Board of Assesment Appeals, City Assessor and City Treasurer of Quezon City v.

Manila
Electric Company
G.R. No. L-15334. January 31, 1964

FACTS:
The Philippine Commission enacted Act No. 484 which authorized the Municipal Board of Manila to
grant a franchise to construct, maintain and operate an electric street railway and electric light, heat
and power system in the City of Manila. Charles M. Swift was awarded the said franchise with terms
and conditions which were embodied in Ordinance No. 44. Respondent Manila Electric Co. (Meralco),
became the transferee and owner of the franchise.

Meralco's electric power is generated by its hydro-electric plant which is transmitted from Laguna to
the City of Manila by means of electric transmission wires. The respondent Meralco has constructed
40 of these steel towers within Quezon City, on land belonging to it.

On November 15, 1955, petitioner City Assessor of Quezon City declared the aforesaid steel towers
for real property tax under Tax Declaration Nos. 31992 and 15549, which the respodent filed a peition
to cancel such declarions but denied. By then, an appeal was taken by respondent MERALCO to the
Board of Assessment Appeals of Quezon City, which required respondent to pay the amount of
P11,651.86 as real property tax on the said steel towers for the years 1952 to 1956. Respondent paid
the amount under protest, and filed a petition for review in the Court of Tax Appeals which rendered a
decision ordering the cancellation of the said tax declarations and the petitioner City Treasurer of
Quezon City to refund to the respondent the sum of P11,651.86. Motion for reconsideration having
been denied, hence, an instant petition for review was filed.

ISSUE:
1. W/N steel support or towers constitute real properties.
2. W/N City Treasurer of Quezon City is held responsible for the refund of the amount paid.

RULING:
1. NO. The tax law does not provide for a definition of real property; but Article 415 of the Civil Code
does, by stating the following are immovable property:

"(1) Land, buildings, roads, and constructions of all kinds adhered to the soil;

(3) Everything attached to an immovable in a Jxed 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 or supports in question, 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
constructions 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.

They cannot be included under paragraph 3, as they are not attached to an immovable in a Jxed
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.

These steel towers or supports do not also fall under paragraph 5, for they are not machineries or
receptacles, instruments or implements, and even if they were, they are not intended for industry or
works on the land. Petitioner is not engaged in an industry or works on the land in which the steel
supports or towers are constructed.

2. YES. The City Treasurer of Quezon City is held responsible for the refund the sum of P11,651.86 of
real property taxes, despite his contention that Quezon City, which was not made a party to the suit, is
the real party in interest not only because this question was not raised in the lower court but also
because, factually, it was he who had insisted that the taxpayer pay the taxes now to be refunded.