Dear Atty. Nico,

I am a government employee, working as an administrative officer in one of the offices of the Vice Mayor.

Two weeks ago, I deposited a regional check from the City branch of XYZ bank to my savings account at ABC’s branch in the amount of P90,800.89. The teller of the latter mistakenly validated my check as local instead of regional, which caused it to be cleared within three banking days instead of the standard seven banking days applicable to regional checks. As a result, I was able to withdraw P50,000 from my account five days later.

The following day, the said check was returned to ABC due to a stop payment order. I was asked by the bank to return the money I withdrew from my account.

My question is: Am I legally obligated to return the said amount, even though the negligence was committed by the bank itself?

Thank you and I am praying that your response would be favorable.

Danny

Dear Danny,

Based on a recent decision of the Supreme Court, you are not legally mandated to return the amount being asked by the said bank.

In the case of BDO Unibank Inc. v Barcellano, the Court cited that the quasi-contract of solutio indebiti harks back to the ancient principle that no one shall enrich themselves unjustly at the expense of another. This is enshrined in Article 2154 of the Civil Code, which succinctly provides:

“If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.”

For the concept of solutio indebiti to apply, the undue payment must have been made by reason of either an essential mistake of fact or a mistake in the construction or application of a doubtful or difficult question of law. Mistake entails an error, misconception or misunderstanding. The mistake of BDO in paying the amount of the check cannot be considered as an error, misconception, or misunderstanding of banking rules and policies. Rather, it was due to BDO’s failure to perform its duty of exercising extraordinary diligence and reasonable business prudence.

The BDO bank teller’s act of validating the check as local instead of regional caused the earlier clearance of the check (from a clearance period of 3 days for local checks to a clearance period of 7 days for regional checks), which then led to the crediting of the amount to Barcellano’s savings account. BDO was grossly negligent in validating the subject check as local instead of regional, considering that the name and branch of the drawee bank (in this case, XYZ Bank) was visible on the face of the subject check and was clearly a regional check. It is axiomatic that no recovery is due if the mistake done is one of gross negligence.

Based on the facts given, it is clear that the above-mentioned jurisprudence can be applied herein on all fours. XYZ Bank mistakenly validated your check as local instead of regional which resulted to its early clearance. As an entity imbued with public interest, it is required to exercise extraordinary diligence, which is more than that of a Roman pater familias or a good father of a family. Accordingly, a bank’s disregard of its own banking policy amounts to gross negligence; hence, ABC’s loss is its own doing.

Atty. Nico A. Antonio