Metropolitan Bank & Trust Company, Inc. vs. Board of Trustees of Riverside Mills Corporation Provident and Retirement Fund 630 SCRA 350

FACTS:

The Riverside Mills Corporation (RMC) established a Plan for its regular employees. The contributions to the plan shall form part of the Fund which shall be held, invested and distributed by the Commercial Bank and Trust Company. The BOT of the fund entered into an agreement with Philbank to act as an agent of the BOT and to hold, manage, invest and reinvest the Fund in Trust Account No. 1797 in its behalf. When RMC ceased its business operations, the BOD of Philbank decided to apply the remaining trust assets held by it in the name of the Fund against part of the RMC’s outstanding obligations. When the unpaid employees of RMC learned of the trust account, they demanded the payment of their share, which went unheeded. They, together with the members of the Fund, filed a complaint for accounting against the BOD of Philbank and its officers. The trial court ruled in favor of the BOT of RMC and was affirmed on appeal. The BOD on petition for review on certiorari under Rule 45 of the Rules of Court contends that without known claimants of the Fund for eleven (11) years since RMC closed shop, it was justifiable for petitioner to consider the Fund to have “technically reverted” to, and formed part of RMC’s assets. Hence, it could be applied to satisfy RMC’s debts to Philbank.

 

Issue:

Whether the BOD’s contention is correct.

 

Ruling:

No. The Court held that “a trust is a “fiduciary relationship with respect to property which involves the existence of equitable duties imposed upon the holder of the title to the property to deal with it for the benefit of another.” A trust is either express or implied. Express trusts are those which the direct and positive acts of the parties create, by some writing or deed, or will, or by words evincing an intention to create a trust.”