Dear PAO,

Last week, my sister mistakenly received P10,000 in her GCash account. The sender immediately contacted her and informed her that he had mistakenly entered one digit of the 11-digit mobile number and realized the error only after the transaction went through. My sister is worried that the transaction might be part of the recent scam involving erroneous fund transfers and was wondering whether she could simply ignore the sender and keep the money for herself. Thank you.

Klang

Dear Klang,

The answer to your query is found in Article 2154 of the New Civil Code, which provides that “[i]f something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.” This is called ‘solutio indebiti,’ a Latin term from Roman law which means ‘payment of what is not owing.’

Further, the legal obligation to return that which was erroneously given arises from quasi-contracts, which is anchored on the principle that no one shall enrich himself unjustly at the expense of another. As codified under Article 22 of the same Code, the principle of unjust enrichment entails:

“Article 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.”

In Domestic Petroleum Retailer Corporation vs. Manila International Airport Authority (G.R. No. 210641, March 27, 2019), the Supreme Court, speaking through Associate Justice Alfredo Benjamin Caguioa, recapitulated that “[i]n order to establish the application of solutio indebiti in a given situation, two conditions must concur: (1) a payment is made when there exists no binding relation between the payor who has no duty to pay, and the person who received the payment, and (2) the payment is made through mistake, and not through liberality or some other cause.”

“In such a case, a creditor-debtor relationship is created under a quasi-contract whereby the payor becomes the creditor who then has the right to demand the return of payment made by mistake, and the person who has no right to receive such payment becomes obligated to return the same.” (Sebastian Siga-An vs. Alicia Villanueva, G.R. No. 173227, January 19, 2009, Ponente: Associate Justice Minita Chico-Nazario)

From your narration of facts, it is clear that the essential requisites of solutio indebiti are present in the transaction involving your sister. First, the transfer was made when there is no pre-existing legal or contractual obligation for the sender to transfer P10,000 to your sister; and second, the transfer was made through mistake, and not through liberality or some other cause. Clearly, the transfer was a mistake. And since your sister received the amount of P10,000 when there was no right to demand it, she has an obligation to return it to the original sender, especially after the latter has already demanded the same.

We hope that we were able to answer your queries. This advice was solely based on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Thank you for your continued trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected].