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Board of Assessment Appeals V Meralco

The Board of Assessment Appeals ruled that MERALCO's steel transmission towers were subject to real property tax. MERALCO appealed, arguing the towers were personal property. The Court of Tax Appeals agreed with MERALCO and cancelled the tax. On further appeal, the Supreme Court held that MERALCO's steel towers were personal property as they were not adhered to the soil, could be separated without damage, and were intended to support transmission wires rather than an on-site industry. The towers were thus exempt from real property tax under MERALCO's franchise.

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97 views2 pages

Board of Assessment Appeals V Meralco

The Board of Assessment Appeals ruled that MERALCO's steel transmission towers were subject to real property tax. MERALCO appealed, arguing the towers were personal property. The Court of Tax Appeals agreed with MERALCO and cancelled the tax. On further appeal, the Supreme Court held that MERALCO's steel towers were personal property as they were not adhered to the soil, could be separated without damage, and were intended to support transmission wires rather than an on-site industry. The towers were thus exempt from real property tax under MERALCO's franchise.

Uploaded by

Glo Allen Cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Board of Assessment Appeals v.

Meralco

FACTS
On November 15, 1955, the QC City Assessor declared the MERALCO's steel towers subject to
real property tax. After the denial of MERALCO's petition to cancel these declarations, an appeal was
taken to the QC Board of Assessment Appeals, which required respondent to pay P11,651.86 as real
property tax on the said steel towers for the years 1952 to 1956.

MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax
Appeals (CTA) which rendered a decision ordering the cancellation of the said tax declarations and the
refunding to MERALCO by the QC City Treasurer of P11,651.86.

ISSUE
Are the steel towers or poles of the MERALCO considered real or personal properties?

HELD
Pole long, comparatively slender, usually cylindrical piece of wood, timber, object of metal or the
like; an upright standard to the top of which something is affixed or by which something is supported.
MERALCO's steel supports consists of a framework of 4 steel bars/strips which are bound by steel cross-
arms atop of which are cross-arms supporting 5 high-voltage transmission wires, and their sole function is
to support/carry such wires. The exemption granted to poles as quoted from Part II, Par.9 of respondent's
franchise is determined by the use to which such poles are dedicated.

It is evident that the word poles, as used in Act No. 484 and incorporated in the petitioner's
franchise, should not be given a restrictive and narrow interpretation, as to defeat the very object for
which the franchise was granted. The poles should be taken and understood as part of MERALCO's
electric power system for the conveyance of electric current to its consumers.

Art. 415 of the NCC classifies the following as immovable property:
(1) Lands, buildings, roads and constructions of all kinds adhered to the soil;
xxx
(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;
xxx
(5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for
an industry ot works which may be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works;
Following these classifications, MERALCO's steel towers should be considered personal property.
It should be noted that the steel towers:
(a) are neither buildings or constructions adhered to the soil;
(b) are not attached to an immovable in a fixed manner they can be separated without breaking
the material or deterioration of the object;
(3) are not machineries, receptacles or instruments, and even if they are, they are not intended for
an industry to be carried on in the premises.

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