Haystack: Board of Assessment Appeals v. City Treasurer (GR L-15334, 31 January 1964)

Board of Assessment Appeals v. City Treasurer
[G.R. No. L-15334. January 31, 1964.]
En Banc, Paredes (J): 8 concur, 1 concur in result, 1 took no part.

Facts: On 20 October 1902, the Philippine Commission enacted Act 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 44 approved on 24 March 1903. Meralco 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. Meralco has constructed 40 of these steel towers within Quezon City, on land belonging to it.

On 15 November 1955, City Assessor of Quezon City declared the aforesaid steel towers for real property tax under Tax Declaration 31992 and 15549. After denying Meralco's petition to cancel these declarations an appeal was taken by Meralco to the Board of Assessment Appeals of Quezon City, which required Meralco to pay the amount of 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 which rendered a decision on 29 December 1958, ordering the cancellation of the said tax declarations and the City Treasurer of Quezon City to refund to Meralco the sum of P11,651.86. The motion for reconsideration having been denied, on 22 April 1959, the petition for review was filed.

The Supreme Court affirmed the decision appealed from, with costs against the petitioners.

1. Definition of “pole”
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.) Poles made of two steel bars joined together by an interlacing metal rod, are called "poles" notwithstanding the fact that they are not made of wood.

2. Steel towers, which is within the term “poles,” are exempted from taxes under part II, paragraph 9 of Meralco’s franchise
Paragraph 9 of Meralco’s franchise provides 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." In the present case, Meralco'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 and their sole function is to support or carry such wires.

3. Interpretation of poles so as to include towers is not a novelty; US cases
The conclusion 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. (See Steamons v. Dallas Power & Light Co. (Text) 212 S.W. 222, 224; 32-A Words and Phrases p. 365.; Salt River Valley Users' Ass'n. v. Compton 8 p. 2nd. 249-250; and Inspiration Consolidation Cooper Co. v. Bryan, 252 p. 1016)

4. Interpretation should not be restrictive and narrow to defeat the object for which the franchise granted
The word "poles", as used in Act 484 and incorporated in the Meralco'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 as contemplated thereon, should be understood and taken as a part of the electric power system of the 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 50 years ago, it would be a departure to progress in technology. Steel towers, thus, can better effectuate the purposes for which Meralco's franchise was granted.

5. Tax law does not define real property; Article 415 of the Civil Code defines by enumeration
The tax law does not provide for a definition of real property; but Article 415 of the Civil Code does, by stating which are immovable property.

6. Steel towers are not immovable property under paragraph 1, 3 and 5
The steel towers or supports 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 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.

7. It is the duty of the City Treasurer to refund; legal technicalities cannot be availed of
Indulging in legal technicalities and niceties which do not help the City Treasurer any; for, factually, it was he who had insisted that respondent herein pay the real estate taxes, which Meralco 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. Thus, he cannot be sustained in his argument 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. The question has not been raised in the lower court and, therefore, it cannot properly be raised for the first time on appeal.

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