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G.R. No.

155076

February 27, 2006

LUIS MARCOS P. LAUREL, Petitioner, vs. HON. ZEUS C. ABROGAR, Presiding Judge of the Regional Trial Court, Makati City, Branch 150, PEOPLE OF THE PHILIPPINES& PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Respondents. DECISION CALLEJO, SR., J.: Before us is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 68841 affirming the Order issued by Judge Zeus C. Abrogar, Regional Trial Court (RTC), Makati City, Branch 150, which denied the "Motion to Quash (With Motion to Defer Arraignment)" in Criminal Case No. 99-2425 for theft. Philippine Long Distance Telephone Company (PLDT) is the holder of a legislative franchise to render local and international telecommunication services under Republic Act No. 7082.2 Under said law, PLDT is authorized to establish, operate, manage, lease, maintain and purchase telecommunication systems, including transmitting, receiving and switching stations, for both domestic and international calls. For this purpose, it has installed an estimated 1.7 million telephone lines nationwide. PLDT also offers other services as authorized by Certificates of Public Convenience and Necessity (CPCN) duly issued by the National Telecommunications Commission (NTC), and operates and maintains an International Gateway Facility (IGF). The PLDT network is thus principally composed of the Public Switch Telephone Network (PSTN), telephone handsets and/or telecommunications equipment used by its subscribers, the wires and cables linking said telephone handsets and/or telecommunications equipment, antenna, the IGF, and other telecommunications equipment which provide interconnections.3 1avvphil.net PLDT alleges that one of the alternative calling patterns that constitute network fraud and violate its network integrity is that which is known as International Simple Resale (ISR). ISR is a method of routing and completing international long distance calls using International Private Leased Lines (IPL), cables, antenna or air wave or frequency, which connect directly to the local or domestic exchange facilities of the terminating country (the country where the call is destined). The IPL is linked to switching equipment which is connected to a PLDT telephone line/number. In the process, the calls bypass the IGF found at the terminating country, or in some instances, even those from the originating country.4 One such alternative calling service is that offered by Baynet Co., Ltd. (Baynet) which sells "Bay Super Orient Card" phone cards to people who call their friends and relatives in the Philippines. With said card, one is entitled to a 27-minute call to the Philippines for about ¥37.03 per minute. After dialing the ISR access number indicated in the phone card, the ISR operator requests the subscriber to give the PIN number also indicated in the phone card. Once the caller’s identity (as purchaser of the phone card) is confirmed, the ISR operator will then provide a Philippine local line to the requesting caller via the IPL. According to PLDT, calls made through the IPL never pass the toll center of IGF operators in the Philippines. Using the local line, the Baynet card user is able to place a call to any point in the Philippines, provided the local line is National Direct Dial (NDD) capable.5

PLDT asserts that Baynet conducts its ISR activities by utilizing an IPL to course its incoming international long distance calls from Japan. The IPL is linked to switching equipment, which is then connected to PLDT telephone lines/numbers and equipment, with Baynet as subscriber. Through the use of the telephone lines and other auxiliary equipment, Baynet is able to connect an international long distance call from Japan to any part of the Philippines, and make it appear as a call originating from Metro Manila. Consequently, the operator of an ISR is able to evade payment of access, termination or bypass charges and accounting rates, as well as compliance with the regulatory requirements of the NTC. Thus, the ISR operator offers international telecommunication services at a lower rate, to the damage and prejudice of legitimate operators like PLDT.6 PLDT pointed out that Baynet utilized the following equipment for its ISR activities: lines, cables, and antennas or equipment or device capable of transmitting air waves or frequency, such as an IPL and telephone lines and equipment; computers or any equipment or device capable of accepting information applying the prescribed process of the information and supplying the result of this process; modems or any equipment or device that enables a data terminal equipment such as computers to communicate with other data terminal equipment via a telephone line; multiplexers or any equipment or device that enables two or more signals from different sources to pass through a common cable or transmission line; switching equipment, or equipment or device capable of connecting telephone lines; and software, diskettes, tapes or equipment or device used for recording and storing information.7 PLDT also discovered that Baynet subscribed to a total of 123 PLDT telephone lines/numbers.8 Based on the Traffic Study conducted on the volume of calls passing through Baynet’s ISR network which bypass the IGF toll center, PLDT incurred an estimated monthly loss of P10,185,325.96.9 Records at the Securities and Exchange Commission (SEC) also revealed that Baynet was not authorized to provide international or domestic long distance telephone service in the country. The following are its officers: Yuji Hijioka, a Japanese national (chairman of the board of directors); Gina C. Mukaida, a Filipina (board member and president); Luis Marcos P. Laurel, a Filipino (board member and corporate secretary); Ricky Chan Pe, a Filipino (board member and treasurer); and Yasushi Ueshima, also a Japanese national (board member). Upon complaint of PLDT against Baynet for network fraud, and on the strength of two search warrants10 issued by the RTC of Makati, Branch 147, National Bureau of Investigation (NBI) agents searched its office at the 7th Floor, SJG Building, Kalayaan Avenue, Makati City on November 8, 1999. Atsushi Matsuura, Nobuyoshi Miyake, Edourd D. Lacson and Rolando J. Villegas were arrested by NBI agents while in the act of manning the operations of Baynet. Seized in the premises during the search were numerous equipment and devices used in its ISR activities, such as multiplexers, modems, computer monitors, CPUs, antenna, assorted computer peripheral cords and microprocessors, cables/wires, assorted PLDT statement of accounts, parabolic antennae and voltage regulators. State Prosecutor Ofelia L. Calo conducted an inquest investigation and issued a Resolution11 on January 28, 2000, finding probable cause for theft under Article 308 of the Revised Penal Code and Presidential Decree No. 40112 against the respondents therein, including Laurel. On February 8, 2000, State Prosecutor Calo filed an Information with the RTC of Makati City charging Matsuura, Miyake, Lacson and Villegas with theft under Article 308 of the Revised Penal Code. After conducting the requisite preliminary investigation, the State Prosecutor filed

an Amended Information impleading Laurel (a partner in the law firm of Ingles, Laurel, Salinas, and, until November 19, 1999, a member of the board of directors and corporate secretary of Baynet), and the other members of the board of directors of said corporation, namely, Yuji Hijioka, Yasushi Ueshima, Mukaida, Lacson and Villegas, as accused for theft under Article 308 of the Revised Penal Code. The inculpatory portion of the Amended Information reads: On or about September 10-19, 1999, or prior thereto, in Makati City, and within the jurisdiction of this Honorable Court, the accused, conspiring and confederating together and all of them mutually helping and aiding one another, with intent to gain and without the knowledge and consent of the Philippine Long Distance Telephone (PLDT), did then and there willfully, unlawfully and feloniously take, steal and use the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR), which is a method of routing and completing international long distance calls using lines, cables, antennae, and/or air wave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined, effectively stealing this business from PLDT while using its facilities in the estimated amount of P20,370,651.92 to the damage and prejudice of PLDT, in the said amount. CONTRARY TO LAW.13 Accused Laurel filed a "Motion to Quash (with Motion to Defer Arraignment)" on the ground that the factual allegations in the Amended Information do not constitute the felony of theft under Article 308 of the Revised Penal Code. He averred that the Revised Penal Code, or any other special penal law for that matter, does not prohibit ISR operations. He claimed that telephone calls with the use of PLDT telephone lines, whether domestic or international, belong to the persons making the call, not to PLDT. He argued that the caller merely uses the facilities of PLDT, and what the latter owns are the telecommunication infrastructures or facilities through which the call is made. He also asserted that PLDT is compensated for the caller’s use of its facilities by way of rental; for an outgoing overseas call, PLDT charges the caller per minute, based on the duration of the call. Thus, no personal property was stolen from PLDT. According to Laurel, the P20,370,651.92 stated in the Information, if anything, represents the rental for the use of PLDT facilities, and not the value of anything owned by it. Finally, he averred that the allegations in the Amended Information are already subsumed under the Information for violation of Presidential Decree (P.D.) No. 401 filed and pending in the Metropolitan Trial Court of Makati City, docketed as Criminal Case No. 276766. The prosecution, through private complainant PLDT, opposed the motion,14 contending that the movant unlawfully took personal property belonging to it, as follows: 1) intangible telephone services that are being offered by PLDT and other telecommunication companies, i.e., the connection and interconnection to their telephone lines/facilities; 2) the use of those facilities over a period of time; and 3) the revenues derived in connection with the rendition of such services and the use of such facilities.15 The prosecution asserted that the use of PLDT’s intangible telephone services/facilities allows electronic voice signals to pass through the same, and ultimately to the called party’s number. It averred that such service/facility is akin to electricity which, although an intangible property, may, nevertheless, be appropriated and be the subject of theft. Such service over a period of time for a consideration is the business that PLDT provides to its customers, which enables the latter to send various messages to installed recipients. The service rendered by PLDT is akin to

merchandise which has specific value, and therefore, capable of appropriation by another, as in this case, through the ISR operations conducted by the movant and his co-accused. The prosecution further alleged that "international business calls and revenues constitute personal property envisaged in Article 308 of the Revised Penal Code." Moreover, the intangible telephone services/facilities belong to PLDT and not to the movant and the other accused, because they have no telephone services and facilities of their own duly authorized by the NTC; thus, the taking by the movant and his co-accused of PLDT services was with intent to gain and without the latter’s consent. The prosecution pointed out that the accused, as well as the movant, were paid in exchange for their illegal appropriation and use of PLDT’s telephone services and facilities; on the other hand, the accused did not pay a single centavo for their illegal ISR operations. Thus, the acts of the accused were akin to the use of a "jumper" by a consumer to deflect the current from the house electric meter, thereby enabling one to steal electricity. The prosecution emphasized that its position is fortified by the Resolutions of the Department of Justice in PLDT v. Tiongson, et al. (I.S. No. 97-0925) and in PAOCTF-PLDT v. Elton John Tuason, et al. (I.S. No. 2000-370) which were issued on August 14, 2000 finding probable cause for theft against the respondents therein. On September 14, 2001, the RTC issued an Order16 denying the Motion to Quash the Amended Information. The court declared that, although there is no law that expressly prohibits the use of ISR, the facts alleged in the Amended Information "will show how the alleged crime was committed by conducting ISR," to the damage and prejudice of PLDT. Laurel filed a Motion for Reconsideration17 of the Order, alleging that international long distance calls are not personal property, and are not capable of appropriation. He maintained that business or revenue is not considered personal property, and that the prosecution failed to adduce proof of its existence and the subsequent loss of personal property belonging to another. Citing the ruling of the Court in United States v. De Guzman,18Laurel averred that the case is not one with telephone calls which originate with a particular caller and terminates with the called party. He insisted that telephone calls are considered privileged communications under the Constitution and cannot be considered as "the property of PLDT." He further argued that there is no kinship between telephone calls and electricity or gas, as the latter are forms of energy which are generated and consumable, and may be considered as personal property because of such characteristic. On the other hand, the movant argued, the telephone business is not a form of energy but is an activity. In its Order19 dated December 11, 2001, the RTC denied the movant’s Motion for Reconsideration. This time, it ruled that what was stolen from PLDT was its "business" because, as alleged in the Amended Information, the international long distance calls made through the facilities of PLDT formed part of its business. The RTC noted that the movant was charged with stealing the business of PLDT. To support its ruling, it cited Strochecker v. Ramirez, 20 where the Court ruled that interest in business is personal property capable of appropriation. It further declared that, through their ISR operations, the movant and his co-accused deprived PLDT of fees for international long distance calls, and that the ISR used by the movant and his coaccused was no different from the "jumper" used for stealing electricity. Laurel then filed a Petition for Certiorari with the CA, assailing the Order of the RTC. He alleged that the respondent judge gravely abused his discretion in denying his Motion to Quash the

"the connection and interconnection to their telephone lines/facilities. it would then be permissible to allege in the Information that it is the gas business. 2002. "there is no crime if there is no law punishing the crime. dealings or intercourse of any nature. and no longer the merchandise produced by such enterprise. the annual or periodical rents. in prosecutions for theft of certain forms of energy.23 He further declared that to categorize "business" as personal property under Article 308 of the Revised Penal Code would lead to absurd consequences. he was charged with stealing the international long distance calls belonging to PLDT. goods or merchandise and merely renders a service or.29 where this Court .27 The appellate court ruled that a petition for certiorari under Rule 65 of the Rules of Court was not the proper remedy of the petitioner. the term "revenue" is defined as "the income that comes back from an investment (as in real or personal property). or issues of any species of real or personal property. The CA opined that PLDT’s business of providing international calls is personal property which may be the object of theft. and cited United States v. Laurel concluded. interests."22 Laurel further posited that an electric company’s business is the production and distribution of electricity. (2) a commercial or industrial enterprise.24 Laurel further cited the Resolution of the Secretary of Justice in Piltel v. it held that while business is generally an activity which is abstract and intangible in form." such service cannot be the subject of theft as defined in Article 308 of the Revised Penal Code. Moreover. not its business. In said resolution.Amended Information. electronic-international mobile equipment identity (EMEI/IMEI). while a water company’s business is the production and distribution of potable water. He argued that the "business" in all these cases is the commercial activity. a gas company’s business is the production and/or distribution of gas (as fuel). since a telephone company does not produce any energy. it was noted that the inadequacy prompted the filing of Senate Bill 2379 (sic) entitled "The Anti-Telecommunications Fraud of 1997" to deter cloning of cellular phones and other forms of communications fraud.25 where it was ruled that the Revised Penal Code. the RTC failed to distinguish between the business of PLDT (providing services for international long distance calls) and the revenues derived therefrom." On the other hand. or subscriber identity module" and "any attempt to duplicate the data on another cellular phone without the consent of a public telecommunications entity would be punishable by law. is not adequate to address the novel means of "stealing" airwaves or airtime. The said bill "aims to protect in number (ESN) (sic) or Capcode. in the words of PLDT. He opined that a "business" or its revenues cannot be considered as personal property under Article 308 of the Revised Penal Code. while the goods and merchandise are the products of such activity. electricity or water. it is the electricity or gas which is alleged to be stolen and not the "business" of providing electricity or gas. since a "business" is "(1) a commercial or mercantile activity customarily engaged in as a means of livelihood and typically involving some independence of judgment and power of decision. Mendoza. Carlos28 to support such conclusion. However. the electric business or the water business which has been stolen. and (3) refers to transactions. it is nevertheless considered "property" under Article 308 of the Revised Penal Code. On the merits of the petition. in prosecutions for theft of gas. Thus. profits. The tribunal also cited Strochecker v." On August 30. Ramirez. legislated as it was before present technological advances were even conceived. mobile identification number (MIN)."26 Thus.21 As gleaned from the material averments of the amended information. the CA rendered judgment dismissing the petition.

is personal property of the PLDT. The appellate court held that the operations of the ISR are not subsumed in the charge for violation of P. 401. through its officers. thus. of feloniously taking. "routing and completing international long distance calls using lines. Petitioner’s interpretation as to whether an "international long distance call" is personal property under the law is inconsequential. antenna and/or airwave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined. In support of his petition before the Court. The respondent reiterates that international calls involve (a) the intangible telephone services that are being offered by it. which approved the Revised Penal Code way back in January 1. He asserts that the Philippine Legislature." THE COURT OF APPEALS ERRED IN RULING THAT THE TERM "BUSINESS" IS PERSONAL PROPERTY WITHIN THE MEANING OF ART. (b) the use of its telephone network. and are capable of appropriation. He further claims that while the right to carry on a business or an interest or participation in business is considered property under the New Civil Code. which.31 The OSG avers that what was stolen by petitioner and his co-accused is the business of PLDT providing international long distance calls which. though intangible. 1932. 3952. cables. otherwise known as the Bulk Sales Law. brought and sold like other personal property. It insists that the business of international calls and revenues constitute personal property because the same are valuable articles of merchandise. the term "business. is personal property susceptible of appropriation.ruled that one-half interest in a day’s business is personal property under Section 2 of Act No. the Office of the Solicitor General (OSG) maintains that the amended information clearly states all the essential elements of the crime of theft. assails the decision of the CA. In its comment on the petition. that is. could not have contemplated to include international long distance calls and "business" as personal property under Article 308 thereof. respondent PLDT asserts that personal property under Article 308 of the Revised Penal Code comprehends intangible property such as electricity and gas which are valuable articles for merchandise. lines or facilities over a period of time. the connection and interconnection to the telephone network." however. while abstract and intangible in form." The OSG maintains that the international long distance calls alleged in the amended information should be construed to mean "business" of PLDT. lines or facilities are personal . is not.D.32 For its part. including petitioner.33 PLDT further posits that business revenues or the income derived in connection with the rendition of such services and the use of its telephone network.30 Petitioner avers that the petition for a writ of certiorari may be filed to nullify an interlocutory order of the trial court which was issued with grave abuse of discretion amounting to excess or lack of jurisdiction. lines or facilities. 308 OF THE REVISED PENAL CODE. contending that THE COURT OF APPEALS ERRED IN RULING THAT THE PERSONAL PROPERTY ALLEGEDLY STOLEN PER THE INFORMATION IS NOT THE "INTERNATIONAL LONG DISTANCE CALLS" BUT THE "BUSINESS OF PLDT. No. as a reading of the amended information readily reveals that specific acts and circumstances were alleged charging Baynet. he reiterates the arguments in his pleadings filed before the CA. stealing and illegally using international long distance calls belonging to respondent PLDT by conducting ISR operations. Laurel. now the petitioner. and (c) the income derived in connection therewith.

lines or facilities which allow electronic voice signals to pass through the same and ultimately to the called party’s number.35 A special civil action for certiorari is also available where there are special circumstances clearly demonstrating the inadequacy of an appeal. and (c) whether or not the trial court committed grave abuse of discretion amounting to excess or lack of jurisdiction in denying the motion of the petitioner to quash the amended information.34 The petition is meritorious. lines. and (e) for certain considerations such as public welfare and public policy. v. are proper subjects of theft under Article 308 of the Revised Penal Code. As this Court held in Bristol Myers Squibb (Phils. (d) the decision in the present case will arrest future litigations. Appeal and certiorari are mutually exclusive of each other. the general rule is that a petition for certiorari under Rule 65 of the Rules of Court. or if such order is patently erroneous. which enables the latter to send various messages to intended recipients. the accused may resort to the extraordinary remedy of certiorari. despite availability of appeal after trial. petitioner averred that the trial court committed grave abuse of its discretion amounting to excess or lack of jurisdiction when it denied his motion to quash the Amended Information despite his claim that the material allegations in the Amended Information do not charge theft under Article 308 of the Revised Penal Code. can be appropriated by another. Inc. (c) where the order is a patent nullity. Viloria:36 Nonetheless. or facilities over a period of time for consideration is the business that it provides to its customers. in short. PLDT’s business of providing said telecommunication services. when an unfavorable judgment is rendered. On the issue of whether or not the petition for certiorari instituted by the petitioner in the CA is proper. therefore. though intangible property. the trial court deprived him of his constitutional right to be informed of the nature of the charge against him. Such use over a period of time is akin to merchandise which has value and. null and void. to nullify an order denying a motion to quash the Information is inappropriate because the aggrieved party has a remedy of appeal in the ordinary course of law. there is at least a prima facie showing on the face of the petition and its annexes that: (a) the trial court issued the order with grave abuse of discretion amounting to lack of or in excess of jurisdiction. assail the order and the decision on appeal. or. The issues for resolution are as follows: (a) whether or not the petition for certiorari is the proper remedy of the petitioner in the Court of Appeals. as amended. and the remedy of appeal would not afford adequate and expeditious relief. if the trial court issues the order denying the motion to quash the Amended Information with grave abuse of discretion amounting to excess or lack of jurisdiction. By so doing.37 In his petition for certiorari in the CA. (b) whether or not international telephone calls using Bay Super Orient Cards through the telecommunication services provided by PLDT for such calls. He insists that he should not be . He further averred that the order of the trial court is contrary to the constitution and is. may nevertheless be appropriated and can be the object of theft. The remedy of the aggrieved party is to continue with the case in due course and. the settled rule is that a writ of certiorari may be granted in cases where. or any offense for that matter. The use of respondent PLDT’s telephone network.properties under Article 308 of the Revised Penal Code. It is akin to electricity which. (b) appeal would not prove to be a speedy and adequate remedy. thus.). However. According to respondent PLDT. or null and void for being contrary to the Constitution. this is what actually happened when petitioner Laurel and the other accused below conducted illegal ISR operations. so is the use of said telephone services/telephone network.

The rule is rooted on the constitutional right of the accused to be informed of the nature of the crime or cause of the accusation against him. thus.42 If the facts alleged in the Information do not constitute an offense. the aforesaid international telephone calls. and ordain its punishment.41 and on additional facts admitted or not denied by the prosecution. telecommunication services and business is contrary to the letter and intent of the law. It is Congress. The rule is that. and may not be held to include offenses other than those which are clearly described. As a general prerequisite. ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity.44 Due respect for the prerogative of Congress in defining crimes/felonies constrains the Court to refrain from a broad interpretation of penal laws where a "narrow interpretation" is appropriate. in order to strictly determine the wrath and breath of the conduct the law forbids. that is. The Court must take heed to language. He cannot be convicted of an offense even if proven unless it is alleged or necessarily included in the Information filed against him. as mentioned by the petitioner. not the Court. on its face. when the congressional purpose is unclear. within its coverage. On the second issue.46 Penal statutes may not be enlarged by implication or intent beyond the fair meaning of the language used. penal laws are to be construed strictly. the complaint or information should be quashed by the court. or any offense for that matter. It. an offense has been committed. The Order of the trial court denying the motion of the petitioner to quash the Amended Information is a patent nullity. notwithstanding that the Court may think that Congress should have made them more comprehensive. a motion to quash on the ground that the Information does not constitute the offense charged. that if the alleged facts are true. Such rule is founded on the tenderness of the law for the rights of individuals and on the plain principle that the power of punishment is vested in Congress. . The construction by the respondents of Article 308 of the said Code to include. it does not contain material allegations charging the petitioner of theft of personal property under Article 308 of the Revised Penal Code. the court must apply the rule of lenity.47 Words and phrases in a statute are to be construed according to their common meaning and accepted usage.39 and describes the property which is the subject of theft to advise the accused with reasonable certainty of the accusation he is called upon to meet at the trial and to enable him to rely on the judgment thereunder of a subsequent prosecution for the same offense. legislative history and purpose. behooved the trial court to quash the Amended Information. which is to define a crime. the telecommunication services provided by PLDT and its business of providing said services are not personal properties under Article 308 of the Revised Penal Code. Petitioner is correct.compelled to undergo the rigors and tribulations of a protracted trial and incur expenses to defend himself against a non-existent charge. not in the judicial department.45However.40 It must show. should be resolved on the basis of said allegations whose truth and veracity are hypothetically committed.43 We have reviewed the Amended Information and find that. An information or complaint must state explicitly and directly every act or omission constituting an offense38 and must allege facts establishing conduct that a penal statute makes criminal. we find and so hold that the international telephone calls placed by Bay Super Orient Card holders.

48 When interpreting a criminal statute that does not explicitly reach the conduct in question. joyas. Intangible properties such as rights and ideas are not subject of theft because the same cannot be "taken" from the place it is found and is occupied or appropriated. But the words "Personal property" under the Revised Penal Code must be considered in tandem with the word "take" in the law. shall take personal property of another without the latter’s consent. ropas. para conseguir su apropiación. the Court should not base an expansive reading on inferences from subjective and variable understanding.As Chief Justice John Marshall declared."53 According to Cuello Callon. susceptible de ser aprehendida que tenga un valor cualquiera. covers both tangible and intangible properties and are subject of theft under the Revised Penal Code. 308. 335 y 336). material.. An information or complaint for simple theft must allege the following elements: (a) the taking of personal property. The provision was taken from Article 530 of the Spanish Penal Code which reads: 1. so far as to punish a crime not enumerated in the statute because it is of equal atrocity. The statutory definition of "taking" and movable property indicates that. toman las cosas muebles ajenas sin la voluntad de su dueño. the accused must have an intent to steal (animus furandi) personal property. y sin violencia o intimidación en las personas ni fuerza en las cosas. Solamente las cosas muebles y corporales pueden ser objeto de hurto. los derechos. indeed. La sustracción de cosas inmuebles y la cosas incorporales (v. asi que su concepto no coincide por completo con el formulado por el Codigo civil (arts. with intent to gain but without violence. to carry the principle that a case which is within the reason or mischief of a statute is within its provision. The general rule is that.51 One is apt to conclude that "personal property" standing alone. and (d) the taking be accomplished without the use of violence or intimidation of person/s or force upon things. Who are liable for theft. "it would be dangerous.54 . only those movable properties which can be taken and carried from the place they are found are proper subjects of theft. clearly. against or intimidation of persons nor force upon things. pues no es posible asirlas. etcétera. las ideas) no puede integrar este delito. (c) the taking be done with intent to gain. in the context of the Penal Code. or of kindred character with those which are enumerated. gr. Los que con ánimo de lucrarse. not all personal properties may be the proper subjects of theft. tomarlas. meaning the intent to deprive another of his ownership/lawful possession of personal property which intent is apart from and concurrently with the general criminal intent which is an essential element of a felony of dolo (dolus malus). como dinero.49 Article 308 of the Revised Penal Code defines theft as follows: Art. El Codigo emplea la expresión "cosas mueble" en el sentido de cosa que es susceptible de ser llevada del lugar donde se encuentra.52 As explained by Cuelo Callon: "Cosa juridicamente es toda sustancia corporal.– Theft is committed by any person who.50 For one to be guilty of theft. only movable properties which have physical or material existence and susceptible of occupation by another are proper objects of theft. (b) the said property belongs to another.

and gas. hence.Thus. Menagas. precisely as are coal. carried away and appropriated.56 It is not necessary that the property be actually carried away out of the physical possession of the lawful possessor or that he should have made his escape with it. Electricity. stored in cells of different capacity known as an accumulator. Tambunting. by his use of innocent persons without any felonious intent. as well as any mechanical device. Intent to gain includes the unlawful taking of personal property for the purpose of deriving utility. be taken and carried away. It is a valuable article of merchandise. animate or inanimate. Wemple. may be seen and felt. the same as gas. they are not proper subjects of theft or larceny because they are without form or substance. like illuminating gas. However. such as an access device or card. So is the credit line represented by a credit card. There is nothing in the nature of gas used for illuminating purposes which renders it incapable of being feloniously taken and carried away. or it may be sent through a wire. The taker. Thus. wares and merchandise of businessmen and credit cards issued to them are movable properties with physical and material existence and may be taken by another. enjoyment and pleasure. light. likewise. In People v.57 Neither asportation nor actual manual possession of property is required. is not the subject of theft or larceny. A naked right existing merely in contemplation of law.63 the Illinois State Supreme Court declared that electricity.64 the Court of Appeals of New York held that electric energy is manufactured and sold in determinate quantities at a fixed price. On the other hand. like gas. Constructive possession of the thief of the property is enough. v. It may be conveyed to the premises of the consumer.58 The essence of the element is the taking of a thing out of the possession of the owner without his privity and consent and without animus revertendi. the mere "breath" of the Congress. is a valuable article of merchandise. It is a valuable commodity. There is "taking" of personal property. credit or franchise are properties. with intent to gain.59 Taking may be by the offender’s own hands. or power. susceptible of being severed from a mass or larger quantity and of being transported from place to place. In People ex rel Brush Electric Illuminating Co. capable of being transformed either into heat. must have obtained complete and absolute possession and control of the property adverse to the rights of the owner or the lawful possessor thereof. although it may be very valuable to the person who is entitled to exercise it. gas or electricity are capable of appropriation by another other than the owner. being. Carlos61 and United States v. at the . proper subjects of theft. movable properties under Article 308 of the Revised Penal Code should be distinguished from the rights or interests to which they relate. goods. bought and sold like other personal property and is capable of appropriation by another. Gas and electrical energy may be taken. kerosene oil. right to produce oil. good will or an interest in business.60 We agree with the contention of the respondents that intangible properties such as electrical energy and gas are proper subjects of theft. just as gas or oil may be transported either in a close tank or forced through a pipe.55 Such rights or interests are intangible and cannot be "taken" by another. or any agency. The reason for this is that. Electrical energy may. bought and sold like other personal property. satisfaction. Having reached the premises of the consumer.62 based on decisions of the Supreme Court of Spain and of the courts in England and the United States of America. as explained by this Court in United States v. It may be transported from place to place. or the right to engage in business. at some particular amount. and theft is consummated when the offender unlawfully acquires possession of personal property even if for a short time. bought and sold like other personal property. or if such property is under the dominion and control of the thief. it may be used in any way he may desire.

Business does not have an exact definition.67 Business..651. like services in business. reroutes the calls and passes them to its toll center. the taking of goods. Penal responsibility cannot be extended beyond the fair scope of the statutory mandate. as the taking of personal property without the consent of the owner thereof. as claimed by the respondents. Said amount of P20. although are properties. much less. for that matter. the petitioner is not charged of stealing P20. on December 8. ownership of the voices of the telephone callers or of the electronic voice signals or current emanating from said calls. People.95 alleged in the Amended Information is the aggregate amount of access. merely intercepts. the Philippine Legislature should have spoken in language that is clear and definite: that business is personal property under Article 308 of the Revised Penal Code. PLDT merely transmits the electronic voice signals through its facilities and equipment. Baynet Card Ltd. It embraces everything that which a person can be employed. 1930.69 We agree with the contention of the petitioner that. The human voice and the electronic voice signals or current caused thereby are intangible and not susceptible of possession. bought and sold like other personal property. Case law is that. attention and labor of men for the purpose of livelihood or profit. through the PSTN.option of the purchaser. occupation or appropriation by the respondent PLDT or even the petitioner. international telephone calls and the transmission and routing of electronic voice signals or impulses emanating from said calls. . Business is referred as that which occupies the time. or equipment comprising his business. Indeed. transmission or termination charges which the PLDT expected from the international long distance calls of the callers with the use of Baynet Super Orient Cards sold by Baynet Co. Business is also defined as a commercial activity for gain benefit or advantage. the Philippine legislature could not have contemplated the human voice which is converted into electronic impulses or electrical current which are transmitted to the party called through the PSTN of respondent PLDT and the ISR of Baynet Card Ltd. within its coverage. Contrary to the claims of the OSG and respondent PLDT. a narrow interpretation of the law is more consistent with the usual approach to the construction of the statute. he is charged of "stealing the international long distance calls belonging to PLDT" and the use thereof. through the ISR.65 the Supreme Court of Illinois declared that there is nothing in the nature of gas used for illuminating purposes which renders it incapable of being feloniously taken and carried away. In defining theft. When the Revised Penal Code was approved. under Article 308 of the Revised Penal Code.70 Respondent PLDT does not acquire possession.66 Business may also mean employment. susceptible of being severed from a mass or larger quantity and of being transported from place to place. were still non-existent.95 from said respondent. It is a valuable article of merchandise. are not proper subjects of theft under the Revised Penal Code because the same cannot be "taken" or "occupied.651. where a legislative history fails to evidence congressional awareness of the scope of the statute claimed by the respondents. through its operator.370. as gleaned from the material averments of the Amended Information. occupation or profession. there would be no juridical difference between the taking of the business of a person or the services provided by him for gain. the parties called receive the telephone calls from Japan. vis-à-vis. Ltd. IPL and ISR.370. In Woods v." If it were otherwise.68 If it was its intention to include "business" as personal property under Article 308 of the Revised Penal Code. wares or merchandise. Gas and electrical energy should not be equated with business or services provided by business entrepreneurs to the public.

For instance." although an actual sale is involved.76A service is generally not considered property and a theft of service would not.72 The conduct complained of by respondent PLDT is reminiscent of "phreaking" (a slang term for the action of making a telephone system to do something that it normally should not allow by "making the phone company bend over and grab its ankles"). If taking of telecommunication services or the business of a person.74 It may also mean the duty or labor to be rendered by one person to another. to include services to be the subject of theft. decades after the Revised Penal Code took effect. In fact. A "phreaker" is one who engages in the act of manipulating phones and illegally markets telephone services. telecommunications systems have become so tightly merged with computer systems that it is difficult to know where one starts and the other finishes. New Jersey. the Revised Penal Code does not even contain a definition of services. The petitioner is not charged. by altering or tampering with the public utility meter or measuring device by which such services are delivered or by .73 Unless the phone company replaces all its hardware. for its ISR. Several states in the United States. The Pennsylvania Criminal Statute now penalizes theft of services. among others. such as New York. the sale of food by restaurants is usually referred to as "service. or the sense in which it is used. by deception or threat. Phreaking occurred only during the 1960’s and 1970’s. California and Virginia. modems and software. it should have incorporated the same in Article 308 of the Revised Penal Code. Even at common law. it may include a sale.75 In the case of PLDT. it is to render local and international telecommunications services and such other services as authorized by the CPCA issued by the NTC. constitute theft since there can be no caption or asportation.78 If it was the intent of the Philippine Legislature. is to be proscribed. The word "service" has a variety of meanings dependent upon the context. performance of labor for the benefit of another. under the Amended Information. -(1) A person is guilty of theft if he intentionally obtains services for himself or for another which he knows are available only for compensation. for theft of telecommunication or telephone services offered by PLDT. realized that their criminal statutes did not contain any provisions penalizing the theft of services and passed laws defining and penalizing theft of telephone and computer services. thus: (a) Acquisition of services. in some instances. therefore. Even if he is. The telephone set is highly computerized and allows computers to communicate across long distances. The phone companies in North America were impelled to replace all their hardware and adopted full digital switching system known as the Common Channel Inter Office Signaling.77 Neither is the unauthorized use of the equipment and facilities of PLDT by the petitioner theft under the aforequoted provision of the Revised Penal Code. in 1930.71 The instrumentality at issue in this case is not merely a telephone but a telephone inexplicably linked to a computerized communications system with the use of Baynet Cards sold by the Baynet Card Ltd. neither time nor services may be taken and occupied or appropriated. the term "personal property" under Article 308 of the Revised Penal Code cannot be interpreted beyond its seams so as to include "telecommunication or telephone services" or computer services for that matter. and. The corporation uses computers.In this modern age of technology. it must be by special statute79 or an amendment of the Revised Penal Code. The Legislature did not. phreaking would be impossible to stop.

to which he is not entitled. In 1980. whether physically.2-96. 18-2-98 which reads: Computer time or services or data processing services or information or data stored in connection therewith is hereby defined to be property which may be the subject of larceny under § § 18. professional service. by making or maintaining any unauthorized modification or alteration to any device installed by a cable television system. Republic Act No. 8484.2-95 or 18. electrically or inductively. thus: (1) A person is guilty of theft if he purposely obtains services which he knows are available only for compensation. threat. including professional services. the General Assembly of Virginia enacted Code No. they decided to incorporate in the Code Section 223. restaurants or elsewhere. labor or services. use of vehicles or other movable property. or by false token or other trick or artifice to avoid payment for the service. theft of labor or services or use of property is penalized: (a) A person commits theft when he obtains the temporary use of property. Hence. . having control over the disposition of services of others. In the State of Alabama. the drafters of the Model Penal Code in the United States of America arrived at the conclusion that labor and services. telephone or other public service.causing or permitting such altering or tampering. refusal to pay or absconding without payment or offer to pay gives rise to a presumption that the service was obtained by deception as to intention to pay. or embezzlement under § 18. "Services" include labor. as in the case of hotels and restaurants. Interestingly. Commonwealth. Congress has not amended the Revised Penal Code to include theft of services or theft of business as felonies. or by false token or other means to avoid payment for the service. wire or other component of an electric. telephone or cable television system or to a television receiving set connected to a cable television system. or false pretenses under § 18. admission to exhibitions.7. In the State of Illinois in the United States of America. (2) A person commits theft if. by deception or threat.2-111. transportation. by attaching or maintaining the attachment of any unauthorized device to any cable. to a distribution or transmission line. accommodation in hotels. Where compensation for service is ordinarily paid immediately upon the rendering of such service. false token or other means to avoid payment for the services …" In the Philippines. it approved a law. after the State Supreme Court of Virginia promulgated its decision in Lund v. labor or services of another which are available only for hire. by means of threat or deception or knowing that such use is without the consent of the person providing the property. have not been included within the traditional scope of the term "property" in ordinary theft statutes. by making or maintaining any unauthorized connection. he knowingly diverts such services to his own benefit or to the benefit of another not entitled thereto. Instead. which defines and penalizes theft of services.80declaring that neither time nor services may be taken and carried away and are not proper subjects of larceny.2178. Section 13A-8-10(a)(1) of the Penal Code of Alabama of 1975 penalizes theft of services: "A person commits the crime of theft of services if: (a) He intentionally obtains services known by him to be available only for compensation by deception.

The Regional Trial Court is directed to issue an order granting the motion of the petitioner to quash the Amended Information. 8484. 1998. steal. Significantly. destruction. Among the prohibited acts enumerated in Section 9 of the law are the acts of obtaining money or anything of value through the use of an access device. conspiracy to commit access devices fraud is a crime. theft or loss of electronic data messages or electronic documents shall be punished by a minimum fine of One hundred thousand pesos (P100. The petitioner is not charged of estafa before the RTC in the Amended Information. code.00) and a maximum commensurate to the damage incurred and a mandatory imprisonment of six (6) months to three (3) years. However. violation of Republic Act No. Under the law. electronic serial number. Thus. IN LIGHT OF ALL THE FOREGOING.000. on February 11. February 27. SO ORDERED. account number. the petitioner is not charged of violation of R. without the knowledge and consent of the owner of the computer or information and communications system. equipment or instrumentalities-identifier or other means of account access that can be used to obtain money. Case Analysis Tile: Laurel v. Electronic Commerce Act of 2000 provides: Sec. Penalties. 8792. 2006I-PARTIES . 155076. the petition is GRANTED. The assailed Orders of the Regional Trial Court and the Decision of the Court of Appeals are REVERSED and SET ASIDE. an access device means any card.otherwise known as the Access Devices Regulation Act of 1998. and of effecting transactions with one or more access devices issued to another person or persons to receive payment or any other thing of value. resulting on the corruption. alteration. and estafa under Article 315(2)(a) of the Revised Penal Code with the service provider as the private complainant. including the introduction of computer viruses and the like. a prosecution under the law shall be without prejudice to any liability for violation of any provisions of the Revised Penal Code inclusive of theft under Rule 308 of the Revised Penal Code and estafa under Article 315 of the Revised Penal Code. Abrogar (483 SCRA 243) G. with intent to defraud or intent to gain and fleeing thereafter. or destroy using a computer or other similar information and communication devices. personal identification number and other telecommunication services. alter. as follows: a) Hacking or cracking which refers to unauthorized access into or interference in a computer system/server or information and communication system. or any access in order to corrupt. plate. No.R. if an individual steals a credit card and uses the same to obtain services. goods. Section 33 of Republic Act No.— The following Acts shall be penalized by fine and/or imprisonment. 8484.A. 33. Under Section 11 of the law. services or any other thing of value or to initiate a transfer of funds other than a transfer originated solely by paper instrument. he is liable of the following: theft of the credit card under Article 308 of the Revised Penal Code.

Laurel board member and corporate secretary of Baynet Co.RTC also denied his Motion for Reconsideration.. not to PLDT. effectively stealing this business from PLDT while using its facilities in the estimated amount of P20. operate. maintain and purchase telecommunication systems. According to Laurel. and what the latter owns are the telecommunication infrastructures or facilities through which the call is made.Philippine Long Distance Telephone Company (PLDT)-Private respondent(the petitioner in theinitial proceeding)HON. manage. and/or air wave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined. if anything. lease. ABROGAR. Accused Laurel filed a "Motion to Quash (with Motion to Defer Arraignment)".651. for an outgoing overseas call. 308 of the RPC. represents the rental for the use of PLDT facilities. Presiding Judge of the Regional Trial Court. Ltd. now the petitioner. the P20. The RTC issued an Order denying the Motion to Quash the Amended Information.370. no personal property was stolen from PLDT. (Baynet)now Petitioner(one of the respondent or co-accused in the case filed by PLDT) II-PRIOR PROCEEDINGS An information was filed by the state prosecutor impleading Laurel and other respondents of theft under Article 308 of RPC.651. He argued that the caller merely uses the facilities of PLDT. Laurel then filed a Petition for Certiorari with the CA.92 stated in the Information. IV-OBJECTIVE OF THE PARTIES PLDT wishes for the petitioner to be impleaded for committing theft and the loss they've suffered be respectively reimbursed or returned to them. ZEUS C. -Respondent Luis Marcos P. . cables.370. in the said amount with out the priors consent. PLDT charges the caller per minute. assails the decision of the CA before the SC. Laurel.92 to the damage and prejudice of PLDT. Laurel however alleged that the telephone calls with the use of PLDT telephone lines. whether domestic or international. assailing the Order of the RTC. which is a method of routing and completing international long distance calls using lines. Branch 150whose decision is sought to be reversed in the case. belong to the persons making the call. Makati City. He also asserted that PLDT is compensated for the caller’s use of its facilities by way of rental. V-KEY FACTS >Philippine Long Distance Telephone Company (PLDT) is the holder of a legislative franchise to render local and international telecommunication services under Republic Act No. PLDT is authorized to establish. Laurel on the other hand. III-THEORIES OF THE PARTIES PLDT claims that herein petitioner together with his co-accused conspired together in order to steal and use the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR). Thus. The CA dismissed the petition. and not the value of anything owned by it. prays that the motion to quash be granted as the factual basis of herein private repondent as stated in their complaint does not fall within the ambit of Art. antennae. 7082. Under said law. based on the duration of the call.

the RTC failed to . it was noted that the inadequacy prompted the filing of Senate Bill 2379 (sic) entitled "The Anti-Telecommunications Fraud of 1997" to deter cloning of cellular phones and other forms of communications fraud. Laurel concluded.. the operator of an ISR is able to evade payment of access. which connect directly to the local or domestic exchange facilities of the terminating country (the country where the call is destined). the calls bypass the IGF found at the terminating country. and. In said resolution. The IPL is linked to switching equipment. Mendoza. namely. "there is no crime if there is no law punishing the crime. where it was ruled that the Revised Penal Code. legislated as it was before present technological advances were even conceived. Yasushi Ueshima. with Baynet as subscriber. and make it appear as a call originating from Metro Manila. Thus. ISR is a method of routing and completing international long distance calls using International Private Leased Lines(IPL). receiving and switching stations." Thus. Yuji Hijioka. until November 19. as well as compliance with the regulatory requirements of the NTC. the State Prosecutor filed an Amended Information impleading Laurel (a partner in the law firm of Ingles. as accused for theft under Article 308 of the Revised Penal Code. Salinas. The IPL is linked to switching equipment which is connected to a PLDT telephone line/number. the ISR operator offers international telecommunication services at a lower rate. Mukaida. Through the use of the telephone lines and other auxiliary equipment.including transmitting. and the other members of the board of directors of said corporation. which is then connected to PLDT telephone lines/numbers and equipment. antenna or air wave or frequency. In the process. Laurel. termination or bypass charges and accounting rates. even those from the originating country >One such alternative calling service is that offered by Baynet Co. >After conducting the requisite preliminary investigation. Moreover. Laurel further cited the Resolution of the Secretary of Justice in Piltel v. he was charged with stealing the international long distance calls belonging to PLDT. cables.>PLDT alleges that one of the alternative calling patterns that constitute network fraud and violate its network integrity is that which is known as International Simple Resale (ISR). Thus he filed a motion for certiorari before the SC alleging the following: the respondent judge gravely abused his discretion in denying his Motion to Quash the Amended Information. or in some instances. 1999. >Laurel moved to quash said complaint as the property (service/business)contemplated by herein private respondent is not the one embraced in ART 308 of RPC nor any special law for that matter. PLDT asserts that Baynet conducts its ISR activities by utilizing an IPL to course its incoming international long distance calls from Japan. electronic-international mobile equipment identity (EMEI/IMEI). not its business. or subscriber identity module" and "any attempt to duplicate the data on another cellular phone without the consent of a public telecommunications entity would be punishable by law. Baynet is able to connect an international long distance call from Japan to any part of the Philippines. As gleaned from the material averments of the amended information. Lacson and Villegas.">The RTC as well as the CA however dismissed his motion. is not adequate to address the novel means of "stealing" airwaves or airtime. The said bill "aims to protect in number (ESN) (sic) or Capcode. (Baynet) which sells "Bay Super Orient Card" phone cards to people who call their friends and relatives in the Philippines. to the damage and prejudice of legitimate operators like PLDT. Consequently. a member of the board of directors and corporate secretary of Baynet). mobile identification number (MIN). Ltd. for both domestic and international calls.

the telecommunication services provided by PLDT and its business of providing said services are not personal properties under Article 308 of the Revised Penal Code. One is apt to conclude that "personal property" standing alone. which is to define a crime. Who are liable for theft.distinguish between the business of PLDT(providing services for international long distance calls) and the revenues derived therefrom. But the words "Personal property" under the Revised Penal Code must be considered in tandem with the word "take" in the law. covers both tangible and intangible properties and are subject of theft under the Revised Penal Code. For one to be guilty of theft. thus no network fraud exist. the term "revenue" is defined as "the income that comes back from an investment (as in real or personal property)." On the other hand. VII-HOLDING NO. the accused must have an intent to steal (animus furandi) personal property. The statutory definition of .An information or complaint for simple theft must allege the following elements: (a) the taking of personal property. against or intimidation of persons nor force upon things. and (d) the taking be accomplished without the use of violence or intimidation of person/s or force upon things. and (3) refers to transactions. dealings or intercourse of any nature. and ordain its punishment. It is Congress. 308 OF RPC. profits. the annual or periodical rents. Due respect for the prerogative of Congress in defining crimes/felonies constrains the Court to refrain from a broad interpretation of penal laws whereas "narrow interpretation" is appropriate. VIII-RATIODECIDENDI The court finds that the international telephone calls placed by Bay Super Orient Cardholders. not the Court. (c) the taking be done with intent to gain. The rule is that. And only when the congressional purpose is unclear that court my rule on its lenity. with intent to gain but without violence. interests. shall take personal property of another without the latter’s consent.– Theft is committed by any person who. since a "business" is "(1) a commercial or mercantile activity customarily engaged in as a means of livelihood and typically involving some independence of judgment and power of decision. (b) the said property belongs to another. 308. penal laws are to be construed strictly. THE KIND OF PERSONAL PROPERTY CONTEMPLATED BY SAID ARTICLE DOES NOT COVER THE 'BUSINESS OR SERVICE' RENDERED BY PRIVATE RESPONDENT. meaning the intent to deprive another of his ownership/lawful possession of personal property which intent is apart from and concurrently with the general criminal intent which is an essential element of a felony of dolo (dolus malus)." VI-ISSUE WHETHER OR NOT THE PROPERTY CONTEMPLATED BY HEREIN PRIVATE RESPONDENT FALLSWITHIN THE AMBIT OF ART. Article 308 of the Revised Penal Code defines theft as follows: Art. or issues of any species of real or personal property. He opined that a "business" or its revenues cannot be considered as personal property under Article308 of the Revised Penal Code. (2) a commercial or industrial enterprise.

or equipment comprising his business. However. or any agency. or the right to engage in business. satisfaction. Business does not have an exact definition. like services in business. If it was its intention to include "business" as personal property under Article 308 of the Revised Penal Code. wares or merchandise. only movable properties which have physical or material existence and susceptible of occupation by another are proper objects of theft. with intent to gain. Taking may be by the offender’s own hands. The taker. Intent to gain includes the unlawful taking of personal property for the purpose of deriving utility. in the context of the Penal Code. The general rule is that. occupation or profession. and theft is consummated when the offender unlawfully acquires possession of personal property even if for a short time. there would be no juridical difference between the taking of the business of a person or the services provided by him for gain. A naked right existing merely in contemplation of law. Business is referred as that which occupies the time. is not the subject of theft or larceny. There is "taking" of personal property. Such rights or interests are intangible and cannot be "taken" by another. . animate or inanimate. by his use of innocent persons without any felonious intent. clearly. So is the credit line represented by a credit card. ownership of the voices of the telephone callers or of the electronic voice signals or current emanating from said calls. Constructive possession of the thief of the property is enough. must have obtained complete and absolute possession and control of the property adverse to the rights of the owner or the lawful possessor thereof. It is not necessary that the property be actually carried a way out of the physical possession of the lawful possessor or that he should have made his escape with it. The human voice and the electronic voice signals or current caused thereby are intangible and not susceptible of possession. Business may also mean employment. not all personal properties may be the proper subjects of theft. as well as any mechanical device. are not proper subjects of theft under the Revised Penal Code because the same cannot be "taken" or "occupied. vis-à-vis. Neither asportation nor actual manual possession of property is required. Thus. as claimed by the respondents. Respondent PLDT does not acquire possession. they are not proper subjects of theft or larceny because they are without form or substance. although it may be very valuable to the person who is entitled to exercise it. only those movable properties which can be taken and carried from the place they are found are proper subjects of theft. much less. Gas and electrical energy should not be equated with business or services provided by business entrepreneurs to the public. Intangible properties such as rights and ideas are not subject of theft because the same cannot be "taken” from the place it is found and is occupied or appropriated. credit or franchise are properties. good will or an interest in business. Business. for that matter. the taking of goods. the mere "breath" of the Congress. occupation or appropriation by the respondent PLDT or even the petitioner."If it were otherwise. at some particular amount. right to produce oil. enjoyment and pleasure. According to Cuello Callon. the Philippine Legislature should have spoken in language that is clear and definite: that business is personal property under Article 308 of the Revised Penal Code. or if such property is under the dominion and control of the thief. although are properties. It embraces everything that which a person can be employed. such as an access device or card."taking" and movable property indicates that. Business is also defined as a commercial activity for gain benefit or advantage. attention and labor of men for the purpose of livelihood or profit.

Abrogar Laurel was charged with engaging in International Simple Resale (ISR) or the unauthorized routing and completing of international long distance calls using lines. In the Philippines. it had lost billions of pesos in profit because of this unauthorized activities. the petitioner is not charged of violation of R. on February 11. it approved a law. What constitutes the “business” of PLDT? W/N PLDT’s business is considered “personal property” that may be stolen by another? What really constitutes the business of PLDT? . the courts found that other states specifically included “business/services” to be one of a “personal property” as implemented therein. account number. plate. Baynet Card Ltd. through its operator. No. with intent to defraud or intent to gain and fleeing thereafter. Republic Act No. Under Section 11 of the law. Instead. merely intercepts. Case digest Laurel vs. 8484. IX-DISPOSITION Petition is granted. in effect. 155076. equipment or instrumentalities-identifier or other means of account access that can be used to obtain money. 1998. reroutes the calls and passes them to its toll center. services or any other thing of value or to initiate a transfer of funds other than a transfer originated solely by paper instrument. According to PLDT.R. 2006). OBITERDICTUM? In Examining foreign statutes. an access device means any card. and/or air wave frequency and connecting these calls directly to the local or domestic exchange facilities of the country where destined. However..PLDT merely transmits the electronic voice signals through its facilities and equipment. and of effecting transactions with one or more access devices issued to another person or persons to receive payment or any other thing of value. Under the law. The Regional Trial Court is directed to issue an order granting the motion of the petitioner to quashthe Amended Information. conspiracy to commit access devices fraud is a crime. 8484. goods. the issue was whether or not PLDT’s business may be the subject of theft. code. In the original case (G. antennae. In answering this. February 27. Among the prohibited acts enumerated in Section 9 of the law are the acts of obtaining money or anything of value through the use of an access device. personal identification number and other telecommunication services. Congress has not amended the Revised Penal Code to include theft of services or theft of business as felonies. it is necessary to clarify some things first.A.otherwise known as the Access Devices Regulation Act of 1998. electronic serial number. These calls. reached various parts of the country and even Japan without passing through the information gateway of PLDT. The assailed decision of RTC and CA is hereby reversed and ser aside. cables.

through its operator. Any personal property. business may be appropriated. The Supreme Court settled that PLDT’s business is that of providing telephone facilities and services. Since PLDT was not the owner of the calls.” Taking does not mean the physical act of transporting a thing from one place to another. which is the unlawful taking of the telephone services and business. Thus. Under Art 416 of the Civil Code. RPC (theft)? The Supreme Court division which decided the 2006 case said “no” to this question. It does not always mean that the property must be carried from one place to another. services and interest in business are not found in the list of real properties. However. PLDT merely transmits the electronic voice signals through its facilities and equipment. These are intangible and not susceptible of possession. Is PLDT’s business a personal property within the coverage of Art 308. capable of appropriation can be the object of theft. these are personal properties. Act No. merely intercepts. It said that “personal property” should be understood in the context of the Civil Code’s definition of real and personal property. It said that “personal property” under the Revised Penal Code must be understood together with the word “take” in the same law. the calls belong to the person making the call. Therefore. . it is not correct to say that these calls were taken without its consent. Baynet Card Ltd. The 2006 decision therefore required that. under the Bulk Sales Law (Sec 2. corporeal or incorporeal. Taking means depriving the lawful owner or possessor of the property. Only movable properties with physical or material existence and susceptible of occupation by another. the SC discarded this ruling in its 2009 en banc resolution. just like what happened in this case. 3952). The law only speaks of “appropriation. movable properties susceptible of appropriation which are not included in the enumeration of real properties are considered personal properties. It could be done with the use of the offenders’ own hands or by controlling its destination by means of some device or equipment. Laurel argued that PLDT does not own these calls.PLDT accused Baynet of stealing its international long distance calls. reroutes the calls and passes them to its toll center. It owns only the facilities and infrastructures by which these calls are made. It is the use of these communications facilities without the consent of PLDT that constitutes the crime of theft. The act of Baynet was like tampering the water meter or using a jumper to steal water and electricity. Thus. But PLDT does not acquire possession and ownership of the voices of the telephone callers or of the electronic voice signals generated by such calls.. tangible or intangible. business could be object of theft. Business. But this does not altogether exonerate Laurel from liability because it used PLDT’s facilities to allow the Baynet card purchasers to make the calls. are proper objects of theft. the human voice or the electric impulses it generates cannot be included as personal property within the meaning of Art 308. for theft to be committed. there must be asportation or the carrying away of the personal property. The SC also clarified the meaning of taking in the crime of theft. Besides. occupation or appropriation by PLDT or even by Baynet.

: Petition for review on certiorari of the decision of the Court of Appeals (now Intermediate Appellate Court) promulgated on August 27.R. Bagatsing & Assoc. Francisco. 1981 in CA-G. DE CASTRO. Mancella for respondent. No. and HONORABLE COURT OF APPEALS. G. rather than theft of PLDT’s business. 1983 MAKATI LEASING and FINANCE CORPORATION. WEAREVER TEXTILE MILLS. So. as Presiding Judge of the Court of First instance of Rizal .R. petitioner. SP-12731. Ramon D.Guilty or not? The business of providing telecommunication and the telephone service are personal property under Article 308 of the Revised Penal Code. (collaborating counsel) for petitioner. No. Loreto C. However. J. Baduan for petitioner. vs. setting aside certain Orders later specified herein. Jose V. Laurel is guilty of theft of PLDT’s business and service. respondents. INC. L-58469 May 16. the Amended Information accused Laurel of stealing international long distance telephone calls. committed by means of the unlawful use of the latter’s facilities. the Supreme Court decided to remand the case to the lower court and the prosecution was directed to amend the Information.. of Judge Ricardo J. and the act of engaging in ISR is an act of “subtraction” penalized under said article.

much less of a chattel mortgage. as wen as the resolution dated September 22. set aside the Orders of the lower court and ordered the return of the drive motor seized by the sheriff pursuant to said Orders. denying petitioner's motion for reconsideration. Upon private respondent's default. Acting on petitioner's application for replevin. repaired to the premises of private respondent and removed the main drive motor of the subject machinery. the reason why all that the sheriff could do to enfore the writ was to take the main drive motor of said machinery. an order lifting the restraining order for the enforcement of the writ of seizure and an order to break open the premises of private respondent to enforce said writ. 36040. The lower court reaffirmed its stand upon private respondent's filing of a further motion for reconsideration. because it is a real property pursuant to Article 415 of the new Civil Code. On July 13. Petitioner thereafter filed a complaint for judicial foreclosure with the Court of First Instance of Rizal. docketed as Civil Case No.Branch VI. 1981 of the said appellate court. petitioner filed a petition for extrajudicial foreclosure of the properties mortgage to it. issued in Civil Case No.. The appellate court rejected petitioner's argument that private respondent is estopped from claiming that the machine is real property by constituting a chattel mortgage thereon. the same being attached to the ground by means of bolts and the only way to remove it from respondent's plant would be to drill out or destroy the concrete floor. To secure the collection of the receivables assigned. the enforcement of which was however subsequently restrained upon private respondent's filing of a motion for reconsideration. 1981. in certiorari and prohibition proceedings subsequently filed by herein private respondent. private respondent executed a Chattel Mortgage over certain raw materials inventory as well as a machinery described as an Artos Aero Dryer Stentering Range. After several incidents. 1981. Branch VI. the lower court finally issued on February 11. Inc. the case before the lower court. It appears that in order to obtain financial accommodations from herein petitioner Makati Leasing and Finance Corporation. However. . the lower court issued a writ of seizure. 36040. the sheriff enforcing the seizure order. the private respondent Wearever Textile Mills. after ruling that the machinery in suit cannot be the subject of replevin. the Deputy Sheriff assigned to implement the foreclosure failed to gain entry into private respondent's premises and was not able to effect the seizure of the aforedescribed machinery. discounted and assigned several receivables with the former under a Receivable Purchase Agreement. The Court of Appeals.

The next and the more crucial question to be resolved in this Petition is whether the machinery in suit is real or personal property from the point of view of the parties. who are attacking the validity of the chattel mortgage in this case. Vicencio. F. and although this can not in itself alone determine the status of the property. however. with petitioner arguing that it is a personality. as contended by said respondent. it is the defendants-appellants themselves. having treated the subject house as personality. it made itself unequivocably clear that said action was without prejudice to a motion for reconsideration of the Court of Appeals decision. unlike in the Iya cases. while the respondent claiming the contrary. so that they should not now be allowed to make an inconsistent stand by claiming otherwise. A similar.L. that the instant petition was rendered moot and academic by petitioner's act of returning the subject motor drive of respondent's machinery after the Court of Appeals' decision was promulgated. it does so when combined with other factors to sustain the interpretation that the parties. Moreover. Jr. speaking through Justice J. the subject house stood on a rented lot to which defendants-appellants merely had a temporary right as lessee. & Leung Yee vs. Lopez vs. When petitioner returned the subject motor drive. . Finally. as shown by the receipt duly signed by respondent's representative.A motion for reconsideration of this decision of the Court of Appeals having been denied. Strong Machinery & Williamson. intended to treat the house as personality. selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel. The contention of private respondent is without merit. or at least.B. Reyes. as debtors-mortgagors. yet by ceding. wherein third persons assailed the validity of the chattel mortgage. particularly the mortgagors. 41 SCRA 143 where this Court. and was sustained by the appellate court. the contention of private respondent that this petition has been mooted by such return may not be sustained. petitioner has brought the case to this Court for review by writ of certiorari. It is contended by private respondent. 1 Considering that petitioner has reserved its right to question the propriety of the Court of Appeals' decision. & Plaza Theatre. if not Identical issue was raised in Tumalad v. The doctrine of estoppel therefore applies to the herein defendants-appellants. ruled: Although there is no specific statement referring to the subject house as personal property. intended to treat the same as such. Inc. which accordingly held that the chattel mortgage constituted thereon is null and void.L. Orosa.

Private respondent could not now therefore. which is movable in its nature and becomes immobilized only by destination or purpose. Jaramillo. the Court of Appeals lays stress on the fact that the house involved therein was built on a land that did not belong to the owner of such house. but can only be a ground for rendering said contract voidable. There is nothing on record to show that the mortgage has been annulled. It must be pointed out that the characterization of the subject machinery as chattel by the private respondent is indicative of intention and impresses upon the property the character determined by the parties. even granting that the charge is true. As aptly pointed out by petitioner and not denied by the respondent.Examining the records of the instant case. We find no logical justification to exclude the rule out. . there is absolutely no reason why a machinery. be allowed to impugn the efficacy of the chattel mortgage after it has benefited therefrom. as long as no interest of third parties would be prejudiced thereby. Moreover. Neither is it disclosed that steps were taken to nullify the same. such fact alone does not render a contract void ab initio. may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby. Private respondent contends that estoppel cannot apply against it because it had never represented nor agreed that the machinery in suit be considered as personal property but was merely required and dictated on by herein petitioner to sign a printed form of chattel mortgage which was in a blank form at the time of signing. the present case from the application of the abovequoted pronouncement. the latter has indubitably benefited from said contract. may not be likewise treated as such. As stated in Standard Oil Co. This contention lacks persuasiveness. But the law makes no distinction with respect to the ownership of the land on which the house is built and We should not lay down distinctions not contemplated by law. Equity dictates that one should not benefit at the expense of another. the status of the subject machinery as movable or immovable was never placed in issue before the lower court and the Court of Appeals except in a supplemental memorandum in support of the petition filed in the appellate court. as pointed out by petitioner and again not refuted by respondent. If a house of strong materials. it is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property. 630. of New York v. as the appellate court did. In rejecting petitioner's assertion on the applicability of the Tumalad doctrine. 44 Phil. like what was involved in the above Tumalad case. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage. On the other hand. by a proper action in court. or annullable pursuant to Article 1390 of the new Civil Code.

v. To secure the collection of the receivables assigned. Wearever Textile Facts: Wearever Textile in order to obtain a financial accommodation from Makati Leasing. 70. Waerever executed a Chattel Mortgage over certain raw materials inventory as well as a machinery described as an Artos Aero Dryer Stentering Range. Moreover. the case of Machinery and Engineering Supplies. with costs against the private respondent. repaired to the premises of Wearever and removed the main drive motor of the subject machinery. Undoubtedly. finally issued on 11 February 1981. Concepcion Jr. 96 Phil. the error of the appellate court in ruling that the questioned machinery is real. Abad Santos. Makati Leasing filed a petition for extrajudicial foreclosure of the properties mortgage to it. Inc. the enforcement of which was restrained upon Wearever's filing of a motion for reconsideration. Makasiar (Chairman). the Deputy Sheriff assigned to implement the foreclosure failed to gain entry into Wearever's premises and was not able to effect the seizure of the machinery. and they were not the subject of a Chattel Mortgage. becomes very apparent.. concur. Guerrero and Escolin JJ. concurs in the result. discounted and assigned several receivables with the former under a Receivable Purchase Agreement. heavily relied upon by said court is not applicable to the case at bar. the nature of the machinery and equipment involved therein as real properties never having been disputed nor in issue. The sheriff enforcing the seizure order. the Tumalad case bears more nearly perfect parity with the instant case to be the more controlling jurisprudential authority. RTC then issued a writ of seizure.. Aquino. J.From what has been said above. and the Orders of the lower court are hereby reinstated. However. CA.. WHEREFORE. Upon Wearever's default. an order to break open the premises of Wearever to enforce said writ. SO ORDERED. not personal property. Makati Leasing vs. Makati Leasing thereafter filed a complaint for judicial foreclosure with the CFI Rizal. . the questioned decision and resolution of the Court of Appeals are hereby reversed and set aside.

May 16. Weaever says it is real property. No. as long as no interest of third parties would be prejudiced thereby. like what was involved in the above Tumalad case. It must be pointed out that the characterization of the subject machinery as chattel by the private respondent is indicative of intention and impresses upon the property the character determined by the parties. Makati Leasing vs. much less of a chattel mortgage. may not be likewise treated as such. Inc. L-58469. because it is a real property pursuant to Article 415 of the new Civil Code. 44 Phil. Hence this petition. there is absolutely no reason why a machinery. G. may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage. Claims: Makati Leasing says it is personal property. but it was denied. 630. 1983. .R. A motion for reconsideration was filed by Makati Leasing. it is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property. Wearever Textile Makati Leasing and Financial Corporation vs. Jaramillo. which is movable in its nature and becomes immobilized only by destination or purpose.CA set aside the orders of the RTC and ordered the return of the drive motor seized by the sheriff after ruling that the machinery in suit cannot be the subject of replevin. of New York vs. Issue: Whether the machinery in suit is real or personal property? Held: If a house of strong materials. CA also rejected the argument that Wearever is estopped from claiming that the machine is real property by constituting a chattel mortgage thereon. As stated in Standard Oil Co. Wearever Textile Mills.

The Sheriff assigned to execute such foreclosure. Vicencio and Standard Oil Co. In order to secure the collection of the receivables assigned. Upon default of Wearever in paying what is due. Claims: Makati Leasing says it is personal property. Makati Leasing filed a petition for extrajudicial foreclosure of the properties mortgaged to it. the machinery is to be considered as personal property. it is a real property but by virtue of the intention of the parties stipulated in their chattel mortgage contract. Inc. 415 (3) of the NCC. Issue: Whether the machinery is a personal property. Doctrine: Where a chattel mortgage is constituted on a machinery permanently attached to the ground. Facts: Wearever Textile Mills. petitioner filed a complaint for a judicial foreclosure with the RTC of Rizal which was granted even after the motion for reconsideration filed by the private respondent. Hence. of New York v. failed to enter the premises of Wearever to effect the seizure of the machinery. Upon appeal.De Castro. CA argued that the machinery is attached to the ground by means of bolts and the only way to remove it from the respondent’s plant would be to drill out or destroy the concrete floor – which is why all that the sheriff could do to enforce the writ was to take the main drive motor of the machinery. under a Receivable Purchase Agreement so that the latter would lend money to the former. CA reversed the ruling of the RTC and ordered the return of the motor to Wearever since the said machinery cannot be the subject of a replevin and chattel mortgage for it is a real property pursuant to Art. Wearever executed a Chattel Mortgage over certain raw materials inventory as well as a machinery (Artos Aero Dryer Stentering Range). this petition for certiorari. Afterwhich. Held: Yes. Jaramillo where it held that a real property may be considered as a personal property for purposes of executing a chattel . The Court made reference to its ruling in Tumalad v. the machinery was intended to be a personal property. Weaever says it is real property. however. the Sheriff removed the main drive motor of the machinery. discounted and assigned several receivables with Makati Leasing and Financial Corp. By destination. Enforcing then the writ of seizure issued by the lower court. J.

1982 CALTEX (PHILIPPINES) INC.mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby. car hoists.. Furthermore as it was undeniable that it benefited from the chattel mortgage. an air compressor is attached in the wall of the shed or at the concrete wall fence. AQUINO. a water tank if there is any is placed in one corner of the lot. . G. air compressors and tireflators. The Court was not persuaded by its contention as the said issue was not duly raised in the lower and appellate courts nor will the said signing in blank by the respondent make the contract void but merely voidable by a proper action in court. water tanks. No. respondents. elevated tank. it cannot be allowed to impugn its efficacy for equity reasons. petitioner. car hoists are placed in an adjacent shed. and once the parties so agreed. computing pumps. in its gas stations located on leased land. The machines and equipment consists of underground tanks. truck hoists. CENTRAL BOARD OF ASSESSMENT APPEALS and CITY ASSESSOR OF PASAY. car washer. vs.R. L-50466 May 31. water pumps. elevated water tanks. they are already stopped from claiming otherwise. The city assessor described the said equipment and machinery in this manner: A gasoline service station is a piece of lot where a building or shed is erected. gasoline pumps.: This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. Private respondent contended that its characterization of the subject machinery as chattel in their agreement should not be appreciated against it because it had never represented nor agreed in such as it was merely required and dictated on by the petitioner to sign a chattel mortgage in blank form. J.

As to whether the subject properties are attached and affixed to the tenement. This is done to prevent conflagration because gasoline and other combustible oil are very inflammable. water pumps and underground tanks are outside of the service station. the underground gasoline tank. neon lights signboard. machines. It is stipulated in the lease contract that the operators. the elevated water tank. the car hoist under a separate shed. and evidence that the gasoline underground tank is attached and connected to the shed or building through the pipe to the pump and the pump is attached and affixed to the cement pad and pavement covered by the roof of the building or shed. . and to consider only the building as the service station is grossly erroneous. all of them used in the pursuance of the gasoline service station business formed the entire gasoline service-station. for the tenement we consider in this particular case are (is) the pavement covering the entire lot which was constructed by the owner of the gasoline station and the improvement which holds all the properties under question. depository of gasoline or crude oil.. Rollo). The pavement covering the entire lot of the gasoline service station. The footing of the pump is a cement pad and this cement pad is imbedded in the pavement under the shed. a few meters away from the shed. is dug deep about six feet more or less. they are attached and affixed to the pavement and to the improvement. so with the water tank it is connected also by a steel pipe to the pavement. upon demand.The controversial underground tank. concrete fence and pavement and the lot where they are all placed or erected. (pp. as well as all the improvements. The said machines and equipment are loaned by Caltex to gas station operators under an appropriate lease agreement or receipt. then to the electric motor which electric motor is placed under the shed. equipments and apparatus are allowed by Caltex (Philippines) Inc. So to say that the gasoline pumps.. it is clear they are. 58-60. The building or shed. shall . This underground tank is connected with a steel pipe to the gasoline pump and the gasoline pump is commonly placed or constructed under the shed. the air compressor. The underground gasoline tank is attached to the shed by the steel pipe to the pump.

denying Caltex's motion for reconsideration. Caltex retains the ownership thereof during the term of the lease. which was composed of Secretary of Finance Cesar Virata as chairman. When Republic act No. Acting Secretary of Justice Catalino Macaraig. The Board. The Solicitor General's contention that the Court of Tax Appeals has exclusive appellate jurisdiction over this case is not correct. 1979. held in its decision of June 3. therefore. and that the definitions of real property and personal property in articles 415 and 416 of the Civil Code are not applicable to this case. 1977 that the said machines and equipment are real property within the meaning of sections 3(k) & (m) and 38 of the Real Property Tax Code. On May 2. Section 7(3) of that law in providing that the Tax Court had jurisdiction to review by appeal decisions of provincial or city boards of assessment appeals had in mind the local boards of assessment appeals but not the Central Board of Assessment Appeals which under the Real Property Tax Code has appellate jurisdiction over decisions of the said local boards of assessment appeals and is. which took effect on June 1. 1978. The city board of tax appeals ruled that they are personalty. 1979 Caltex filed this certiorari petition wherein it prayed for the setting aside of the Board's decision and for a declaration that t he said machines and equipment are personal property not subject to realty tax (p. The decision was reiterated by the Board (Minister Vicente Abad Santos took Macaraig's place) in its resolution of January 12. Presidential Decree No. The lessor of the land. a copy of which was received by its lawyer on April 2.541. Jr. The city assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable realty. there was as yet no Central Board of Assessment Appeals. in the same category as the Tax Court. Rollo). 16. does not become the owner of the machines and equipment installed therein. The realty tax on said equipment amounts to P4. and Secretary of Local Government and Community Development Jose Roño. 52.10 annually (p. where the gas station is located.return to Caltex the machines and equipment in good condition as when received. . 1125 created the Tax Court in 1954. ordinary wear and tear excepted. 464. The assessor appealed to the Central Board of Assessment Appeals. 1974. Rollo).

Section 2 of the Assessment Law provides that the realty tax is due "on real property. machinery and other improvements affixed or attached to real property not hereinafter specifically exempted. m) Machinery — shall embrace machines. such as land. Consequently. a petition for reconsideration may be filed. beauty or utility or to adapt it for new or further purposes. including land. mechanical contrivances. . 38. industrial or agricultural purposes (See sec. This issue has to be resolved primarily under the provisions of the Assessment Law and the Real Property Tax Code. as well as the installations and appurtenant service facilities.Section 36 of the Real Property Tax Code provides that the decision of the Central Board of Assessment Appeals shall become final and executory after the lapse of fifteen days from the receipt of its decision by the appellant. instruments. Inc. machinery. and other improvements" not specifically exempted in section 3 thereof. amounting to more than mere repairs or replacement of waste. appliances and apparatus attached to the real estate. The Code does not provide for the review of the Board's decision by this Court. costing labor or capital and intended to enhance its value. The Code contains the following definitions in its section 3: k) Improvements — is a valuable addition made to property or an amelioration in its condition. Assessment Law). Within that fifteen-day period. 3[f]. This provision is reproduced with some modification in the Real Property Tax Code which provides: SEC. the only remedy available for seeking a review by this Court of the decision of the Central Board of Assessment Appeals is the special civil action of certiorari.— There shall be levied. The issue is whether the pieces of gas station equipment and machinery already enumerated are subject to realty tax. together with all other equipment designed for or essential to its manufacturing. buildings. assessed and collected in all provinces. Incidence of Real Property Tax. buildings. the recourse resorted to herein by Caltex (Philippines). cities and municipalities an annual ad valorem tax on real property. It includes the physical facilities available for production.

S. 44 Phil. 328. 70. Jaramillo. In the Davao Saw Mills case the question was whether the machinery mounted on foundations of cement and installed by the lessee on leased land should be regarded as real property for purposes of execution of a judgment against the lessee. Caltex invokes the rule that 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. 96 Phil. where Meralco's steel towers were considered poles within the meaning of paragraph 9 of its franchise which exempts its poles from taxation. for without them the gas station would be useless. are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. (Compare with Machinery & Engineering Supplies. 119 Phil.We hold that the said equipment and machinery. This question is different from the issue raised in the Davao Saw Mill case. 61 Phil 709). Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty (84 C. The sheriff treated the machinery as personal property. the question is whether the gas station equipment and machinery permanently affixed by Caltex to its gas station and pavement (which are indubitably taxable realty) should be subject to the realty tax. 633). Manila Electric Co. of New York vs. a usufructuary. or any person having only a temporary right. This Court sustained the sheriff's action. vs. Notes 40 and 41). That ruling is an interpretation of paragraph 5 of article 415 of the Civil Code regarding machinery that becomes real property by destination. Here. unless such person acted as the agent of the owner (Davao Saw Mill Co. The steel towers were considered personalty because they were attached to square metal frames by means of bolts and could be moved from place to place when unscrewed and dismantled.. . Inc. Court of Appeals.J. Castillo. This case is also easily distinguishable from Board of Assessment Appeals vs. "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" (Standard Oil Co. 181-2. 630. where in a replevin case machinery was treated as realty). and which have been attached or affixed permanently to the gas station site or embedded therein. as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station. vs.

CALTEX PHILS. De Castro and Escolin. water tanks. elevated water tanks. computing pumps. The Central Board of Assessment Appeals did not commit a grave abuse of discretion in upholding the city assessor's is imposition of the realty tax on Caltex's gas station and equipment. The petition for certiorari is dismissed for lack of merit. 501). Barredo (Chairman). CENTRAL BOARD OF ASSESSMENT APPEALS 114 SCRA 296 FACTS: The City Assessor characterized the items in gas stations of petitioner as taxable realty. JJ. WHEREFORE. Concepcion. the questioned decision and resolution of the Central Board of Assessment Appeals are affirmed. JJ. Upon expiration of the lease agreement. elevated tank. SO ORDERED. Guerrero. HELD: .. Jr. vs. gasoline pumps. V.. City Assessor. concur. 116 Phil. etc. the equipment should be returned in good condition. No costs. These items included underground tanks.Nor are Caltex's gas station equipment and machinery the same as tools and equipment in the repair shop of a bus company which were held to be personal property not subject to realty tax (Mindanao Bus Co. and Abad Santos. These items are not owned by the lessor of the land wherein the equipment are installed. took no part.

as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station. THE HON. are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. No. 630. Gasoline station equipments and machineries are permanent fixtures for purposes of realty taxation. FERNANDEZ.) Inc. 44 Phil. for without them the gas station would be useless. 181-2. San Juan. Notes 40 and 41).J.R. in his capacity as Executor of the Testate Estate of EPERIDION PRESBITERO. and which have been attached or affixed permanently to the gas station site or embedded therein.—We hold that the said equipment and machinery. 1982 Gasoline station equipments and machineries are subject to the real property tax. respondents. HELEN CARAM NAVA. the question is whether the gas station equipment and machinery permanently affixed by Caltex to its gas station and pavement (which are indubitably taxable realty) should be subject to the realty tax. 1963 RICARDO PRESBITERO.S. are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. vs. Africa and Benedicto and Hilado and Hilado for petitioner. Central Board of Assessment Appeals. “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” (Standard Oil Co. G. and the PROVINCIAL SHERIFF OF NEGROS OCCIDENTAL. for without them the gas station would be useless.— Here. of New York vs. L-19527 March 30. Jaramillo. 114 SCRA 296 . Caltex (Phil. Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty (84 C. vs. 633).The equipment and machinery as appurtenances to the gas station building or shed owned by Caltex and which fixtures are necessary to the operation of the gas station. May 31. and which have been attached and fixed permanently to the gas station site or embedded therein. petitioner. This question is different from the issue raised in the Davao Saw Mill case. JOSE F. .

sought in vain to amicably settle the case through petitioner's son. versus Esperidion Presbitero. J. in another friendly letter. 26-238. the sheriff levied upon and garnished the sugar quotas allotted to plantation audit Nos. 3492. plaintiff. reiterated his previous suggestion for an amicable settlement. as may be determined by the Court a quo upon evidence to be presented by the parties before it. in its Civil Case No. on June 21." Thereafter. June 10. When no response was forthcoming. 1959. and the court a quo ordered on June 9. which became final.. 26-237. Poblador. in a letter dated December 8. was a modification of a decision of the Court of First Instance of Negros Occidental. Cruz and Nazareno and Manuel Soriano for respondents.00. upon failure to do so. plaintiff's counsel. to execute in favor of the plaintiff. furnishing copies of the writ of execution and the notice of garnishment to the manager of the Ma-ao Sugar Central . a deed of reconveyance of Lot No. 26-239. It appears that during the lifetime of Esperidion Presbitero. . 788 of the cadastral survey of Valladolid.. to pay to the plaintiff the value of each of the said properties. but the same produced no fruitful result. On the following day. 26-240 and 26-241 adhered to the Ma-ao Mill District and "registered in the name of Esperidion Presbitero as the original plantation-owner". the issuance of a partial writ of execution for the sum of P12. said counsel.250.000.Paredes. REYES. judgment was rendered against him by the Court of Appeals on October 14. also free from all liens and encumbrances. Thereupon. 608 of the same cadastral survey. free from all liens and encumbrances. Ricardo Presbitero. No. said counsel asked for.L. J. 1959. 1960.00 by way of attorney's fees. entitled "Helen Caram Nava.: Petition for a writ of certiorari against the Court of First Instance of Negros Occidental. The defendant is further adjudged to pay to the plaintiff the value of the products received by him from the 5-hectare portion equivalent to 20 cavans of palay per hectare every year.R. and another deed of reconveyance of a 7-hectare portion of Lot No. 20879. at the rate of P10. plus costs. within 30 days from the time this judgment becomes final..B. defendant. 1960. and to pay to the plaintiff the sum of P1. from 1951 until possession of the said 5-hectare portion is finally delivered to the plaintiff with legal interest thereon from the time the complaint was filed. or. This judgment. 1960. or 125 cavans yearly.00 per cavan. in CA-G.

1960. and on the day following wrote the sheriff to proceed with the auction sale of the sugar quotas previously scheduled for November 5. and on November 4. and after some hearings. in an order dated August 27. a writ of execution for P17. and that the writs. in its order dated September 24. 1960. The sheriff issued the notice of auction sale on October 20. and. based on uncontradicted evidence previously adduced. Negros Occidental.00. and the court. to set aside the writs of execution. 1960 to declare the market value of the lots in question to be P2. In view thereof. and so plaintiff.00 for the 14 hectares of land at P2. T-28046 covering Lot 788. granted him twenty (20) days to finalize the survey of Lot 608. . Ricardo Presbitero. 1960. in Case No. Proceedings for the settlement of his estate were commenced in Special Proceedings No. occasionally protracted by postponements. 3492. and the Sugar Quota Administration at Bacolod City. 1960. could only be enforced as a money claim against his estate. 1960. moved the court for payment by the defendant of the sum of P35.00 per hectare. Plaintiff Helen Caram Nava (herein respondent) then moved the court. filed an urgent motion. as for real property. Because of Presbitero's failure to comply with this order within the time set forth by the court. 1960. Defendant again defaulted. but not the title covering Lot 608 because of an existing encumbrance in favor of the Philippine National Bank. 1960. 1960. On October 15. 1960 either to pay the value of the 14 hectares at the rate given or to deliver the clean titles of the lots. the trial court. 1960. and ordered him to execute a reconveyance of Lot 788 not later than August 31. Bago. gave the defendant until October 15. 1960.Company.500. on manifestation of defendant's willingness to cede the properties in litigation. 1960.500. 1960. death overtook the defendant Esperidion Presbitero. therefore. being for sums of money. on September 21. 1960. the special administrator. and to order the sheriff to desist from holding the auction sale on the grounds that the levy on the sugar quotas was invalid because the notice thereof was not registered with the Register of Deeds. But the court. On October 22. Helen Caram Nava moved for. the plaintiff again moved on August 25. 2936 of the Court of First Instance of Negros Occidental. acting on a prayer of defendant Presbitero. to hear evidence on the market value of the lots. but without presenting for registration copies thereof to the Register of Deeds. and to effect the final conveyance of the said portion of Lot 608 and the whole of Lot 788 free from any lien and encumbrance whatsoever. the defendant finally delivered Certificate of Title No.00 to the hectare.000. suspended the proceedings and ordered him to segregate the portion of Lot 608 pertaining to the plaintiff from the mass of properties belonging to the defendant within a period to expire on August 24. and secured on October 19. are unenforceable since Esperidion Presbitero died on October 22. on June 22.500.

On January 11.970. but this disclaimer cannot be seriously considered since it appears that he was sent a copy of the notice through the chief of police of Valladolid on June 21. thus. 1960. in relation with Section 7." . The petitioner denies having been personally served with notice of the garnishment of the sugar quotas. Rule 39. Rule 59.This urgent motion was heard on November 5. . and that she be directed to file the judgment credit in her favor in Civil Case No. and on May 8 and 23. 3492 as a money claim in the proceedings to settle the Estate of Esperidion Presbitero. 1962. but the auction sale proceeded on the same date. 1961. Squarely at issue in this case is whether sugar quotas are real (immovable) or personal properties. If they be realty. the latter filed on May 4. 1962. respectively. 1961. as certified to by the sheriff. Wherefore. . 1960. A preliminary restraining writ was thereafter issued by the court against the respondents from implementing the aforesaid orders of the respondent Judge. 1961 a supplement to his urgent motion.11. as shown by his motion of November 4. ending in the plaintiff's putting up the highest bid for P34. the court continued hearings on the motion. 1960. On November 10. then the levy upon them by the sheriff is null and void for lack of compliance with the procedure prescribed in Section 14. 1962. 1960 to set aside the writs of execution and to order the sheriff to desist from holding the auction sale. dated February 3. A motion for reconsideration by Presbitero was denied in a subsequent order under date of March 5. the sheriff sold 21. The court granted this motion in its order dated February 3. 1962. .640 piculs of sugar quota to her. of the Rules of Court requiring "the filing with the register of deeds a copy of the orders together with a description of the property . and ultimately denied it on November 18. 1960. plaintiff Nava filed her opposition to Presbitero's urgent motion of November 4. Presbitero instituted the present proceedings for certiorari. plaintiff Nava also filed an urgent motion to order the Ma-ao Sugar Central to register the sugar quotas in her name and to deliver the rentals of these quotas corresponding to the crop year 1960-61 and succeeding years to her. 1960 and March 5. and that he had actual knowledge of the garnishment. The petition further seeks the setting aside of the sheriff's certificate of sale of the sugar quotas made out in favor of Helen Caram Nava.

transferred apart from the plantations to which they are attached. limiting the production of unrefined sugar in the Philippines did not allocate the quotas for said unrefined sugar among lands planted to sugarcane but among "the sugar producing mills and plantation OWNERS". 1äwphï1. Respondent would add weight to her argument by invoking the role that sugar quotas play in our modern social and economic life. and are not one of those included in Article 415 of the Civil Code. and that Ricardo Presbitero had leased sugar quotas independently of the land. 6th Ed. without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 43). whose principal industry is sugar. 873. authorizes the lifting of sugar allotments from one land to another by means only of notarized deeds. they fall under the category of personal properties: ART.ñët Respondent likewise points to evidence she submitted that sugar quotas are. to transfer by sale.S. and for this reason Section 3 of Executive Order No. In general. in fact. and not being thus included. issued by Governor General Murphy. or otherwise. The following are deemed to be personal property: xxx xxx xxx 4. approved by the United States Congress in 1946. those here in question were not noted down in the certificate of title of the land to which they pertain. in fact.-Philippine Trade Relations Act. and cites that the Sugar Office does not require any registration with the Register of Deeds for the validity of the sale of these quotas. sugar quota allocations from one plantation to any other" and that it is "specious to insist that quotas are improvements attaching to one plantation when in truth and in fact they are no longer attached thereto for having been sold or leased away to be used in another plantation". or diminishing the potentiality of either quota or plantation. Wherefore. the respondent. without impairing.In contending that sugar quotas are personal property. She was sustained by the lower court when it stated that "it is a matter of public knowledge and it is universal practice in this province. the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court. destroying. 416. The respondent cites further that the U. and. . all things which can be transported from place to place without impairment of the real property to which they are fixed. lease. invoked the test formulated by Manresa (3 Manresa. Helen Caram Nava. and opined that sugar quotas can be carried from place to place without injury to the land to which they are attached.

they cannot stand against the positive mandate of the pertinent statute. just like servitudes and other real rights over an immovable. Act 4166. Thus.While respondent's arguments are thought-provoking. interest. And Executive Order No.. 74 Phil.. that the allotment is deemed an improvement attached to the land. as amended) provides — SEC. 873 defines "plantation" as follows: (a) The term 'plantation' means any specific area of land under sole or undivided ownership to which is attached an allotment of centrifugal sugar. participation. the sugar quota allocations are accessories to land. the sale would include the quotas.. title. 4. this Court held in the case of Abelarde vs.. though not physically so united. 1825 similarly provides — SEC. The allotment corresponding to each piece of land under the provisions of this Act shall be deemed to be an improvement attaching to the land entitled thereto .. 344. The Sugar Limitation Law (Act 4166. and can not have independent existence away from a plantation. and that at the time the contract of sale was signed the land devoted to sugar were practically of no use without the sugar allotment. names — . Indeed. The production allowance or quotas corresponding to each piece of land under the provisions of this Act shall be deemed to be an improvement attaching to the land entitled thereto .. and Republic Act No. the sugar quotas are inseparable therefrom. 9. it being provided in Section 9. Article 415 of the Civil Code. under express provisions of law. by express provision of law. As an improvement attached to land. action (and) rent" which the grantors had or might have in relation to the parcels of land sold. Lopez. although the latter may vary. in enumerating what are immovable properties. that even if a contract of sale of haciendas omitted "the right.

Neither is it necessary. gauged from the moment of actual levy. as the case presently stands. Makalintal. it is impertinent to discuss the survival or nonsurvival of claims after the death of the judgment debtor. J. because of its invalidity. since the lease or sale of quotas are voluntary transactions.. WHEREFORE. Suffice it to state that. or desirable. the writs of execution are not in question.10. nor the fact that allocation of unrefined sugar quotas is not made among lands planted to sugarcane but among "the sugar producing mills and plantation OWNERS". took no part. and the sheriff's certificate of sale of the sugar quotas in question declared null and void.J. did ask for desistance from holding the sale. Bengzon. . Public Law 371-79th Congress) allows transfers of sugar quotas does not militate against their immovability. Padilla. and there can exist no quota without there being first a corresponding plantation.S. but the levy on the quotas. is not necessarily identical to involuntary transfers or levies. the regime of which. and. Labrador. As to the remedial issue that the respondents have presented: that certiorari does not lie in this case because the petitioner had a remedy in the lower court to "suspend" the auction sale. 1960. Costs against respondent Nava.. C. (Emphasis supplied) It is by law. JJ. the preliminary injunction heretofore granted is hereby made permanent.. The fact that the Philippine Trade Act of 1946 (U. Since the levy is invalid for non-compliance with law. concur. Neither does the fact that the Sugar Quota Office does not require registration of sales of quotas with the Register of Deeds for their validity. Barrera. Article 416 of the Civil Code being made to apply only when the thing (res) sought to be classified is not included in Article 415. it may be stated that the latter's urgent motion of November 4. that these properties are immovable or real. to pass upon the conscionableness or unconscionableness of the amount produced in the auction sale as compared with the actual value of the quotas inasmuch as the sale must necessarily be also illegal. Dizon and Regala. the levy amount to no levy at all. but did not avail thereof. Paredes. and servitudes and other real rights over immovable property. and there cannot be a sugar plantation owner without land to which the quota is attached. a day before the scheduled sale (though unresolved by the court on time). therefore. Contracts for public works.

vs.8) Presbitero died after.2) Legal bases :a) The Sugar Limitation Lawxxx attaching to the land xxx (p 631)b) RA 1825xxx to be an improvement attaching to the land xxx (p 631)c) EO # 873"plantation" xxx to which is attached an allotment of centrifugal sugar.6) The court then ordered Presbitero to segregate the portion of Lot 608 pertaining to Nava from the mass of properties belonging to the defendant within a period to expire on August 1960. No. out of court. FERNANDEZ Facts:1) ESPERIDION Presbitero failed to furnish Nava the value of the properties under litigation. Assistant City Attorney Jaime R. . the estate administrator.9) RICARDO Presbitero. 1964 BOARD OF ASSESSMENT APPEALS.7) Bottom line.5) The sheriff was not able to present for registration thererof to the Registry of Deeds. the sugar quota allocations are accessories to the land. respondent. But to no avail. the sheriff levied upon and garnished the sugar quotas allotted to the plantation and adhered to the Ma-ao Mill District and registered in the name of Presbitero as the original plantation owner. Issue: W/N the sugar quotas are real (immovable) or personal properties. Presbitero did not meet his obligations. and cannot have independent existence away from a plantation.4) Since the levy is invalid for non-compliance with law. and the auction sale was scheduled. Agloro for petitioners. L-15334 January 31. xxx the levy amount to no levy at all.RICARDO PRESBITERO vs.3) Under the express provisions of law.R. G. then petitioned that the sheriff desist in holding the auction sale on the ground that the levy on the sugar quotas was invalid because the notice thereof was not registered with the Registry of Deeds. petitioners. CITY ASSESSOR and CITY TREASURER OF QUEZON CITY.4) Thereafter. Ross. Selph and Carrascoso for respondent. MANILA ELECTRIC COMPANY.3) Nava's counsel still tried to settle this case with Presbitero.2) Presbitero was ordered by the lower court to pay Nava to settle his debts. Held:1) They are real properties.

on land belonging to it. The findings were as follows: the ground around one of the four posts was excavated to a depth of about eight (8) feet. Quezon City. at the bottom of the post were two parallel steel bars attached to the leg means of bolts. the terms and conditions of which were embodied in Ordinance No. there was no concrete foundation but there was adobe stone underneath. became the transferee and owner of the franchise. heat and power system in the City of Manila and its suburbs to the person or persons making the most favorable bid. These electric transmission wires which carry high voltage current. 484 which authorized the Municipal Board of Manila to grant a franchise to construct. it could not be determined with certainty to whether said adobe stone was placed purposely or not. 1902. from its hydro-electric plant in the province of Laguna to the City of Manila. the tower proper was attached to the leg three bolts. as the place abounds with this kind of stone. 1903. Respondent Manila Electric Co. Charles M. as the bottom of the excavation was covered with water about three inches high. the ground around one of the four legs was excavate from seven to eight (8) feet deep and one and a half (1-½) meters wide. Three steel towers were inspected by the lower court and parties and the following were the descriptions given there of by said court: The first steel tower is located in South Tatalon. but there soft adobe beneath. and the tower carried five high voltage wires without cover or any insulating materials. 44 approved on March 24. As in the first tower. maintain and operate an electric street railway and electric light. (Meralco for short). España Extension. Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls. marked Annex A. The leg was likewise provided with two parallel steel bars . The respondent Meralco has constructed 40 of these steel towers within Quezon City. on land owned by the petitioner approximate more than one kilometer from the first tower. it was seen that there was no concrete foundation. The second tower inspected was located in Kamuning Road.: From the stipulation of facts and evidence adduced during the hearing. K-F. the Philippine Commission enacted Act No. Laguna and is transmitted to the City of Manila by means of electric transmission wires. with an opening of about one (1) meter in diameter.PAREDES. Swift was awarded the said franchise on March 1903. A photograph of one of these steel towers is attached to the petition for review. There being very little water at the bottom. J. running from the province of Laguna to the said City. decreased to about a quarter of a meter as it we deeper until it reached the bottom of the post. are fastened to insulators attached on steel towers constructed by respondent at intervals. the following appear: On October 20. Quezon City. with two cross metals to prevent mobility.

buildings. plant (not including poles. wires. earnings. In upholding the cause of respondents. franchise.86 as real property tax on the said steel towers for the years 1952 to 1956. transformers.651. 31992 and 15549. Respondent paid the amount under protest. looks like mud or clay. and poles. the tower could be dismantled and reassembled. and insulators).. 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. The grantee shall be liable to pay the same taxes upon its real estate. probably due to high humidity. The third tower examined is located along Kamias Road. income.. (2) the steel towers are personal properties and are not subject to real property tax.. and filed a petition for review in the Court of Tax Appeals (CTA for short) which rendered a decision on December 29.. and insulators of the grantee from which taxes and assessments the grantee . The tax exemption privilege of the petitioner is quoted hereunder: PAR 9. so that by unscrewing the bolts. Like the first one. petitioner City Assessor of Quezon City declared the aforesaid steel towers for real property tax under Tax declaration Nos. Quezon City. which. The motion for reconsideration having been denied. As in the first two towers given above. 1959. on April 22. It was also found that the square metal frame supporting the legs were not attached to any material or foundation. 1955. These are assigned as errors by the petitioner in the brief. 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. and (3) the City Treasurer of Quezon City is held responsible for the refund of the amount paid. On November 15.86. 1958. It was found that there was no concrete foundation. the instant petition for review was filed.bolted to a square metal frame also bolted to each corner. . an appeal was taken by respondent to the Board of Assessment Appeals of Quezon City. 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. After denying respondent's petition to cancel these declarations. the bottom arrangement of the legs thereof were found to be resting on soft adobe. and shall be in lieu of all taxes and assessments of whatsoever nature and by whatsoever authority upon the privileges.651. wires. Like the two previous ones. the second tower is made up of metal rods joined together by means of bolts. Said percentage shall be due and payable at the time stated in paragraph nineteen of Part One hereof. which required respondent to pay the amount of P11. transformers. machinery and personal property as other persons are or may be hereafter required by law to pay .

above quoted. In a proceeding to condemn land for the use of electric power wires. 32-A Words and Phrases. also by extension. and they denominated these supports or towers. a similar typically cylindrical piece or object of metal or the like". but the use to which they are dedicated.W. and poles of the PLDT Co. (Stemmons and Dallas Light Co. comparatively slender usually cylindrical piece of wood or timber. The term also refers to "an upright standard to the top of which something is affixed or by which something is supported. this term was construed to mean either wood or metal poles and in view of the land being subject to overflow. and it is well understood in that jurisdiction that a transmission tower or pole means the same thing. 1907.. and the necessary carrying of numerous wires and the distance between poles. as typically the stem of a small tree stripped of its branches. respondent's steel supports consists 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. which are made of two steel bars joined together by an interlacing metal rod. in the City of Manila. Act No. In accordance with the definitions. as electric poles. 9. It must be noted from paragraph 9. a tent pole. They are called "poles" notwithstanding the fact that they are no made of wood. nor the material or form of which it is made. is not determined by their place or location. 222. may be seen cylindrical metal poles. In their decisions the words "towers" and "poles" were used interchangeably. 224. The conclusion of the CTA that the steel supports in question are embraced in the term "poles" is not a novelty. nor by the character of the electric current it carries. As heretofore described. 484 Respondent's Franchise.is hereby expressly exempted. cubical concrete poles. that the concept of the "poles" for which exemption is granted. The steel supports or towers were made of iron or other metals consisting of two pieces running from the ground up some .) The word "pole" means "a long.) Along the streets. in which the law provided that wires shall be constructed upon suitable poles. sometimes. pole is not restricted to a long cylindrical piece of wood or metal. Several courts of last resort in the United States have called these steel supports "steel towers". but includes "upright standards to the top of which something is affixed or by which something is supported. 365. (Par. p.) The term "poles" was also used to denominate the steel supports or towers used by an association used to convey its electric power furnished to subscribers and members. emphasis supplied. Part Two. specifically a vessel's master (Webster's New International Dictionary 2nd Ed. constructed for the purpose of fastening high voltage and dangerous electric wires alongside public highways. as a dovecote set on a pole. (Tex) 212 S. p. the statute was interpreted to include towers or poles. telegraph poles.

It was held that in defining the word pole. that the word "poles". as to defeat the very object for which the franchise was granted. v. therefore. constructed like ladders and loaded with high voltage electricity. arms. Oxford. Bryan 252 P. The poles as contemplated thereon. 126 Atl. so that they can be subject to a real property tax. then one should admit that the Philippines is one century behind the age of space. being wider at the bottom than at the top. they are like the steel towers in question. Compton. and that regardless of the size or material wire of its individual members. the logical question posited is whether they constitute real properties. for the conveyance of electric current from the source thereof to its consumers. In form and structure. and other equipment capable of carrying wires for the transmission of electric power (Connecticut Light and Power Co. 8 P. 101 Conn. but Article 415 of the Civil Code does. but was considering the danger from any elevated wire carrying electric current. Granting for the purpose of argument that the steel supports or towers in question are not embraced within the term poles. In a case. by stating the following are immovable property: . It should also be conceded by now that steel towers.) The term "poles" was used to denote the steel towers of an electric company engaged in the generation of hydro-electric power generated from its plant to the Tower of Oxford and City of Waterbury. 249-250. The tax law does not provide for a definition of real property. and are embedded in the cement foundations sunk in the earth. 1).thirty feet high. (Salt River Valley Users' Ass'n v. can better effectuate the purpose for which the respondent's franchise was granted. 484 and incorporated in the petitioner's franchise. p. It is evident. 1016). or "rounded poles" as it used to do fifty years back. 2nd. These steel towers are about 15 feet square at the base and extended to a height of about 35 feet to a point. but claimed that the steel towers on which it is carried were so large that their wire took their structure out of the definition of a pole line. should not be given a restrictive and narrow interpretation. 383. v. should be understood and taken as a part of the electric power system of the respondent Meralco. the said two metal pieces being connected with criss-cross iron running from the bottom to the top. one should not be governed by the wire or material of the support used. as used in Act No. and to the towers are attached insulators. like the ones in question. 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. the top of which extends above the surface of the soil in the tower of Oxford. If the respondent would be required to employ "wooden poles". for obvious reasons. 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.

and they can be separated without breaking the material or causing deterioration upon the object to which they are attached.651. because they do not constitute buildings or constructions adhered to the soil. they are removable and merely attached to a square metal frame by means of bolts. for they are not machineries. receptacles. As per description. receptacles. in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object. xxx xxx xxx The steel towers or supports in question. which when unscrewed could easily be dismantled and moved from place to place. They can not be included under paragraph 3. and even if they were.(1) Land. given by the lower court. instruments or implements. Petitioner is not engaged in an industry or works in the land in which the steel supports or towers are constructed. xxx xxx xxx (5) Machinery. It is finally contended that the CTA erred in ordering the City Treasurer of Quezon City to refund the sum of P11. they are not intended for industry or works on the land. xxx xxx xxx (3) Everything attached to an immovable in a fixed manner. buildings. do not come within the objects mentioned in paragraph 1. roads. which can be disassembled by unscrewing the bolts and reassembled by screwing the same. joined together by means of bolts. It is argued that as the City . as they are not attached to an immovable in a fixed manner. and constructions of all kinds adhered to the soil. and which tends directly to meet the needs of the said industry or works. These steel towers or supports do not also fall under paragraph 5. 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. Each of these steel towers or supports consists of steel bars or metal strips. despite the fact that Quezon City is not a party to the case.86. They are not construction analogous to buildings nor adhering to the soil.

J. concurs in the result. an appeal was taken with the CTA which held that the steel towers come under the exception of “poles” under the franchise given to MERALCO. notwithstanding its capacity to sue and be sued.. therefore. took no part. The herein petitioner is indulging in legal technicalities and niceties which do not help him any. under the circumstances. Concepcion.. and. Dizon.. After denying the respondent’s petition to cancel these declarations. HELD: The steel towers of an electric company don’t constitute real property for the purposes of real property tax. it was he (City Treasurer) whom had insisted that respondent herein pay the real estate taxes. MANILA ELECTRIC COMPANY 10 SCRA 68 FACTS: City Assessor of QC declared the steel towers for real property tax under Tax Declarations. . the steel towers are personal properties. which respondent paid under protest. Makalintal. Labrador. C. Reyes. with costs against the petitioners. JJ. concur. J. Barrera and Regala. the decision appealed from is hereby affirmed. Having acted in his official capacity as City Treasurer of Quezon City.L. BOARD OF ASSESSMENT APPEALS V. Bengzon. This question has not been raised in the court below. but Quezon City. Bautista Angelo.Treasurer is not the real party in interest.J.. it cannot be properly raised for the first time on appeal. he should not be ordered to effect the refund.B. J. IN VIEW HEREOF. and the City Treasurer is liable for the refund of the amount paid. for factually. he would surely know what to do. Padilla. which was not a party to the suit..

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