CTA Case No. 710

COURT OF lh APPEALS e?UBLIC OF THE PHILIPPINES yp?

MINDANAO BUS COMPANY, Petitioner, - V@ESUB o CeTeoAe CASA NO. 710

CITY TREASURER & ASTESSOR

DBECISiION

The petitioner is a public utility company engaged in land trensportetion in Mindanao. It has ite mein office in Cagayan de Oro City where it maintains a gerage, repair chep, blackemith and carpentry shops. It owns certein mechinexies used in the operetion of seid shops which were assessed by the City Assessor of Cagayan de Ore City for pur- peses of the reel property tax. Not saticfied with the eseessment, petitioner appealed to the City Board of Assessment Appeals of Cagayan de Oro City. Said Board having sffizmed the essessment, peti- tioner has appealed to this Court, The parties submitted o stipulation of facts, pertinent portions of which read as followes wtalaey mee petitioner Pg a public so eee transporting can by motor trucks, Seed She eutheniaall Wenee an the tehend shadonslnemoimanne:

— and y iggy So ci = an '° ce, and shop tt cogayan 3 and/or ” ekaatene at — Pay Lanacz Pegae- dien, Zamboanga del Sur; Daveco City;

~ PP 224

G.TeA. CASE NO, 710 -2-« and Kibewe, Bukidnon Province;

3. That the machineries sought to be assessed the re as teal properties a the 9 Pam pe (b} oe ee ae appear- » marked Annex ones

(e) Lathe aathine with motor, s "Cc";

a) Black and Grinde

(a) Nesesing tag sttnced e Marked Annex “D*;

P asPCO Press, () peecina Tat sets ; « marked Annex

) Battery Tungar

DECISION «

CeoTeAs CASE NO. 710 6 That these machineries have never been or were never used es ine Petitioner aaseils the aesessment on two grounds, nemelyt (1) that the machineries in ques- tion are not real but personel properties, and (2) that the assessment, or veluetion, of said machin- eries is excessive.

The machineries in question are sought to be taxed es real property by virtue of Secse WO, et seq of Republic Act Ne, 521 (Charter of Cagayan de Gro City), in reletion te Article 415 of the Civil Code, which provides:

. ART. 415. The following are immoveble property’ axe not permanently attached to the land or build. inge owned by petitioner. However, respondent con- tends that said machindzies heve acquired the char- acter of immovables by destination, beceuse they heave been placed in the shops of petitioner and are intended and are actually used in its business. (See Decision of respondent, Annex D of the Petition 226

DECISION «

C.TeAe CASE WG 710 hn for Review, pp. ©, CTA records.) “Ye agree with respondent that, pursuant to paragraph (5) of Art. 415 of the Civil Code, said er have acquired the character of immoveble property by destination as they have been pleced in the shops of petitioner and ere intended and are actually used in connection with ite traneportation business. It is not denied thet the use of said mechineries by petitioner tend directly to meet the needs of its business or in- dustry. They may rescquire their condition ag mova- bles only if they are separated, net from the inm- moveable, but from the industzy or work in which they are utilized. Therefore, the fact thet on certain occasions some of the machineries, eprecifically the battery charger, were brought to some other stations maintained by petitioner to repsiz ite trucks will wot alter their condition as immovables as long as —— ene said machineries continue to be used in its industry by petitioner.

earn teenie ener It is argued on behalf of petitioner that peregreph (5) of Article 415 of the Civil Code does not apply to seid machineries because it is not en- gaged in an industry. “e quote from the memorandum of counsel for petitioners This provision is therefore not oppli- cable to the machineries sought to be assessed, for these are not used DIRECTLY in an industry; petitioner does not use them in an industrial processing of raw materiels into finished products, such es the bot.

tling plants ef the Pensi-Cola, or the San Miguel Brewery, manufacturing beer, or soft drinks directly; or « sugar 2270

DECISION «

C.TeAe CASE NO. 710 = L. ) - mill or corn and rice mill directly ereducing refined sugar or rice by dizect process, for public sale. These tools and machines in question are used mexely to repeir the buses; or construct bodies of these buses, which when completed are not for sale, but for use in its sele buniness as regulations of Commis ei one (see Dpe 3-4, Menoreddua for Petitiones, ) Counsel for petitioner would limit the meaning of the tezm “industzry*® to businesses which aze engaged in by persons or entities for the preduction er manu-~ facture of qoods for sale. We do not think that the texm as used in Article 415 of the Civil Code has such e limited meanings It has been defined as a department or branch of art, oeccupetion or business. (Webster's Internationel Dictionary.) Therefore, the transportation business is on industry.

Finally, it is contended thet the valuation of said machinkries made by the City Assessor of Caga- yan de Ore City and affizrmed by respondent is exces- sive. The values of said machineries es appraised by the City Assessor ere as followss Hachinexy te Lathe w/ Motor ee ® $00.00 a ay te Machine 1,008. 47 on §00, CO Neghine 356. 25 SOx 18,00

Black & Decker

Pempco Pydreuls ™ — =

c 2 a <- - sas MaPuel 2,749.42 SOK 1,370.00 Hobert, Klectric We ldex 1,234.30 5% Total asseased value « ~~~ + « Te 228

RECISION «

CoToAe CASE NO, TIO « 6 « It is contended that seid machineries heave been fully depreciated end that their salvage velue is ersetically nil. “we find, however, frow the evi- dence cresented by retitioner itself thet the value- tion made by the Gity ASesescor is in secordance with the veluation made by neti tioner in Tax Decleration N@. 29198, Exhibit C, wherein petitioner claimed a depreciation allowance of SOM of the original cast. (See page 32, C.T.A. records.) Consequently, there is no merit in the allegetion thet the valustion made by the City Assessor is excessive.

Finding no revereible error in the decision appealed from, the some is hereby effirmed, with costs egainst petitioner.

SC ORDERED

Manila, July 2, 196% FE_B2 tan E__ MAN &. GAALT

Asecciete Judge

wz CONCURS

Presiding Judge

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