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JOSEPH GOYANKO v. UNITED COCONUT PLANTERS BANK

FACTS:

The case involves a dispute regarding an investment made by the late Joseph Goyanko, Sr. in the amount of Two Million Pesos (P2,000,000.00) with Philippine Asia Lending Investors, Inc. (PALII) in 1995. After Goyanko's death, both his legitimate family and illegitimate family presented conflicting claims to PALII for the release of the investment. In response, PALII deposited the investment proceeds with United Coconut Planters Bank, Mango Avenue Branch (UCPB) under the account name "Phil Asia: ITF (In Trust For) The Heirs of Joseph Goyanko, Sr." on October 29, 1996.

UCPB allowed PALII to withdraw One Million Five Hundred Thousand Pesos (P1,500,000.00) from the account on December 11, 1997, leaving a balance of only P9,318.76. The petitioner, Joseph Goyanko, Jr., who is the administrator of the Estate of Joseph Goyanko, Sr., filed a complaint before the Regional Trial Court (RTC) seeking to recover the amount withdrawn. However, the RTC dismissed the complaint.

The petitioner then appealed to the Court of Appeals (CA), which partially granted the appeal. The petitioner contends that an express trust was created and argues that UCPB was negligent and acted in bad faith in allowing the withdrawal. On the other hand, UCPB asserts that no trust was created and that the mere designation of the account as "ITF" does not establish a trust.

ISSUES:

  1. Whether an express trust was created between PALII, UCPB, and the HEIRS.

  2. Whether UCPB was negligent and in bad faith in allowing the withdrawal.

  3. Whether the petitioner has a cause of action against UCPB.

RULING:

  1. The Court of Appeals (CA) and the Regional Trial Court (RTC) held that no express trust was created between PALII, UCPB, and the HEIRS. The CA affirmed the decision of the RTC, ruling that the words "ITF HEIRS" in the ACCOUNT were insufficient to establish the existence of a trust. The absence of a clear intention to create a trust and the fact that the contract of deposit was only between PALII and UCPB were considered by the courts. Therefore, UCPB is not liable for the amount withdrawn.

  2. The petitioner argued that UCPB was negligent and in bad faith in allowing the withdrawal and failing to inquire into the nature of the ACCOUNT. However, the courts held that UCPB was merely performing its duty as a depository bank and was not required to investigate the trust relation between PALII and the HEIRS. There was no evidence to prove that UCPB had knowledge of the trust relation. Therefore, UCPB was not negligent or in bad faith.

  3. The petitioner claimed that UCPB should not have allowed the withdrawal because an express trust existed. However, since the courts ruled that no express trust was created, the petitioner does not have a cause of action against UCPB. The dismissal of the complaint by the RTC was affirmed by the CA.

PRINCIPLES:

  • For a trust to be established, there must be a competent trustor and trustee and a clear intention to create a trust.

  • In a deposit contract, the bank's obligation is to return the proceeds to the account holder.

  • The designation of an account as "ITF" is insufficient to establish the existence of a trust.

  • A depository bank is not required to investigate the trust relation between the account holder and third parties.