Mindanao Bus Company v. City Assessor (Case Digest)

GR No. L-17870

Sep 29, 1962

TOPIC: INTRODUCTION AND PRELIMINARY CONSIDERATIONS

Facts:

The City Assessor of Cagayan de Oro City subjected Mindanao Bus Company’s maintenance and repair equipment to realty tax. The company is in the business of transporting passengers and cargoes by motor trucks over its authorized lines in the Island of Mindanao.

The machineries subjected to realty tax included a

• welder machine
• storm boring machine
• lathe machine
• decker grinder
• hydraulic press
• battery charger

The company owns the land where it maintains and operates a garage for its motor trucks, a repair shop, blacksmith and carpentry shops, and with these machineries which are placed therein, its trucks are made.

These machineries have never been or were never used as industrial equipment to produce finished products for sale, nor to repair machineries, parts and the like offered to the general public indiscriminately for business or commercial purposes for which petitioner has never engaged in.

Issue:

Are the machineries movable or immovable properties?

Ruling:

They are personal property.

These machines are not essential for the industry that the bus company was engaged in. They were merely accidental. The company’s business is transporting people or cargo from place to place, and these machines are not essential for that.

Article 415(5) of the Civil Code states that machineries are immovable if they “tend directly to meet the needs of the said industry or works.” This is not so in this case. In addition, the machineries were also mounted on platforms and can be moved around the repair shop.

More importantly, the provision also requires that the industry must be carried on in a building or on a piece of land. The machineries, therefore, cannot be deemed real properties.