Yon Mitori International Industries v. Union Bank of the Philippines

Summary

This case involved a banking dispute where Union Bank erroneously credited P420,000.00 from a BPI check to depositor Rodriguez Ong Tan's account due to a technical system error, before the check cleared. Tan withdrew P480,000.00 despite knowing the drawee account had been closed, as evidenced by five previous dishonored checks from the same account. When the check was returned dishonored, Union Bank demanded reimbursement but Tan refused. The Supreme Court applied the principle of unjust enrichment under Article 22 of the Civil Code, finding Tan acted in bad faith and was unjustly benefited at Union Bank's expense. The Court distinguished this case from PNB v. Cheah, rejecting claims of gross negligence, and ordered Tan to return P385,299.40 with 6% annual interest. The decision reinforced that depositors cannot retain proceeds of dishonored instruments even when banks commit technical errors in processing.