(7) Andres v.

Manufacturers Hanover, GR 82670, September 15, 1989

FACTS:

The petitioner Dometila M. Andres, doing business under the name and style of Irene’s Wearing Apparel
was engaged in the manufacture of ladies garments, children’s wear, men’s apparel and linens for local
and foreign buyers. Among its foreign buyers was Facets of the United States. Facets instructed the First
National State Bank (FNSB) of New Jersey to transfer $10,000 to Irene’s Wearing Apparel via Philippine
National Bank (PNB). FNSB instructed Manufacturers Hanover and Trust Corporation (Mantrust) to
effect the transfer by charging the amount to the account of FNSB with them.

After Mantrust has effected the transfer, the payment was not posted immediately because the payee
designated in the telex was only “Wearing Apparel.” Private respondent sent PNB another telex stating
that the payment was to be made to “Irene’s Wearing Apparel.” Irene’s Wearing Apparel received the
remittance of $10,000.

After learning about the delay, Facets informed FNSB about the situation. Facets, unaware that
petitioner had already received the remittance, informed private respondent and amended its
instruction asking it to effect the payment to Philippine Commercial and Industrial Bank (PCIB) instead of
PNB.

Private respondent, Manufacturers Hanover and Trust Corporation, also unaware that petitioner had
already received the remittance, instructed PCIB to pay $10,000 to petitioner. Hence, Irene’s Wearing
Apparel received another $10,000 which was charged again to the account of Facets with FNSB.

FNSB discovered that private respondent had made a duplication of remittance. Private respondent
asked petitioner to return the second remittance of $10,000 but the latter refused to do so.

What have we learned about the topic?

Art. 2154 provides that if something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises.

Art. 1145 provides that oral contracts, quasi-contract must be commenced within 6 years

Art. 559 The common law principle that where one of two innocent persons must suffer by a fraud
perpetrated by another, the law imposes the loss upon the party who, by his misplaced confidence,
has enabled the fraud to be committed, cannot be applied in a case which is covered by an express
provision of the new Civil Code, specifically Article 559. Between a common law principle and a
statutory provision, the latter must prevail in this jurisdiction.

What does the case teach us?

Manufacturers Hanover and Trust Corporation has the right to recover the second $10,000 remittance it
had delivered to Dometila M. Andres.

The law determines the quasi-contract of solutio indebiti. One of the manifestations of the ancient
principle is that no one shall enrich himself unjustly at the expense of another. For this article to apply
the following requisites must concur: "(1) that he who paid was not under obligation to do so; and, (2)
that payment was made by reason of an essential mistake of fact".

Here, the second payment made by Mantrust was made by a mistake of fact. However, the doctrine of
solution indebiti does not apply because there was negligence on the part of the respondents and that
they were not unjustly enriched since Facets still has a balance of $49,324. Therefore, if an act or good
was unduly delivered through mistake, the obligation to return it arises.

There is mistake of fact and the doctrine of solution indebiti applies in the case. Records shows that
there was a mistake in the second remittance of US $10,000.00 is borne out by the fact that both
remittances have the same reference invoice number which is 263 80. Lastly in the attempt that
from the time the second $10,000.00 remittance was made, five hundred and ten days had elapsed
before private respondent demanded the return thereof. Needless to say, private respondent
instituted the complaint for recovery of the second $10,000.00 remittance well within the six years
prescriptive period for actions based upon a quasi-contract. [art 1145]