board of assessment eta als vs. manila electric co

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BOARD OF ASSESSMENT APPEALS, CITY ASSESSOR and CITYTREASURER OF

QUEZON CITY

vs.

MANILA ELECTRIC COMPANY

G.R. No. L-15334

31 January 1964

CASE SUMMARY

By virtue of Act No. 484, in 1902, the Municipal Board, having

been authorized by the Philippine Commission, granted a franchise toconstruct, maintain and operate an electric street railway and electriclight, heat and power system in the City of Manila. Said franchise wasawarded to Charles M. Swift having the most favorable bid. Hereinrespondent Manila Electric Company (Meralco for short), becametransferee and owner of the franchise.

Meralco transmit electricity from its hydro-electric plant inLaguna to Manila through transmission wires which carry high voltagecurrent. These transmission wires were fastened to insulators attachedon steel towers constructed by Meralco at intervals from Laguna to

Manila. Respondent Meralco has constructed forty (40) steel towerswithin Quezon City, on land belonging to it.

In 1955, the City Assessor of Quezon City, herein referred to aspetitioner, declared said steel towers for real property tax. Meralcofiled a petition to cancel declaration but was denied by the petitioner.Thus, an appeal was taken by Meralco to the Board of Assessment. Thelatter required Meralco to pay for real property taxes on the said steeltowers for the years 1952 to 1956. Meralco paid for real propertytaxes, however, filed a petition for review in the Court of Tax Appeals(CTA for brevity). CTA rendered a decision ordering the cancellation of

said tax declarations and the City Treasurer of Quezon City to refundthe respondent for the amount paid on said taxes. A motion forreconsideration was filed by the City Treasurer but was denied. So, thisinstant petition for review was filed to the Supreme Court.

Issues of the Case


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Whether the steel towers or poles of the Meralco considered realso that they could be subjected to real property taxes.

Applicable Provisions of the Law

Article 415 of the Civil Code does, by stating the following areimmovable property:

(1) Land, buildings, roads, and constructions of all kinds adheredto the soil;

x x x x x x x x x

(3) Everything attached to an immovable in a fixed manner, insuch a way that it cannot be separated therefrom withoutbreaking the material or deterioration of the object;

x x x x x x x x x

(5) Machinery, receptacles, instruments or implements intendedby the owner of the tenement for an industry or works whichmay be carried in a building or on a piece of land, and whichtends directly to meet the needs of the said industry or works;

x x x x x x x x x

Ruling of the Court

The decision appealed from was affirmed by the Supreme Court,with costs against the petitioners.

The Supreme Court upheld the previous ruling of the CTA thatsaid steel towers are personal properties and cannot be subjected forreal property taxes, and as a consequence, and that the

reimbursement for the payment made by Meralco is proper.

In finding that said steel towers are personal properties theSupreme Court ruled:

1. that they do not come within the objects mentioned in

paragraph 1, because they do not constitute buildings or

constructions adhered to the soil. They are not construction


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analogous to buildings nor adhering to the soil. As per

description, given by the lower court, they are removable

and merely attached to a square metal frame by means of

bolts, which when unscrewed could easily be dismantled and

moved from place to place;

2. that they can not be included under paragraph 3, as they

are not attached to an immovable in a fixed manner, and

they can be separated without breaking the material or

causing deterioration upon the object to which they are

attached. Each of these steel towers or supports consists of

steel bars or metal strips, joined together by means of bolts,

which can be disassembled by unscrewing the bolts and

reassembled by screwing the same; and

3. that they do not also fall under paragraph 5, for they are not

machineries, receptacles, instruments or implements, andeven if they were, they are not intended for industry or works

on the land. Petitioner is not engaged in an industry or works

in the land in which the steel supports or towers are

constructed.

Opinion

These steel towers are personal properties. Applying the tests in

determining the nature of property as to whether it is personal, the

steel towers are indeed, personal properties. Though test by

description, they can be carried from place to place or could be easilyremoved without injuring the property to which these were attached.

By test of exclusion, these are not included in the enumerations made

in Article 415 of the New Civil Code. Also, its purpose fell short as to

mean constructions adhered to the soil, or those receptacles intended

for use on the tenement or the land. Industry does not operate on said

land where these steel towers were placed or constructed.

board of assessment eta als vs. manila electric co

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