G.R. No. 146021 - Bank of the Philippine Islands vs. Sarmiento

Petitioner: Bank of the Philippine Islands, which initiated the suit seeking reimbursement of salary payments.
Respondent: Elizabeth G. Sarmiento, assistant manager of the bank’s España Branch.

In 1987, the España Branch was under investigation for several alleged anomalous transactions involving time deposits.
During the investigation, respondent Sarmiento, among other suspects, became embroiled in the scrutiny concerning the irregularities.
It is alleged that her irregular attendance was a factor in the investigation.

From October 10, 1987, to June 30, 1988, Sarmiento did not regularly report for work—attending only sporadically.
Despite her infrequent presence, she received her full salary amounting to P116,003.52 during that period.
The petitioner argued that as she was not actually performing work, her receipt of the salary was a mistake and constituted a case of solutio indebiti (mistaken payment).
Conversely, Sarmiento testified that she was verbally directed by Assistant Vice-President (AVP) Arturo Kimseng to refrain from regular attendance while an internal audit (linked to the investigation) was underway.
According to respondent, the instruction was intended to safeguard the integrity of the investigation by preventing her from tampering with records or influencing subordinates.

Following the internal audit and the ensuing dispute, the bank demanded repayment of the salary, asserting the “no work, no pay” principle.
The Regional Trial Court of Quezon City dismissed the bank’s complaint for failings in establishing its case by preponderance of evidence.
The trial court noted that as a managerial employee, Sarmiento was not subject to strict timekeeping and that her intermittent attendance was compatible with the custom of managerial work.
The decision of the trial court was later affirmed by the Court of Appeals (CA) on September 15, 2000, with a subsequent denial of the bank’s motion for reconsideration on November 13, 2000.

The bank, unsatisfied with the CA’s findings, elevated the case by filing a petition for review on certiorari, contesting how the lower courts resolved the disputed issues of the alleged verbal instruction and the application of the solutio indebiti doctrine.

Whether the respondent was indeed instructed by AVP Arturo Kimseng to abstain from reporting for work during the investigation period.

Does the evidence support the claim that such a verbal instruction was given?
How does the alleged instruction align with common business practices regarding internal audits and managerial employee conduct?

Whether the salary payments made to the respondent during the period when she was not regularly present constitute a mistaken overpayment (solutio indebiti).

Is the "no work, no pay" principle applicable under the circumstances, considering her managerial status?
Whether the continued employer-employee relationship during the period precludes the application of the solutio indebiti concept.

Whether the lower courts’ factual findings—primarily regarding the existence and effect of the alleged verbal instruction—should be reexamined or given deference in the Supreme Court’s review.