provision on solutio indebiti.

The appellant City of Manila, at the very start, notwithstanding the Ordinance
imposing the Retailer’s Tax, had no right to demand payment thereof.

Appellee categorically stated that the payment was not voluntarily made (a fact found also by the lower court), but
on the erroneous belief, that they were due. Under this circumstances, the amount paid, even without protest is
recoverable. “If the payer was in doubt whether the debt was due, he may recover if he proves that it was not
due” (Art. 2156, NCC). Appellee had duly proved that taxes were not lawfully due. There is, therefore, no doubt
that the provisions of solutio indebiti, of the new Civil Code, apply to the admitted facts of the case.

Article 2156
If the payer was in doubt whether the debt was due, he may recover if he proves that it was not due.

For example, a debtor pays a creditor prematurely because he is not sure whether the debt is already due. The
creditor accepts it . The debtor can recover what he has paid prior to the due date of the debt provided that the
demand for reimbursement is not made after the debt has become due. This is a case of solutio indebiti.

Article 2157
The responsibility of two or more payees, when there has been payment of what is not due, is solidary.

An illustration of this article is as follows: A is indebted to B and C for P2,000. The obligation is of a solidary nature
such that A can pay only to one of them the whole obligation, and the debt is considered paid as to both. Thus, if A
pays B the amount of P2,000, the debt is considered paid. It is up to C to claim from B his share of the credit which
is P1,000. If there is payment by mistake, A can recover from either B or C the amount which he has paid. This is
true, even if in the meantime, C has not yet obtained his P1,000.

Article 2158
When the property delivered or money paid belongs to a third person, the payee shall comply with the provisions
of Article 1984.

Illustration:
A is obliged to pay B his obligation by giving B a watch. Despite the fact that the payment is not yet due, A gives B
the watch which turns out to be stolen from X. At the time of his receipt of the watch, B has no obligation to ask A
questions as to who owns the watch. However, if B later finds out that X really owns the watch, B must advise X
that he (B) is in possession of his (X’s) watch. X must claim the watch within one month from the advice. If X does
not claim the watch, B is excused from all liability if, A, because of solutio indebiti, claims back the watch, and B
gives back the watch to A. However, if at the time A gives the watch of B, the latter has reasonable grounds to
believe that it has been acquired unlawfully, B can return the same to A.

Article 2159
Whoever in bad faith accepts an undue payment, shall pay legal interest if a sum of money is involved, or shall be
liable for fruits received or which should have been received if the thing produces fruits.

If the creditor knows that the payment is not yet due and payment is tendered to him, he must inform the debtor
that payment is not yet due. Should the creditor accept such premature payment, he is therefore in bad faith and
shall be liable for interest from the time he accepts payment up to the time he returns it upon demand of the
debtor.

Article 2160
He who in good faith accepts an undue payment of a thing certain and determinate shall only be responsible for
the impairment or loss of the same or its accessories and accessions insofar as he has thereby been benefited. If he
has alienated it, he shall return the price or assign the action to collect the sum.
An illustration of this article is as follows: A is obliged to give B a house on January 1, 1997. Believing that it was
due on August 1, 1996, A delivered the house on said date. B likewise did not know that the house was still due on
January 1, 1997. B was in good faith. On November 1996, the house was rented in the amount of P2,000 per hour
by a movie producer for a particular motion picture and, while shooting, the kitchen was accidentally burned. After
the shooting of the motion picture, B was paid the rent in the amount of P30,000 for 15 hours. On December 1996,
A discovered that the house was not yet due and demanded its return. B can return the house and pay the amount
of the kitchen which has been impaired, because he (B) has been benefited by the house when he had it rented.