GR L 5770; (October, 1910) (Digest)
G.R. No. L-5770
TEODORO R. YANGCO, plaintiff-appellee, vs. THE CITY OF MANILA, defendant-appellant.
October 10, 1910
FACTS:
Teodoro R. Yangco owned a parcel of land in Manila, which was later determined to contain 4,243.63 square meters. From 1901 to 1906, Yangco’s land was assessed for taxation based on an area of 6,610 square meters, as declared by Yangco himself in a sworn statement submitted to the city assessor, in compliance with Section 46 of Act No. 183 (the Manila Charter). During this six-year period, Yangco paid $4,747.78 in taxes. Had the assessment been based on the actual area of 4,243.63 square meters, he would have paid $3,555.17.
After 1906, the City surveyed the lot and correctly fixed its area at 4,243.63 square meters. Upon discovering the overpayment of $1,192.61, Yangco demanded a refund from the city assessor, which was subsequently denied by the municipal board. Yangco then filed an action in the Court of First Instance, which ruled in his favor. The City of Manila appealed this decision, while Yangco contended that the money was paid under a mutual mistake of fact and should be returned under the doctrine of quasi-contract.
ISSUE:
Can Teodoro R. Yangco recover overpaid real estate taxes that he paid for six years, based on an erroneous declaration of his property’s area that he himself submitted and did not question until after a significant period of time, under the theory of mutual mistake of fact?
RULING:
No. The Supreme Court reversed the judgment of the Court of First Instance.
The Court held that taxes are not contracts, whether express or implied, but are positive acts of the Government. A taxpayer is bound by the description of the property he himself has furnished in his sworn declaration for assessment. Yangco, as the property owner, was presumed to know the actual size of his lot better than anyone else. He allowed the city to collect taxes based on his own sworn declaration for six years without any objection or bringing the error to the attention of the city authorities. The Court concluded that after such “long silence and negligence,” Yangco could not compel the City to refund the difference. The ruling was specifically based on the facts presented in this particular case, without attempting to establish a general doctrine regarding the refund of taxes paid.