FOR THE LOVE OF CHRIST JESUS; THE BEGINNING AND THE END.

LAW OF EQUITY AND TRUSTS PART I AND II

TABLE OF CONTENTS
LAW OF EQUITY PART 1
DEFINITION OF EQUITY.
NATURE, ORIGIN AND RECEPTION OF EQUITY.
THE MAXIMS AND PRINCIPLES OF EQUITY
NATURE OF EQUITABLE INTEREST AND THE DOCTRINE OF NOTICE. 9
EQUITABLE INTEREST AND LEGAL ESTATES
THE DOCTRINE OF NOTICE.
PRIORITY.
PARTICULAR EQUITABLE INTERESTS.
ASSIGNMENT OF CHOSES IN ACTION.
DISTINCTION BETWEEN NOVATION AND ASSIGNMENT.
THE DOCTRINE OF CONVERSION
THE DOCTRINE OF SATISFACTION.
THE DOCTRINE OF PERFORMANCE
THE DOCTRINE OF ELECTION.
THE REMEDY OF INJUNCTION.
SPECIFIC PERFORMANCE.
THE REMEDY OF RESCISSION.
RECTIFICATION.
DEFENCES AVAILABLE TO EQUITABLE REMEDIES.

EQUITY PART II/LAW OF TRUSTS.

DEFINITION OF TRUST.
TRUST DISTINGUISHED FROM OTHER LEGAL CONCEPTIONS.
CLASSIFICATION OF TRUST
EXPRESS PRIVATE TRUST
 ESSENTIALS OF A TRUST… THE THREE CERTAINTIES.
COMPLETELY AND INCOMPLETELY CONSTITUTED TRUST
TRUST OF IMPERFECT OBLIGATION.
RESULTING AND CONSTRUCTIVE TRUSTS.
CHARITABLE TRUSTS.
TRUSTEES. APPOINTMENT, QUALIFICATION, DUTIES, POWERS,
DETERMINATION, REMEDIES FOR BREACH OF TRUST, ETC.
THE EQUITABLE REMEDY OF TRACING.
PERPETUITIES AND ACCUMULATION.

LAW OF EQUITY
This note is too short please consult your textbooks. It should serve as a mere guide. Please
read sentence line thoroughly and ask questions where confused.
DEFINITION OF EQUITY.
Broadly speaking, equity is that which is fair, right and just… a moderator of the rigour of
legal rules seeking to mitigate the harshness. Technically speaking, it is the law administered
by the early courts of chancery. This technical definition is unnecessary in the light of the
fusion of both systems by the Judicature Act 1873 and 1875.
NATURE, ORIGIN AND RECEPTION OF EQUITY.
Traceable to 13th century England with the exercise of equitable jurisdiction by the
chancellors during the reign of king Edward 1.
:: In those days, the Kings Bench, Common pleas and the Exchequer operated independently.
:: The common-law was operated by the writ (form of action) system. A claimant had to fit
his claim into an existing writ. Chancellors were the secretary of state who drew and sealed
royal writs.
:: With the suspension of this power (to draw writs) by the provision of Oxford 12581, the
law became rigid and a claimant who could not fit his claim into an existing writ had no
remedy.
:: The litigant who was denied justice (for inability to fit his claim into an existing writ)
petitioned the king (through the council) who could exercise his prerogative of mercy.

1
Though granted respite by the In Consimili Casu Clause of Westminster 1285
:: The chancellors usually dealt with these petitions. The chancellors in dealing with these
petitions were guided by the ideas of conscience, good faith and reason based on the facts
of each case. This led to the administration of flexible and responsive justice based on the
facts of each case rather than rigid systems of law.
:: This flexible system of justice was criticised by Selden as varying according to each
chancellor’s conscience just as the length of their feet.
As the chancellor extended and consolidated his jurisdiction, inevitable conflicts between
the Chancery and Common Law courts arose. Various cases (like Neath V Rydley and
Courtney V Glanvil) demonstrated the belligerence of the common-law courts towards
interference by the chancery. This notwithstanding, Cardinal Wosely granted “common
injunction” in deserving cases to prevent access to common-law courts. This shows how
aggressive the courts were towards one another.
:: The tension between common-law courts and the chancery became glaring in the Earl of
Oxford’s Case, where a common-law court held that the defendant was entitled to eject the
plaintiff (who built a house) from his land. When the case went to the Chancery, Lord
Ellesmere held to the opposite and granted an injunction to restrain the defendant
(landowner) from ejecting the plaintiff (assignee of lease) from the land as “by the law of
God, he who builds a house must live in it”. This sparked the outrage of the common-law
courts and the quarrel was referred to king James 1 who resolved the dispute in favour of
the Chancery.
:: The Common-law Procedure Amendment Act 1854 and the Chancery Amendment
Act (Lord Cairns Act) were enacted to accommodate the separate administration of the two
systems. For example, it enabled each court to grant both common and equitable reliefs (to
some extent).
:: Subsequently, Both systems of administration were fused by the Judicature Act 1873
and 1875 with Section 16 and 25 respectively providing that equity shall prevail over
common-law in the event of conflict.
:: As years went by, equity began to rigidify as men with legal training assumed the position
of chancellor. As Lord Eldon had once noted that the rules of equity must be well settled.
For example, in National Provincial Bank V Ainsworth, the court refused to recognise the
right of a deserted wife to occupy the matrimonial home. Lord Denning grieved over the
rigidity and emphasised the need for the future generation to create a “new equity”. The need
to do justice without undue regard to technicalities has also been emphasised in-Ezekiel V
Nwankwo.
Although equity has been criticised and seems to have rigidified over the years, equity has
contributed to both substantive, procedural and remedial justice in the following regards:
(amongst others):
1. Equitable Remedies: have been provided especially where damages would not do sufficient
justice to the case. Specific performance compels the performance of an obligation under
a contract. An injunction seeks to restrain or compel the performance of an act in deserving
situations-American Cynamid V Ethicon. Rectification seeks to bring a written agreement
in consonance with the prior consensus of the parties. Rescission seeks to nullify a contract
for deserving reasons. These and many more remedies have been introduced by Equity.
2. Equitable Reliefs: like doctrines of part performance, secret trust, and so on has been
provided. These have been applied in numerous cases like: Walsh V Lonsdale, Obanor V
Co-operative Bank Ltd, Udolisa V Nwanosike, Errington V Errington amongst others to
prevent fraud and do justice to each case.
3. Estoppel: the equitable doctrine of estoppel has arisen to prevent a promisor from going
back on his word where a party has changed his positon in relying on the promisor’s
representation/promise.
4. In Trust:
- Common law did not recognise the rights of beneficiaries. Equity recognises the right of
beneficiaries. The trustee is compelled to act in the interest of the beneficiary.
- Land is now devisable to women who can own separate property- Married Women's
Property Act.
5. In Mortgage: A mortgage is a loan agreement secured with property. The contribution of
equity to the realm of mortgage is that:
- Equity now makes it possible for a mortgagor to redeem his property after the lapse of the
contractual date for redemption. This was impossible at common-law.
6. In Land: The burden of restrictive covenants (agreement that land shall not be used in a
particular way) is now recognised as running with land except for a purchaser without notice.
In conclusion, the ingenuity and conscientious reasoning of the chancellor gave birth to
equity which (at present) touches virtually every aspect of law and justice. Equity has been
received into Nigeria (first) by Ordinance no. 3 of 1863, 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:
The exercise of equitable jurisdiction was based on certain principles which are now
embodied in the “maxims of equity”2. These maxims reflect the nature and essence of equity
in pithy phrases which guide the application of its rules.
Some are fund of numbering these maxims. This at best amounts to an indirect way of
cramming and rigidifying the maxims of equity. The truth is that the total number of maxims

2
J.O. Fabunmi (Equity and Trusts in Nigeria).
 are innumerable. What matters is that you are able to decipher the maxims at work in
examination questions and real life situations.
EQUITY WOULD NOT SUFFER A WRONG TO BE WITHOUT A REMEDY:
This is the root of equitable jurisdiction as the chancery sought to (and indeed equity seeks
to) provide remedy to litigants where the ordinary rules of law denied them.
For example at common law, the rights of beneficiaries under a trust were not recognised.
However, equity now recognises the rights of beneficiaries under a trust and compels the
trustees to hold the property for the benefit of the beneficiaries3.
Equity introduced certain remedies which would assist the court in deciding a case. E.g. the
Anton Pillar Order which enables the plaintiff to discover facts within the knowledge of the
defendant as was seen 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. At common-law, the only
remedy for breach of contract was damages. Equity however added the remedies of specific
performance, injunction, etc. where damages would not be sufficient. All these were done
to provide a remedy where there is a wrong.
EQUITY FOLLOWS THE LAW
Kayode Eso JSC noted in Trans Bridge Co Ltd V Survey international Ltd that equity does
not exist in vacuo. Equity was developed to supplement and mitigate rather than override
common-law rules. Equity and common law should not be seen as always fighting.
- Estates and interest in land which existed at common-law also exist in equity. For example
restrictive covenants- Tulk V Moxhay.
- Just like common-law interests, an equitable interest can devolve on intestacy.
- Just like common law, equity acknowledges that legal estate is vested in trustee but compels
him to act in the interest of the beneficiary.
Although equity follows the law, it may divert/deviate from following the law where doing
so would amount to injustice. This is done by utilising doctrines like; secrecy, part-
performance, estoppel, amongst others to fill the gap in law and prevent injustice. Equity
seeks to prevent fraudulent use of the law4 See Archibong V Duke, Chidiak V Coker,
Udolisa V Nwanosike, etc.
WHERE EQUITIES ARE EQUAL, THE LAW PREVAILS.

3
The right of the beneficiaries is enforceable against all but a bona fide purchaser for value without
notice of the existing trust.
4
See for example: Savannah Bank V Ajilo, where the litigant was able to evade his responsibility
because the consent of governor was not sought in accordance with Section 22 of the Land Use
Act.
 Meaning that a legal interest in property takes priority over an equitable interest in the same
property5. Except:
- The legal encumbrancer had notice of an equitable interest in the property before purchase.
(Notice may be actual, constructive or implied).
- There has been fraud, duress or misrepresentation in connection with the acquisition of legal
title.
- The transaction has been set aside by a competent court of law.

In Pilcher V Rawlins: Legal estate in trust property was conveyed to the defendant by way
of legal mortgage. The court held that since the defendant was an innocent purchaser for
value without notice, his legal title prevailed over the beneficiary’s equitable interest in the
trust property.
Joseph V Lyons: “A” assigned his after-acquired-stock to B and later pledged same to C.
The court held that C (being a bona fide purchaser for value without notice) had priority
over B.
WHERE THE EQUITIES ARE EQUAL, THE FIRST IN TIME PREVAILS.
Equitable interest is ranked in order of creation. An earlier equitable interest in the property
prevails 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 receipt without collecting payment facilitated the creation of a
subsequent equity… thus the vendor’s equity was postponed due to his negligence.
- In the case of assignment of choses in action6. 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.
In Cave V Cave, A trustee purchased land with trust money and conveyed the land to his
brother. The brother then mortgaged the land to “A” by way of legal mortgage and then to
“B” by way of equitable mortgage. The court held: “A’s” legal mortgage prevailed… then,
the beneficiary’s7 equitable interest (being first in time) prevailed over B’s equitable
mortgage.
HE WHO SEEKS EQUITY MUST DO EQUITY.
Meaning that the plaintiff must be prepared to act justly towards the defendant. In Brown V
Adebanjo, the plaintiff who had agreed to collect compensation in respect of a trespass to

5
See Section 16 of the Land Instrument Registration Law, all document registration in law
creates a legal interest. An example of an equitable interest is a sales receipt or deposit of title deeds
to secure loan (mortgage).
6
This shall be discussed later.
7
I.e. the beneficiary of the trust.
 his land was estopped from turning around to sue the defendant for trespass. See also Re
Leslie. This maxim is made manifest in the following situations:
- Election: No one should claim a benefit under a document and at the same time evade an
obligation under the same document. Ker V Wanchope
- Consolidation and mortgages: the power to make sure both/all mortgages are redeemed
rather than one alone. Consolidation therefore looks at a joint rather than sequestered
redemption of mortgage.
- Illegal loans: In Lodge V National Union Investment Co, the loan granted to the plaintiff
was illegal, but the court (instead of dwelling on the illegality) held that he can only recover
his securities where the amount borrowed was repaid… he cannot rely on the fact that the
loan was illegal to evade obligation. See also Kasumu V Baba Egbe.
HE WHO COMES TO EQUITY MUST COME WITH CLEAN HANDS.
An applicant should have a clean record and must have conducted himself in a fair and
proper manner (in relation to the transaction alone). He who has committed iniquity
(immorality, illegality…) shall not have equity. ex turpi causa non oritur actio. See Viatonu
V Odutayo.
In Craig V Craig: the petitioner’s suit for dissolution of her marriage on grounds of adultery
was rejected because she was also guilty of adultery. In Oilfield Supply Centre ltd V Joseph
Lloyd Johnson, the plaintiff was estopped from suing for the winding up of the defendant
company because he got into the employment of the company by irregular means. In Gills
V Lewis, the relief against forfeiture of premises was refused as the plaintiff has been using
the premises for immoral purposes. See also Overturn V Bannister.
DELAY DEFEATS EQUITY / EQUITY AIDS THE VIGILANT AND NOT THE
INDOLENT.
Where the applicant has slept on his right or is guilty of unreasonable delay. Limitation
periods are utilised to bar access to courts. See Section 4 of the Limitation Act. Section
27-redemption of mortgage payment-16 years limitation, Section 31-breach of trust 6 years.
Note however that in cases of fraud there is no limitation.
In Allcard V Skinner, the plaintiff joined the “Church of England Sisterhood” and made
gifts and donations to the “mother” (of the sisterhood) under circumstances that may amount
to undue influence. After about six years of leaving the sisterhood, she sought to recover the
sums. The delay for 6 years vitiated her claim.
 Note that the doctrine of laches can be used where the limitation period does not apply-
Akpan Awo V Cookey Gam (prescription8), Nwakobi V Nzekwu. Laches occurs where the
plaintiff discovered the facts and neglected to enforce his right for a long period of time.
Time begins to run where the facts have occurred and there exists a person that can sue and
another that can be sued-In Board of Trade V Cayner Irvin and co.
Generally, the limitation period under the limitation statute does not apply to a customary
landowner. However, the case of Akpan Awo V Cookey Gam elucidated upon circumstances
that may give rise to the right of prescription under customary law. In that case, the court
noted that the defendant must establish all the following:
- That he is an adverse possessor: meaning that he does not derive the right of possession
from the owner of the land-Epelle V Ojo. E.g. a tenant is not an adverse possessor.
- That he took possession of the land under a mistaken belief that he had title to it. In Nwakobi
V Nzekwu, since the defendants knew that they were trespassers, they had no right of
prescription.
- The plaintiff (owner) had knowledge of his (the defendant’s) adverse possession but
acquiesced9 in it. Knowledge may be actual, constructive or implied. In family land, the
family may be presumed to have knowledge where the important members of the family
have knowledge of adverse possession.
- Relying on the acquiescence, the defendant has altered his position10.
- There is no justification for the plaintiff’s acquiescence: the silence or inaction of the
plaintiff (owner) could be due to intimacy, blood ties, family relationships… with the
adverse possessor.
There must be sufficient lapse of time capable of establishing acquiescence on the part of
the plaintiff: it all depends on the facts of each case. In this case (Akpan Awo V Cookey
Gam) 21years sufficed. In Okiade V Morayo, 5 years was sufficient.
EQUALITY IS EQUITY.
Equity prefers fairness of equal division of property between people that are entitled to it.
Except justice dictates otherwise. This maxim shall be illustrated in the following headings:
- Equity prefers tenancy in common to joint tenancy. Under joint tenancy, full title in
property passes to the last surviving joint tenant. However, under tenancy in common, each
tenant has a distinct share in property which he can dispose as he wishes. Upon death, the
surviving tenant holds the deceased’s contribution in trust for the deceased’s representatives-
Lake V Gibson: Lake V Craddock.

8
This has been discussed in the la
9
Acquiescence meaning that the plaintiff (landowner) did not protest.
10
Maybe by making improvements on the land or spending money on the property.
 Joint tenancy can be severed 1. where the parties advance amount in equal proportions-
Rimmer V Rimmer. 2. Where (in the absence of fraud) a joint tenant disposes or alienates
his share-Ipaye V Aribisala.
- Loan on Mortage: A tenancy in common shall be implied where A and B lend money to C
who mortgages his property to them jointly. If B dies, A would be a trustee for the estate of
B to the tune of A’s contribution.
- Partnership: it is presumed that any property acquired by partners in their business is held
by them as beneficial tenants in common rather than as joint tenants.
Where there is no basis for division of property among two or more people, equity prefers
equal division. In Jones V Maynard, the court divided the funds in the spouses joint account
(including the investments traceable to the finance of the joint account) between the husband
and wife equally upon divorce.
EQUITY LOOKS ON THE INTENT (SUBSTANCE) RATHER THAN FORM.
The court in Ezekiel V Nwankwo noted that equity would not allow a matter of form to
defeat that of substance.
- In the sale of land, equity allows completion within a reasonable time after the date of
completion expires.
- Equity allows a mortgagor to redeem his mortgaged property notwithstanding that
redemption date has passed.
- Performance of contract (time): At common-law, time would usually be of the essence
and a defaulting party may be liable to pay damages upon default. However, equity can order
specific performance in deserving situations. Except the parties or the nature of the goods
make time of the essence.
EQUITY LOOKS ON THAT AS DONE WHICH OUGHT TO BE DONE.
This maxim is relevant in the area of property. This maxim is made manifest in:
The Doctrine of conversion: Where property is directed to be converted from one form to
another, the property is regarded as converted in equity the moment the trust directive
becomes effective notwithstanding that it has not yet been actually converted. In Fletcher V
Ashburner the court noted that contracting parties can make money land or land money all
depends on the directive given.
Contractual Agreements: Equity treats a contract to do a thing as if the thing were already
done. In Iragunima V Rivers State Housing and Property Development Authority, the
government leased a land to Nwosu for a term of seven years. Nwosu leased the same land
to Okoro who applied for a renewal for 60 years. Okoro paid all the requisite fees but the
deed was not drawn up. Okoro built a house on the land which he sold to x. later the
government sought to sell the property as abandoned property. The Supreme Court
 contended that since okoro had done all that was necessary to renew lease and it just
remained the part of the government, Equity would assume that the lease has been granted.
See also Walsh V Lonsdale.
EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION.
Where a person under an obligation to do a thing does some other act capable of being
regarded as a fulfilment of that obligation, it can be regarded as fulfilling the obligation. The
basis of this maxim can be found in the doctrine of performance and satisfaction (discussed
later).
EQUITY ACTS IN PERSONAM.
This is the foundation of all equitable jurisdiction where it is directed against a person as
opposed to property-Ayinde V Abimbola. Exparte Polland11.
This maxim is useful in methods of enforcing judgment. Like mareva injunction (to prevent
judgment debtor from siphoning/disposing his property abroad) to prevent frustration of
court’s judgment12.
EQUITY WOULD NOT AID A VOLUNTEER.
A volunteer is one who enters into a contract without furnishing consideration. Except a
trustee. See Oba Akezua V Benin Divisional Council.
NATURE OF EQUITABLE INTEREST AND THE DOCTRINE OF NOTICE.
Equitable interests are rights over property which (though invalid at common-law) were
recognised and enforced by the courts of chancery.
At common-law, certain formalities had to be observed to create or transfer a legal interest
in property. Section 1 and 4 of the statute of frauds 1677 requires that every lease or land
transaction must be in writing. Section 2 and 3 of the Real Property Acts requires a deed
to be executed for every lease. Non-compliance with these formalities may (instead of
invalidating the contract/agreement) give rise to an equitable interest. In Ogunbambi V
Abowaba, the court held that a purchase receipt coupled with possession can give rise to
equitable interest.
Equitable interests can be classified into two:
- Those modelled on common-law rights. Or
- Those invented by equity independently.

11
However equity can go beyond the person where justice demands. For example, tracing (right to
follow property except it gets into the hands of a bona fide purchaser for value without notice) Also
in equity mixed funds can be resolved into its component parts.
12
But note that equity does not act in vain as such it will not be granted where the order cannot be
enforced abroad.
 Equitable Interests Modelled On Common-Law Rights: This can be seen as where equity
builds upon common law rights. E.g beneficial interest in trust. At common-law, the trustee
was the legal owner and the beneficiary had no right over the trust property. Equity now
makes the trustee a mere custodian while the beneficiary is seen as the true owner (cesti que
trust).
Equitable Interests Invented by Equity Independently: Are those interests that were
inexistent at common law (like mortgagor’s equity of redemption, estate contracts, equitable
mortgage, restrictive covenants, vendor’s equitable lien) or invalid for non-compliance with
formalities.
EQUITABLE INTEREST AND LEGAL ESTATES.
The general rule is that a legal estate in property is enforceable against the whole world
while an equitable interest is enforceable against the whole world but13 a bona fide purchaser
for value without notice. “Notice” thus determines the extent of an equitable interest.
THE DOCTRINE OF NOTICE.
You hear: “Bona-fide purchaser for value without notice”. Notice in this regard means
knowledge of an existing interest in a particular property.
Notice can be:
- Actual: where the purchaser (before purchase/during negotiation) gained information of an
existing equitable interest in the property whether from observation or disclosure.
- Constructive: where the purchaser ought to have discovered the existence of an interest in
the property if he had been diligent. In Peto V Hammond, the buyer’s neglect to call for the
deed was held to be constructive notice. In Daniels V Davison, where there was a person
was already in possession of the land, constructive notice was imputed on the purchaser.
Similar facts occurred in Ogunbambi V Abowaba and Olowu V Oshinubi. In Orasanmi V
Idowu, the court noted that for possession of land to amount to constructive notice, it must
have been continuous and undisturbed. In this case, although the respondent had been in
possession for 20 years, he was not in possession at the time of sale. Therefore the purchaser
was not negligent… constructive notice could not be imputed.
- Imputed: Where an agent of the purchaser acquires knowledge of an existing interest in the
property in the course of transacting, such notice shall be imputed to the principal-Section
3 of the conveyancing Act. In G.B Olivant V Alakija his agents were present at the
transaction and knew all the facts. The knowledge of the agent could be imputed on the
principal. Except the agent deliberately conceals the facts with the intention of defrauding
his principal.

13
Meaning except
PRIORITY.
Where there are two or more competing interest over the same property, the issue of priority
shall arise. As has been noted in Ogunbambi V Abowaba that fraudulent landowners can
sell the same piece of land at different times to different persons.
The temporal order rule: recognised both at common-law and equity. Qui est tempore,
portior est jure. Simply means that interest in property is ranked in order of creation.
The question of priority can take the following dimensions:
*** Where two or more legal interest in a property conflict: The first in time prevails. In
Adu Kofi V Adje, a single landed property was validly sold at two authorised auctions to
different people at different times. The court held that the plaintiff who bought the property
at the earlier auction obtained a better title14.
*** Where an equitable and legal interest in a property conflicts: the legal interest shall
prevail because where the equities are equal, the law prevails. Provided the subsequent legal
encumberancer is a bona fide purchaser for value and without notice of the existing equitable
interest-Folashade V Duroshola.
*** Where two or more equitable interest in a property conflicts: the first in time shall
prevail. In fulfilment of the maxim, where the equities are equal, the first in time prevails.
The cases of Cave V cave, Pilcher V Rawling, Rice V Rice, Ajose V Harworth are
instructive on this.
Fraud, gross negligence and notice may postpone a prior legal or equitable interest to a
subsequent equitable interest. Especially where injustice would be occasioned.
In Northern Counties of England Fire Insurance Company V Whipp the mortgagor (who
had the key to the company’s safe) was able to steal his title deeds from the mortgagee
company. He used the same title deeds to execute a mortgage. The court noted that the
company’s prior interest still prevailed since they did not connive with the fraudster. In
Oliver V Hinton, failure of the purchaser to ask for title deeds in respect of the property
fixed him with constructive notice and postponed his interest. In Akingbade V Elemesho,
constructive notice was also imposed upon the purchaser to postpone his interest as the court
held that he had been negligent in the transaction. In Ogunbambi V Abowaba, constructive
notice was imputed where the purchaser ought to have discovered that another was in
possession of the land.

14
As was noted in Northern Counties England Fire Insurance V Whipp, such situations (where
two legal interests clash) seldom occurs and where such occurs, it is usually linkable to fraud,
concealment, misrepresentation and the likes. In practice, one may go to the land registry to inquire
for the survey plan and determine the one that was first created.
 PARTICULAR EQUITABLE INTERESTS.
These are interests which arise principally out of transactions affecting land therefore
belonging primarily to real property law. They include:
- Estate contracts.
- Restrictive covenants.
- Mortgagor’s equity of redemption.
- Equitable mortgage.
- Equitable Charge.
- Equitable Lien.
These shall be briefly discussed.
ESTATE CONTRACTS: what this implies is that an agreement to sell or lease land creates
an equitable interest in the land notwithstanding that the land has not actually been sold.
Such interest is enforceable against all but a purchaser for value without notice (he can still
sue for damages). At common-law, damages can be awarded for breach. In Equity, specific
performance can be ordered to compel the contracting vendor to execute the conveyance or
lease. Specific performance would not be ordered where the plaintiff had notice of an
existing interest over the property. In Olowu V Oshinubi, notice on the defendant’s part
made the prior interest prevail. In Orasanmi V Idowu, the court noted that for possession of
land to amount to constructive notice, it must have been continuous and undisturbed. In this
case, although the respondent had been in possession for 20 years, he was not in possession
at the time of sale.
RESTRICTIVE COVENANTS: as was noted in Tulk V Moxhay occurs where the vendor
of a land enters into a contract mandating the buyer not to use the land sold (adjoining a land
retained by the vendor) in a certain way. Equity permits such covenants to run with land
thereby binding subsequent purchasers and constituting an exception to privity of contract
(that only parties to a contract can be bound by it). Except a bonfide purchaser without notice
of the restrictive covenant purchases such land. These shall be discussed in more detail later.
MORTGAGOR’S EQUITY OF REDEMPTION: At common-law, where the mortgagor
fails to repay the amount of loan plus interest at the agreed date, he loses the right to redeem
mortgaged property. However, the equity of redemption allows a mortgagor to redeem his
property after the contractual redemption date has lapsed15.
EQUITABLE MORTGAGE: an equitable mortgage is created in any of the following
situations:

15
This right can be transferred just like any other interest in property.
- Where a mortgagor mortgages his equitable interest in property: he cannot pass anything
more than the equitable interest he has over the property. Nemo dat quad non habet. For
example where a beneficiary mortgages trust property.
- An agreement to create a legal mortgage: gives the purchaser an equitable interest over
the property. Specific performance can be ordered to compel its execution. Except there had
been prior notice. As equity regards as done, that which ought to be done.
- Where title deeds are deposited to secure loan, an equitable mortgage would be presumed:
In British and French Bank ltd V Akande, the court noted that there must be a contract
stipulating the terms of deposit.
- When legal mortgage is created without complying with formalities like Section 22 of the
Land Use Act requiring Governor’s consent. Savannah Bank V Ajiloh.
EQUITABLE CHARGE: A written agreement whereby property is to be regarded as
security for a loan… in such a situation, an equitable charge may arise.
EQUITABLE LIEN: a vendor who has conveyed property and has not been fully paid, can
have a lien over the property pending when the buyer has fully paid.. A subsequent bona
fide purchaser for value may acquire a better title than the vendor-Ayorinde V Scott.
Where one with legal mortgage conveys his fee simple to another: he then has only equitable
interest in the property and can only create other equitable interests.
REQUIREMENT OF REGISTRATION.
The “bona fide purchaser for value without notice” has been limited by statutes. The Statutes
(like English Land Charges Act 1925, Land Registration Law of Eastern State, and so on)
mandate that all registrable equitable interest in documents affecting land must be registered.
Failure to register renders the document void as against a subsequent purchaser whether he
had notice or not.
Interests shall rank according to the date of registration-Crayem V C.A.S.T … Section 151
of the Property and Conveyancing Law of Western Nigeria. It can be concluded that
since the registration book is open to the public, registration of an interest in land can create
constructive notice.
ASSIGNMENT OF CHOSES IN ACTION.
A chose in action is a personal intangible right in property which can only be enforced
by taking legal proceedings and not by taking physical possession. A cursory appreciation
of property is necessary for a proper understanding. Property can be classified into:
1. Realty: immovable
2. Personal: Movable property further classified into:
- 2.1 Tangible: chose in possession capable of being physically possessed and stolen.
- 2.2 Intangible: these are choses in action incapable of physical possession. Rights over them
can be enforced only through legal action. A chose in action may be:
 2.2.1 Legal Chose in Action: Recoverable by action at common-law. for example debt,
copyright, shares, and so on.
 2.2.2 Equitable Chose in Action: only enforced by proceeding in equity like fund, or legacy
under a will.
At common-law, only a legal chose could be assigned provided the consent of the debtor
was obtained. Except assignment was done by the king, or as regards mercantile choses in
action (like negotiable instruments which are transferrable by mere delivery). To prevent a
floodgate of suits.
Classification of Assignment.
Section 25 of the Judicature Act removed the common-law rule against assignment. An
assignment of choses in action has been classified into legal and equitable above, however
for further elucidation they can be classified into four categories viz:
- Legal (statutory) assignment of Legal Chose: an assignment of a legal chose according to
prescribed formalities.
- Legal (statutory) Assignment of Equitable Chose: an assignment of equitable chose in
action according to formalities.
- Equitable assignment of Legal Chose: assignment of legal chose without full compliance
with formalities.
- Equitable Assignment of Equitable Chose: assignment of an equitable chose without
complying with formalities.
Note however that on grounds of public policy, certain choses cannot be assigned like
Pension right (section 18 of the Pensions Act 1979), alimony, maintenance, salary, moto
insurance policy and the likes.
To amount to STATUTORY ASSIGNMENT: The court in Udukason Enterprises V
Robinson Olisa noted that the assignment must be16:
- Absolute: not an assignment of part of a fund or by way of charge. In Western Nigerian
Finance Company V West Coast Builders, an assignment of 25 percent of debt was held to
be an assignment in part.
- In writing and signed by the assignor.
- Written notice must be given to the debtor which takes effect from the time of receipt.
A statutory assignment of chose enables the assignor to sue in his name.

16
See also Section 25 judicature act 1873, section 150 Property and Conveyancing Law (Ogun
State).
 EQUITABLE ASSIGNMENT: Arises due to non-compliance with formalities stipulated in
the law. The following are guiding requirements
- An intention to assign.
- A sufficiently identified chose (out of a specified fund).
- Consideration must be furnished as Equity would not aid a volunteer.
- The assignment Need NOT be in writing.
- Need NOT be absolute: the assignee would have to join the assignor in a suit where the
assignment is not absolute.
- Notice may or may not be given to the debtor. Notice may however be relevant in the
following situations:
 To determine priority. (the rule in Dearle V Hall (discussed later)).
 To ensure payment to the assignee.
 An assignee cannot take a better title except notice has been received by the debtor or it is a
negotiable instrument and a holder in due course for value takes a good title.
 A notice in writing may make an absolute equitable assignment a legal assignment.
The rule in Dearle V Hall.
Where the owner of an equitable interest in pure personalty assigns same to more than one
assignees, the priority does NOT depend on dates of creation but on the dates on which the
trustee (debtor) receives notice. Except an assignee has notice of a previous assignment.
(Not verbatim)
In this case (Dearle V Hall), one Brown assigned his interest first to Dearle, Sherring
(second) and Hall (third) in 1808, 1809 and 1812 respectively. Hall (the last assignee) served
the executors notice of the assignment. The court held that Hall was entitled since notice of
his assignment reached the executors first and he had no notice of previous dealings.
Where notice is received at the same time, priority shall be determined in the order which
the interests were created.
Notice can be oral or in writing. In Lloyds V Bank, notice received through newspaper was
sufficient. Section 152 Property and Conveyancing Law (Ogun State) preserved this rule
provided notice is given in writing (similar provisions can be found in the laws of other
states).
DISTINCTION BETWEEN NOVATION AND ASSIGNMENT.
A novation occurs where contracting parties (by agreement) shift the burden of repaying a
debt. In simple terms: Where A owes B #50 and B owes C #50, both A, B and C can agree
that A should pay C the money due. See GB Olivant V Effioms.
1. Consideration: Novation must be supported by consideration. While (as stated above) a
legal assignment of chose in action does not need to be supported by consideration.
2. Consent: Under novation, all the parties must consent while under Assignment of choses in
action, the consent of the debtor may not be required.
3. Notice: under novation, notice must be given to the debtor and creditor while under equitable
assignment, notice is not essential.
4. Absolute: Unlike an equitable assignment, novation requires that the original debt must be
totally extinguished.
CONVERSION, SATISFACTION, PERFORMANCE AND ELECTION.
CONVERSION.
The meaning and essence of this fictitious doctrine has been embodied in the dictum of
Bowen LJ in Attorney General v. Hubbuck
“When money is agreed or directed to be turned into land or land agreed or directed to be
turned into money… equity would regard that which ought to be done as done”.
Meaning that in the above scenario, the money becomes land (realty) and the land becomes
money (personalty) in the eyes of equity from the time such direction/directive becomes
effective. Notwithstanding that there has been no actual sale.
As has been noted by Sewel MR in Fletcher V Ashburer; “contracting parties may make
land money or money land”.
Langdell has recognised the fictitious and artificial nature of the doctrine.
The birth of this doctrine (as noted by Maitland) lies in the two systems of intestate
succession that operated in England (Personalty (movables) and realty (immovable
property)).
Circumstances where the doctrine will operate where:
1. Where there is a binding and enforceable contract for the sale or purchase of land: the
doctrine takes effect once the contract is concluded. The money becomes land and the land
money and devolves as such notwithstanding that there has been no actual sale. In such
situation, the vendor is seen as holding it in trust for the purchaser.
2. Where there is an option to purchase: the rule in Lawes V Bennett posits that if an owner
of real estate contracts to sell it and
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LAW OF EQUITY AND TRUSTS PART I AND II

TABLE OF CONTENTS
LAW OF EQUITY PART 1
DEFINITION OF EQUITY.
NATURE, ORIGIN AND RECEPTION OF EQUITY.
THE MAXIMS AND PRINCIPLES OF EQUITY
NATURE OF EQUITABLE INTEREST AND THE DOCTRINE OF NOTICE. 9
EQUITABLE INTEREST AND LEGAL ESTATES
THE DOCTRINE OF NOTICE.
PRIORITY.
PARTICULAR EQUITABLE INTERESTS.
ASSIGNMENT OF CHOSES IN ACTION.
DISTINCTION BETWEEN NOVATION AND ASSIGNMENT.
THE DOCTRINE OF CONVERSION
THE DOCTRINE OF SATISFACTION.
THE DOCTRINE OF PERFORMANCE
THE DOCTRINE OF ELECTION.
THE REMEDY OF INJUNCTION.
SPECIFIC PERFORMANCE.
THE REMEDY OF RESCISSION.
RECTIFICATION.
DEFENCES AVAILABLE TO EQUITABLE REMEDIES.

EQUITY PART II/LAW OF TRUSTS.

DEFINITION OF TRUST.
TRUST DISTINGUISHED FROM OTHER LEGAL CONCEPTIONS.
CLASSIFICATION OF TRUST
EXPRESS PRIVATE TRUST
ESSENTIALS OF A TRUST… THE THREE CERTAINTIES.
COMPLETELY AND INCOMPLETELY CONSTITUTED TRUST
TRUST OF IMPERFECT OBLIGATION.
RESULTING AND CONSTRUCTIVE TRUSTS.
 CHARITABLE TRUSTS.
TRUSTEES. APPOINTMENT, QUALIFICATION, DUTIES, POWERS,
DETERMINATION, REMEDIES FOR BREACH OF TRUST, ETC.
THE EQUITABLE REMEDY OF TRACING.
PERPETUITIES AND ACCUMULATION.

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