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Bacani Vs Nacoco

This case discusses whether the National Coconut Corporation (NACOCO) is considered a government entity. NACOCO was organized to promote the coconut industry, which is a function the government chose to exercise. However, NACOCO was given separate corporate powers from the government and can sue and be sued like other corporations. While NACOCO serves a ministrant government function, it has a distinct corporate existence governed by corporate law rather than being directly part of the government. The court ruled that NACOCO is not a government entity based on its separate corporate personality and governance under corporate law rather than as a direct arm of the government.

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Rowell Ian Gana-an
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571 views

Bacani Vs Nacoco

This case discusses whether the National Coconut Corporation (NACOCO) is considered a government entity. NACOCO was organized to promote the coconut industry, which is a function the government chose to exercise. However, NACOCO was given separate corporate powers from the government and can sue and be sued like other corporations. While NACOCO serves a ministrant government function, it has a distinct corporate existence governed by corporate law rather than being directly part of the government. The court ruled that NACOCO is not a government entity based on its separate corporate personality and governance under corporate law rather than as a direct arm of the government.

Uploaded by

Rowell Ian Gana-an
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BACANI VS NACOCO, 100 PHIL 471

Topic: Elements of a State; Ministrant vs Constituent Functions

FACTS OF THE CASE

Plaintiffs are court stenographers assigned in Branch VI of the Court of First Instance of Manila. Such
had a pending civil case entitled Francisco Sycip vs. NACOCO. Assistant Corporate Counsel Federico Alik-
pala, counsel for NACOCO, requested said stenographers for copies of the transcript of the stenographic
notes taken by them during the hearing. Plaintiffs complied with the request by delivering to Counsel
Alikpala the needed transcript containing 714 pages and thereafter submitted to him their bills for the
payment of their fees. The National Coconut Corporation paid the amount of P564 to Bacani and P150
to Matoto for said transcript at the rate of P1 per page.

Upon inspecting the books of this corporation, the Auditor General disallowed the payment of these fees
and sought the recovery of the amounts paid. On January 1953, the Auditor General required the Plain-
tiffs to reimburse said amounts on the strength of a circular of the Department of Justice wherein the
opinion was expressed that NACOCO, being a government entity, was exempt from the payment of the
fees in question. On Feb 1954, the Auditor General issued an order directing the Cashier of the DOJ to
deduct from the salary of Bacani the amount of P25 every payday and from the salary of Matoto the
amount of P10 every payday beginning March 30, 1954. To prevent deduction of these fees from their
salaries and secure a judicial ruling that the NACOCO is not a government entity within the purview of
section 16, Rule 130 of the Rules of Court, this action was instituted in the CFI of Manila.

ISSUES
Whether or not NACOCO is a government entity by virtue of its performance of government functions.

RULING

No. While NACOCO was organised with the purpose of adjusting the coconut industry to a position in-
dependent to trade preferences in the United States and of providing facilities for the better curing of
copra products and the proper utilisation of coconut by-products, a function which our government has
chosen to exercise to promote the coconut industry, it was given a corporate power separate and dis-
tinct from our government. It may sue and be sued in the same manner as any other corporations, and
in this sense it is a different entity from our government.

Our government functions are twofold: constitute and ministrant. The former are those which constitute
the very bonds of society and are compulsory in nature; the latter are those that are undertaken only by
way of advancing the general interests of society, and are merely optional. To this latter class belongs
the organization of those corporations owned or controlled by the government to promote certain as-
pects of the economic life of our people such as the National Coconut Corporation. These are what we
call government-owned or controlled corporations which may take on the form of a private enterprise
or one organized with powers and formal characteristics of a private corporation under the Corporation
Law. But while NACOCO was organized for the ministrant function of promoting 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.

“Government of the Republic of the Philippines" used in section 2 of the Revised Administrative Code
refers only to that government entity through which the functions of the government are exercised as
an attribute of sovereignty, and in this are included those arms through which political authority is made
effective whether they be provincial, municipal or other form of local government. These are what we
call municipal corporations. They do not include government entities which are given a corporate per-
sonality. separate and distinct from the government and 'which are governed by the Corporation Law.
Their powers, duties and liabilities have to be determined in the light of that law and of their corporate
charters.

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