THE EFFECTIVENESS OF THE LAW OF TRUST IN NIGERIAN

CUSTOMARY LEGAL SYSTEM

BY
OMOWONUOLA ALABI

INTRODUCTION
The Law of Trust was part of the received English law into Nigeria, which comprised of
Common Law, the doctrines of Equity and Statutes of General Application. Equity was
developed by the Lord Chancellor in the Court of Chancery, the purpose of which was to
mitigate the harshness of the common law. The development of the equitable principles by
the Court of Chancery also influenced the growth of trust. Consequently, the received English
law and case law has to a large extent shaped the development and practice of the law of
trusts in Nigeria.
According to some authors, the meaning of trust as a legal concept is traceable to the moral
connotation of the term which eventually informed its jurisprudential basis. Literally, trust
means confidence reposed in others. It was this moral obligation that was eventually
developed into a legal concept by the English chancery court and it became part of the
Nigerian legal jurisprudence through statutory enactments, its administration regulated by
established principles of equity and statutes. In medieval times, trust was widely employed as
a means of transferring estates from one person to another for the benefit of a third party. The
transferor is variously known as settlor, feoffor or testator, while the person (or persons) for
whom the trust is created is called feofee or beneficiary. In the same vein, the person in
whose care the settlor entrusts the estate is known as the trustee.
It is instructive to note that the office of the trustee is very vital for the smooth administration
of the trust. This is so because the estate is vested in the trustee who holds such property in
accordance with the terms of the trust for the benefit of the beneficiary. A person may be
expressly appointed trustee by an instrument or through some other means recognized by law.
The equitable principle that equity does not want for a trustee is to the effect that considerable
importance is attached to the office of a trustee in the trust administration. Even in situations
where the instrument fails to appoint one, a trustee can be appointed by the court or through
statutory powers.
TRUST
The concept of a trust is recognized under Nigerian Law in relation to investments amongst
others. Where a trustee holds, property, such property is held in trust for the benefit of
designated beneficiaries. This concept is commonly used with investment structures such as
collective schemes and extensively regulated by the stipulated provisions of the law and the
Securities and Exchange Commission. A trust is created by an individual when he executes a
written Declaration of Trust directing one person or more persons (sometimes this can be a
corporate trust company) called a trustee(s) to hold property or assets in accordance with the
terms and conditions contained in the trust instrument for the benefit or one or more persons
or a section of the general public, called the ‘beneficiaries’ or cestui que trust, who are the
equitable owners of the property or assets, while the legal interest is vested in the trustee. In
Nigeria as in most jurisdictions, the law of trusts is governed by statutes and case law. The
trustee is charged with the management of the trust property and holding the same according
to the instructions of the settlor in the trust instrument. It is however possible for a person to
be both the trustee and the beneficiary in a trust. The written Declaration of Trust usually
names the first trustees while it specifies the position for the appointment of successive
trustees and contains the terms of the trust. These terms set out the powers and duties of
trustees and the benefits accruing to the beneficiaries. Other ways of creating a trust are
through the exercise of power of appointment, transfer of trust either inter vivos or in
someone’s Will, by contract and statute.
A trust created by a Will is referred to as a testamentary trust and the terms and conditions of
such trusts are contained in the Will creating it. A trust may be created during someone’s
lifetime i.e. inter vivos and such a trust is called a living or inter vivos trust, in such a case,
the person creating the trust is referred to as the grantor, settlor or donor. The trust agreement
or declaration usually contains the provisions guiding the trust and in the event of the death of
the settlor, the trust property will be regulated by the provisions of the trust rather the Will of
the settlor or provisions of any statute. This is because a trust may supplant a Will since all
the estate of the settlor would have already been planned and settled by the trust before the
settlor’s death. On the other hand, a trust may be the creation of a Will. A trust created inter
vivos may be revocable or irrevocable if such provision is reserved in the instrument creating
the trust.

THE CONCEPT OF TRUST IN NIGERIAN CUSTOMARY LAND TENURE

The essential character of customary land law is that land belongs to the community, the
village or the family. Individual ownership of land is a foreign concept. Under customary law,
all members of the community, village or family have an equal right to the land. Title to land
is vested in the corporate unit. Individuals cannot lay claim to any portion of it as the ‘owner’.
Individual rights are limited to the use and enjoyment of the land. The community head is a
caretaker performing administrative functions in a representative capacity and does not have
sole rights in the land.
The Chief or administrator of the village of head of family has charge of the land and is only
loosely called the owner. He is in essence a trustee and as such holds the land in trust for the
use of the community or family. Every member who wants to use it is entitled to be allocated
an adequate piece for cultivation to satisfy his/her needs but cannot dispose of such land
without the consent of the elders of the community. This legal status of land is in no way
affected by the super-imposed statutory regime of the colonial administration through the
Crowns Land Act. The only meaning of such super-imposition was to vest the root title to
land in the Crown but only notionally as actual ownership was retained by the community
and the individuals who worked the land. In effect the individual once allocated land enjoys
all attributes of "owner" and in case of eminent domain; compensation paid goes to him/her.
The concept of trusteeship is well founded in the system of ownership under customary law
e.g. ownership of family property under customary law is vested in the family as a unit but
the power of management and control of such property is vested in the head of the family and
he is strictly enjoined to exercise the power for the benefit of himself as well as other
members of the family. He enjoys a wide discretion in the exercise of his powers as long as
he discharges his duties in accordance with rules of customary law. Due to the managerial
duties of the family head, he is often referred to as the owner of family property but in the
real sense of it, he acts somewhat as a trustee, holding family property on behalf of the family
members who would be regarded as the beneficiaries. However, the concept of family
property under customary law maintains a strict distinction between management and the
beneficial enjoyment of family property. Thus the burden of management lies with the family
head while beneficial enjoyment of the property vests in members of the family. This is the
basis of trusteeship ideas in the customary law system of property ownership; it is also the
premise upon which fiduciary principles relating to management and control of family
property are formulated.
The legal proposition that the head of the family holds family possessions in trust for himself
and other members of the family is not derived from the received English law of trust. It is
rather, a composite designation of a traditional system of property holding which by itself
creates a unique species of trust.
There is only recognized ownership of family property under customary law and that
ownership is vested in all the members of the family as a group and not in any individual.
Such ownership can only be validly transferred by the head of the family with the consent of
the principal members of the family. This limited power of the head of the family under
customary law to dispose of family property indicates a significant difference between the
powers of head of family as trustee of family property and those of a trustee under the
received English law of trust in relation to his trust. Though strictly constrained by the
instrument creating his trust, the power of an English trustee to confer good title on the
purchaser has never been in doubt, even if the exercise of this power amounts to a breach of
trust.
Under the English legal system, there is a distinction between law and equity in that, the
effect is the creation of two separate titles in one property such that the legal title is vested in
the trustee while the equitable interest is vested in the beneficiary. On the contrary, the
customary law system of ownership of family property does not recognize duality of
ownership. Notwithstanding the extensive and flexible powers of the head of a family in
relation to family property, the head’s duty to consult principal members of the family and
obtain their consent before entering into any major transaction affecting family property
remains of prime importance.
Furthermore, “the duty of an English trustee to account used to provide a distinguishable
feature between the concept of trusteeship under English law and trusteeship under customary
law. It is a well-established principle that, trustee under the received English law is liable to
account to the beneficiaries of his trust. This was not the same as the trustee under customary
law. The non-liability of the head of the family from accounting to other members is a
privilege attaching to his office. This exemption of the head of the family from accounting
has been a feature of the tenure from the very early times and it is now settled incident of
family property until recently. It was held that the head of the family, like a trustee under the
English law, is accountable to the members of the family”. In the words of Somolu J. in
Ajiboye Akande v. Bamgboye Akanbi, “I can see no harm in making the accountability of
trustees of properties held under customary law as strict as that of other types of trustees
known to our law”. Thus, accountability of the family head, though foreign to the customary
law practice, has been adapted and hence the accountability practice of the English trustee
applies to the family head acting on behalf of the family.

CONCLUSION
It is well known that the concept of trust was introduced into Nigeria by the English and
before that time, the entire concept was foreign to the system of administration within the
country. However, in an attempt to reconcile the method of administration of the English with
that of the colonies, trust was introduced. Since its introduction, it has been a focal point in
courts of law being that there has been no distinction between courts of common law and
courts of equity in the Nigerian judicial system as it was in the English setting. But its
administration still remains alien to the customary law system; ranging from the duality of
interest in a trusteeship i.e. the equitable interest held by the beneficiary, as well as the legal
interest held by the trustee, which the customary law does not recognize; the family head
being regarded as a trustee stricto senso, accountability of the family head as a trustee and so
on.
Also in Nigeria the rule is hardly known. In the absence of legislation specifically on the
point, our position is governed by the English common law which, simply put, is that no
interest in property is valid unless vesting takes place not later than twenty-one years, after
the death of the last relevant person who was living at the date the trust was created.

REFERENCES
1. Trust Law And The Administration Of Real Property In Nigeria Ibrahim Abdulkarim
2. Trust - The Rule Against Perpetuity
3. Trust Under Customary Law

4. National Open University Of Nigeria: Equity And Trusts II