G.R. No. L-17133 - U.S.T. Cooperative Store vs. City of Manila

Petitioner/Appellee: U.S.T. Cooperative Store, a duly organized cooperative association registered with the Securities and Exchange Commission on March 18, 1947, under Commonwealth Act No. 565 as amended.
Respondents/Appellants: The City of Manila and Marcelino Sarmiento, as Treasurer of the City of Manila.
The case involves a petition for refund of municipal taxes and license fees paid by the Cooperative to the City of Manila for the period from July 1957 to December 1958.
The total amount involved in the refund suit is P12,315.10.

The Cooperative was under the jurisdiction of the Cooperative Administration Office from its registration, and its net assets did not exceed P500,000 during 1957, 1958, and 1959.
On June 22, 1957, Republic Act No. 2023 (Philippine Non-Agricultural Cooperative Act) was enacted, amending and consolidating laws on non-agricultural cooperatives.
Pertinent provisions of R.A. No. 2023:

Section 4(1) deemed all cooperatives registered under prior laws and under the jurisdiction of the Cooperative Administration Office as registered under the new Act, with their by-laws continuing in force unless inconsistent with the new Act.
Section 66(1) exempts cooperatives with net assets not exceeding P500,000 from all taxes and government fees, except those specifically provided under the Act.

Despite this legal exemption, the Cooperative paid municipal taxes and license fees to the City of Manila during the stated period.
In May 1959, the Cooperative requested a refund from the City Treasurer, which was denied. This refusal prompted the filing of the instant case.

Appellants argue the exemption did not apply because the Cooperative conducted business not only with its members but also with the general public.
They also claim that since the payments were made voluntarily, the Cooperative waived the right to the refund.

The law restricts cooperatives from transacting with non-members beyond what they transact with members (Section 58), but there was no proof that the Cooperative violated this.
The restriction on transaction with non-members does not affect the cooperative's tax exemption status under Section 66(1).
Section 4(1) confirmed the Cooperative’s registration under R.A. No. 2023 despite it being registered under prior laws.
The payments were made in ignorance of the enactment and application of R.A. No. 2023, which was published only in December 1957 despite being enacted in June 1957.

Whether or not the U.S.T. Cooperative Store is exempt from municipal taxes and license fees under Section 66(1) of Republic Act No. 2023.
Whether the fact that the Cooperative transacted business with the general public, in addition to its members, affects its entitlement to tax exemption.
Whether the Cooperative can recover taxes and fees voluntarily paid under a mistake of law or fact.