FACTS: |
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Some
stockholders of RISCO contributed a total amount of P212,720.00 to
rehabilitate the company by purchasing three (3) parcels of land. The Minutes
of the Special Meeting of the Board of Directors of RISCO provided that the
contributions constituted a lien or interest in the lands. The lands were,
however, attached and was bought by the PNB as the lone and highest bidder.
Subsequently, titles were issued in the name of PNB which prompted the said
stockholders to file a complaint for quieting of title.
The
trial court ruled in favor of the plaintiffs on the basis that there was an
express trust. The decision was, however, set aside by the Court of Appeals
on the ground that the contributions was a loan secured by a lien rather than
an express trust.
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issue: |
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Whether
there was an express trust in this case.
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ruling: |
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No.
The Court held that “Express trusts, sometimes referred to as direct trusts,
are intentionally created by the direct and positive acts of the settlor or
the trustor—by some writing, deed, or will or oral declaration. It is created
not necessarily by some written words, but by the direct and positive acts of
the parties. This is in consonance with Article 1444 of the Civil Code, which
states that “no particular words are required for the creation of an express
trust, it being sufficient that a trust is clearly intended.””
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