What is a Trust Agreement?
It is an obligational transaction made between the trustor and the trustee, determining their rights and obligations, specifying the reasons for the termination of the fiduciary transaction, and outlining the conditions for the return of the transferred right by the trustee to the trustor. A trust agreement is not a contract directly regulated by law. It arises from the principle of freedom of contract, as mentioned in Article 26 of the Code of Obligations.
General Assembly of Civil Chambers, dated 17.05.2000, Case No: 2000/2-888, Decision No: 2000/885.
… Fiduciary transactions are agreements in which one party seriously transfers certain rights to another for the purpose of protecting their interests or providing security. However, the acquiring party either does not exercise certain rights arising from this transfer at all or may only exercise some of them in the manner predetermined by the original right holder and beneficiary.
Characteristics of a Trust Agreement
A trust agreement is not subject to any formal requirement. However, if the contract to which it is attached has a formal requirement, the trust agreement must also comply with that requirement.
Transaction Based on Trust:
A fiduciary transaction is carried out based on trust between the parties. The party transferring ownership of an asset in trust relies on the assurance that the asset will be returned to them.
Parties:
The parties to a fiduciary transaction are the trustor and the trustee. The trustor is the person who transfers the asset in trust to someone they trust. The trustee is the person who, while using the asset for their own benefit, is obligated to return it to the trustor.
Obligatory Nature:
A trust agreement is an independent contract that defines the rights and obligations of the parties and constitutes the legal basis for the transfer of receivables and ownership.
Right to Transfer and Return:
In a fiduciary transaction, the trustee undertakes to comply with the agreed conditions while exercising their rights and to transfer the right or object back to the trustor (or a third party designated by them) once the purpose is fulfilled or the agreed period expires.
How Is a Trust Agreement Proven?
According to established case law of the Court of Cassation, the existence of a trust agreement must be proven with written evidence. Without a written document provided by the parties, it is not possible to prove the existence of a trust agreement. Even if there is no direct trust agreement, the submitted document must indicate signs of such an agreement. This written document is necessary as the initial evidence, after which other forms of proof, such as witness testimony, may be presented.
Court of Cassation Unification of Judgments Decision dated 05.02.1947, No. 20/6
In this case, there is no written document signed by the parties confirming that the disputed property belongs to the plaintiff and was transferred to the defendant under a return condition. Even if no such written evidence exists, if a document originating from the opposing party (such as a handwritten but unsigned note or letter by the trustee, a typed or computer-written document bearing the trustee’s initials, or documents containing an unverified fingerprint or seal) can be considered as “initial evidence,” then, under Article 202 of the Turkish Code of Civil Procedure No. 6100, the trust agreement may be proven by all types of evidence, including witness testimony.
Legal Consequences of a Trust Agreement
A trust agreement is a legal transaction based on trust between the parties. The trustor may resort to legal remedies if the trustee fails to comply with the terms. The dispute subject to the contract is submitted to the court with jurisdiction over the matter. If the trustee fails to fulfill the obligation of returning the asset, they become liable for compensation to the trustor.
Court of Cassation Rulings on Trust Agreements
- Civil Chamber, Case No: 2017/3767, Decision No: 2017/5018.
In the case between the parties;
The plaintiff claims that they transferred the villa on parcel 1015, plot 1, which they own, to the defendant by signing a trust agreement, and that the real intention of the parties was not a sale, and no payment was made due to the transfer of the title deed of the property. However, the defendant abused the trust established by the trust agreement and did not return the title deed of the property. The plaintiff argues that the defendant was never the true owner of the property in question and requests the cancellation of the title deed registration and its registration in the plaintiff’s name.
The defendant asserts that the trust agreement in question was neither signed by them nor by the parties, and that the trust agreement submitted to the court was not a real trust agreement, but rather a document forged through the commission of a crime. The defendant further argues that the agreement does not meet the valid conditions for a trust agreement, lacks a date, and that they have the original version of the document, and thus defends the dismissal of the case.
The court ruled to dismiss the case as it could not be proven.
The decision was appealed by the plaintiff’s attorney within the given time, and the report of the Reviewing Judge was read, and their opinion was taken. The file was reviewed, and the necessary discussions were held.
-DECISION-
Based on the contents of the file, the collected evidence, the legal grounds for the judgment, and particularly the fact that there is no error in the evaluation of the evidence, the plaintiff’s appeal objections are found to be unfounded. The decision of rejection is in accordance with procedure and law and is UPHELD. A balance of 3.70 TL appeal fee is to be collected from the appellant, the plaintiff. The decision was made unanimously on 05.10.2017.
- Civil Chamber, Case No: 2011/5294, Decision No: 2013/7453.
COURT: COMMERCIAL COURT
In the case between the parties, the decision dated 28…2010 and numbered 2009/835-2010/733, issued by the … Civil Commercial Court, was requested to be reviewed with a hearing by the plaintiff’s attorney in both the main and consolidated cases. On the scheduled date of the hearing, 09.04.2013, no other parties attended, and it was confirmed by a roll call that the plaintiff’s attorney, Av. … Sarı, was present. After hearing the plaintiff’s attorney and due to the heavy caseload and time constraints, the examination and final decision of the case were postponed. After hearing the report prepared by Reviewing Judge … and reviewing the petition, project documents, hearing minutes, and all other documents in the case file, the necessary discussions were held, and the matter was considered.
The plaintiff’s attorney argued in both the main and consolidated cases that the plaintiff and the defendant company were founded by the non-party … …, that due to heart issues, the plaintiff transferred his shares to the non-party …, and that later … left the partnership. It was claimed that 45% of …’s shares were transferred to the defendant …, while 5% was registered under the name of …. The attorney further argued that the company legally required a second partner, which is why the shares were registered under the defendant’s name. It was stated that the defendant …’s brother-in-law’s son, who was 18 years old at the time of the registration and had no income, was the one who received the shares, and that the plaintiff was given a power of attorney to manage the company’s affairs. The plaintiff claimed to have handled all business related to the company, with expenses being paid by them, while the defendant refused to accept the offer to acquire the shares. Based on these points, the plaintiff requested the cancellation of the share registration and its transfer to the plaintiff’s name.
The defendant’s attorney argued that the plaintiff was not a partner in the company and that the defendant’s shares were transferred from … … to the defendant, requesting the dismissal of the case.
The other defendant did not respond to the lawsuit.
According to the court, based on the claims, defenses, and the content of the case file, it was concluded that if there is a written document or initial written evidence of the trust agreement, it can be proven by all types of evidence, including witness testimony. However, in this case, such evidence was absent, and the alleged relationship of trust was not established with the defendant. It was found that the company’s founders were … and … …, and the person whom the plaintiff claimed to have made the trust agreement with was the non-party …. It was further established that shares held outside the trust agreement by … … were transferred to the defendant. In order to evaluate the trust agreement, the transfer must have occurred between the trustor and the trustee. It was decided that the use of oath evidence in this case was inappropriate and that the plaintiff failed to present any evidence to support their claim. Therefore, both the main and consolidated cases were dismissed.
The decision was appealed by the plaintiff’s attorney.
1- Based on the information and documents in the case file, and after discussing and evaluating the evidence cited in the reasoning of the court decision, there was no procedural or legal violation. Therefore, the plaintiff’s attorney’s appeal objections, other than those outlined in the following section, must be rejected.
… However, the case is related to the request for the cancellation of shares arising from the trust agreement and their registration in the plaintiff’s name, and the court dismissed the case based on the reasons mentioned above. However, trust transactions involve the transfer of an asset or right within the scope of a person’s property to the trustee for the purpose of creating security or management, with the trustee using the asset in accordance with the terms of the trust agreement and returning it as specified when the purpose is achieved. According to the Supreme Court’s Unified Precedent Decision No. 20/6 dated 05.04.1947, a trust agreement can only be proven by written evidence. This written evidence must be a document presented by the parties that bears their signatures. Although no written document of this kind was presented, and while it is not sufficient to prove the entire dispute between the parties, if there is a document that indicates the occurrence of such a situation from the opposing party, it can be considered as evidence that can prove the trust agreement, and the case can be proven by any evidence, including witness testimony. If there is no written evidence or initial written evidence, the trust agreement can also be proven by definitive evidence such as an admission (Civil Procedure Code Article 188), or oath (Articles 225 and following of the Civil Procedure Code). If the plaintiff relies on oath evidence, the court must remind the plaintiff of this right.
In the present case, the plaintiff did not present written evidence or initial written evidence related to the trust agreement, and since the plaintiff’s evidence list relied on oath evidence, the court should have reminded the plaintiff of the right to take an oath and then made a decision based on its outcome. However, with an erroneous evaluation stating that oath evidence could not be applied in this case, the court wrongly dismissed the case. Therefore, the decision must be overturned for this reason.
CONCLUSION: For the reasons stated in paragraph (1) above, the plaintiff’s attorney’s other appeal objections are REJECTED.
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