Torbela vs. Rasario 661 SCRA 633

FACTS:

The spouses Eugenio and Marta Torbela received a parcel of land from Marta’s sister. Upon the death of the spouses, the Land was adjudicated in equal shares among their children. These children executed a Deed of Absolute Quitclaim over the land in favor of their nephew, Dr. Rosario. Another Deed of Absolute Quitclaim was executed, this time by Dr. Rosario, acknowledging that he only borrowed the land and was already returning it to his aunts and uncles. The latter Deed was notarized but was not immediately annotated on the title of the land, hence, the title was still in the name of Dr. Rosario. Dr. Rosario mortgaged the land to Banco Filipino for a loan. Dr. Rosario failed to pay the loan and the mortgage was extra-judicially foreclosed. The children then filed a complaint for recovery of ownership and possession of the subject land against Dr. Rosario and Banco Filipino. The trial court ruled in their favor which was affirmed by the Court of Appeals.

 

Issue:

Whether an express trust was created in this case.

 

Ruling:

Yes. The Court held that “Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or impliedly evincing an intention to create a trust. Under Article 1444 of the Civil Code, “[n]o particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended.”62 It is possible to create a trust without using the word “trust” or “trustee.” Conversely, the mere fact that these words are used does not necessarily indicate an intention to create a trust. The question in each case is whether the trustor manifested an intention to create the kind of relationship which to lawyers is known as trust. It is immaterial whether or not he knows that the relationship which he intends to create is called a trust, and whether or not he knows the precise characteristics of the relationship which is called a trust.”