G.R. No. L-14618. May 30, 1961.
SANTOS LUMBER COMPANY, ET AL., plaintiffs-appellees, vs. CITY OF CEBU, ET AL., defendants-appellants.

FACTS

This case concerns the execution of a prior Supreme Court judgment in G.R. No. L-10196, which declared certain tax ordinances of the City of Cebu ultra vires and ordered the City to refund taxes collected thereunder. The specific refund ordered was P97,542.57, representing taxes paid up to February 1953. After this judgment became final, the lumber company appellees filed a petition in the trial court for a writ of execution to recover not only that sum but also an additional P223,002.65, representing taxes they had paid under the same void ordinances after February 1953, during the pendency of the earlier appeal.
The City of Cebu opposed the execution for the post-February 1953 payments. Its primary contention was that a taxpayer could only recover illegally collected taxes if the payments were made under protest. The City argued that while portions of the additional sum (P59,108.88) were paid under protest, the bulk (P163,893.77) was paid voluntarily without protest. Therefore, the City was willing to refund the amounts specified in the original judgment and the payments made under protest, but refused to refund the voluntary payments, asserting that their recovery should be the subject of a separate action.

ISSUE

Whether the appellees are entitled to a refund, via a writ of execution in the same case, for all taxes paid under the void ordinances after February 1953, including those paid without explicit protest.

RULING

Yes. The Supreme Court affirmed the trial court’s order for a full refund. The legal logic proceeds from two key points. First, the Court examined the governing law—the charter of the City of Cebu ( Commonwealth Act No. 58 , as amended). It noted that, unlike the charters of other cities like Dumaguete and Quezon City, the Cebu City charter does not contain a provision making a prior payment under protest a condition precedent for filing a suit to recover illegally collected taxes. Therefore, the general common law rule requiring protest for voluntary payments does not apply by statutory mandate.
Second, the Court applied a logical and equitable construction to the circumstances. The appellees had initially paid the P97,542.57 under protest and successfully litigated the ordinances’ invalidity. The subsequent payments made during the appeal, whether explicitly labeled “under protest” or not, were made under the continuing cloud of that very litigation challenging the tax’s legality. The Court reasoned that it would be unreasonable to require a fresh protest for each payment when the fundamental challenge to the ordinance’s validity was already pending before the courts. The payments were, in substance, involuntary in the context of the ongoing legal dispute. Consequently, all payments made under the ordinances subsequently declared void were recoverable in the same action, and a writ of execution was the proper remedy to enforce the refund of the entire amount. The appeal was dismissed.