The Supreme Court (SC) has ruled that a bank cannot require a depositor to return money they already withdrew on the ground of unjust enrichment when the loss was caused by the bank’s own gross negligence.
In a decision written by Associate Justice Japar Dimaampao and made public Aug. 24, the SC’s Third Division denied the petition filed by BDO Unibank Inc. (BDO), adding that the bank’s disregard of its own banking policy amounted to gross negligence.
The case stemmed from Cristina Barcellano’s deposit of a regional check worth P151,200 from an Albay branch of Landbank into her savings account at BDO’s Lucena City branch.
The BDO teller mistakenly validated the check as local instead of regional, allowing the amount to be credited after only three banking days instead of the required seven.
Believing the funds were available, Barcellano withdrew P76,000. Shortly after, BDO received a stop payment order on the check and demanded that she return the money. Although Barcellano initially agreed, she never repaid the amount. BDO later refused to release the remaining balance and filed a criminal complaint for estafa.
The Regional Trial Court acquitted Barcellano, finding no fraud, deceit, or abuse of confidence on her part. It held that the premature withdrawal resulted from BDO’s own negligence. The Court of Appeals affirmed the ruling.
Before the SC, BDO asked for a review of the civil aspect of the case, arguing that despite Barcellano’s acquittal, she should still be required to return the money. BDO argued that her refusal amounted to unjust enrichment. The bank also argued that since the funds were released due to its error in processing the check, Barcellano was required to return them based on the principle of solutio indebiti, which requires the repayment of money received by mistake.
The SC disagreed.
While Barcellano’s acquittal extinguished her civil liability arising from the alleged crime, the SC explained that civil liability may still arise from other sources of obligation, such as unjust enrichment.
Unjust enrichment happens when someone keeps a benefit without valid reason and at another’s expense, or retains money or property against principles of justice, equity, and good conscience.
An obligation to reimburse arises when payment is made by mistake without any duty to pay. The claiming party must show that the person knowingly received and retained a benefit to which they were not entitled.
The SC found that BDO failed to prove this. The bank did not explain why the stop payment order was issued or show that Barcellano knew the check would not be honored. Instead, the evidence showed that she withdrew the money in good faith after BDO itself made the funds available in her account.
The SC further ruled that BDO’s own gross negligence caused its loss. It found that the bank credited the check before it had properly cleared it, incorrectly treated a regional check as a local check, and failed to detect the error until after receiving the stop payment order. These lapses showed a failure to observe basic safeguards meant to protect the bank from the risks of invalid checks.
The SC also rejected BDO’s reliance on solutio indebiti. Although the doctrine generally requires the return of money received by mistake, it does not apply when the mistake resulted from the payor’s own gross negligence. Here, BDO’s error stemmed from its failure to exercise the extraordinary diligence and reasonable prudence required of banks, the SC Office of the Spokesperson said in a press release.
The SC emphasized that banking is a business imbued with public interest, and banks are required to exercise the highest degree of diligence. “Paying out funds from a deposited check before proper clearance, and disregarding established banking procedures fall below this standard.” ||
