Practice question
An institution is both a bank and an authorized trustee. It claims all assets it physically holds have the same legal status, so an ordinary bank money deposit and property held for an identified trust must be treated identically for every claim. Which is correct?
- Bank status automatically turns every trust asset into a loan
- Trust authority makes all ordinary deposits trusts
- The capacity and governing arrangement must be identified; Sections 87 and 92 specifically distinguish trustee-held assets from general business.
- Physical custody alone supplies the only rule
- A bank may unilaterally erase beneficiaries’ interests
Legal references
- General Banking Law, RA 8791, Sections 3, 55, 87-88 and 92-93: https://lawphil.net/statutes/repacts/ra2000/ra_8791_2000.html
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