G.R. No. 112214 June 18, 1998
SECURITY BANK & TRUST COMPANY, petitioner, vs. COURT OF APPEALS, CRISPULO “IKE” ARBOLEDA and AMADOR LIBONGCO, respondents.

FACTS

Petitioner Security Bank & Trust Company (SBTC) filed an action for recovery of a sum of money against private respondents Crispulo Arboleda and Amador Libongco. The case arose from a check for P60,000.00 issued by A.T. Diaz Realty (through Anita Diaz) to Arboleda, drawn against its current account with SBTC, as part payment for a parcel of land. Diaz later issued a stop payment order on the check, claiming she had paid the capital gains tax and reimbursed a co-owner herself, and requested Arboleda to return the check. Arboleda instead encashed the check on November 24, 1983. Due to an internal bank error—checking the savings account ledger (which had no stop payment order) instead of the current account ledger (which had the order)—SBTC honored the check. Upon discovering the error, SBTC recredited the amount to Diaz’s account. SBTC then demanded the return of the money from Arboleda, who stated it had been given to Libongco. Libongco conditioned return on Diaz presenting a receipt for the capital gains tax payment, which was not shown. SBTC filed suit. The trial court dismissed the complaint, ruling Arboleda and Libongco had no obligation to return the money, as Arboleda was entitled to a commission and Diaz could not prove tax payment, and that the stop payment reason (“transaction incomplete”) was a misrepresentation since the sale was completed. The trial court also cited a bank form clause absolving it from liability for inadvertent payment contrary to a stop order. The Court of Appeals affirmed. Libongco died during proceedings, and the case against him was dismissed.

ISSUE

Whether private respondent Crispulo Arboleda is obligated to return the P60,000.00 to petitioner Security Bank & Trust Company.

RULING

No. The Supreme Court affirmed the decision of the Court of Appeals. The Court held that no contractual relation was created between SBTC and Arboleda from the payment; SBTC merely paid the check on behalf of its depositor, Anita Diaz. By recrediting the amount to Diaz’s account, SBTC effectively stepped into the shoes of the drawer (Diaz). Therefore, SBTC’s action is subject to the same defenses Arboleda could raise against Diaz. The Court found that Diaz’s claim of having paid the capital gains tax was doubtful due to lack of receipt, absence of official records, and the related check being payable to cash without identifying the payee. Since Arboleda denied owing any obligation to Diaz, and the payment (recrediting) by SBTC was made without Arboleda’s knowledge or consent, SBTC could only recover from Arboleda to the extent the payment benefitted him, pursuant to Article 1236 of the Civil Code. As Arboleda asserted the money was rightfully due to him, no such benefit was established. The petition was denied.