Bacani vs NACOCO

G.R. No. 132244 - Sept 14, 1999

Topic: Government - Constituent and Ministrant and Functions of the Government

EN BANC
[G.R. No. L-9657. November 29, 1956.]
LEOPOLDO T. BACANI and MATEO A. MATOTO, ​Plaintiffs​-​Appellees​, vs. NATIONAL COCONUT
CORPORATION, ET AL., ​Defendants​, NATIONAL COCONUT CORPORATION and BOARD OF
LIQUIDATORS, ​Defendants​-​Appellants​.

FACTS
- Plaintiffs are court stenographers assigned in Branch VI of the Court of First Instance of Manila.
- Counsel for defendant requested for copies of the transcript of stenographic notes taken during the hearing.
- Plaintiffs complied with request by delivering a transcript containing 714 pages. The National Coconut
Corporation paid the amount of 564 pesos to Leopoldo Bacani and 150 pesos to Mateo Matoto for the said
transcript at 1 peso per page.
- Auditor General disallowed the payment upon inspecting the books of the corporation.
- January 19, 1953 - the Auditor General required the plaintiffs to reimburse said amounts since the National
Coconut Corporation is a government entity, and should thus be exempt from payment.
- February 6, 1954 - Auditor General issued an order directing the Cashier of the Department of the
Department of Justice to deduct from the salary of Leopold T. Bacani an amount of 25 pesos every payday,
and 10 pesos from the salary of Mateo Matoto beginning March 30, 1954.
- An action was instituted to the Court of First Instance of Manila to prevent deduction of these fees from their
salaries and secure a judicial ruling that NACOCO is NOT a government entity within the purview of Sec. 16
Rule 130 of the Rules of Court.
- According to defendants, NACOCO is a government entity within the purview of Sec 2 of the Revised
Administration of 1917 and hence it is exempt from paying the stenographers’ fee under Rule 130 of the
Rules of Court.
- Court found for the plaintiffs declaring
- NACOCO is not a government entity(Sec. 16, Rule 130 of the Rules of Court)
- Payments already made by defendant to plaintiffs and received are valid, just, and legal.
- Plaintiffs are under no obligation to make a refund of these payments already received by them
- Under Sec 16., Rule 130 of the Rules of Court
- the Government of the Philippines is exempt from paying the legal fees provided for therein, and
among these fees are those 2/5 which stenographers may charge for the transcript of notes taken
by them that may be requested by any interested person (section 8). The fees in question are for
the transcript of notes taken during the hearing of an ease in which the National Coconut
Corporation is interested, and the transcript was requested by its assistant corporate counsel for
the use of said corporation.
- On the other hand, section 2 of the Revised Administrative Code defines the scope of the term "Government
of the Republic of the Philippines" as follows:
- " 'The Government of the Philippine Islands' is a term which refers to the corporate governmental
entity through which the functions of government are exercised throughout the Philippine Islands,
including, save as the contrary appears from the context, the various areas through which political
 authority is made effective in said Islands, whether pertaining to the Central Government or to the
provincial or. municipal branches or other form of local government."
ISSUES

1. W/N the National Coconut Corporation may be considered as included in the term “Government of the Republic of
the Philippines” for the purpose of the exemption of the legal fees provided for in Rule 130 of the Rules of Court. - NO
Court’s holding:
- “Government of the Republic of the Philippines” - "Government of the Republic of the Philippines" refers to a
government entity through which the functions of government are exercised, including the various arms
through which political authority is made effective in the Philippines, whether pertaining to the central
government or to the provincial or municipal branches or other form of local government.
- “Government” - "that institution or aggregate of institutions by which an independent society makes
and carries out those rules of action which are necessary to enable men to live in a social state, or
which are imposed upon the people forming that society by those who possess the power or
authority of prescribing them" (U.S. vs. Dorr, 2 Phil., 332).
- Functions of government: constitute (constitute the very bonds of society and are compulsory in
nature) and ministrant (undertaken only by way of advancing the general interests of society, and
are merely optional)
- The organization of corporations owned or controlled by the government to promote certain aspects
of the economic life of our people such as the National Coconut Corporation fall under the
ministrant functions of the government.
- Does the fact that these corporations perform certain functions of government make them a part of the
Government of the Philippines? NO.
- They do not acquire this status for the simple reason that they do not come under the classification
of municipal or public corporation.
- NACOCO: While it was organized with the purpose of "adjusting the coconut industry to a position
independent of trade preferences in the United States" and of providing "Facilities for the better
curing of copra products and the proper utilization of coconut by products", a function which our
government has chosen to exercise to promote the coconut industry, however, it was given a
corporate power separate and distinct from our government, for it was made subject to the
provisions of our Corporation Law in so far as its corporate existence and the powers that it may
exercise are concerned (sections 2 and 4, Commonwealth Act No. 518).
- ERGO, it can sue and be sued in the same manner as any other private corporations, thus making
it a different entity from our government.
- Government as major stockholder =/= public corporation
- NACOCO does not fall under the government entities described under section 2 of the RAC. Exemption
Clause prescribed in Sec 16, Rule 130 of the Rules of Court does not apply.
- Government entities which are given a corporate personality separate and distinct from the government are
governed by the Corporation Law.
- Under Sec. 3 Rule 140, stenographers can only charge 0.30 pesos per page before appeal is taken, and
0.15 pesos per page after the filing, but NACOCO has agreed and paid 1 peso per page for the services
without raising any sort of objection.
- Payment of the fees in question became contractual and valid even if it goes beyond the limit prescribed in
Sec. 8 Rule 130 of the Rules of Court.
- Question of procedure is insubstantial as the case refers to an action of prohibition to restain officials
concerned from deduction from the plaintiff’s salaries, and not the money claim disapproved by the Auditor
General.
RULING
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.