Flashcards Studio

Facts: A corporation pays PHP 600,000 to the City Treasurer for a 'Title Transfer Compliance Fee' based on a city circular that such fee is required to process a land-title transfer as part of a modernization program. After the title transfer, the corporation learns that no such fee exists in law and that the City Treasurer has retained the money. The corporation sues to recover the amount on the theory of solutio indebiti grounded on mistake of law. (a) Identify the controlling doctrine and its essential elements. (b) Is a mistake of law a valid basis for recovery under solutio indebiti, and how does this differ from a mistake of fact? (c) Apply to the facts: should the corporation be allowed to recover from the City Treasurer, and what defenses might the Treasurer raise?