Tsai vs.

Court of Appeals
Ruby Tsai vs. Court of Appeals, Ever Textile Mills, Inc. and Mamerto Villaluz
G.R. No. 120109, October 2, 2001
Quisumbing, J.
Doctrine: Nothing detracts the parties from treating it [the property that is immovable by nature as chattels to secure an
obligation under the principle of estoppel.
Facts: On November 26, 1975, respondent Ever Textile Mills, Inc. (EVERTEX) obtained a P3,000,000.00 loan from
Philippine Bank of Communications (PBCom). As security for the loan, EVERTEX executed in favor of PBCom, a deed
of Real and Chattel Mortgage over the lot where its factory stands and the chattels located therein as enumerated in a
schedule attached to the mortgage contract. PBCom granted a second loan of P3,356,000.00 to EVERTEX. The loan was
secured by a Chattel Mortgage over personal properties enumerated in a list attached thereto which were similar to those
listed in Annex A of the first mortgage deed.
After April 23, 1979, the date of the execution of the second mortgage, EVERTEX purchased various machines and
equipments. Then, due to business reverses, EVERTEX filed insolvency proceedings. The CFI issued an order declaring
the corporation insolvent. All its assets were taken into the custody of the Insolvency Court. In the meantime, upon
EVERTEXs failure to meet its obligation to PBCom, the latter commenced extrajudicial foreclosure proceedings against
EVERTEX. On December 15, 1982, the first public auction was held where petitioner PBCom emerged as the highest. On
December 23, 1982, another public auction was held and again, PBCom was the highest bidder. PBCom then leased the
entire factory premises to petitioner Ruby L. Tsai for P50,000.00 a month and subsequently sold the factory, lock, stock
and barrel to Tsai for P9,000,000.00, including the contested machineries.
On March 16, 1989, EVERTEX filed a complaint for annulment of sale, reconveyance, and damages with the Regional
Trial Court against PBCom, alleging that the extrajudicial foreclosure of subject mortgage was in violation of the
Insolvency Law. Further, EVERTEX averred that PBCom, without any legal or factual basis, appropriated the contested
properties, which were not included in the Real and Chattel Mortgage nor in the Chattel Mortgage and neither were those
properties included in the Notice of Sheriffs. The disputed properties, which were valued at P4,000,000.00, are: 14
Interlock Circular Knitting Machines, 1 Jet Drying Equipment, 1 Dryer Equipment, 1 Raisin Equipment and 1 Heatset
Equipment.
The trial court rendered in favor of EVERTEX. PBCom and Tsai appealed to the Court of Appeals which affirmed RTCs
decision. Their Motion for reconsideration was also denied. Thus, PBCom and Tsai filed their separate petitions for review
with this Court.
Issue: Whether the nature of the disputed machineries make them immovable under Article 415 (3) and (5) of the Civil
Code.
Held: No. Petitioners contend that the nature of the disputed machineries, i.e., that they were heavy, bolted or cemented on
the real property mortgaged by EVERTEX to PBCom, make them ipso facto immovable under Article 415 (3) and (5) of
the New Civil Code. This assertion, however, does not settle the issue. Mere nuts and bolts do not foreclose the
controversy. We have to look at the parties intent.
While it is true that the controverted properties appear to be immobile, a perusal of the contract of Real and Chattel
Mortgage executed by the parties herein gives us a contrary indication. In the case at bar, both the trial and the appellate
courts reached the same finding that the true intention of PBCOM and the owner, EVERTEX, is to treat machinery and
equipment as chattels. The pertinent portion of respondent appellate courts ruling is quoted below:
It should be noted that the printed form used by appellant bank was mainly for real estate mortgages. But reflective of the
true intention of appellant PBCOM and appellee EVERTEX was the typing in capital letters, immediately following the
printed caption of mortgage, of the phrase real and chattel. So also, the machineries and equipment in the printed form
of the bank had to be inserted in the blank space of the printed contract and connected with the word building by
typewritten slash marks. Now, then, if the machineries in question were contemplated to be included in the real estate
mortgage, there would have been no necessity to ink a chattel mortgage specifically mentioning as part III of Schedule A a
listing of the machineries covered thereby. It would have sufficed to list them as immovables in the Deed of Real Estate
Mortgage of the land and building involved.
Too, assuming arguendo that the properties in question are immovable by nature, nothing detracts the parties from treating
it as chattels to secure an obligation under the principle of estoppel. As far back as Navarro v. Pineda, 9 SCRA 631 (1963),
an immovable may be considered a personal property if there is a stipulation as when it is used as security in the payment
of an obligation where a chattel mortgage is executed over it, as in the case at bar.
In the instant case, the parties herein: (1) executed a contract styled as Real Estate Mortgage and Chattel Mortgage,
instead of just Real Estate Mortgage if indeed their intention is to treat all properties included therein as immovable, and
(2) attached to the said contract a separate LIST OF MACHINERIES & EQUIPMENT. These facts, taken together,
evince the conclusion that the parties intention is to treat these units of machinery as chattels. A fortiori, the contested
after-acquired properties, which are of the same description as the units enumerated under the title LIST OF
MACHINERIES & EQUIPMENT, must also be treated as chattels. And, since the disputed machineries were acquired in
1981 and could not have been involved in the 1975 or 1979 chattel mortgages, it was consequently an error on the part of
the Sheriff to include subject machineries with the properties enumerated in said chattel mortgages.
Board of Assessment Appeals QC
v MERALCO
Posted on June 22, 2013
Board of Assessment Appeals, Q.C. vs Meralco
10 SCRA 68
GR No. L-15334
January 31, 1964
FACTS
On November 15, 1955, the QC City Assessor declared the MERALCO's steel towers subject to real property tax.
After the denial of MERALCO's petition to cancel these declarations, an appeal was taken to the QC Board of
Assessment Appeals, which required respondent to pay P11,651.86 as real property tax on the said steel towers for
the years 1952 to 1956.
MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax Appeals (CTA) which
rendered a decision ordering the cancellation of the said tax declarations and the refunding to MERALCO by the QC
City Treasurer of P11,651.86.
ISSUE
Are the steel towers or poles of the MERALCO considered real or personal properties?
HELD
Pole long, comparatively slender, usually cylindrical piece of wood, timber, object of metal or the like; an upright
standard to the top of which something is affixed or by which something is supported.
MERALCO's steel supports consists of a framework of 4 steel bars/strips which are bound by steel cross-arms atop
of which are cross-arms supporting 5 high-voltage transmission wires, and their sole function is to support/carry
such wires. The exemption granted to poles as quoted from Part II, Par.9 of respondent's franchise is determined by
the use to which such poles are dedicated.
It is evident that the word poles, as used in Act No. 484 and incorporated in the petitioner's franchise, should not
be given a restrictive and narrow interpretation, as to defeat the very object for which the franchise was granted. The
poles should be taken and understood as part of MERALCO's electric power system for the conveyance of electric
current to its consumers.
Art. 415 of the NCC classifies the following as immovable property:
(1) Lands, buildings, roads and constructions of all kinds adhered to the soil;
xxx
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object;
xxx
(5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for an industry
ot works which may be carried on in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works;
Following these classifications, MERALCO's steel towers should be considered personal property. It should be
noted that the steel towers:
(a) are neither buildings or constructions adhered to the soil;
(b) are not attached to an immovable in a fixed manner they can be separated without breaking the material
or deterioration of the object;
are not machineries, receptacles or instruments, and even if they are, they are not intended for an industry
to be carried on in the premises.
Mindanao Bus Co. vs. City Assessor
Mindanao Bus Co. vs. City Assessor and Treasurer
G.R. No. L-17870. September 29, 1962.
Labrador, J.
Doctrine: Movable equipment, to be immobilized in contemplation of Article 415 of the Civil Code, must be the essential
and principal elements of an industry or works which are carried on in a building or on a piece of land. Thus, where the
business is one of transportation, which is carried on without a repair or service shop, and its rolling equipment is repaired
or serviced in a shop belonging to another, the tools and equipment in its repair shop which appear movable are merely
incidentals and may not be considered immovables , and, hence, not subject to assessment as real estate for purposes of the
real estate tax.
Facts: Respondent City Assessor of Cagayan de Oro City assessed at P4,400 petitioners equipment in its repair or service
shop. Petitioner appealed the assessment to the respondent Board of Tax Appeals on the ground that the same are not
realty. The Board of Tax Appeals of the City sustained the city assessor, so petitioner herein filed with the Court of Tax
Appeals a petition for the review of the assessment. The Court of Tax Appeals having sustained the respondent city
assessors ruling, and having denied a motion for reconsideration, petitioner brought the case to this Court.
Issue: Whether the Tax Court erred in its interpretation of paragraph 5 of Article 415 of the New Civil Code, and holding
that pursuant thereto, the movable equipments are taxable realties, by reason of their being intended or destined for use in
an industry.
Held: Yes. Movable equipments, to be immobilized in contemplation of Article 415 of the Civil Code, must be the
essential and principal elements of an industry or works which are carried on in a building or on a piece of land. Thus,
where the business is one of transportation, which is carried on without a repair or service shop, and its rolling equipment
is repaired or serviced in a shop belonging to another, the tools and equipments in its repair shop which appear movable
are merely incidentals and may not be considered immovables, and, hence, not subject to assessment as real estate for
purposes of the real estate tax.
Similarly, the tool and equipment in question in this instant case are, by their nature, not essential and principal elements
of petitioners business of transporting passengers and cargoes by motor trucks. They are merely incidentals acquired as
movables and used only for expediency to facilitate and/or improve its service. Even without such tools and equipment, its
business may be carried on, as petitioner has carried on without such equipments, before the war. The transportation
business could be carried on without the repair or service shop if its rolling equipment is repaired or serviced in another
shop belonging to another.
Article 415 of the Civil Code requires that the industry or works be carried on in a building or on a piece of land. But in
the case at bar the equipments in question are destined only to repair or service the transportation business, which is not
carried on in a building or permanently on a piece of land, as demanded by the law. Said equipment may not, therefore, be
deemed as real property.
Serg's v. PCI Leasing
Sergs Products, Inc. vs. PCI Leasing G.R. No. 137705. August 22, 2000

FACTS:
PCI Leasing and Finance filed a complaint for sum of money, with an application
for a writ of replevin.
Judge issued a writ of replevin directing its sheriff to seize and deliver the
machineries and equipment to PCI Leasing after 5 days and upon the payment of the
necessary expenses.
The sheriff proceeded to petitioner's factory, seized one machinery, with word
that he would return for other machineries.
Petitioner (Sergs Products) filed a motion for special protective order to defer
enforcement of the writ of replevin.
PCI Leasing opposed the motion on the ground that the properties were still
personal and therefore can still be subjected to seizure and writ of replevin.
Petitioner asserted that properties sought to be seized were immovable as
defined in Article 415 of the Civil Code.
Sheriff was still able to take possession of two more machineries
In its decision on the original action for certiorari filed by the Petitioner, the appellate
court, Citing the Agreement of the parties, held that the subject machines were personal
property, and that they had only been leased, not owned, by petitioners; and ruled that
the "words of the contract are clear and leave no doubt upon the true intention of the
contracting parties."

ISSUE: Whether or not the machineries became real property by virtue of
immobilization.

Ruling:
Petitioners contend that the subject machines used in their factory were not proper
subjects of the Writ issued by the RTC, because they were in fact real property.

Writ of Replevin: Rule 60 of the Rules of Court provides that writs of replevin are issued
for the recovery of personal property only.

Article 415 (5) of the Civil Code provides that machinery, receptacles, instruments or
implements intended by the owner of the tenement for an industry or works which may
be carried on in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works

In the present case, the machines that were the subjects of the Writ of Seizure were
placed by petitioners in the factory built on their own land.They were essential and
principal elements of their chocolate-making industry.Hence, although each of them was
movable or personal property on its own, all of them have become immobilized by
destination because they are essential and principal elements in the industry.

However, contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from
claiming otherwise.Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.

Section 12.1 of the Agreement between the parties provides The PROPERTY is, and
shall at all times be and remain, personal property notwithstanding that the PROPERTY
or any part thereof may now be, or hereafter become, in any manner affixed or attached
to or embedded in, or permanently resting upon, real property or any building thereon,
or attached in any manner to what is permanent.

The machines are personal property and they are proper subjects of the Writ of
Replevin
Fels Energy vs. Batangas
Fels Energy, Inc. vs. Province of Batangas
G.R. No. 168557. February 16, 2007.
Callejo Sr., J.
Doctrine: In Consolidated Edison Company of New York, Inc., et al. v. The City of New
York, et al., a power company brought an action to review property tax assessment. On
the citys motion to dismiss, the Supreme Court of New York held that the barges on
which were mounted gas turbine power plants designated to generate electrical power,
the fuel oil barges which supplied fuel oil to the power plant barges, and the accessory
equipment mounted on the barges were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that docks and structures
which, though floating, are intended by their nature and object to remain at a fixed place
on a river, lake, or coast are considered immovable property. Thus, power barges are
categorized as immovable property by destination, being in the nature of machinery and
other implements intended by the owner for an industry or work which may be carried on
in a building or on a piece of land and which tend directly to meet the needs of said
industry or work.
Facts: On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc.
over 330 MW diesel engine power barges moored at Balayan Bay in Calaca, Batangas.
The contract, denominated as an Energy Conversion Agreement, was for a period of five
years. Article 10 states that NPC shall be responsible for the payment of taxes. (other
than (i) taxes imposed or calculated on the basis of the net income of POLAR and
Personal Income Taxes of its employees and (ii) construction permit fees, environmental
permit fees and other similar fees and charges. Polar Energy then assigned its rights
under the Agreement to Fels despite NPCs initial opposition.
FELS received an assessment of real property taxes on the power barges from Provincial
Assessor Lauro C. Andaya of Batangas City. FELS referred the matter to NPC,
reminding it of its obligation under the Agreement to pay all real estate taxes. It then gave
NPC the full power and authority to represent it in any conference regarding the real
property assessment of the Provincial Assessor. NPC filed a petition with the LBAA. The
LBAA ordered Fels to pay the real estate taxes. The LBAA ruled that the power plant
facilities, while they may be classified as movable or personal property, are nevertheless
considered real property for taxation purposes because they are installed at a specific
location with a character of permanency. The LBAA also pointed out that the owner of
the bargesFELS, a private corporationis the one being taxed, not NPC. A mere
agreement making NPC responsible for the payment of all real estate taxes and
assessments will not justify the exemption of FELS; such a privilege can only be granted
to NPC and cannot be extended to FELS. Finally, the LBAA also ruled that the petition
was filed out of time.
Fels appealed to the CBAA. The CBAA reversed and ruled that the power barges belong
to NPC; since they are actually, directly and exclusively used by it, the power barges are
covered by the exemptions under Section 234(c) of R.A. No. 7160. As to the other
jurisdictional issue, the CBAA ruled that prescription did not preclude the NPC from
pursuing its claim for tax exemption in accordance with Section 206 of R.A. No. 7160.
Upon MR, the CBAA reversed itself.
Issue: Whether or not the petitioner may be assessed of real property taxes.
Held: YES. The CBAA and LBAA power barges are real property and are thus subject to
real property tax. This is also the inevitable conclusion, considering that G.R. No. 165113
was dismissed for failure to sufficiently show any reversible error. Tax assessments by
tax examiners are presumed correct and made in good faith, with the taxpayer having the
burden of proving otherwise. Besides, factual findings of administrative bodies, which
have acquired expertise in their field, are generally binding and conclusive upon the
Court; we will not assume to interfere with the sensible exercise of the judgment of men
especially trained in appraising property. Where the judicial mind is left in doubt, it is a
sound policy to leave the assessment undisturbed. We find no reason to depart from this
rule in this case.
In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et
al., a power company brought an action to review property tax assessment. On the citys
motion to dismiss, the Supreme Court of New York held that the barges on which were
mounted gas turbine power plants designated to generate electrical power, the fuel oil
barges which supplied fuel oil to the power plant barges, and the accessory equipment
mounted on the barges were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that docks and structures
which, though floating, are intended by their nature and object to remain at a fixed place
on a river, lake, or coast are considered immovable property. Thus, power barges are
categorized as immovable property by destination, being in the nature of machinery and
other implements intended by the owner for an industry or work which may be carried on
in a building or on a piece of land and which tend directly to meet the needs of said
industry or work.
Petitioners maintain nevertheless that the power barges are exempt from real estate tax
under Section 234 (c) of R.A. No. 7160 because they are actually, directly and
exclusively used by petitioner NPC, a government- owned and controlled corporation
engaged in the supply, generation, and transmission of electric power.
We affirm the findings of the LBAA and CBAA that the owner of the taxable properties
is petitioner FELS, which in fine, is the entity being taxed by the local government. As
stipulated under Section 2.11, Article 2 of the Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and all the
fixtures, fittings, machinery and equipment on the Site used in connection with the Power
Barges which have been supplied by it at its own cost. POLAR shall operate, manage and
maintain the Power Barges for the purpose of converting Fuel of NAPOCOR into
electricity.
It follows then that FELS cannot escape liability from the payment of realty taxes by
invoking its exemption in Section 234 (c) of R.A. No. 7160. Indeed, the law states that
the machinery must be actually, directly and exclusively used by the government owned
or controlled corporation; nevertheless, petitioner FELS still cannot find solace in this
provision because Section 5.5, Article 5 of the Agreement provides:
OPERATION. POLAR undertakes that until the end of the Lease Period, subject to the
supply of the necessary Fuel pursuant to Article 6 and to the other provisions hereof, it
will operate the Power Barges to convert such Fuel into electricity in accordance with
Part A of Article 7.
It is a basic rule that obligations arising from a contract have the force of law between the
parties. Not being contrary to law, morals, good customs, public order or public policy,
the parties to the contract are bound by its terms and conditions.
Time and again, the Supreme Court has stated that taxation is the rule and exemption is
the exception. The law does not look with favor on tax exemptions and the entity that
would seek to be thus privileged must justify it by words too plain to be mistaken and too
categorical to be misinterpreted. Thus, applying the rule of strict construction of laws
granting tax exemptions, and the rule that doubts should be resolved in favor of
provincial corporations, we hold that FELS is considered a taxable entity.
The mere undertaking of petitioner NPC under Section 10.1 of the Agreement, that it
shall be responsible for the payment of all real estate taxes and assessments, does not
justify the exemption. The privilege granted to petitioner NPC cannot be extended to
FELS. The covenant is between FELS and NPC and does not bind a third person not
privy thereto, in this case, the Province of Batangas.
It must be pointed out that the protracted and circuitous litigation has seriously resulted in
the local governments deprivation of revenues. The power to tax is an incident of
sovereignty and is unlimited in its magnitude, acknowledging in its very nature no
perimeter so that security against its abuse is to be found only in the responsibility of the
legislature which imposes the tax on the constituency who are to pay for it. The right of
local government units to collect taxes due must always be upheld to avoid severe tax
erosion. This consideration is consistent with the State policy to guarantee the autonomy
of local governments and the objective of the Local Government Code that they enjoy
genuine and meaningful local autonomy to empower them to achieve their fullest
development as self-reliant communities and make them effective partners in the
attainment of national goals.
In conclusion, we reiterate that the power to tax is the most potent instrument to raise the
needed revenues to finance and support myriad activities of the local government units
for the delivery of basic services essential to the promotion of the general welfare and the
enhancement of peace, progress, and prosperity of the people.
G.R. No. 168557 February 16, 2007
FELS ENERGY, INC., Petitioner,
vs.
THE PROVINCE OF BATANGAS and
THE OFFICE OF THE PROVINCIAL ASSESSOR OF BATANGAS, Respondents.
x----------------------------------------------------x
G.R. No. 170628 February 16, 2007
NATIONAL POWER CORPORATION, Petitioner,
vs.
LOCAL BOARD OF ASSESSMENT APPEALS OF BATANGAS, LAURO C. ANDAYA, in his
capacity as the Assessor of the Province of Batangas, and the PROVINCE OF BATANGAS
represented by its Provincial Assessor, Respondents.


FACTS:
1. NPC entered into a lease contract with Polar Energy, Inc. over 3x30 MW diesel engine
power barges moored at Balayan Bay in Calaca, Batangas. The contract, denominated as an
Energy Conversion Agreement
5
(Agreement), was for a period of five years.

2. Article 10 reads: NAPOCOR shall be responsible for the payment of (a) all taxes, import
duties, fees, charges and other levies imposed by the National Government of the Republic
of the Philippines or any agency or instrumentality thereof (b) all real estate taxes and
assessments, rates and other charges in respect of the Power Barges.
6


3. Subsequently, Polar Energy, Inc. assigned its rights under the Agreement to FELS. FELS
received an assessment of real property taxes on the power barges from Provincial Assessor
of Batangas City.

4. FELS referred the matter to NPC, reminding it of its obligation under the Agreement to pay
all real estate taxes.

5. NPC sought reconsideration of the Provincial Assessors,which motion was denied.Hence,
NPC filed a petition with the Local Board of Assessment Appeals (LBAA) for the setting
aside of the assessment and the declaration of the barges as non-taxable items;

LBAA ruling:
the owner of the bargesFELS, a private corporationis the one being taxed, not NPC. A
mere agreement making NPC responsible for the payment of all real estate taxes and
assessments will not justify the exemption of FELS; such a privilege can only be granted
to NPC and cannot be extended to FELS.

6. Aggrieved, FELS appealed the LBAAs ruling to the Central Board of Assessment Appeals
(CBAA).

CBAA ruling:
Initiall, it ruled that the power barges exempt from real property tax. The CBAA reasoned
that the power barges belong to NPC; since they are actually, directly and exclusively
used by it, the power barges are covered by the exemptions

In a complete volte face, the CBAA issued a Resolution reversing its earlier decision.
Affirming the real property tax assessment on FELS.

7. FELS filed a petition for review before the CA
CA ruling:
Denied or lack of merit. Affirmed the assessment.
Petition filed out of time.

Issues:

1. WON, petition was filed out of time. YES.

2. Whether power barges, which are floating and movable, are personal properties and therefore,
not subject to real property tax. THEY ARE REAL PROPERTY.

3. If power barges are real properties, whether they are exempt from real estate tax under Section
234 of the Local Government Code (LGC) being used by NPC. NO.



HELD:
Petitioners contentions are bereft of merit.

1. Petition was filed out of time.
Section 226 of R.A. No. 7160, otherwise known as the Local Government Code of 1991,
provides:
SECTION 226. LBAA - Any owner or person having legal interest in the property who is not
satisfied with the action of the provincial, city or municipal assessor may, within sixty (60)
days from the date of receipt of the written notice of assessment, appeal to the Board of
Assessment Appeals of the province or city.
Instead of appealing to the Board of Assessment Appeals (as stated in the notice),
NPC opted to file a motion for reconsideration of the Provincial Assessors decision, a
remedy not sanctioned by law.
The remedy of appeal to the LBAA is available from an adverse ruling or action of the
provincial, city or municipal assessor in the assessment of the property. It follows then that
the determination made by the respondent Provincial Assessor with regard to the taxability of
the subject real properties falls within its power to assess properties for taxation purposes
subject to appeal before the LBAA.
33

2. Power barges are real property.
Power barges are real property and are thus subject to real property tax
Article 415 (9) of the New Civil Code provides that "[d]ocks and structures which, though
floating, are intended by their nature and object to remain at a fixed place on a river,
lake, or coast" are considered immovable property.
Thus, power barges are categorized as immovable property by destination, being in the
nature of machinery and other implements intended by the owner for an industry or work
which may be carried on in a building or on a piece of land and which tend directly to meet
the needs of said industry or work.
51

3. They are not exempt even if used exclusively by NPC.
We affirm the findings of the LBAA and CBAA that the owner of the taxable properties is
petitioner FELS, which in fine, is the entity being taxed by the local government. As
stipulated under Section 2.11, Article 2 of the Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and all the
fixtures, fittings, machinery and equipment on the Site used in connection with the Power
Barges which have been supplied by it at its own cost. POLAR shall operate, manage and
maintain the Power Barges for the purpose of converting Fuel of NAPOCOR into electricity.
52

It follows then that FELS cannot escape liability from the payment of realty taxes by invoking
its exemption in Section 234 (c) of R.A. No. 7160, which reads:
WHEREFORE, the Petitions are DENIED and the assailed Decisions and Resolutions AFFIRMED.