G. R. No. L-15334. January 31, 1964
BOARD OF ASSESSMENT APPEALS, ET AL., PETITIONERS, VS. MANILA ELECTRIC COMPANY, RESPONDENT.
PAREDES, J.:
On October 20, 1902, 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 and its
suburbs to the person or persons making the Most favorable bid. Charles
M. Swift was awarded the said franchise on March 1903, the terms and
conditions of which were embodied in Ordinance No. 44 approved on March
24, 1903. Respondent Manila Electric Co. (Meralco for short), became
the transferee and owner of the franchise.
Meralco’s electric power is generated by its hydro-electric plant
located at Botocan Falls, Laguna and is transmitted to the City of
Manila by means of electric transmission wires, running from the
province of Laguna to the said City. These electric transmission wires
which carry high voltage current, are fastened to insulators attached
on steel towers constructed by respondent at intervals, from its
hydro-electric plant in the province of Laguna to the City of Manila.
The respondent Meralco has constructed 40 of these steel towers within
Quezon City, on land belonging to it. A photograph of one of these
steel towers is attached to the petition for review, marked Annex A.
Three steel towers were inspected by the lower court and the parties
and the following were the descriptions given thereof by said court:
“The first steel tower is located in South Tatalon,
España Extension, Quezon City, The findings were as follows: the ground
around one of the four posts was excavated to a depth of about eight
(8) feet, with an opening of about one (1) meter in diameter, decreased
to about a quarter1 of a meter as it went deeper until it reached the
bottom of the post; at the bottom of the post were two parallel steel
bars attached to the leg by means of bolts; the tower proper was
attached to the leg by three bolts; with two. cross metals to prevent
mobility; there was no cement foundation but there was adobe stone
underneath; as the bottom of the excavation was covered with water
about three inches high, it could not be determined with certainty as
to whether said adobe stone was placed purposely or nofcf as the place
abounds with this kind of stone; and the tower carried five high
voltage wires without caver or any insulating materials,The
second tower inspected was located in Kamuning Road, K-F, Quezon City,
on land covered owned by the petitioner approximately more than one
kilometer from the first tower. As in the first tower, the ground
around one of the four legs was excavated from seven to eight (8) feet
and one and a half (1-½) meters wide. There being very little water at
the bottom, it was seen that there was no concrete foundation, but
there was soft adobe beneath. The leg was likewise provided with two
parallel steel bars bolted to a square metal frame also bolted to
each corner. Like the first one, the second tower is made up of metal
rods joined together by means of bolts, so that by unscrewing the
bolts, the tower could be dismantled and reassembled.The
third tower examined is located along Kamias Road, Quezon City. As in
the first two towers given above, the ground around the two legs of the
third tower was excavated to a depth about two or three inches beyond
the outside level of the steel bar foundation. It was found that there
was no concrete foundation. Like the two previous ones, the bottom
arrangement of the legs thereof were found to be resting on soft adobe,
which, probably due to high humidity, looks like mud or clay. It was
also found that the square metal frame supporting the legs’ were not
attached to any material or foundation.
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. After denying respondent’s petition
to cancel these declarations, an appeal was taken by respondent 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
(CTA for short) which rendered a decision on December 29, 1958,
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. The motion for reconsideration having been
denied, on April 22, 1959, the instant petition for review was filed:
In upholding the cause of respondents, the CTA held that: (1) the
steel towers come within the term “poles” which are declared exempt
from taxes under part II paragraph 9 of respondent’s franchise; (2) the
steel towers are personal properties and are not subject to real
property tax and (3) the City Treasurer of Quezon City is held
responsible for the refund of the amount paid. These are assigned as
errors by the petitioner in the brief.
The tax exemption privilege of the petitioner is quoted hereunder:
“Par. 9, The grantee shall be liable to pay the same
taxes upon its real estate, buildings, plant (not including poles,
wires, transformers, and insulators), machinery and personal property
as other persons are or may be hereafter required by law to pay. * * *
Said percentage shall be due and payable at the times stated in
paragraph nineteen of Part One hereof, * * * and shall be in lieu
of all taxes and assessments of whatsoever nature, and by whatsoever
authority upon the privileges, earnings, income, franchise, and poles,
wires, transformers, and insulators of the grantee from “which taxes
and assessments the grantee is hereby expressly exempted.” (Par. 9,
Part Two, Act No. 484, Respondent’s Franchise; italics supplied.)
The word “Pole” means “a long, comparatively slender usually
cylindrical piece of wood or timber, as typically, the stem of a small
tree stripped of its branches; also, by extension, a similar typically
cylindrical piece or object of metal or the like”. The term also refers
to “an upright standard to the top of which something is affixed or
by which something is supported; as a dovecote set on a pole;
telegraph poles; a tent pole; sometimes, specifically, a vessel’s
mast.” (Webster’s New International dictionary, 2nd Ed. p. 1907.)
Along- the streets, in the City of Manila, may be seen cylindrical
metal poles, cubical concrete poles, and poles of the PLDT Co. which
are made of two steel bars joined together by an interlacing metal
rod. They are called “poles” notwithstanding the fact that they are not
made of wood. It must be noted from paragraph 9, above quoted, that the
concept of the “poles” for which exemption is granted, is not
determined by their place or location, nor by the character of the
electric current it carries, nor the material or form of which it is
made, but the use to which they are dedicated. In accordance with the
definitions, a pole is not restricted to a long cylindrical piece of
wood or metal, but includes “upright standards to the top of which
something is affixed or by which something is supported.” As heretofore
described, respondent’s steel supports consist of a framework of four
steel bars or strips which are bound by steel cross-arms atop of which
are cross-arms supporting five high voltage transmission wires (See
Annex A) and their sole function is to support or carry such wires.
The conclusion of the CTA that the steel supports in question are
embraced in the term “poles” is not a novelty. Several courts of last
resort in the United States have called these steel supports “steel
towers”, and they have denominated these steel supports or towers, as
electric poles. In their decisions the words “towers” and “poles” were
used interchangeably, and it is well understood in that jurisdiction
that a transmission tower or pole means the same thing.
In a proceeding to condemn land for the use of electric power wires,
in which the law provided that wires shall be constructed upon suitable
poles, this term was construed to mean either wood or metal poles and
in view of the land being subject to overflow, and the necessary
carrying of numerous wires and the distance between poles, the statute
was interpreted to include towers as poles. (Steamons vs. Dallas Power& Light Co. (Text) 212 S.W. 222, 224; 32-A.Words and Phrases p. 365.)
The term “poles” was also used to denominate the steel supports or
towers used by an association to convey its electric power furnished
to subscribers and members, constructed for the purpose of fastening
high voltage and dangerous electric wires alongside public highways.
The steel supports or towers were made of iron or other metals
consisting of two pieces running from the ground up some thirty feet
high, being wider at the bottom than at the top, the said two metal
pieces being connected with criss-cross iron running from the bottom to
the top, constructed like ladder and loaded with high voltage
electricity. In form and structure, they are like the steel towers in
question. (Salt River Valley Users’ Ass’n. vs. Compton. 8 p. 2nd. 249-250.)
The term “poles” was used to denote the steel towers of an electric
company engaged in the generation of hydro-electric power and transmitting the power generated from its plant to the tower of Oxford and
City of Waterbury. These steel towers are about 15 feet square at the
base and extended to a height oil about 35 feet to a point, and are
embedded in cement foundations sunk in the earth, the top of which
extends above the surface of the soil in the tower of Oxford, and to
the towers are attached insulators, arms, and other equipment capable
of carrying wires for the transmission of electric power (Connecticut
Light and Power Co. vs. Oxford 101 Conn. 383, 126 Atl. p. 1).
In a case, the defendant admitted that the structure on which a
certain person met his death was built for the purpose of supporting a
transmission wire used for carrying high-tension electric power, but
claimed that the steel towers on which it was carried were so large
that their wire took its structure out of the definition of a pole
line. It was held that in defining the word pole, one should not be
governed by the wire or material of the support used, but was
considering the danger from any elevated wire carrying electric
current, and that regardless of the size or material wire of its
individual members, any continuous series of structures intended and
used solely or primarily for the purpose of supporting “wires carrying
electric currents is a pole line (Inspiration Consolidation Cooper Co. vs. Bryan, 252 p. 1016).
It is evident, therefore, 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, is to defeat the very object
for which the franchise was granted. The poles as contemplated thereon,
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. If the respondent would be
required to employ “wooden poles” or “rounded poles” as it used to do
fifty years back, then one should admit that the Philippines is one
century behind the age of space. It should also be conceded by now that
steel towers, like the ones in question, for obvious reasons, can
better effectuate the purposes for which the respondent’s franchise was
granted.
Granting for the purpose of argument that the steel supports or towers in question are not embraced within the term poles,
the logical question posited is whether they constitute real
properties, so that they can be subject to a real property tax. 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 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 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 can not be included under paragraph 3, as they are not attached to
an immovable in a fixed 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 assembled 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.
It is finally contended that the CTA erred in ordering the City
Treasurer of Quezon City to refund the sum of P11,651.86, despite the
fact that Quezon City is not a party to the case. It is argued that as
the City Treasurer is not the real party in interest, but Quezon City,
which was not made a party to the suit, notwithstanding its capacity to
sue and be sued, he should not be ordered to effect the refund. This
question has not been raised in the court below and, therefore, it
cannot properly be raised for the first time on appeal. The herein
petitioner is indulging in legal technicalities and niceties which do
not help him any; for, factually, it was he (City Treasurer) who had
insisted that respondent herein pay the real estate taxes, which
respondent paid under protest. Having acted in his official capacity as
City Treasurer of Quezon City, he would surely know what to do, under
the circumstances.
In view hereof, the decision appealed from is hereby affirmed, with costs against the petitioners.
Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Barrera and Regala, JJ., concur.