Goyanko, Jr. vs. United Coconut Planters Bank

A bank deposit designated as "In Trust For" (ITF) a third party does not automatically create an express trust between the depositor and the bank, and the bank's obligation remains that of a debtor to its depositor-creditor under a simple loan contract.

Joseph Goyanko, Sr. invested P2,000,000 with Philippine Asia Lending Investors, Inc. (PALII). Conflicting claims to the investment arose between his legitimate and illegitimate families. Pending resolution of these claims, PALII deposited the proceeds with UCPB under the name "Phil Asia: ITF (In Trust For) The Heirs of Joseph Goyanko, Sr."

• The Investment and Conflicting Claims: In 1995, Joseph Goyanko, Sr. invested P2,000,000 with PALII. Following his death, his legitimate and illegitimate families presented conflicting claims to the investment proceeds.
• The UCPB Deposit: Pending investigation of the claims, PALII deposited the proceeds with UCPB under the account name "Phil Asia: ITF (In Trust For) The Heirs of Joseph Goyanko, Sr." The account was an ordinary savings account with PALII's general manager as the sole authorized signatory.
• The Withdrawal: On December 11, 1997, UCPB allowed PALII to withdraw P1,500,000.00 from the account, leaving a balance of P9,318.76.
• Demand and Refusal: Petitioner demanded that UCPB restore the withdrawn amount plus interest, which UCPB refused. Petitioner subsequently filed a complaint for recovery of sum of money against UCPB.

• Existence of Express Trust: Petitioner argued that an express trust was created based on PALII's letters, making PALII the trustor, UCPB the trustee, and the heirs the beneficiaries. The naming of the cestui que trust is not necessary as long as they are identifiable.
• Negligence and Bad Faith: Petitioner maintained that UCPB was negligent and in bad faith in allowing the withdrawal and failing to inquire into the nature of the account, asserting UCPB was aware of the trust relation between PALII and the heirs.
• Cause of Action: Petitioner insisted that because an express trust exists, UCPB should not have allowed the withdrawal, and the dismissal for lack of cause of action was erroneous.

• Ordinary Deposit Contract: Respondent countered that the account was an ordinary deposit contract creating a debtor-creditor relationship between PALII and UCPB, and the "ITF" designation was insufficient to establish an express trust or charge UCPB with knowledge of the relation.
• Change of Theory: Respondent argued that petitioner changed his theory of the case on appeal. Before the CA, petitioner argued that the heirs were the trustors-beneficiaries and PALII was the trustee. Before the Supreme Court, petitioner argued that PALII was the trustor, UCPB was the trustee, and the heirs were the beneficiaries. No trust agreement was executed between PALII and UCPB.

• Change of Theory: Whether the petitioner is allowed to change his theory of the case on appeal.
• Question of Fact: Whether the existence of an express trust is a question of fact beyond the scope of a Rule 45 petition.
• Existence of Express Trust: Whether an express trust was created between PALII and UCPB in favor of the heirs based on the "ITF" designation.
• Bank's Liability: Whether UCPB is liable for allowing the withdrawal from the account.

• Change of Theory: A change of theory on appeal is not allowed as it violates basic rules of fair play, justice, and due process, effectively depriving lower courts of the opportunity to decide the merits of the case fairly.
• Question of Fact: Whether an express trust exists is a question of fact. Factual findings of lower tribunals are conclusive on the parties and not reviewable under Rule 45, especially when affirmed by the CA. None of the recognized exceptions to this rule apply.
• Existence of Express Trust: No express trust was created. The essential elements of an express trust—including a competent trustor and trustee, a present and complete disposition of the trust property, and a declaration of terms with reasonable certainty—were absent. UCPB was never under any equitable duty to deal with or given any power of administration over the account; PALII undertook the duty to hold the title for the benefit of the heirs. The mere use of the words "ITF" did not automatically reveal an intention to create a trust between PALII and UCPB.
• Bank's Liability: UCPB was not liable. Under Article 1980 of the Civil Code, a creditor-debtor relationship exists between the bank and the depositor. The fiduciary nature of the bank's relationship with its depositors does not convert the contract from a simple loan to a trust agreement. UCPB merely performed its contractual obligation to its depositor, PALII, by allowing the withdrawal. A bank's duty is to its creditor-depositor and not to third persons, who cannot hold the bank responsible absent a court order or garnishment.

• Elements of an Express Trust — An express trust requires a competent trustor and trustee, an ascertainable trust res, sufficiently certain beneficiaries, a present and complete disposition of the trust property, an active purpose, some power of administration other than a mere duty to perform a contract, and a declaration of terms with reasonable certainty. The absence of any one element is fatal to the trust's existence. The Court applied this doctrine to rule that no express trust was created because UCPB was never given any power of administration over the account, and the terms of administration were not shown with reasonable certainty.
• Nature of Bank Deposits — Fixed, savings, and current deposits of money in banks are governed by the provisions concerning simple loan, creating a creditor-debtor relationship between the bank and the depositor. The fiduciary nature of the bank-depositor relationship does not convert the contract into a trust agreement; it merely obliges the bank to observe high standards of integrity and performance. The Court applied this doctrine to hold that UCPB's obligation was solely to its depositor, PALII, and allowing the withdrawal was a fulfillment of its contractual duty.
• Change of Theory on Appeal — A party who deliberately adopts a certain theory upon which the case was decided by the lower court will not be permitted to change it on appeal, as doing so violates basic rules of fair play, justice, and due process. The Court applied this doctrine to reject the petitioner's new theory that PALII was the trustor and UCPB was the trustee, a departure from his stance before the lower courts that PALII was the trustee and the heirs were the trustors-beneficiaries.

• "A trust can be created without using the word 'trust' or 'trustee,' but the mere use of these words does not automatically reveal an intention to create a trust."
• "While this may seem to be the case, by reason of the fiduciary nature of the bank’s relationship with its depositors, this fiduciary relationship does not 'convert the contract between the bank and its depositors from a simple loan to a trust agreement, whether express or implied.'"
• "the bank’s duty is to its creditor-depositor and not to third persons. Third persons, like the HEIRS here, who may have a right to the money deposited, cannot hold the bank responsible unless there is a court order or garnishment."

• Rizal Surety & Insurance Co. v. CA, 329 Phil. 789 — Followed. Cited for the elements required before an express trust will be recognized, including a competent trustor and trustee, an ascertainable trust res, and sufficiently certain beneficiaries.
• Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No. 138569 — Followed. Cited for the doctrine that the fiduciary relationship between a bank and its depositors does not convert the contract from a simple loan to a trust agreement.
• Falton Iron Works Co. v. China Banking Corporation, 55 Phil. 208 — Followed. Cited for the ruling that a bank's duty is to its creditor-depositor and not to third persons, who cannot hold the bank responsible absent a court order or garnishment.

• Article 1444, Civil Code — Provides that no particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended. Applied to emphasize that while no written words are required, the creation of an express trust must be firmly shown and cannot be assumed from loose and vague declarations.
• Article 1980, Civil Code — Provides that fixed, savings, and current deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loan. Applied to establish that a creditor-debtor relationship exists between UCPB and PALII, and UCPB was merely fulfilling its contractual obligation by allowing the withdrawal.
• Rule 45, Rules of Court — Governs petitions for review on certiorari, which resolve only questions of law, not questions of fact. Applied to decline review of the factual finding that no express trust existed.

Antonio T. Carpio (Chairperson), Mariano C. Del Castillo, Jose Portugal Perez, Estela M. Perlas-Bernabe