PH Supreme Court: Depositor does not have to return money mistakenly credited

MANILA – The Supreme Court on Monday said a customer cannot be compelled to return money mistakenly credited by a bank ahead of actual clearing of the check covering the sum.

The high tribunal issued the remark after its Third Division denied the petition filed by BDO Unibank, Inc. to return the money the customer had already withdrawn in good faith on the ground of unjust enrichment, when the loss was caused by the bank’s gross negligence.

The court 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,” it added.

On Sept. 17, 2003, “C” deposited a regional check worth PHP151,200 from an Albay branch of Land Bank of the Philippines into her savings account at BDO 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.

Barcellano then withdrew PHP76,000 on Sept. 23, 2003. Shortly after, BDO received a stop payment order on the check and demanded that she return the money.

Barcellano would not return the sum to BDO, which later refused to release the remaining balance and filed a criminal complaint for estafa.

The Regional Trial Court (RTC) acquitted Barcellano and held that the premature withdrawal resulted from BDO’s own negligence. The Court of Appeals affirmed the ruling.

Before the SC, BDO asked to review 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 argued that because it released the funds due to an error in processing the check, Barcellano must return them under the principle of solutio indebiti, which requires repayment of money received by mistake.

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 it issued the stop payment order 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,” it said. (PNA)