MOVABLE PROPERTY

G.R. No. L-15334

BOARD OF ASSESSMENT APPEALS vs. MANILA ELECTRIC COMPANY
Justice Jose Ma. Paredes
Summarized by Horace Cimafranca
Quezon City levied real property tax upon steel towers owned by respondent
Meralco. The Court found that such towers fall within the exception afforded to Meralco
under Act No. 484, a charter that governs its franchise. In the said charter, electric poles
are included among the facilities exempt from taxation. Furthermore, the Court
determined that the electric poles are movable properties as their nature and
composition do not fall within any of the paragraphs of Article 415 of the Civil Code,
which defines and enumerates immovable properties.
IMPORTANT PEOPLE
Board of Assessment Appeals petitioner, body that hears appeals on tax
assessments
City Treasurer of Quezon City petitioner, office that levied tax upon Meralco
Manila Electric Company respondent, company that owns the steel towers
upon which real property tax was levied
FACTS
1. 1933 Meralco became the owner of the franchise to construct, maintain and
operate a power system in Manila by virtue of Act No. 484.
2. Meralco has since built transmission lines, carried on steel towers, from its
hydropower plant in Laguna to Manila. Some of these towers are located in
Quezon City.
3. 1955 The steel towers of Meralco in Quezon City were declared for real
property tax by the City Assessor of Quezon City. An appeal was taken by
Meralco to the petitioner (Board), but this was dismissed.
4. Meralco paid the amount assessed (P11,651.86) under protest and filed a
petition for tax review before the Court of Tax Appeals (CTA). The CTA
decided in favor of Meralco and held that the steel towers are within the
exemption (exemption was expressly stated as for poles, among other
facilities) from taxation granted to Meralco and that the steel towers are
personal properties and therefore not subject to real property tax.
ISSUE with HOLDING
1. W/N the steel towers can be counted as within the term poles, which was
specified as among those facilities exempt from taxation under Act No. 484.

a. Yes. The Court cites several US jurisprudence, such as Stemmons v.

Dallas Light Company, Connecticut Light and Power Co. v. Oxford,
where the term towers and poles are used interchangeably, regardless
of the material composition of the pole or tower being referred to.
b. The term pole should not be given a restrictive and narrow
interpretation, and should be understood and taken as a part of the
electric power system for the conveyance of electric current.
2. W/N the steel towers are immovable or real properties subject to real
property tax.
a. No, the steel towers are personal properties.
b. The towers cannot be considered as included among the kind of real
properties enumerated under Article 415 of the Civil Code since they
do not constitute buildings adhered to the soil (Art. 415, par. 1), they
are not attached to an immovable matter and can be separated without
breaking the material to which they are attached (Art. 415 par. 3), and
they are not machineries intended for industry or works on the land
they stand on (Art. 415, par. 5).
c. The Court inspected three of such steel towers in South Tatalon,
Kamuning and Kamias, all in Quezon City. It was found that the towers
are made of steel connected by bolts and thus can easily be
dismantled. In addition, all three towers do not have concrete
foundations, and so are not attached to anything that can be
considered as immovable matter.

DISPOSITIVE PORTION
IN VIEW HEREOF, the decision appealed from is hereby affirmed, with costs
against the petitioners.
DOCTRINE
Structures which are not buildings or constructions adhered to the soil, or
attached to an immovable matter and cannot be detached therefrom without
disturbing the nature of the matter, or machineries or implements intended for
industry or works on the land upon which they stand, or fall under any of the
enumerations found in Article 415 of the Civil Code are movable or personal
properties.
RELEVANCE TO THE LESSON
This case illustrates an example of a moveable property.

OTHER NOTES
1. Also contended was that the CTA erred in ordering the City Treasurer of
Quezon City to refund the tax paid by the respondent. The Court held that the
question was not raised with the CTA, and therefore cannot be properly
raised for the first time on appeal.