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BAA v. MERALCO (G.R. No. L-15334, January 31, 1964)

The Manila Electric Company (MERALCO) constructed 40 steel towers on land it owned in Quezon City to transmit electric current. The Quezon City assessor declared 3 of the steel towers as real property subject to real property tax. MERALCO paid the tax under protest. The Court of Tax Appeals cancelled the tax declaration and ordered a refund, finding the steel towers to be personal property. The Supreme Court affirmed, holding that the steel towers were not real property based on the civil code definition. Specifically, the towers were not adhered to the soil, could be dismantled without damage, and were not machinery for any industry or works on the land.

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1K views1 page

BAA v. MERALCO (G.R. No. L-15334, January 31, 1964)

The Manila Electric Company (MERALCO) constructed 40 steel towers on land it owned in Quezon City to transmit electric current. The Quezon City assessor declared 3 of the steel towers as real property subject to real property tax. MERALCO paid the tax under protest. The Court of Tax Appeals cancelled the tax declaration and ordered a refund, finding the steel towers to be personal property. The Supreme Court affirmed, holding that the steel towers were not real property based on the civil code definition. Specifically, the towers were not adhered to the soil, could be dismantled without damage, and were not machinery for any industry or works on the land.

Uploaded by

Lorie Jean Udarbe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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G.R. No.

L-15334 January 31, 1964


BOARD OF ASSESSMENT APPEALS, CITY ASSESSOR and CITY TREASURER OF QUEZON CITY, petitioners,
vs.
MANILA ELECTRIC COMPANY, respondent.
Assistant City Attorney Jaime R. Agloro for petitioners.
Ross, Selph and Carrascoso for respondent.
PAREDES, J.:

FACTS:
MERALCO constructed 40 steel towers within Quezon City, on land belonging to it. Three steel towers
were declared for real property tax by the City Assessor.

MERALCO paid such tax under protest. Filed a petition for review in the CTA.

Court of Tax Appeals: Cancelled tax declaration and ordered MERALCO for refund. – Personal property.
MR denied. Hence this petition.

ISSUE: WON steel towers of MERALCO are considered real properties subject to real property tax.

HELD: NO.
The poles should be understood and taken as a part of the electric power system of the respondent
MERALCO, for the conveyance of electric current from the source thereof to its consumers.

The tax law does not provide for a definition of real property; but Article 415 of the Civil Code does:
(1) Land, buildings, roads, and constructions of all kinds adhered to the soil;
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object;
(5) Machinery, receptacles, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried in a building or on a piece of land,
and which tends directly to meet the needs of the said industry or works

The steel towers are evidently personal properties under the following:
1) They are not adhered to the soil. They are not construction analogous to buildings nor adhering to
the soil because as per description, 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) They are not attached to an immovable property and can be dismantled without breaking or
deteriorating the material. They can be separated without breaking the material or causing
deterioration upon the object to which they are attached. In fact, each of these steel towers or
supports consists of steel bars joined together by means of bolts, which can be disassembled by
unscrewing the bolts and reassembled by screwing the same.
3) They are not machineries nor instruments or implements intended for the industry or works on the
land. Even if they were machineries, receptacles, instruments or implements, they are not intended
for industry or works on the land. MERALCO is not engaged in an industry or works in the land in
which the steel supports or towers are constructed.

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