G.R. No. L-6976; August 30, 1955
Laguna Tayabas Bus Company, plaintiff-appellant, vs. Province of Laguna and the Provincial Treasurer of Laguna, defendants-appellees.

FACTS

The Laguna Tayabas Bus Company (plaintiff) sought to recover from the Province of Laguna (defendant) the sum of P53,657.75 as toll fees it claimed were illegally collected for the use of the Lumban bridge from February 26, 1948, to July 31, 1949. In the alternative, it prayed for a refund of 50% of those fees (P26,828.87). The Lumban bridge was originally constructed by the province in 1930 using funds from a bond issue. It was located on a road declared national. Destroyed during the war, it was replaced with a bailey bridge by the national government, using the old abutments and piers. The Provincial Board of Laguna approved Resolution No. 750 on October 1, 1947, fixing toll fees for the bridge, which was approved by the Secretary of Public Works and Communications on November 25, 1947, under Section 2131 of the Revised Administrative Code. The Director of Public Works later recommended a 50% reduction of these tolls, approved by the Secretary on April 21, 1948. However, the Provincial Board, citing its bonded indebtedness and claiming ownership of the bridge, refused to implement the reduction via a resolution on March 6, 1948, and continued collecting the original rates until July 31, 1949. After a controversy over ownership, the Office of the President, through the Executive Secretary, declared the bridge belonged to the national government. The Provincial Board subsequently turned over the bridge to the Department of Public Works and Communications and made the reduced tolls effective starting August 1, 1949, as per its Resolution No. 556 dated August 3, 1949. This position was later formalized by President Elpidio Quirino’s Executive Order No. 552 on August 7, 1952, which declared the bridge national and ordered the reduced tolls effective as of August 1, 1949. The plaintiff demanded a refund for the period it paid the higher rates, which was refused, leading to this lawsuit. The Court of First Instance of Laguna upheld the collection’s validity and dismissed the complaint.

ISSUE

1. Was the collection of toll fees for the use of the Lumban bailey bridge, pursuant to Provincial Board Resolution No. 750 (approved October 1, 1947), valid and legal prior to its declaration as a national bridge?
2. Is the plaintiff entitled to a refund of the toll fees paid from February 26, 1948, to July 31, 1949, either in full or for the 50% reduction that was later approved?

RULING

1. Yes, the collection was valid and legal. The Supreme Court held that although the bridge was later declared national property by Executive Order No. 552 (effective August 1, 1949), the toll collections prior to that date were lawful. The national government, through the Secretary of Public Works and Communications, had approved the province’s toll resolution under Section 2131 of the Revised Administrative Code. This approval was an accommodation to help the province pay its bonded indebtedness incurred for the original bridge. The national government allowed the province to administer the bridge and collect tolls, creating a valid arrangement until the official change in ownership status.
2. No, the plaintiff is not entitled to a refund. The Court ruled that the 50% reduction in toll fees recommended by the Director of Public Works and approved by the Secretary was only made effective as of August 1, 1949, by the subsequent actions of the Provincial Board (Resolution No. 556) and the President (Executive Order No. 552). There was no intention to give the reduction retroactive effect. Therefore, the tolls collected by the province at the original, approved rates from February 26, 1948, to July 31, 1949, were collected in accordance with law. The decision of the Court of First Instance dismissing the complaint was affirmed.