SC scuttles bank’s recovery claim
The SC rejected the argument, finding that Barcellano acted in good faith and had no reason to know the check would be dishonored.
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The SC rejected the argument, finding that Barcellano acted in good faith and had no reason to know the check would be dishonored.
The Supreme Court (SC) has ruled that banks cannot recover money withdrawn by depositors when the loss resulted from the bank’s own gross negligence in processing a check.
In a decision penned by Associate Justice Japar B. Dimaampao dated 12 February 2026, the SC Third Division denied a bank’s petition, ruling that its failure to follow established clearing procedures barred it from recovering P76,000 withdrawn by depositor Cristina Barcellano.
Barcellano had deposited a P151,200 regional check from a LandBank branch in Albay into her savings account at the bank’s Lucena City branch. A teller mistakenly treated the check as a local check and released the funds after three banking days instead of the required seven.
Believing the funds shown as available were hers, Barcellano withdrew P76,000.
The bank later received a stop-payment order and demanded that she return the money. When she refused, it withheld her remaining balance and filed an estafa complaint.
The Regional Trial Court acquitted Barcellano, finding no fraud, deceit, or abuse of confidence. The Court of Appeals affirmed the lower court’s decision.
The bank argued before the SC that Barcellano remained liable under solutio indebiti, which requires the return of money paid by mistake.
The SC rejected the argument, finding that Barcellano acted in good faith and had no reason to know the check would be dishonored.
It said the bank’s premature crediting of the check, misclassification of its clearing status and failure to follow safeguards constituted gross negligence.
The SC said solutio indebiti cannot be invoked when the payor’s own failure to exercise the required degree of diligence caused the loss.
It also stressed that banks, being businesses imbued with public interest, are held to the highest degree of care.
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