Dometila Andres (IWA) v Manufacturers Hanover and Trust Corp, (Mantrust) CA GR No.

L-82670 9/15/1989

FACTS:
Facets Funwear, Inc. was a US based company that is doing business with Irenes Wearing Apparel, the latter is operated by
Dometila Andres. As payment for the merchandise bought by Facets, the latter instructed FNSB to remit the amount of 10,000
USD to the PNB account of IWA. FNSB in turn instructed Mantrust to remit the money to the PNB account of IWA and just
debit FNSBs account with Mantrust.

The transfer was delayed due to an error (Wearing Apparel only; lacks Irenes). Acting on this error, Facets now instructs
FNSB to transfer the money to PCIB instead of PNB, now FNSB instructs Mantrust to do the same. Unaware that IWA had
already received the money, another remittance of 10,000 USD was transferred to IWA.
FNSB discovered this, had asked Mantrust to recredit the 2nd amount, to which the latter complied.
Now, Mantrust asked IWA to return the 2nd amount, IWA refused to do so.

Mantrust filed an action for the recovery of the amount.

IWA contends that the money was transferred due to negligence and carelessness of the staff of the bank and that Facets had an
outstanding amount of 49,000 plus USD, so there was no unjust enrichment.
RTC: ruled in favor of IWA (IWA was not unjustly enriched bec of Facets outstanding balance)
CA: ruled in favour of Mantrust

ISSUE: WON IWA was unjustly enriched because of the erroneous 2nd transfer/WON IWA had the obligation to return the
duplicate payment.

RULING: Yes.

Mantrust is right. Art. 2154 (which provides for principle of solution indebiti, a quasi-contract) of the NCC is applicable: If
something received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it
arises.
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.
Pet: contends that there was no unjust enrichment because Facets had outstanding balance.
Court ruled: Contract of sale of garments was between IWA and Facets, and not between IWA and Mantrust. It was
then Facets wc was indebted to IWA and not Mantrust, so it cannot not return due to outstanding balance since no
contractual relation between them.

Pet: contends that payment by Res Mantrust was not made by mistake but was result of negligence.
Court ruled: There was a mistake, not negligence, in the second remittance. It was evident by the fact that both
remittances have the same reference invoice number.

This legal provision, which determines the quasi-contract of solution indebiti, is one of the concrete manifestations of the
ancient principle that no one shall enrich himself unjustly at the expense of another. In the Roman Law Digest the maxim
was formulated thus: "Jure naturae acquum est, neminem cum alterius detrimento et injuria fieri locupletiorem." And the
Partidas declared: "Ninguno non deue enriquecerse tortizeramente con dano de otro." Such axiom has grown through the
centuries in legislation, in the science of law and in court decisions. The lawmaker has found it one of the helpful guides in
framing statutes and codes.