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G.R. Nos. L-13012 and L-14786: City of Cebu vs Judge Edmundo Piccio and Anastacio Caballero
December 31, 1960, Obligations and Contracts
Solutio Indebiti

Caballero was the caretaker of the cemeteries in the City of Cebu. He was removed on April 15, 1953.
After trial, the lower court found that Caballero was unjustly removed from his position hence Judge
Piccio, on August 6, 1955, ordered the reinstatement of Caballero and that he be paid for back wages
reaching as far back from his date of removal. The mayor and the other officers involved refused to
comply with the court order which made the said judge issue the order again this time with a stern
warning that coercive power may be employed if the court’s order is not complied with.

The order was issued on 11 October 1957. The city paid Caballero P3224.00 but under protest as it
averred that the original party to the case was the mayor and the other officers and not the city itself.
The city also averred that the payment to Caballero was wrongful and illegal. Being not a party to the
original case, the City of Cebu is not obliged to make any payment at all. The Court of Appeals dismissed
the appeal brought by the City of Cebu.

ISSUE: Whether or not solutio indebiti may be invoked by the city of Cebu.

HELD: No. The SC ruled in favor of Caballero. The complaint to refund is predicated upon the following
provisions of the Civil Code:

Art. 2154. If something is received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.”

Considering that the indispensable requisites of this juridical relation, known as solutio indebiti are
1. That he who paid was not under the obligation to do so, and
2. That the payment was made by reason of an essential mistake of fact.

It is fully established that Caballero had the perfect right to demand for the payment of his back
salaries during his illegal dismissal, that the sum of P3224.00 was paid to Caballero by virtue of a
writ of execution lawfully issued; and that the payment was not made through mistake. On this
score alone, it would appear manifest that the complaint does not state a cause of action.