Extra-Contractual Obligations

Quasi-Contracts

#101 BPI v. Sarmiento

(Jovit)

Facts:

Sarmiento was the assistant manager of BPI Espana branch. Sometime on 1987, during her
tenure, the branch was investigated for anomalous transactions in the time deposits. It was
during this investigation that Sarmiento did not regularly report for work. However, inspite of her
absence, she was paid the amount of Php 116,003.52 as her salary. Sarmiento was asked by
the bank to return the money as this was paid erroneously. Sarmiento refused hence the bank
instituted an action for the collection of money in the lower court. BPI insists that its payment of
the salary was by mistake since Sarmiento who chose not to report for work was not entitled to
the salary as it follows the “No work, No pay” policy. Thus, she has the obligation to return the
same based on the principle of solutio indebiti.

On the other hand, Sarmiento claimed that she was asked by VP Kimseng of the Audit
Department to stop working while the investigation was going on. This was for the purpose of
preventing her from tampering with the records or from influencing her subordinates.

The RTC of QC dismissed the complaint for failure of BPI to establish its case by preponderance
of evidence. The lower court held that the principle of solutio indebiti upon which BPI based its
complaint for a sum of money is untenable. The lower court based this on the fact that Sarmiento
was a managerial employee, she was not required to punch in her card at the bundy clock, that
she was allowed to visit the business establishments of her several clients thus she could not be
seen reporting for work which is not conclusive proof that she was not rendering service to her
employer. The court also took note of the fact that BPI was not able to rebut the answer of
Sarmiento that she was asked to temporarily stop working. The case was elevated to CA.The
Court of Appeals affirmed the decision of the lower court and denied the M/R filed by petitioner.
Hence, this petition.

Issue: W/N Sarmiento is bound to return the payment made by BPI based on the principle of
Solution Indebiti.

Held:

No, she is not obliged to return the money.According to the SC, there is solutio indebiti where: (1)
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 causes. The quasi-contract of solutio indebiti is based on
the ancient principle that no one shall enrich himself unjustly at the expense of another.

Both elements are lacking in the present case. Sarmiento was only terminated from office on
Aug. 26, 1988. She was not suspended from office. Consequently, during the period in question,
there existed employer-employee relationship between petitioner and Sarmiento which entitled
her to the payment of her salary during the said period. Thus, there can be no mistaken payment
in the case at bar. Moreover, the payment was made with the knowledge and approval of the
immediate superior of Sarmiento. Therefore, no solutio indebiti.

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