Depositors who withdraw funds in good faith cannot be forced to bear losses caused by a bank’s own gross negligence, the Supreme Court has ruled, reinforcing banks’ responsibility to follow established safeguards when handling customer funds.

The ruling came from the case of BDO Unibank, Inc. v. Cristina Barcellano y Riego, G.R. No. 261264, where the Court rejected BDO Unibank’s attempt to recover money withdrawn by a depositor after the bank prematurely credited her account with proceeds from a check that had not yet properly cleared.

The Supreme Court affirmed that the bank could not invoke unjust enrichment or solutio indebiti, a legal principle generally allowing recovery of something delivered by mistake, when the mistake resulted from the bank’s own gross negligence.

The bank’s clearing error

The dispute began on September 17, 2003, when Cristina Barcellano deposited a ₱151,200 regional check drawn on LandBank’s Ligao City branch in Albay into her BDO savings account in Lucena City.

A BDO teller mistakenly processed the instrument as a local check.

That distinction mattered because regional checks were subject to a longer clearing period. By treating the check as a local instrument, BDO credited the account after only three banking days instead of the required seven.

Believing the money was already available, Barcellano withdrew ₱76,000 on September 23.

The following day, BDO received a stop-payment order on the check and demanded that Barcellano return the amount she had withdrawn. She initially agreed but did not make the repayment.

BDO subsequently withheld the remaining balance in her account and filed an estafa complaint against her.

The Regional Trial Court in Lucena City eventually acquitted Barcellano, finding no fraud, deceit or abuse of confidence. It also found that BDO’s own negligence had caused the premature withdrawal.

The Court of Appeals affirmed the ruling.

Supreme Court: The bank’s own negligence matters

The Supreme Court likewise rejected BDO’s petition.

The Court held that BDO could not establish unjust enrichment because there was no showing that Barcellano knowingly received and retained money to which she was not entitled.

From the depositor’s perspective, the bank had already made the funds available.

The Court also found that solutio indebiti did not apply because BDO’s premature crediting was not simply an innocent or ordinary mistake. The bank had failed to follow its established procedures for clearing regional checks, despite the nature of the check being apparent from the instrument itself.

That failure amounted to gross negligence.

The Court emphasized that banks are held to a higher standard of care because banking is imbued with public interest. They are expected to exercise extraordinary diligence in handling depositors’ funds, rather than merely the diligence expected of an ordinary person.

In practical terms, the bank’s own safeguards are part of its responsibility.

When a bank disregards those safeguards and that failure causes a loss, it cannot automatically shift that loss to a customer who acted in good faith.

What the ruling means for depositors

The decision reinforces an important distinction in cases involving mistaken bank credits.

It does not mean that customers are generally entitled to keep money that a bank accidentally deposits into their accounts.

A customer who knowingly receives money that does not belong to them may still face an obligation to return it.

The circumstances in Barcellano’s case were different.

The bank itself prematurely treated the funds as available because it failed to follow the correct clearing procedure. Barcellano then withdrew part of the money believing she was entitled to do so.

The Supreme Court therefore placed responsibility for the resulting loss on the party whose negligence caused it.

The ruling also underscores why proper clearing procedures matter beyond internal bank operations. Those safeguards determine when funds can safely be treated as available to customers.

A higher standard for banks

The decision ultimately rests on a broader principle governing the banking industry: banks must exercise extraordinary diligence in handling other people’s money.

That higher standard reflects the public interest involved in banking and the trust customers place in financial institutions.

For depositors, the ruling provides protection against being made to absorb losses simply because a bank failed to follow its own procedures.

For banks, it reinforces that internal controls are not optional safeguards whose consequences can later be passed on to customers. When those controls are ignored and the resulting loss stems from gross negligence, the bank may have to bear the consequences itself.

The Supreme Court’s ruling therefore does not create a blanket exemption for customers who receive funds by mistake. Instead, it draws a clearer line between a customer’s good-faith reliance on funds made available by a bank and situations where a customer knowingly keeps money that does not belong to them.

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