1) PUNZALAN V.

LACSAMANA
Buildings are always treated as immovable or real property under the Code… even if it was dealt with
separately from the land upon which it stood

FACTS:
Some land belonging to Antonio Punzalan was foreclosed by the Philippine National Bank Tarlac, Branch in
failure of the former to pay the mortgaged fee amounting to P10 grand Since PNB was the highest bidder,
the land went to PNB.

Sometime 1974, while the property was still in the possession of Punzalan, Punzalan constructed a
warehouse on the said land by virtue of the permit secured from the Municipal Mayor of Bamban, Tarlac.
Subsequently, in 1978, a contract of sale was entered into by PNB and Remedios Vda. De Lacsamana, whom
in lieu of the said sale secured a title over the property involving the warehouse allegedly owned and
constructed by the plaintiff.

Punzalan filed a suit for annulment of the Deed of Sale with damages against PNB and Lacsamana before
the Court of First Instance of Rizal, Branch 31, impugning the validity of the sale of the building, requesting
the same to be declared null and void and that damages in the total sum of P23, 200 more or less be
awarded to him.

Respondent Lacsamana in his answer averred the affirmative defense of lack of cause of action contending
that she was a purchaser for value, while, PNB filed a Motion to Dismiss on the ground of improper venue,
invoking that the building was a real property under Article 415 of the Civil Code, and therefore, Section 4 (a)
of the Rules of Court should apply.

Punzalan filed a Motion for Reconsideration asserting that the action he filed is limited to the annulment of
sale and that, it does not involved ownership of or title to property but denied by the court for lack of merit.
A motion for pre-trial was also set by Punzalan but was also denied by the court invoking that the case was
already dismissed.

Hence, a petition for certiorari was filed by the petitioner.

ISSUE:
Whether or not the judgment rendered by the court is proper.
HELD:
While it is true that the petitioner does not directly seek the recovery of the title or possession of the
property in question, his action for annulment of sale and his claim for damages are closely intertwined with
the issue of ownership of the building, which, under the law, is considered immovable property, the recovery
of which is petitioners primary objective. The prevalent doctrine is that an action for the annulment or
rescission of a sale of real property does not operate to efface the objective and nature of the case, which is
to recover said property. It is a real action. Respondent Court did not err in dismissing the case on the ground
of improper venue under Section 12 Rule 4 which was timely raised under Section 1 Rule 16 of the Rules of
Court.

2) MERALCO vs CBAA
FACTS: Meralco assails the decision of the Central Board of Assessment Appeals dated May
6, 1976, holding that Meralco Securities' oil pipeline is subject to realty tax.
Pursuant to a pipeline concession issued under the Petroleum Act of 1949, Republic Act No.
387, Meralco Securities installed from Batangas to Manila a pipeline system consisting of
cylindrical steel pipes joined together and buried not less than one meter below the surface
along the shoulder of the public highway. The portion passing through Laguna is about 30
km long.
In order to repair, replace, remove or transfer segments of the pipeline, the pipes have to be
cold-cut by means of a rotary hard-metal pipe-cutter after digging or excavating them out of
the ground where they are buried. In points where the pipeline traversed rivers or creeks, the
pipes were laid beneath the bed thereof. Hence, the pipes are permanently attached to the
land.

However, Meralco Securities notes that segments of the pipeline can be moved from one
place to another as shown in the permit issued by the Secretary of Public Works and
Communications which permit provides that the government reserves the right to require the
removal or transfer of the pipes by and at the concessionaire's expense should they be
affected by any road repair or improvement.

Pursuant to the Assessment Law, Commonwealth Act No. 470, the provincial assessor of
Laguna treated the pipeline as real property and issued Tax Declarations.
Meralco Securities appealed the assessments to the Board of Assessment Appeals of Laguna
composed of the register of deeds as chairman and the provincial auditor as member. That
board in its decision of June 18, 1975 upheld the assessments.
Meralco Securities brought the case to the Central Board of Assessment Appeals.

ISSUE: Whether/not Meralco’s pipeline is not real property thus not subject to realty tax.

CBAA ruled that the pipeline is subject to realty tax. The pipes are machinery or
improvements, as contemplated in the Assessment Law and the Real Property Tax Code; that
they do not fall within the category of property exempt from realty tax under those laws; that
articles 415 and 416 of the Civil Code, defining real and personal property, have no
application to this case; that even under article 415, the steel pipes can be regarded as realty
because they are constructions adhered to the soil and things attached to the land in a fixed
manner and that Meralco Securities is not exempt from realty tax under the Petroleum Law.

Meralco Securities insists that its pipeline is not subject to realty tax because it is not real
property within the meaning of article 415. This contention is not sustainable under the
provisions of the Assessment Law, the Real Property Tax Code and the Civil Code.

Section 2 of the Assessment Law provides that the realty tax is due "on real property,
including land, buildings, machinery, and other improvements" not specifically exempted in
section 3 thereof. Central Board of Assessment Appeals did not act with grave abuse of
discretion, did not commit any error of law and acted within its jurisdiction in sustaining the
holding of the provincial assessor and the local board of assessment appeals that Meralco
Securities' pipeline system in Laguna is subject to realty tax.