Facts:

• The case involves the Metropolitan Bank & Trust Company, Inc. (petitioner), as the successor-in-interest of Global Business Bank, Inc., formerly known as Philippine Banking Corporation (Philbank).
• The respondents are the Board of Trustees of Riverside Mills Corporation Provident and Retirement Fund (RMCPRF), represented by Ernesto Tanchi, Jr., Cesar Saligumba, Amelita Simon, Evelina Ocampo, and Carlitos Y. Lim, along with the RMC Unpaid Employees Association, Inc., and individual beneficiaries of the RMCPRF.
• On November 1, 1973, Riverside Mills Corporation (RMC) established a Provident and Retirement Plan (Plan) for its regular employees, with contributions from both the company and its employees.
• The Plan stipulated that the assets of the Fund could not revert to RMC until all liabilities had been satisfied.
• On October 15, 1979, the Board of Trustees of RMCPRF entered into an Investment Management Agreement with Philbank to manage the Fund.
• In 1984, RMC ceased operations, but Philbank continued to manage the Fund.
• In 1995, Philbank decided to apply the remaining trust assets to RMC's outstanding obligations.
• The RMC Unpaid Employees Association, representing terminated employees, demanded their share of the Fund in 1997.
• When their demand was ignored, they filed a complaint for accounting against the Board and Philbank.
• The Regional Trial Court (RTC) of Makati City, Branch 137, declared the reversion of the Fund to RMC invalid and ordered Philbank to reverse the application of the Fund, render a complete accounting, and pay attorney's fees.
• The Court of Appeals (CA) affirmed the RTC's decision, leading to this petition for review on certiorari.

Issue:

• (Unlock)

Ruling:

1. The Supreme Court ruled that the reversion and application of the RMCPRF to satisfy RMC's debt to Philbank were invalid.
2. The Supreme Court upheld the authority of the RMCPRF Board of Trustees to act on behalf of the Fund even after RMC...(Unlock)

Ratio:

• The Supreme Court held that the RMCPRF was an express trust created for the exclusive benefit of RMC's employees.
• The Plan explicitly stated that the assets of the Fund could not revert to RMC until all liabilities had been satisfied.
• The cessation of RMC's operations in 1984 did not terminate the Board of Trustees' authority to manage the Fund.
• The Board's...continue reading