‘Banks can’t demand return of funds withdrawn due to their own mistake’

By Jordan Domingo

THE Supreme Court has ruled that banks cannot compel depositors to return money they were able to withdraw prematurely because of the bank’s own negligence.

The ruling stemmed from a case involving BDO Unibank and Cristina Barcellano, whose withdrawal of funds was made possible after a bank teller mistakenly processed a regional check as a local check, allowing it to clear earlier than the prescribed period.

In a decision penned by Associate Justice Japar Dimaampao, the Supreme Court’s Third Division dismissed BDO’s petition challenging lower court rulings that had acquitted Barcellano of estafa.

The case began in September 2003 when Barcellano deposited a P151,200 regional check issued by a LandBank branch in Albay into her BDO savings account in Lucena City.

The check should have taken seven banking days to clear. However, the BDO teller mistakenly classified it as a local check, which required only three banking days for clearing.

Six days after the deposit, Barcellano withdrew P76,000 from her account.

The following day, BDO received a stop-payment order and asked Barcellano to return the amount she had withdrawn. Although she initially agreed, she did not return the money.

Barcellano later sought to withdraw the remaining balance in her account through her lawyer. Instead, BDO filed an estafa complaint against her.

Both the Regional Trial Court and the Court of Appeals ruled in Barcellano’s favor, finding that the premature withdrawal resulted from the bank’s own negligence.

BDO elevated the case to the Supreme Court, arguing that Barcellano should still return the money because keeping it constituted unjust enrichment. The bank invoked the legal principle of solutio indebiti, which generally applies when money or property is mistakenly delivered to someone who has no right to receive it.

The Supreme Court, however, rejected the argument.

The high court noted that BDO failed to explain why the stop-payment order had been issued and, more importantly, failed to establish that Barcellano knowingly received money to which she was not entitled.

“Plain as day, BDO failed to demonstrate that Barcellano knowingly received a benefit to which she was not entitled when she withdrew the funds from her account,” the court said.

The SC consequently ruled that solutio indebiti did not apply.

The court also stressed the heightened responsibility imposed on banks in handling their customers’ transactions, noting that they are required to exercise “extraordinary diligence,” a standard higher than that expected of an ordinary person or a “good father of the family.”

The ruling underscores that banks cannot simply shift the consequences of their own operational errors to depositors who withdraw funds in good faith and without knowledge that the transaction was improperly processed.