff. Equitable defences are mostly affirmative defences praying the court to excuse the wrong of the defendant simply because the plaintiff has acted in some inequitable ways that should disallow him from being entitled to the remedies sought in court. It means that the plaintiff has acted in some shady manners and we shouldn’t forget that he who comes to equity must come with clean hands. Prior to the fusion of the courts of Equity and Common law by the Judicature Act, equitable defences were only available at the court of equity. However, equitable defences such as Estoppel, Standing by, Laches and acquiescence now have legal recognition.

Laches and Acquiescence are twin equitable defences which are derived from the maxims, “Delay defeats equity” and “Equity aids the Vigilant and not the Indolent” respectively. Although they are regarded as twins because they go pari-pasu, however they are not particularly the same thing.


The equitable maxim “delay defeats equity” Is the foundation of the doctrine of Laches. In it’s basic sense, laches means delay or lapse or time or lack of diligence in doing something. In equity, generally time is not of essence where a contract is concerned thus making it possible for a decree of specific performance to be granted even where the contractual date for performance has passed. However, a delay which is sufficient to prevent a party from obtaining an equitable remedy is Laches in it’s restricted legal form. A delay by a plaintiff in pursuing his right may furnish a defence in equity to an equitable claim. For instance, pleading delay alone may be sufficient to prevent the plaintiff from obtaining an Interlocutory/Interim injunction via an Ex parte application as the defendant may be entitled to invoke laches to defeat the claim of the plaintiff. The point is, a smaller degree of delay alone may defeat the claim of a plaintiff to an Interlocutory injunction but it may not be sufficient to defeat the claim of a plaintiff to a perpetual injunction. This is because if an interlocutory injunction is dismissed, it is not to say that the plaintiff has been greatly prejudiced as he can still bring an action for a perpetual injunction however a dismissal of a perpetual injunction amounts to a total dismissal of the plaintiff’s claim. Thus, a defendant who seeks to defeat a plaintiff’s claim of perpetual injunction will have to plead more than laches as a plea of mere delay or lapse of time or lack of diligence will not be sufficient in substantive cases involving perpetual injunctions and a claim to title to land. Such a plea of laches must be backed up by circumstances (acquiescence) which will make it inequitable for the plaintiff to enforce his claim. Snell even describes laches to consist of lapse of time coupled with the existence of circumstance which makes it inequitable to enforce the claim. This is the major reason the defences of laches and acquiescence have always tagged along as if they mean the same thing.

We must however stress that the peculiarities and circumstances of each case determine which of the equitable defences to be applicable. In Allcard v Skinner it was held that “Delay will be fatal to a claim for equitable relief if the plaintiff has acted in such a way or manner as to suggest a clear inducement of the defendant into altering his position on the reasonable faith that the claim has been released or abandoned”. Also in Bourne v Swan & Edgar Ltd it was established that the defence of delay can be invoked where the delay may have resulted to the destruction or loss of evidence by which the claim may have been rebutted.

According to Sir Barnes Peacock two circumstances are always important to plead the defence of laches and they are:

  1. The length of the delay.
  2. The nature of the acts done by the delay during the interval.

In the Supreme Court case of Kaiyaoja v Egunla, the Supreme Court upheld the appeal and set aside the judgment of the lower court. Presiding justice T.O Elias (CJN) held thus: “Again, we agree with Mr. Abudu, learned counsel for the appellants that the facts of this case do not support the finding of acquiescence, laches and standing by which was made by the learned trial judge against the appellants. In the first place, the appellants’ persistence in issuing warning notices does not seem to be consistent with acquiescence. Moreover, the period of delay, but we are satisfied that the evidence in this case discloses nothing with regard to the conduct of the present appellants which could be taken to mean acquiescence on their part. In the light of the facts and the particular circumstances of the case before us, we take the view that the doctrine of laches and acquiescence was wrongly applied to this case.”

It must be noted that the decision as to whether the defence of laches will avail a party in any case is majorly for the discretion of the court and will largely depend on the hardship caused to the defendant by the delay and the effect upon the third parties. The discretion is expected to be exercised for the balance of justice. In UBA v MODE it was established that where discretion is exercised by the court, it must be stressed that such discretion must be judiciously and judicially exercised. The equitable defence is not arbitrarily exercised; the court is guided by principles which Sir Barnes Peacock laid down in Lindsay Petroleum co Ltd v Hurd as follows:

“Now the doctrine of Laches in courts of equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might be fairly regarded as equivalent to a waiver of it or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted. In either of these cases, if an argument against relief which otherwise would be unjust is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitation; the validity of the defence must be tried upon the principles substantially equitable…”


It is derived from the equitable maxim “Equity aids the Vigilant and not the indolent” acquiescence can simply be defined as a plaintiff’s conduct from which it can be inferred that he has agreed to certain state of affairs affecting his legal right.

In the Nigerian Supreme court case of Adedeji v Olosho, the court per G.A Oguntade J.s.c defined the equitable defence of acquiescence as a means or conduct from which it can be inferred that a person has agreed to certain states of affairs affecting his legal rights. If a person has agreed to his right being taken away, he should not afterward complain about it, he would be estopped by the fact of his having consented to the act complained of. Since acquiescence operates by way of estoppel, it is a weapon of defence under which the respondents can take refuge. In other words, he who consents to a harm to be done to them cannot bring an action over such acts (Volenti non fit injuria).

Another comprehensive definition of acquiescence was given in the case of Caincross v Lorimer where the court said: “it is a rule of universal law that if a man either by words or by conduct has intimated that he consents to an act which has been done and he will offer no opposition to it, although it could not have been lawfully done without his consent and he thereby induces others to do that from which they otherwise might have abstained, he cannot question the legality of the act he had so sanctioned to the prejudice of those who had given faith to his words or to the fair interference to be drawn from his conduct. In such cases proof of positive assent or concurrence is unnecessary; it is enough that they had full notice of what was being done and the position of the other party is altered.”

Delay or lapse of time may be well taken into consideration to determine whether or not a conduct sufficiently constitutes acquiescence. However, it is possible to find acquiescence without delay (laches) and laches without acquiescence but there’s usually some overlap. In Sayers v Collyers where a house was being used as a beer shop in breach of a covenant that was to be strictly used for residential purposes. The plaintiff filed an action for injunction and failed as the defendant pleaded the defence of acquiescence showing that the plaintiff did not only condone the breach for three (3) years but also patronized the plaintiff by buying beer from the shop. The defence of acquiescence successfully barred the legal claim of the plaintiff.

Unlike Laches which is said to merely consist of delay or lapse of time or lack of diligence, acquiescence as an equitable defence may not bar a claim relating to title to land for instance unless certain conditions are met; they include:

  1. Adverse possession by the person (defendant) which is inconsistent with the possession of the owner (plaintiff). However, a tenant’s possession being a mere leasehold cannot be said to be inconsistent with the possession of his landlord (there’s an agreement and valuable consideration). A tenant will always be a tenant until his position changes lawfully. In Maji V shafi, the Nigerian Supreme Court held “Now in order to ground a plea of long possession showing acquiescence on the part of the other party, it is necessary to show that such possession as relied upon was adverse and of such a character that the other party would be deemed to have actual and constructive notice thereof.”
  2. The possession must have lasted over a long period of time.
  • The real owner must have really exhibited acquiescence and/or laches whereupon the person who relied on it must have altered his position. It means that the real owner must have looked on while the trespasser carried on as the real owner. In Sosan V Ademuyiwa, where the plaintiff in 1976 sought a declaration of title and other reliefs over a parcel of land against the defendants and claimed to be the legal owner of the property through inheritance from years immemorial. The defendants also claimed to have been in effective possession of the parcel of land through their predecessors in title since 1939. The defendant pleaded the equitable defence of laches and acquiescence to defeat the legal title of the plaintiff over the disputed parcel of land. The plaintiff lost at the trial court but won at the court of appeal which spurred the defendants to appeal to the Supreme Court. Upon examination of the records of the lower courts and based on the grounds of appeal, it was discovered by the supreme court that although the defendants were in adverse possession, they had however been on the land for 30 to 37 years, built houses on it, lived on it , even leased portions of it to U.A.C (Nig) ltd. without hindrance from the plaintiff. The court per Kayode Eso Jsc upheld the appeal of the defendants and set aside the majority judgment of the court of appeal and restored the judgment of the lower court which was upheld by the minority judgment of the court of appeal. That is, the equitable defence of laches and acquiescence availed the defendants.

However in instances where it is clearly seen that the plaintiff did not sit by and watch their legal right being affected and issued warning Notice to the defendants then the defence of laches and acquiescence will not avail the defendants as illustrated in Kayaoja v Egunla.

A mortgage is a conveyance of legal or equitable interest in property from the mortgagor to the mortgagee as security for the repayment of a loan on the discharge of some other obligation with a provisor for ceasal upon redemption. In a mortgage transaction, the person who borrows is known as the mortgagor while the lender is known as the mortgagee; the debt itself is called Mortgage debt/loan. Proprietary interest is what is transferred from the mortgagor to the mortgagee.

A mortgage can also be defined as a legal instrument which is used to create a security interest in real property held by a lender as a security for a debt, usually a loan of money. It should be noted that a mortgage in itself is not a debt; it is the lender’s security for a debt. It Is subject to the condition that the title shall be reconveyed if the mortgage debt is liquidated.


  1. Lien: A lien is a right to retain possession of the property of another person until a debt is paid. A lien can be said to be a mere right of retention giving no right to sell or otherwise deal with the property. For instance, a mechanic can possess a lien over a car until a debt is paid. It is a means of coercing the debtor to pay. In Green & All Motors ltd it was decided that a mechanic has a right of lien over a car he has repaired until the owner pays him. However in a mortgage, proprietary interest on the property is transferred to the mortgagee giving him the right to do certain things on the property.
  2. Pledge: A pledge is a loan of money that is secured by the possession of chattels delivered to the lender. A land cannot however be pledged because it is immovable.
  3. A pawn: A pawn occurs in a customary law system. In a pawn transaction, the pawnor grants possession of the land to the pawnee and the proceed or usufruct from the land is used to offset or discharge the loan. The thing pawned must be capable of yielding annual income. Economic trees such as oil palms, cocoa and kola nut trees can be pawned.
  4. Conditional Sale: This is not an outright sale,the purchaser does not even have security over the land. The proprietary interest remains in the vendor, not the purchaser.
  5. A Charge: According to Megarry and Wade, for most practical purposes, a charge is regarded as specie of mortgage; a transaction that best resembles mortgage. There’s however no conveyance of proprietary interest. It only gives the chargee certain rights over the property of the charger. The proprietary interest is not transferred. It must also be noted that land cannot be pledged but can be charged.


A mortgage can either be legal or equitable. It is deemed legal when it Is signed, sealed and delivered. An equitable mortgage is one who falls short of a legal mortgage. It is possible for a person to have both legal and equitable interest in a land or a property.

Legal Mortgage

A legal mortgage is a written document of conveyance. It can also be regarded as a deed which must be signed, sealed and delivered, which means it must be properly executed. In the past, the Red Adhesive (Wax) waiver was used as a seal. In recent times however, for a document to be signed, sealed and delivered it means it must be properly executed that is signed. Everyone who ought to sign must do so and that in the presence of witnesses. Furthermore, legal mortgage transfers legal title to the mortgagee and prevents the mortgagor from dealing with the mortgaged asset while the mortgage still exists.

It must be noted that if it is a company that is involved in a mortgage transaction, the company’s deal must be on the document of the conveyance. A legal mortgage is the most secure form of security and it is recognized by the Land Use Act 1978.


Since equity came to mitigate the harshness of common law, equitable mortgage makes provision for when a person doesn’t have a legal right to a property but an equitable right. In a case where a person wants to borrow money with the same land in which he doesn’t have a legal interest, he may borrow with equitable interest (since he is still the owner of the land) say for example where a person has transferred his legal right under a deed, he may use the land to activate an equitable mortgage. Here, when two equities are in dispute, the first in time prevails.


  1. At Common Law
  2. Equity
  3. Operation of Law.
  4. At Common Law: The mode of creating the mortgage will depend on whether it is a freehold estate or a term of years. In England, there were two ways of creating mortgages; freehold and term of years.
  5. A) Freehold Estate: in the earliest days of the common law, a mortgage was a mere pledge which took either one of two forms. It might be agreed that the lender should enter into possession of the land, and should take the rents and profits in discharge of both the principal and the interest of the loan. This was known as Vivium Vadium (a living pledge) since it was self-redeeming. On the other hand, the arrangement might be that the lender should take the rents and profits of the land in discharge of the interest only, the transaction was regarded a dead pledge (Mortium Vadium) since it did not affect the gradual extinction of the debt. The dead pledge was not lawful and was regarded as sinful. However, by the 15th century, a mortgage transaction took a different form such that at the appointed date for offsetting the loan, If the loan is not settled then the Mortgagee’s interest became absolute and the mortgagor’s interest extinguished and yet the mortgagor was still bound to pay even after losing his land. There was a hard rule that a feoffor (morgagor/debtor) should be bound to repay the loan on the exact date fixed or be denied from redeeming his property forever. According to Lord Haldane in Kreglinger V New pentagonial Meat and Cold storage: “what made the hardship on the debtor a glaring one was that the debt still remained unpaid and could be recovered from a feoffor notwithstanding that he had actually forfeited the land to his mortgagee.”

However, a better change had been made by the intervention of equity. Equity was of the opinion that the property mortgaged was merely a security for the money lent and that it was really unjust that the mortgagor should lose his property merely because he repaid his loan late. Initially, equity only intervened in the cases of accident, mistake, special hardships but soon, relief was granted in all cases. The position now is that even if the fixed date for repayment had passed, equity compelled the mortgagee to reconvey the property back to the mortgagor on payment of the principal sum, interests and costs. In the words of Lord Nottingham in the case of Thomborough v Baker:

“In natural justice and equity, the principal right of the mortgagee is to the money and his right to the land is only as a security for the money.”

It is a habit for equity to concede to the mortgagor a grace period of six months after the appointed day for the repayment of the loan and redemption of his property had lapsed. This attitude of equity is explained by the fact that the mortgagor retains an interest in property, i.e once a mortgage, always a mortgage.  This right of the mortgagor is retainable by his Equity of redemption. The equity of redemption is the mortgagor’s right of ownership to the property subject to the mortgage (once a mortgage, always a mortgage). Once a mortgagor can redeem his loan, he should have his property back.

  1. B) Term of Years: If the security offered by the borrower was a leasehold interest and not a fee simple, there were two methods at common law for creating a mortgage and they are:
  2. Sub-lease/sub-demise

Sub-lease/Sub demise

Leasehold is for a certain term of years and not an absolute right to the property. Here, the mortgagor has an interest for a certain number of years. Sub-demise occur where a person mortgages his interest on a leasehold .In a sub-demise, mortgage is created for a period slightly shorter than the term the mortgagor/sub-lessor possess on the land, this is to say that the mortgagor/sub-lessor cannot lease out all the term of years he possess on his property so let’s say that a person has a 20 years interest in a property, he can only lease out, 15, 18 and even 19 years but he cannot lease out the whole 20 years.

The advantage of this method is that, the mortgagee/sub-lessee is not subjected to the burden of any Covenant that may be contained in the Head-lease since there’s no privity of estate between the mortgagee/sub-lessee and the head lessor.


In an assignment, a person can mortgage the whole interest they have in a property. This is to say if he has 10 years, he can mortgage the whole 10 years because he has an absolute interest. This method is however not entirely desirable because it subjects the mortgagee/sub-lessee to the burden of a covenant that may be contained in the head-lease because privity of estate exists.

  1. 2. EQUITY

A mortgage may arise in equity through the following ways:

  1. Equitable interest.
  2. Agreement to create a legal mortgage.
  • Delivery of title deed in equitable interest.

Mortgage as an equitable interest

Equitable interest is mortgageable. The most classical example is where a mortgagor creates a second mortgage over the same property in favour of a subsequent mortgage. If the interest a person has in a property is equitable, he can only transfer the equitable interest after all one cannot give what he doesn’t have. Here, two maxims must be taken into consideration and they are:

  • Where two equities are equal, the law prevails.
  • Where the equities are equal, the first in time prevails.


Agreement to create a legal mortgage

If there’s an agreement to create a legal mortgage between the mortgagor and the mortgagee; that in itself is an agreement because equity sees as done that which ought to be done. A legal mortgage is to be signed, sealed and delivered and also to be in writing (since it’s a written document of conveyance). However, if a legal mortgage falls short of the requirements of a legal mortgage, instead of it being thrown away as it were, it would be construed as an equitable mortgage.


Delivery of Title Deed

The most common method of creating an equitable mortgage is the deposit of title deeds by the owner of the land with a lender in consideration for the loan with the intention to create a security interest in favour of the lender in respect of the property to which the deed relates. It has been held in Russel v Russel that an equitable mortgage is created by the delivery to the lender of the title deeds relating to the borrower’s land provided it is intended to treat the land as security. Therefore, the requirement of a memorandum is excused and the mere act of deposit constitutes an act of part performance. In practice however, the delivery of title deed is always accompanied by an execution of a memorandum under seal as this may enable the equitable mortgagee to have the powers of a legal mortgagee under the property and conveyancing law.


  1. The Right of Foreclosure: foreclosure is a judicial procedure by which the mortgagee acquires the land for himself free from the mortgagor’s equity of redemption. Simply put, when a foreclosure order is granted, the mortgaged property is vested in the mortgagee fee from the mortgagor’s equity of redemption. The court however prefers sale to foreclosure order. However, where the court deems it fit to decree foreclosure nisi by which the mortgagor is given a fixed time usually six months to pay the debt and upon the lapse of this time, if the mortgagor is unable to pay the foreclosure order is made absolute. The effect of this is that the mortgaged property now belongs to the mortgagee. Where there are more mortgagees than one interested in the same property, an order absolute by the first mortgagee foreclosed all subsequent incumbrances but if say for instance it is the second mortgagee who first obtains the foreclosure order, the effect is that the interest of the subsequent mortgagees behind him is foreclosed but the right of the first mortgagee is to be left untouched. The rule that guides it is “foreclose down”. An order of the court is essential for foreclosure. Re Farnol Eades Irvine & Co. Ltd, where the court stated that foreclosure is done by the order of the court and not by any person.

The rule of foreclosure applies to an equitable mortgage where a deposit of title deeds with the lender has been accompanied by an agreement by the borrower to give a legal mortgage if required to do so. Since no legal estate is involved, the court’s order absolute will direct the mortgagor to convey the land to the mortgagee unconditionally and it is immaterial whether his mortgage is made merely by deposit of title deeds or is accompanied by a written memorandum.

  1. The Right to Sell: This power arises as soon as the date fixed for repayment has passed or where the mortgage debt is payable by instalments the power arises as soon as an instalment is due and unpaid. The power only becomes exerxisable where the mortgagee satisfies any of the following conditions:
  2. a) Where the mortgagee has served notice requiring payment on the mortgagor and where the mortgagor has defaulted in payments of the mortgage money or part for three months after such service,
  3. b) Until some interest is in arrears and is unpaid for two months after becoming due or
  4. c) There is a breach of some covenant contained in the mortgaged deed which imposes an obligation on the mortgagor.

Under equity, the general rule is that foreclosure and not sale is the proper remedy for an equitable mortgagee. However where the mortgage is made in a form which entitles him to require the execution of a mortgage containing a power of sale, then he can exercise the statutory power of sale which only applies where the mortgage was made by deed. In the case of an equitable mortgage not made by deed, there is no power of sale out of court.

  1. The Right to enter into Possession: it is the right of the legal mortgagee to seek possession of the mortgaged property. Since a legal mortgage gives the mortgagee a legal estate in possession, he is entitled to take possession of the mortgaged property as soon as the mortgage is made even if the mortgagor is not guilty of any default. If the property was already let to a tenant before the mortgage was made or if a subsequent lease in binding on the mortgage, the mortgagee cannot take physical possession but can take possession by directing the tenants to pay their rents to him in place of the mortgagor. However, a mortgagee who is in possession has the duty to account for all the money that he received while in possession which is due to the rule that the mortgagee must not obtain any additional advantage out if the mortgage beyond the payment of the principal sum, interest and cost. Where the mortgagee occupies the rent instead of letting it, he is liable for a fair occupation rent and where is also allows the property to remain vacant which he could have let out, he is also liable to pay an occupational rent.

An equitable mortgagee does not have the right to take possession of the land unless the right to do so has been expressly reserved or unless the court makes an order to that effect.

  1. Appointment of a Receiver: in order to avoid the responsibilities of taking possession, a well-drawn mortgage provides for the appointment of a receiver with the extensive powers to manage the mortgaged property. The mortgagee by appointing a receiver ensures that the property is efficiently managed and that his claim for interest is made from the net rents and profits. At first the appointment was made by the mortgagor at the request of the mortgagee but subsequently mortgagees began to reserve a power for themselves acting in theory as agents of the mortgagor. The appointment of a receiver may be expressed in the deed or mortgage.

If an equitable mortgage is created by a deed, the statutory power of appointing a receiver is available to the mortgagee but in the absence of a deed, the appointment must be made by the court.


  1. Right of ownership: where the mortgagor is in possession, he remains the true beneficial owner of the property in the eyes of equity. Consequently, he can grant a lease of the property and take the profits and rents. He’s not liable to account for the rents and profits so derived to the mortgagee.
  2. The Right to Bring Actions: The mortgagor has no immediate legal title to possession as against the mortgagee. As against the third parties such as trespasser or neighbours committing nuisance, the mortgagor like any other person lawfully in possession of land could sue at common law to protect that possession. Thus, he could recover the land from anyone other than the mortgagee or someone claiming through him.
  3. The Right of Redemption: it is the right of a mortgagor to redeem a mortgaged property upon the discharge of the mortgaged liabilities. The right of redemption postulates that there must be no clog or fetter on the equity of redemption. Since the object of a mortgage Is merely to provide the mortgagee with a security, any provision which directly or indirectly prevents the discovery by the mortgagor of his property upon performance of the obligation for which the security was created is repugnant to the very nature of the transaction and therefore void. The relevant maxim is “once a mortgage, always a mortgage.” We must note that there is a difference between the equity of redemption and the equitable right to redeem. Equitable right to redeem is a development of equity which arises as soon as the contractual date of the redemption of the mortgage has lapsed. The right of redemption may be lost by lapse of time. Section 27 of the Limitation Act provides that where a mortgagee has been in possession of a property for 16 years, no action to redeem can be brought by the mortgagor or anyone claiming through it.”

In ordinary parlance, trust is the confidence in or reliance on a person. However we already know that there is always a technical meaning for law terms and they are not to be taken at face value. Trust at law has been defined by different scholars but the most generally accepted definition was given by Prof Keeton and he defines trust to be “a relationship whereby a person known as the trustee is compelled in equity to hold property whether real or personal and whether by legal or equitable title for the benefits of persons of whom he may be one and whom are termed cestuis qui trust or for some other object permitted by law”.

Terms of a Trust

  1. Settlor: The owner of a property that creates a trust. This is a term used intervivus(while alive). Where a person gives away his property to another as a trust while he still lives.
  2. Cestuis qui trust: Means the beneficiary or beneficiaries as the case may be.
  3. Trustee: A trustee could be a person or a company that holds and administers property or assets for the benefit of specified individuals or for public use.

A trust can be created in two ways:

  1. Mortis Causa: This is a trust created through a will but only takes effect after the death of the testator.
  • Trust Intervivus: it is a trust created during the lifetime of a settlor.


  • With Trust, properties can be held on behalf of persons who cannot legally hold such properties such as infants, people of unsound mind etc.
  • A trust allows the settlor to make his devise without it being subjected to public scrutiny.
  • Trust is used to cater for dependants, mistresses and illegitimate children.
  • Trust could be used for the furtherance of charitable works.


  1. Bailment: is the delivery of chattels from the bailor to the bailee for specific purpose after which the property is returned to the bailor or dealt with in accordance to the bailor’s instructions. Whereas, trust is a relationship where a person known as a trustee is compelled in equity to hold the property whether real or personal for the benefit of persons of which he may be one. Bailment is recognized under common law while trust is developed under equity. The duties of a bailee are minimal and different to those of a trustee. We must also note that only chattels can be bailed meanwhile, any property whatsoever (real and personal) can be a subject matter of a Trust. A property cannot be bailed because it is immovable and cannot be physically delivered to the bailee.
  2. Trust and Agency: Agency is similar to trust in a number of ways. In an agency agreement there’s always a principal, an agent and a third party and same goes for a trust relationship as there’s always a settlor, a trustee and a beneficiary. Agents like trustees must act personally i.e, they cannot or must not sub-delegate (delegatum non protest delegares). Another similarity is seen in accountability; an agent is accountable to their principal as trustees are accountable for profits to the beneficiary, in other words, in agency and trust relationships, the agent and trustee have a fiduciary role.

There are however differences between an agency and a trust one of which is that a trust is proprietary; a trustee can deal with a property by improving or leasing it based on his discretion but an agent has to follow the orders of their principal.

  1. Trust and Contract: contract and Trust are both legally enforceable. While a Trust gives right In Rem , a contract gives a right in personam(strictly between two parties). Also, unless a contract is under seal, it must be supported by valuable consideration, in trust however, a beneficiary need not furnish consideration. Furthermore, only parties to a contract can sue on it but privity does not affect trust.
  2. Trust and Power: The major difference is that trust is imperative (deals with specific instructions) while power is discretionary; a person could choose or choose not to do something. In Re weeks settlement 1897, a testator left the property for his widow for life with the provision that she could leave it to the children in equal share but she sold it instead. The court held that it was a trust for it was highly discretionary. Also in Re coats where the testator said “if my wife feels that I have forgotten my friends, I direct my executors to pay to such friends or friend as nominated by my wife a sum not exceeding 25 pounds per friend ” it is already clear from the wordings that the wife had the power to decide whether or not any friend has been forgotten.

Applicable Laws of Trust in Nigeria

  1. Property Conveyancy law (PCL) applicable in states of the old western region including Edo and Delta. Lagos is however governed by Property Conveyancy Act.
  2. Administration of Estate law.
  3. Public Trustees Act and Law
  4. Land Use Act
  5. Trustees Investment Act.

How can a Trust be constituted?

Trust can be constituted in two (2) ways and they are:

  • Conveyance to a Trustee
  • Declaration of Trust

Conveyance to a trustee must be backed up by action. All that has to be done in respect of the property must be ensured to be done. If it is a chattel, it must be delivered and handed over to the trustee and if it is land; since land is immovable, the title documents, deed of assignment, receipt concerning the land must be handed over to the trustee. Where it is the case of shares, the shares must be duly transferred to the trustee. We must note that a trust cannot be created by mere words of mouth. Sec 7 statutes of Fraud 1677 states that any declaration of trust in respect of land must be a memorandum in writing and signed by both parties. In Milroy v Lyod where a settlor gave shares to Samuel lyod to hold it in trust for the beneficiary but didn’t go to the bank to transfer the shares, it was held that no trust was created because a proper conveyance had not been constituted. It is a rule that a trust cannot be created by mere words of mouth.

Declaration of trust on the other hand occurs when a settlor declares himself as a trustee for the beneficiary. He must also fulfill all he has to in order to make the trust a valid. In Jones v Locke where a father gifted his son a cheque of £900 but didnt sign it at the back and neither did he take it to the bank for proper execution. Upon his demise, it was held that there was no express trust as the evidence only showed an intention to make a gift of the cheque to the infant but not to declare a trust.

The reason it is advised in law for a person to do all he is supposed to do to make a gift pass to another person is simply because equity will not perfect an imperfect gift nor will equity aid a volunteer.

There are exceptions to the rule of equity not perfecting an imperfect gift and they can be illustrated in the following instances:

  1. In the rule established in Strong v Bird: For this exception to be applicable, the property must have been duly and lawfully vested in the donee/trustee and there must also be an intention from the donor to make the gift continue even after the donor’s death. In Strong v Bird, Bird borrowed £1,100 from his stepmother. She was living with him and paying him rent and it was agreed by both parties that the loan would be repaid by a reduction in the rent until it was settled. She only paid the reduced rent twice and afterwards continued paying the rent in full until her death and even made the stepson the executor of her will. Upon her death, her next of kin attempted to recover the debt from Bird. The court held that the appointment of Bird as the executor was an evidence that the loan to Bird was a gift to him because the executor is responsible for calling in debts to the testator’s estate and it would be ridiculous for the executor to sue himself for debt.
  2. Donatio Mortis Causa: is a gift made inter vivus(while alive) but takes effect after death. It is a bridge between Inter vivus and Mortis causa; a bridge between life and death. Essential requirements of a donatio are that:
  • The gift must have been made in contemplation of death but not necessary in expectation of death.
  1. The subject matter of the gift must have been delivered to the donee only that it can’t take effect until the death of the donor.
  2. The gift must have been given under such circumstances as to show that the property is to revert back to the donor if he should recover. In Thompson v Mechan where the donor was going on a very hazardous journey and now made a donatio Mortis cause at that time he was contemplating death. Also in Wilkes v Allington, the donor was suffering from an incurable disease and made a gift because he thought he didn’t have long to lite but at the end of the day didn’t die of it.
  3. Proprietary Estoppel: If after an imperfect gift has been made, the donor stands by and watch the donee improve the gift then later comes to make a claim on such property after the donee has altered his position. The law will compel such donor to perfect the gift by handling over the necessary documents to the donee. Also, conveyance of a property to an infant is an imperfect gift because an infant does not have the capacity to own a property, however by section 35(4) of the Property conveyancy law, a property can be conveyed to a person on behalf of the infant.

For a trust to be validly created, three conditions must be met. These conditions were laid down by lord Longdale MR in knight v knight, the conditions are otherwise called “the three certainties” and they are:

  • Certainty of Words/intention
  1. Certainty of subject matter
  2. Certainty of Object

Certainty of Words

Technical words are not required for the creation of trust. The words of the trust must be examined in each case to determine whether they impose an obligation of trust on the donee. If from the words, it is clear that the testator intends to create a binding duty to carry out his wishes, then a trust is created. In Ali v Ali, the words “I leave my property in charge of…, for the benefit of…” was construed to be a trust.

However, placatory words such as hope, wish, desire, in confidence etc. are frowned at. In Re Adam v Keshington Vsstry, a testator gave his real and personal property for the use of his dear wife in full confidence that she would do what is right for the benefit of his children. It was held that there was no trust. Similarly in Comiskey v Bowring, a testator gave his real and personal estate to his wife in full confidence that she would make such use of it like he would himself. It was held that there was no trust.

The effect of uncertainty of words/intention instant the trust fails and the donee/trustee enjoys the benefit.

Certainty of Subject Matter

The subject matter of the trust (what the settlor intends to gift) must be clear and certain else the trust will fail and this is because a person cannot give something that is not defined. Land, chattel, chose (shares) must be certain. As a matter of fact, the interest that should be given to each beneficiary as well as the percentage must be stated. The exception to this is where the trust is discretionary; the trustee determines the subject matter.

In Re Golays Will Trust, the testator directed the trustees to choose one of his flats and to receive a reasonable income from his other properties. It was held that the trustee could choose any of the flat. The effect of uncertainty of subject matter is that the trust fails and the trustee takes the benefit. The solution to uncertainty of subject matter is sometimes embedded in the maxim equality is equity in which case everything will be shared equally among the beneficiaries.

Certainty of Object

The identity of a beneficiary must be known except it is a charitable trust. Lord Denning in Re-Vandervell posited that “it is clear laws that a trust other than a charitable trust must be for ascertainable beneficiary”. In Brown v Gold a trust for the testator’s old friends failed because the words, old and friends are ambiguous. Also in Re-Ball, a trust for the testator’s dependants failed because it could not be determined. The effect of uncertainty of object is that the trust would fail and result back to the donor’s estate.

The term charity is wide. In its general sense, charity means an attitude of kindness and understanding towards another. In law, the term charity must fall within the purpose, spirit and intendment of the statutes of Uses Act 1601 known as the statute of Elizabeth. Lord Macnaghten in Commission of Income tax v Pensell says charity in its legal sense comprise of four principal division and they are:

  1. a) A trust for the relief of poverty.
  2. b) Trust for the advancement of education.
  3. c) Trust for the advancement of religion.
  4. d) Trust for other purposes beneficial to the community.

Trust for the relief of poverty

The question here is how can one determine poor people in order to successfully create a trust for the relief of poverty? The general standard of the people and profession in the community must be taken into consideration. All the objects must fall within the designated quo. In Re Gardon, a gift for ladies of limited means was held to be a relief of poverty. Also, in Re-Cottam, a trust to provide flat at an economic rate for aged persons was held to be a relief of poverty. However, in Re Sanders, a gift for the working class failed for it was not categorized as a relief for poverty.

Trust for the advancement of education

The concept of education is broad and not limited to classroom activities. In Re shaw Will trust, improvement of a branch of human knowledge was held to be for the advancement of education. Anything done for the furtherance of knowledge for the benefit of the general public or a section of it not selected by personal nexus thus in Oppenheim v Tobacco Security Trust Company, a trust for the education of the children of the company’s employees failed.

Education has been defined in Re Wiltrust as the improvement of useful part of human knowledge. A person cannot now hide under the guise of advancing education to propagate some other interest thus in Re-Hummeltenberg; a trust for the funding of a college for the funding of a spiritualistic medium failed. In Re pinion, a trust for a public library devoted solely to the works of pornography failed. A gift for the advantage of political education in association with a political party in furtherance of its aim and objectives to the general public failed in Ponal law Memorial Trust.

Trust for the advancement of religion

This has been defined as any form of monotheistic theism which requires spiritual belief in recognition of some unseen powers. It may include morality but is not limited to and greater than morality. Any form of religion whether popular or unpopular in as much as it is not contrary to public morality. In Fatumola v Ogundimu it was held that a trust for the advancement of religion must invariably be public at large, not a section of it. It must benefit the generality of the public. In Re moon; trust for the propagation of mission work was held to be valid. Also in Re Bacca, trust for the increase of salary of clergymen was held to be valid. However in Hoane v Osborne, the upkeep of the grave of one clergyman was held to be invalid. In Iyanda V Ajike the trust for the maintenance of family mosque was not held to be charitable.

Other purposes beneficial to the community

This includes every other object for the benefit of the public. Such as, trust for the provision of hospital care for the sick free of charge, fire brigade, preservation of animals as seen in Re smith.  In addition,  a trust to a private person that occupies a public office would be held to be charitable.

Essentials of a charitable trust

The basic essential of a charitable trust is the requirement of public benefit. The trust must benefit the public at large. However, a trust to a private person that occupies a public office would be held to be charitable. In Re Jonnes, trust for a vicar for his work in his parish was held to be charitable.


Cypress means closely related to or closely resembles. Where it is impossible or impracticable to carry out the trust, the trust will not fail but will be applied cypress, that is, it will apply to something closely related to it. The two characteristics for a cypress doctrine are:

  1. Impossibility or impracticability to carry out the trust
  2. General charitable intention by the donor.

 Impossibility or impracticability

In Dacoastal v De pao a trust for the establishment of an institution for the purpose of educating people in Jewish religion was impossible because it was during the reign of Adolph Hitler. It was applied in a way that they admitted people to learn about other religions. In Re dominion student Altrust where the trust for commonwealth students of European origin was applied cypress to all commonwealth students.

It should be stated that Cypress doctrine cannot be used to rewrite or remake the original trust.

The general charitable intention by the donor

In Re Hardwood, a trust to the peace society of Belfast could not be carried out because it was discovered that the peace of Belfast did not exist. The court held that because the testator had good intention and acted in good faith, the trust could be applied to other peace society.

Where a gift was given to an institution that has amalgamated or transited the gift would apply to the new identity. However, where an institution has ceased to exist at the date of the death of the testator, the cypress doctrine will not apply because there was no charitable intention; if there was, the testator would have redirected the trust when he discovered the institution no longer exist before his death.


It simply means life in the being plus twenty-one years. Generally, private trust will be caught by the rule against perpetuity but charitable trust cannot be caught by perpetuity; it can be eternal.

 Advantages of Charitable Trust

  • Charitable trust will not fail for uncertainty of object.
  • It is not affected by the rule against perpetuity.
  • It is exempted from Tax.

As opposed to charitable trust, an express private trust is created by the acts of a person known as the testator and for the benefit of private persons. It can be done inter vivus or by Mortis Causa(a will). There are different types of private trust and they are discussed below:

  1. Secret Trust

A secret trust can be fully secret or half secret. It is one of the means employable by a testator who wishes to cater for beneficiaries whose identities he doesn’t want revealed. Secret trust is usually done Mortis Causa. It is used majorly to cater for illegitimate children and mistresses. If the trust is fully secret then the will or testament will not disclose there’s a trust. For instance, the testator may include a clause like; I give my car to Barrister keji, which does not indicate any trust.  For a fully secret trust to be created some requirements must be fulfilled and they are:

  • The testator must intend that the donee (trustee) should hold the property in trust for the beneficiary.
  • The testator must have communicated his intention to the trustee before the gift takes effect.
  • The donee must accept the trust.
  • The identity of the secret beneficiary must be communicated to the done (trustee) during the testator’s lifetime. If this is not done, the trust may fail for uncertainty of object and the trust will result back to the estate of the testator.
  • There must be evidence that the donee holds the property in trust for the beneficiary.

This type of trust requires a very high standard of proof because there’s every possibility of fraud. It is due to this fact that the half secret trust came into existence.  In a half secret trust, the identity of the beneficiary is still not revealed but it is drafted in such a manner that makes it known that a trust has been created. For instance where a testator states “I give my property to Barrister Ademiposi to be held in trust upon the terms I’ve already told her.”

All the requirements of secret trust still apply. In Re Boyes, a secret trust was created by a testator who sent the terms of the trust as a letter to be delivered to the trustee. The letter didn’t get to the trustee until much later after the death of the testator. The trust failed on the ground of uncertainty of object and resulted back to the estate of the testator.

In Re Collin cooper, a testator by his will left the sum of £5,000 to two persons to be secretly held in trust for them. By an amendment to his will(codecil), he increased the sum to £10,000 but that addition was not communicated to the trustee. It was held that the beneficiaries were only entitled to the Initial £5,000 because the requirements of the secret trust were not met.


 When a trust is completely constituted, it means that all that which is to be done concerning that trust has been done. If the subject matter of the trust is a land, the title document, deed of assignment, receipt et all  must have been delivered for equity will not aid a volunteer neither will it perfect an imperfect gift. If the subject matter is a chattel, it must have been handed over since it is movable. If a trust is completely constituted, it benefits the beneficiary.

However, a beneficiary cannot benefit from an incompletely constituted trust except:

  • The rule in strong v Bird applies
  • Donatio Mortis Causa
  • Proprietory estoppel
  • Conveyance to an infant

In Jeffery v Jeffery, a father conveyed freehold to his daughter which he gave the document to the trustee and agreed to convey the leasehold which he didn’t until his death. It was held that it was only the freehold the daughter would benefit from the trust. The leasehold couldn’t benefit her because it was incompletely constituted.


A trust is of perfect obligation if there are human beneficiaries who can enforce it. Where the objects are not human beneficiaries it is termed a trust of imperfect obligation. Most trusts are trusts of perfect obligation.

In Re Astor, a trust for the maintenance of good understanding between nations was held to be imperfect. However, where the trustee is willing to carry it out, it is allowed only that he cannot be compelled to do so. In Re dean, a trust for the maintenance of the testator’s horse was established as the trustee was willing to carry out the instruction. In Adeseye v Williams where the testator directed his trustee to let out his property and collect rent for 15 years then use the rent to build a memorial tomb for him after which the house should be given to the plaintiff. Onyeama CJ held that it was a private trust of imperfect obligation and that the trustee cannot be compelled to carry out the trust.


Where an express trust fails for uncertainty of object, the trust will result back to the estate of the donor. In Re Ames settlement, there was a fund for a marriage but it was later discovered that the marriage was void ab initio. The money resulted back to the donor’s estate because something cannot stand on nothing.

Also, where there’s a failure to exhaust the beneficial interest under an express trust, the trust results back to the estate of the donor. In Re Abbot,  a trust was given for the benefit of Mr A for life and that after his death, the trust should go to his children. Mr A died a bachelor and had no children, the beneficial interest was not exhausted and so had to result back to the donor’s estate. However, where it can be construed that the donor had no intention of the trust resulting back to his estate and doesn’t want the trustee to get the property, such property will be held “Bona vacantia” which means it will pass to the state(government) to be used for public interest.

Where a purchase is done in the name of another, say for instance, if A paid for a property but asked it to be delivered to B, the property still belongs to A. However an advancement which applies where a husband pays for a property in the name of his house but asked that it should be delivered to his wife, such property will be deemed to be for the wife as a gift because of the “in loco parentis” relationship they share as husband and wife. This also applies to father and son.


A discretionary trust occurs where the trustee of a property has a discretion to dispose off a trust property or to share the property to the beneficiaries in a manner that he wishes to.

In Abasi v Kopon, a testator in his will bequeathed all his property to his children who were loyal to him. The trustee shared the property among the children excluding the plaintiff. It was held that the trustee had the discretion to share the property among the children.

The appointment of trustees in Nigeria was originally governed by the English Trustee Act 1893 as a statute of general application (SOGA) and was in force in all states of Nigeria except Ogun, Oyo, Ondo and Bendel states which were states in the defunct western region of the country. Processes for appointment of trustees can be classified into two:

  • First Trustees
  • Subsequent Trustees

Appointment of the first trustees

The first trustees of any trust instrument are ordinarily appointed by the settlor or testator in the deed or Will creating the trust. Where the trust is a trust inter vivos which Is a living trust, the trustees are usually parties to the deed in their official capacity and the trust is properly constituted upon the conveyance of the trust property to them. In a will on the other hand, the same person may be appointed as executor and trustee and where they are different persons, the trust is properly constituted upon the death of the testator. It must be noted that since the title of the executors relates back to the death of the testator, they will hold the trust property in constructive trust pending the transfer to the person(s) appointed trustees in the Will.

Furthermore, trustees hold as joint tenants and if one of several dies, the survivors are the trustees and they and their successors retain the same power and duties as the original trustees, this was illustrated in Re Harding. Upon the death of a sole trustee, his personal representative becomes the trustee. Thus a trust does not usually fail for lack of a trustee. Where a trustee disclaims or predeceases the settlor or testator, the trust still subsist; the only exception is where the settlor or testator made himself the trust dependent upon the acceptance of office by the trustees.

  1. Appointment of Subsequent Trustees

Certain reasons ranging from death, disclaimer, removal, refusal to act, being outside jurisdiction for 12 months and incapacitation among other reasons will give rise to the need to fill the vacuum created by any such circumstances. For instance if a sole or only surviving trustee dies, his personal representative becomes the trustee until the time a new trustee is appointed. The power to appoint subsequent or new trustee is generally governed by the statute and the appointment must necessarily be in writing (by deed). By the provisions of Section 24 Trustee law 1959, new trustees may be appointed in writing by: a) The person or persons nominated in the trust instrument, in the absence of that, b) By the continuing trustees, failing which c) By the personal representatives of the last surviving trustees, failing whom d) The court.

  1. By the person or persons nominated in the trust instrument: where there’s an express stipulation in the trust instrument vesting the power to appoint a new trustee in someone. That person will therefore be entitled to exercise such power failing which a statutory power to appoint will apply. This power is usually given in simple terms to individuals called the Donees. It must be stressed that a donee under this heading is essentially and fundamentally different from a continuing or surviving trustee. In Re Wheeler v De Rochow the settlor gave power to the donees to appoint a new trustee if one of the existing trustees should become incapable. One of the trustees however became bankrupt and absconded. Now the question of who between the donee and the continuing or surviving trustees had the duty of appointing the new trustee arose. The court held that the bankruptcy only made the absconded trustee unfit and not incapable. Hence, there was no basis for the exercise of power of new appointment by the donee and only the surviving or continuing trustee may appoint. It should be noted that section 24 of the trustee law permits the person exercising such power to appoint himself as the new trustee if he so wishes.
  2. By the Continuing or surviving trustees: This is basically where an appointment is made by the sole or surviving/continuing trustee to fill the vacancy in the numbers. It means that a retiring sole trustee or a retiring group of trustees are vested with the right to appoint their successors which is usually done where the number of trustees is not up to at least three. An appointment cannot however be made to extend the number beyond four. By provision of of section 27(1) trustee law, Once a new trustee is so appointed by a deed containing a declaration that the trust property vests in the appointee that declaration ,without any separate conveyance operates to vest the trust property in the new appointee.
  3. By the personal representative of the last surviving trustee: Where a sole or only surviving trustee dies, his personal representative becomes the trustee until the time a new trustee is appointed. A personal representative is either an executor for the estate of the deceased person who left a Will or an administrator of an intestate estate.
  4. By the Court: According to the provisions of section 41(1) of the English Trustees Act 1925 which is in tandem with section 28 of our own trustee law 1959 which states that: “The court may, whenever it is expedient to appoint a new trustee or new trustees and it is found inexpedient or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustees…” The reference to the court here is the high court of a state.

Resulting to the court should be the last option of any interested beneficiary after the earlier preceding options might have been exhausted. The above provision only gives the court a discretion and the circumstances in which the court may exercise such discretion are various and they include:

  • Where all the trustees of a testamentary trust predeceased the testator and difficulty is experienced in obtaining administration of his estate.
  • Where a sole surviving trustee dies intestate.
  • Where the donee is incapable of making an effective appointment because of infancy
  • Where a trustee has, through age or infirmity become incapable of acting.
  • Where a trustee is permanently resident abroad.

In all, the court has power to replace a trustee against his will but upon good reason as displayed in Re Henderson. It has been stated that the power or the court in this instance is discretionary and must always be exercised judiciously. Thus, the court may therefore not exercise the discretion where the power under section 24 of the trustees law can be exercised.

According to Turner L.J in Re Tempest (1886) the courts in exercising their discretionary power may be guided by three principles:

  1. The court will have regards for the last wishes of the testator or settlor if clearly expressed in the instrument if can be inferred from it. The court is bound to give effect to such wishes.
  2. The court will not pander to the wishes of some of the beneficiaries against some other beneficiaries particularly where such will not give good effect to the wishes of the settlor or testator.
  • The court in making such appointment will have regard to the consideration whether such appointment will promote or defeat the due and proper execution of the trust.

The court in making appointments must consider whether the appointment will promote or defeat the due and proper execution of the trust.

It is very important to draw a distinction between a trustee’s duties and his power of discretion. A duty is an obligation that must be complied with and carried out, which implies that a trustee is generally under an obligation to always abide by the terms of the trust instrument in due defence to the wishes of the settlor or testator. The trustee is expected to carry out his duty with utmost diligence. A discretion on the other hand has to do with the judgment of the trustee by the very essence of being a trustee of the property. This discretion is an exercise of power which may or may not be exercised depending on the circumstances. For instance, where a trust instrument authorizes the sale of a property, the trustee is mandated to sell the property , he may however exercise his discretion in determining when to sell or who to sell to provided that no rule or duty is being breached by his action.

Furthermore, if the trust instrument states that the trustee must invest, the trustee will have no option than to invest. Again, he may exercise his discretion in determining what manner of profitable investment to invest in.

Interplay between Duty and Discretion can be illustrated with the case of Re Mayo where there were three trustees for the sale of a trust property. One of them wished to sell while the other two were willing to postpone the sale till a better time. Simonds J held that their duty to sell is an overriding duty which must prevail over their discretion to postpone and since they were not unanimous on the decision to postpone, the minority’s decision to sell will prevail since they were ordinarily under a duty to sell. The view of the single trustee who wished to sell prevailed.

It is pertinent to note that unless it is expressly authorized in the trust instrument, trustees cannot act by majority. Thus, trustees are personally liable for breach of trust depending on their individual involvement in the administration of the trust. Equity indeed expects that all trustees must be active and not indolent. A trustee may also be liable for breach of trust alongside the active trustees merely on his account of inactivity which may be interpreted as condonment. It must be very stated that the position of a trustee is onerous (burdensome) and largely gratuitous. He stands to gain nothing from his work unless special provision is made in the trust instrument authorizing remuneration. It is required of a trustee to observe the highest standard of integrity and a reasonable standard of business efficiency in the management of the affairs of the trust. He is in a fiduciary position and is not entitled to make any secret profit.

The basic right of a beneficiary is to have the trust duly administered in accordance with the provisions of the trust and the general law. Whenever a trustee violates or neglects any of his duties to the beneficiary, he has committed a breach of trust. The violation may be from a deliberate or negligent act or an omission to act or may even arise from mere inactivity.

A breach of trust consists of an improper act, neglect, default or omission of a trustee with regard to trust property or of a beneficiary’s interest in it.  Breach of trust may also include the following:

  • Direct interference with trust property for improper purposes.
  • Failure to exercise proper care in discharging a duty.
  • Discretion exercised in bad faith.

A trustee is guilty of a breach of trust if he fails to do that which his duty requires of he does that which he is not entitled to do. A beach of duty begins from fraudulent conversion of trust funds to a purely technical failure which in the true sense of it harms nobody.

A trustee may be guilty of a breach of trust in the following circumstances:

  1. Where he makes an unauthorised profit out of the trust which is in breach of his duty to not make secret profit.
  2. Where he purchases trust property without authority.
  • Where he engages in unauthorised investment.
  1. Where he favours one beneficiary at the expense of another.
  2. Where he negligently allows trust properties to remain in the sole control of the trustee.
  3. Where he negligently allows one trust fund to become intermingled with another.


It must be noted that trustees are only liable for breach of trust for their own acts and omissions. That is, there is no vicarious liability between them. We must also note that a trustee is not responsible for any loss unless it is proven he was reckless and careless with the property. A trustee will however be liable if he leaves a matter in the hands of his co-trustee without taking active part. A trustee is expected to ensure that the other trustees do not misappropriate the trust funds or else he would have neglected his duty to protect the trust.

In addition, liability may arise where a trustee conceals a breach of trust committed by another trustee. If after a trustee discovers the breach yet takes no step to rectify the breach, then such trustee is liable for breach. It is the rule that a trustee is bound to make good the law to the trust estate.

The trustee is liable to restore the trust estate to the same position it would have been if no breach had been committed as established in Re Dawson. Moreover, where a trustee has committed a breach of trust, the trustee may be liable to pay the capital lost coupled with interest calculated from the day of the misappropriation of funds.

Finally, the liability of trustees is joint and several for the beneficiary for the beneficiary must join all the trustees in an action relating to trust liability. It is pertinent to note that any third party who actually participated in the breach is liable; this was shown by the court in Re cooper v Stoneham.


A trustee who has caused a loss to the trust property by committing a breach of trust may escape liability in any of the following situations:

  1. Leave by court: The court will relieve a trustee either wholly or partly for personal liability of trust if he acted honestly and reasonably and ought to be fairly excused for the breach.
  2. Acquiescence by the beneficiary: This relates to the conduct of the beneficiary after the breach has occurred. If he takes no action during a reasonable period of time to seek redress; the trustee may be released from liability.
  • Statutes of limitation: The limitation statute by virtue of sec 31(1) of Limitation Act 1956 provides that an action to recover money or other property or in respect of any breach of trust may not be brought against a trustee or any person after the expiration of six years from the date from which the right of action accrued. However, the Statutes of Limitation is inapplicable where the claim is based on fraud or fraudulent breach to which the trustee is a party. The limitation statute is also inapplicable where the trust property or proceeds is retained in the possession of the trustee or converted to his use.

3. Where the beneficiary participated in or consented to the breach of trust (volenti non fit injuria), he who consents to a wrong cannot seek remedy. To a willing person, injury is not done.


  • Tracing of trust properties
  • Injunctions
  • A personal remedy against the guilty trustee
  • A personal remedy for the recipient.