4. Benguet Corp.

Vs CBAA  The petitioner does not dispute that the tailings dam may be considered realty within
GR NO. 106041 the meaning of Article 415. It insists, however, that the dam cannot be subjected to
Date promulgated realty tax as a separate and independent property because it does not constitute an
By: Race Del Rosario "assessable improvement" on the mine although a considerable sum may have been
Topic: Article 415 spent in constructing and maintaining it.
Petitioners: Benguet Corporation  The OSG, on the other hand, argues that the dam is an assessable improvement
Respondents: CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF ASSESSMENT because it enhances the value and utility of the mine. The primary function of the dam
APPEALS OF ZAMBALES, PROVINCIAL ASSESSOR OF ZAMBALES, PROVINCE OF ZAMBALES, is to receive, retain and hold the water coming from the operations of the mine, and it
and MUNICIPALITY OF SAN MARCELINO also enables the petitioner to impound water, which is then recycled for use in the
Ponente: J. Cruz plant.

ISSUE(s):
RECIT-READY SUMMARY:
W/N the tailings dam can be considered as a real property and is subject to realty tax
The Provincial Assessor of Zambales assessed the tailings dam belonging to the petitioner as
HELD/RATIO
taxable improvements. The petitioner, however, contends that the dam cannot be
subjected to realty tax because it does not constitute as an “assessable improvement”. The
Yes.
SC held that the definition of the tailings dam falls under Article 415 of the NCC which
means that it should be considered as a real property and is subject to realty tax.
 The Real Property Tax Code does not carry a definition of "real property" and simply
says that the realty tax is imposed on "real property, such as lands, buildings,
DOCTRINE: Article 415 defines which properties can be considered as an immovable
machinery and other improvements affixed or attached to real property." In the
property. Such properties are considered as real properties which means that they are
absence of such a definition, we apply Article 415 of the Civil Code, the pertinent
subject to realty tax.
portions of which state:
Art. 415. The following are immovable property.
FACTS:
(1) Lands, buildings and constructions of all kinds adhered to the soil;
(3) Everything attached to an immovable in a fixed manner, in such a way that it
 In 1985, the Provincial Assessor of Zambales assessed the tailings dam and the land
cannot be separated therefrom without breaking the material or deterioration
thereunder of the petitioner as taxable improvements which amounted
of the object.
P11,319,304.00.
 Section 2 of C.A. No. 470, otherwise known as the Assessment Law, provides that the
 Benguet Corp. appealed to the Board of Assessment Appeals but it was dismissed on
realty tax is due "on the real property, including land, buildings, machinery and other
the ground of the petitioner's "failure to pay the realty taxes that fell due during the
improvements" not specifically exempted in Section 3 thereof. A reading of that
pendency of the appeal."
section shows that the tailings dam of the petitioner does not fall under any of the
 The petitioner seasonably elevated the matter to the Central Board of Assessment
classes of exempt real properties therein enumerated.
Appeals,1 one of the respondents. The Board reversed the dismissal of the appeal but,
 The Court is convinced that the subject dam falls within the definition of an
on the merits, agreed that "the tailings dam and the lands submerged thereunder
"improvement" because it is permanent in character and it enhances both the value
(were) subject to realty tax." According to the board, its immovable nature as
and utility of petitioner's mine. Moreover, the immovable nature of the dam defines
described in paragraphs (a) and (b) of Article 415 of the New Civil Code determines its
its character as real property under Article 415 of the Civil Code and thus makes it
character as a real property. Furthermore, the tax exemption cannot be granted in the
taxable under Section 38 of the Real Property Tax Code.
absence of a law authorizing the same. The amount assessed was affirmed.