MACHINERY ENGINEERING V CA FACTS: On March 13, 1953, Engineering filed a complaint for replevin in the CFI of Manila for

the recovery of the machinery and equipment sold and delivered to Ipo Limestone at their factory in barrio Bigti, Norzagaray, Bulacan. A petitioners bond was posted and a seize order was issued. Two deputy sheriffs, Ramon S. Roco of Engineering, and a crew of technical men and laborers carried out the order in the factory and upon arrival, they were met by Leonardo Contreras, the manager and Pedro Torres. They handed a letter of protest addressed to the ex-officio Provincial Sheriff of Bulacan, contending that the properties in question were not personal properties. The deputy sheriff contended that their duty was ministerial and they proceeded to enter the factory. Roco's attention was called to the fact that the equipment could not possibly be dismantled without causing damages or injuries to the wooden frames attached to them. The sheriffs hesitated in dismantling the equipment but Roco insisted in oing so on his own responsibility, alleging that the bond was posted for such eventuality, the deputy sheriffs directed that some of the supports thereof be cut. Ipo Limestone filed and urgent motion and a counterbond for the return of the properties. The court issued an order in their favor on the same day, directing the Provincial Sheriff of Bulacan to return the machinery and equipment to the place where they were installed at the time of the seizure. The next day, the deputy sheriffs returned the properties seized, by depositing them along the road, near the quarry, of the defendant Company, at Bigti, without the benefit of inventory and without reinstalling hem in their former position and replacing the destroyed posts, which rendered their use impracticable. A few days later Limestones counsel asked the provincial Sheriff if the machinery and equipment, dumped on the road would be re-installed tom their former position and condition. The Provincial Sheriff filed an urgent motion in court, manifesting that had been asked to furnish the Sheriff's office with the expenses, laborers, technical men and equipment, to carry into effect the court's order, to return the seized properties in the same way said they found them on the day of seizure, but said Roco absolutely refused to do so, and asking the court that the Limestone therein be ordered to provide the required aid or relieve the said Sheriff of the duty of complying with the said order. The trial court ordered the Provincial Sheriff and Roco to reinstate the machinery and equipment removed by them in their original condition in which they were found before their removal at the expense of Limestone. ISSUE: W/N the machineries seized are personal property HELD: NO. When the sheriff repaired to the premises of Limestone, the machinery and equipment in question appeared to be attached to the land, particularly to the concrete foundation of said premises, in a fixed manner, in such a way that the former could not be separated from the latter "without breaking the material or deterioration of the object." Hence, in order to remove them, it became necessary, not only to unbolt the same, but , also, to cut some of its wooden supports. Moreover, said machinery and equipment were "intended by the owner of the tenement for an industry" carried on said immovable and tended." For these reasons, they were already immovable property pursuant to paragraphs 3 and 5 of Article 415. (not subject to writ of replevin replevin only for personal property) As to Roco: he clearly knew the risks since he ordered the dismantling on his own responsibility, and that the restitution of said property may be ordered (Sec 5 Rule 62 Rules of Court for writ of replevin) thus he must comply with the liability to restore the properties Real property is not subject to replevin. What has been seized must be returned in the same condition upon which it was taken. The machinery and equipment involved in this case were duly installed and affixed in the premises of Limestone when Engineerings representative (Roco) caused said property to be dismantled and then removed, it follows that Engineering must also do everything necessary to the reinstallation of said property in conformity with its original condition.

DAVAO SAW MILL V CASTILLO FACTS: Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of the Philippine Islands. It has operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of Davao. However, the land upon which the business was conducted belonged to another person. On the land the sawmill company erected a building which housed the machinery used by it. Some of the implements thus used were clearly personal property, the conflict concerning machines which were placed and mounted on foundations of cement. In the contract of lease, it was stipulated that on the expiration of the period agreed upon, or if the Davao Sawmill should leave or abandon the land leased, all the improvements and buildings introduced and erected by them shall pass to the exclusive ownership of the lessor (Davao Light & Power Co.) without any obligation on its part to pay any amount for said improvements and buildings; which do not include the machineries and accessories in the improvements. In another action (Davao Light & Power vs. Davao Saw Mill), a judgment was rendered in favor of Davao Light & Power; a writ of execution issued thereon, and the properties in question were levied upon as personalty by the sheriff. No third party claim was filed for such properties at the time of the sales thereof as is borne out by the record made by the plaintiff herein. Indeed the bidder, which was Davao Light & Power, and the defendant herein having consummated the sale, proceeded to take possession of the machinery and other properties described in the corresponding certificates of sale executed in its favor by the sheriff of Davao. Davao Saw Mill has on a number of occasions treated the machinery as personal property by executing chattel mortgages in favor of third persons. One of such persons is Davao Light & Power by assignment from the original mortgages. Davao Saw Mill questioned the classification of the machinery as property. ISSUE: W/N the machinery are personal property HELD: YES. Though some of the machineries and equipment were bolted to the cement, Davao Sawmill treated such as personal property by executing chattel mortgages upon them. This is indicative of the intention and impresses upon the property the character determined by the parties. Machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, a usufructuary, or any person having only a temporary right, unless such person acted as the agent of the owner. The distinction rests upon the fact that one only having a temporary right to the possession or enjoyment of property is not presumed by the law to have applied movable property belonging to him so as to deprive him of it by causing it by an act of immobilization to become the property of another. ADDITIONAL: Concrete immobilization takes place because of the express provisions of the lease which requires the putting in of improved machinery, deprived the tenant of any right to charge against the lessor the cost of such machinery, and it was expressly stipulated that the machinery so put in should become a part of the plant belonging to the owner without compensation to the lessee. Under such conditions the tenant in putting in the machinery was acting but as the agent of the owner in compliance with the obligations resting upon him, and the immobilization of the machinery which resulted arose in legal effect from the act of the owner in giving by contract a permanent destination to the machinery.

MINDANAO BUS V CITY ASSESOR FACTS: Mindanao Bus Company is a public utility engaged in transporting passengers and cargoes by motor trucks in Mindanao; having its main offices in Cagayan de Oro. The company is also owner to the land where it maintains and operates a garage, a repair shop, blacksmith and carpentry shops; the machineries are placed therein on wooden and cement platforms. With these machineries which are placed therein, its TPU trucks are made; body constructed; and same are repaired in a condition to be serviceable in the TPU land transportation business it operates. These machineries have never been or were never used as industrial equipments to produce finished products for sale, nor to repair machineries, parts and the like offered to the general public indiscriminately for business or commercial purposes for which Mindanao Bus has never engaged in. City Assessor of Cagayan de Oro City assessed at P4,400 as realty tax imposed on the maintenance and repair equipment of Mindanao Bus. Mindanao appealed the assessment to the respondent Board of Tax Appeals on the ground that the equipment are not realty. The Board of Tax Appeals of the City as well as the CTA sustained the city assessor, thus Mindanao appealed. ISSUE: W/N the equipment are immovable HELD: NO. The tools and equipments in question are, by their nature, not essential and principle municipal elements of Mindanaos business of transporting passengers and cargoes by motor trucks. They are merely incidentals acquired as movables and used only for expediency to facilitate and/or improve its service. Even without such tools and equipments, its business may be carried on, as Mindanao has carried on, without such equipments, before the war. The transportation business could be carried on without the repair or service shop if its rolling equipment is repaired or serviced in another shop belonging to another. The equipments in question are destined only to repair or service the transportation business, which is not carried on in a building or permanently on a piece of land, as demanded by the law. Said equipments may not, therefore, be deemed real property. The equipments in question are not absolutely essential to the petitioner's transportation business, and petitioner's business is not carried on in a building, tenement or on a specified land, so said equipment may not be considered real estate.

MERALCO V BOARD OF ASSESSMENT FACTS: There are two oil storage tanks installed in 1969 by Meralco on a lot in San Pascual, Batangas which it leased in 1968 from Caltex (Phil.), Inc. The tanks are within the Caltex refinery compound. They have a total capacity of 566,000 barrels. They are used for storing fuel oil for Meralco's power plants. The storage tanks are made of steel plates welded and assembled on the spot. Their bottoms rest on a foundation consisting of compacted earth as the outermost layer, a sand pad as the intermediate layer and a two-inch thick bituminous asphalt stratum as the top layer. The bottom of each tank is in contact with the asphalt layer. The steel sides of the tank are directly supported underneath by a circular wall made of concrete, eighteen inches thick, to prevent the tank from sliding. Hence, according to Meralco, the tank is not attached to its foundation. It is not anchored or welded to the concrete circular wall. Its bottom plate is not attached to any part of the foundation by bolts, screws or similar devices. The tank merely sits on its foundation. Each empty tank can be floated by flooding its dike-inclosed location with water four feet deep. The Board concludes that while the tanks rest or sit on their foundation, the foundation itself and the walls, dikes and steps, which are integral parts of the tanks, are affixed to the land while the pipelines are attached to the tanks. In 1970, the municipal treasurer of Bauan, Batangas, on the basis of an assessment made by the provincial assessor, required Meralco to pay realty taxes on the two tanks. For the five-year period from 1970 to 1974, the tax and penalties amounted to P431,703.96. The Board required Meralco to pay the tax and penalties as a condition for entertaining its appeal from the adverse decision of the Batangas board of assessment appeals. The Central Board of Assessment Appeals ruled that the tanks together with the foundation, walls, dikes, steps, pipelines and other appurtenances constitute taxable improvements. Meralco contends that the said oil storage tanks do not fall within any of the kinds of real property enumerated in article 415 of the Civil Code and, therefore, they cannot be categorized as realty by nature, by incorporation, by destination nor by analogy. Stress is laid on the fact that the tanks are not attached to the land and that they were placed on leased land, not on the land owned by Meralco. ISSUE: W/N the oil tanks are considered as real property HELD: YES. While the two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. For purposes of taxation, the term "real property" may include things which should generally be regarded as personal property. It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property.

ADDITIONAL: baka lang ipa-compare: The case of Board of Assessment Appeals vs. Manila Electric Company, 119 Phil. 328, wherein Meralco's steel towers were held not to be subject to realty tax, is not in point because in that case the steel towers were regarded as poles and under its franchise Meralco's poles are exempt from taxation. Moreover, the steel towers were not attached to any land or building. They were removable from their metal frames.

MERALCO V CENTRAL BOARD OF ASSESSORS FACTS: Meralco 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 kim long. The pipes are embedded in the soil and are firmly and solidly welded together so as to preclude breakage or damage thereto and prevent leakage or seepage of the oil. The valves are welded to the pipes so as to make the pipeline system one single piece of property from end to end. 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. Meralco 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, the provincial assessor of Laguna treated the pipeline as real property. Meralco appealed. The Central Board of Assessment Appeals, in confirming the ruling of the provincial assessor and the provincial board of assessment appeals that Meralco Securities' pipeline is subject to realty tax, reasoned out that 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 insists that its pipeline is not subject to realty tax because it is not real property within the meaning of article 415.

ISSUE: W/N the pipelines are real property HELD: YES.

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. Also, Real Property Tax Code provides: SEC. 38. Incidence of Real Property Tax. There shall be levied, assessed and collected in all provinces, cities and municipalities an annual ad valorem tax on real property, such as land, buildings, machinery and other improvements affixed or attached to real property not hereinafter specifically exempted. The pipeline of Meralco Securities does not fall within any of the classes of exempt real property enumerated in section 3 of the Assessment Law and section 40 of the Real Property Tax Code. Pipeline means a line of pipe connected to pumps, valves and control devices for conveying liquids, gases or finely divided solids. It is a line of pipe running upon or in the earth, carrying with it the right to the use of the soil in which it is placed. The pipeline system in question is indubitably a construction adhering to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which were welded to form the pipeline. (cite Art 415 par 1 constructions of all kinds adhered to the soil) Insofar as the pipeline uses valves, pumps and control devices to maintain the flow of oil, it is in a sense machinery within the meaning of the Real Property Tax Code. It should be borne in mind that what are being characterized as real property are not the steel pipes but the pipeline system as a whole. On tax: A pipeline for conveying petroleum has been regarded as real property for tax purposes (US jurisprudence). Meralco argues that the realty tax is a local tax or levy and not a tax of general application. This is untenable since realty tax is enforced throughout the Philippines and not merely in a particular municipality or city but the proceeds of the tax accrue to the province, city, municipality and barrio where the realty taxed is situated. Meralcos pipeline system is subject to realty tax.