Mistake of Law as basis for Solutio Indebiti

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AT A GLANCE:

Article 2154 of the New Civil Code states 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.

Article 2154 of the New Civil Code states 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.

The New Civil Code embodies the fundamental principle that no person should unjustly enrich himself or herself at the expense of another. One of its key applications is the doctrine of solutio indebiti, which arises when something is delivered by mistake to a person who has no right to demand it.

What is Solutio Indebiti?

Solutio indebiti is an equitable principle which prevents undue fiscal leakage that may take place if the government is unable to recover from passive recipients amounts corresponding to a properly disallowed transaction. (Cruz-Sta. Rita v. Commission on Audit, G.R. No. 278582, April 22, 2025)

Mistake of Law as a Ground

A common misconception is that only a mistake of fact can give rise to solutio indebiti. However, the Civil Code recognizes that mistake of law may also serve as its basis.

Article 2155 of the New Civil Code of the Philippines states that provides:

“Payment by reason of a mistake in the construction or application of a doubtful or difficult question of law may come within the scope of the preceding article.”

This interpretation has been affirmed by the Supreme Court in Government Service Insurance System v. Commission on Audit, G.R. Nos. 138381 & 141625 (Resolution), November 10, 2004, under Article 2154 of the Civil Code, if something is received and unduly delivered through mistake when there is no right to demand it, the obligation to return the thing arises. Payment by reason of mistake in the construction or application of a doubtful or difficult question of law also comes within the scope of solutio indebiti.

When Mistake is Presumed

The law further provides a presumption in favor of the payer. Article 2163 of the New Civil Code of the Philippines states that it is presumed that there was a mistake in the payment if something which had never been due or had already been paid was delivered; but he from whom the return is claimed may prove that the delivery was made out of liberality or for any other just cause.

Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.

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Mistake of Law as basis for Solutio Indebiti

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