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7/15/2019 [G.R. No. L-9657. November 29, 1956.] LEOPOLDO T. BACANI and MATEO A. MATOTO, Plaintiffs-Appellees, vs.

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Philippine Supreme Court Jurisprudence > Year 1956 > November 1956 Decisions > [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.:

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EN BANC
ChanRobles On-Line Bar Review [G.R. No. L-9657. November 29, 1956.]
LEOPOLDO T. BACANI and MATEO A. MATOTO, Plain ffs-Appellees, vs. NATIONAL COCONUT
CORPORATION, ET AL., Defendants, NATIONAL COCONUT CORPORATION and BOARD OF
LIQUIDATORS, Defendants-Appellants.

DECISION
BAUTISTA ANGELO, J.:
Plain ffs herein are court stenographers assigned in Branch VI of the Court of First Instance of
Manila. During the pendency of Civil Case No. 2293 of said court, en tled Francisco Sycip vs.
Na onal Coconut Corpora on, Assistant Corporate Counsel Federico Alikpala, counsel for
Defendant, requested said stenographers for copies of the transcript of the stenographic notes
taken by them during the hearing. Plain ffs complied with the request by delivering to Counsel
Alikpala the needed transcript containing 714 pages and therea er submi ed to him their bills for
the payment of their fees. The Na onal Coconut Corpora on paid the amount of P564 to Leopoldo
T. Bacani and P150 to Mateo A. Matoto for said transcript at the rate of P1 per page.
Upon inspec ng the books of this corpora on, the Auditor General disallowed the payment of
these fees and sought the recovery of the amounts paid. On January 19, 1953, the Auditor General
required the Plain ffs to reimburse said amounts on the strength of a circular of the Department
of Jus ce wherein the opinion was expressed that the Na onal Coconut Corpora on, being a
DebtKollect Company, Inc. government en ty, was exempt from the payment of the fees in ques on. On February 6, 1954,
the Auditor General issued an order direc ng the Cashier of the Department of Jus ce to deduct
from the salary of Leopoldo T. Bacani the amount of P25 every payday and from the salary of
Mateo A. Matoto the amount of P10 every payday beginning March 30, 1954. To prevent
deduc on of these fees from their salaries and secure a judicial ruling that the Na onal Coconut
Corpora on is not a government en ty within the purview of sec on 16, Rule 130 of the Rules of
Court, this ac on was ins tuted in the Court of First Instance of Manila.
Defendants set up as a defense that the Na onal Coconut Corpora on is a government en ty
within the purview of sec on 2 of the Revised Administra ve Code of 1917 and, hence, it is
exempt from paying the stenographers’ fees under Rule 130 of the Rules of Court. A er trial, the
court found for the Plain ffs declaring (1) “that Defendant Na onal Coconut Corpora on is not a
government en ty within the purview of sec on 16, Rule 130 of the Rules of Court; (2) that the chan roblesvirtualawlibrary

payments already made by said Defendant to Plain ffs herein and received by the la er from the
former in the total amount of P714, for copies of the stenographic transcripts in ques on, are
valid, just and legal; and (3) that Plain ffs are under no obliga on whatsoever to make a refund
chan roblesvirtualawlibrary

of these payments already received by them.” This is an appeal from said decision.
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7/15/2019 [G.R. No. L-9657. November 29, 1956.] LEOPOLDO T. BACANI and MATEO A. MATOTO, Plaintiffs-Appellees, vs. NATIONAL COCONU…
ChanRobles Intellectual Property Under sec on 16, Rule 130 of the Rules of Court, the Government of the Philippines is exempt
Division from paying the legal fees provided for therein, and among these fees are those which
stenographers may charge for the transcript of notes taken by them that may be requested by any
interested person (sec on 8). The fees in ques on are for the transcript of notes taken during the
hearing of a case in which the Na onal Coconut Corpora on is interested, and the transcript was
requested by its assistant corporate counsel for the use of said corpora on.
On the other hand, sec on 2 of the Revised Administra ve Code defines the scope of the term
“Government of the Republic of the Philippines” as follows: chanroblesvirtuallawlibrary

“‘The Government of the Philippine Islands’ is a term which refers to the corporate governmental
en ty through which the func ons of government are exercised throughout the Philippine Islands,
including, save as the contrary appears from the context, the various arms through which poli cal
authority is made effec ve in said Islands, whether pertaining to the central Government or to the
provincial or municipal branches or other form of local government.”
The ques on now to be determined is whether the Na onal Coconut Corpora on may be
considered as included in the term “Government of the Republic of the Philippines” for the
purposes of the exemp on of the legal fees provided for in Rule 130 of the Rules of Court.
As may be noted, the term “Government of the Republic of the Philippines” refers to a
government en ty through which the func ons of government are exercised, including the various
arms through which poli cal authority is made effec ve in the Philippines, whether pertaining to
the central government or to the provincial or municipal branches or other form of local
government. This requires a li le digression on the nature and func ons of our government as
ins tuted in our Cons tu on.
To begin with, we state that the term “Government” may be defined as “that ins tu on or
aggregate of ins tu ons by which an independent society makes and carries out those rules of
ac on 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). This ins tu on, when referring to the na onal government, has
November-1956 reference to what our Cons tu on has established composed of three great departments, the
Jurisprudence                  legisla ve, execu ve, and the judicial, through which the powers and func ons of government are
exercised. These func ons are twofold: cons tute and ministrant. The former are those which
[G.R. No. L-9123. November 7, 1956.] THE PEOPLE
chanroblesvirtuallawlibrary

OF THE PHILIPPINES, Plaintiff-Appellee, vs. cons tute the very bonds of society and are compulsory in nature; the la er are those that are chan roblesvirtualawlibrary

CORNELIO MELGAR, Defendant-Appellant. undertaken only by way of advancing the general interests of society, and are merely op onal.
[G.R. No. L-9023. November 13, 1956.] BISLIG BAY President Wilson enumerates the cons tuent func ons as follows: chanroblesvirtuallawlibrary

LUMBER COMPANY. INC., Plaintiff-Appellee, vs. THE


PROVINCIAL GOVERNMENT OF SURIGAO, Defendant- “‘(1) The keeping of order and providing for the protec on of persons and property from violence
Appellant.
and robbery.
[G.R. Nos. L-9238-39. November 13, 1956.] THE
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, vs. ‘(2) The fixing of the legal rela ons between man and wife and between parents and children.
VICTORIO JABAJAB, accused-Appellee.
‘(3) The regula on of the holding, transmission, and interchange of property, and the
[G.R. No. L-10128. November 13, 1956.] MAMERTO determina on of its liabili es for debt or for crime.
C. CORRE, Plaintiff-Appellant, vs. GUADALUPE TAN
CORRE, Defendant-Appellee.
‘(4) The determina on of contract rights between individuals.
[G.R. No. L-9523. November 15, 1956.] GALICANO
E. YAP, Plaintiff-Appellant, vs. FRANCISCO BOLTRON, ‘(5) The defini on and punishment of crime.
ET AL., Defendants-Appellees.
‘(6) The administra on of jus ce in civil cases.
[G.R. No. L-9202. November 19, 1956.] THE
COLLECTOR OF INTERNAL REVENUE, Petitioner, vs. ‘(7) The determina on of the poli cal du es, privileges, and rela ons of ci zens.
JOSE AVELINO and COURT OF TAX APPEALS,
Respondents. ‘(8) Dealings of the state with foreign powers: the preserva on of the state from external chanroblesvirtuallawlibrary

[G.R. No. L-8717. November 20, 1956.] GENERAL danger or encroachment and the advancement of its interna onal interests.’“ (Malcolm, The
FOODS CORPORATION, Plaintiff-Appellant, vs. Government of the Philippine Islands, p. 19.)
NATIONAL COCONUT CORPORATION, Defendant-
Appellee. The most important of the ministrant func ons are: public works, public educa on, public chanroblesvirtuallawlibrary

[G.R. No. L-8774. November 26, 1956.] In the charity, health and safety regula ons, and regula ons of trade and industry. The principles deter
matter of the testate estate of the deceased JUANA mining whether or not a government shall exercise certain of these op onal func ons are: (1)
JUAN VDA. DE MOLO. EMILIANA MOLO-PECKSON and
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PILAR PEREZ-NABLE, Petitioners-Appellees, vs. that a government should do for the public welfare those things which private capital would not
ENRIQUE TANCHUCO, FAUSTINO GOMEZ, ET AL., naturally undertake and (2) that a government should do these things which by its very nature it is
Oppositors-Appellants.
be er equipped to administer for the public welfare than is any private individual or group of
[G.R. No. L-9098. November 26, 1956.] A. individuals. (Malcolm, The Government of the Philippine Islands, pp. 19-20.)
MAGSAYSAY, INC., Plaintiff-Appellee, vs. CEBU
PORTLAND CEMENT CO., Defendant-Appellant.
From the above we may infer that, strictly speaking, there are func ons which our government is
[G.R. No. L-9551. November 26, 1956.] THE required to exercise to promote its objec ves as expressed in our Cons tu on and which are
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, vs.
ALEJANDRO PAET Y VELASCO, Defendant-Appellee.
exercised by it as an a ribute of sovereignty, and those which it may exercise to promote merely
the welfare, progress and prosperity of the people. To this la er class belongs the organiza on of
[G.R. No. L-9627. November 26, 1956.]
MARGARITA ABARCA VASQUEZ, assisted by her
those corpora ons owned or controlled by the government to promote certain aspects of the
husband, GUIDO N. VASQUEZ, Plaintiffs-Appellees, vs. economic life of our people such as the Na onal Coconut Corpora on. These are what we call
ISIDORA LANDRITO MESAGAL, assisted by her
husband, VENTURA MESAGAL, Defendants-Appellants.
government-owned or controlled corpora ons which may take on the form of a private enterprise
or one organized with powers and formal characteris cs of a private corpora ons under the
[G.R. No. L-7644. November 27, 1956.] HENRY
LITAM, ETC., ET AL., Plaintiffs-Appellants, vs.
Corpora on Law.
REMEDIOS R. ESPIRITU, as guardian of the
incompetent MARCOSA RIVERA, and ARMINIO The ques on that now arises is: Does the fact that these corpora on perform certain func ons
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RIVERA, Defendants-Appellees. [G.R. No. L-7645. of government make them a part of the Government of the Philippines?
November 27, 1956] IN THE MATTER OF THE
INTESTATE OF THE DECEASED RAFAEL LITAM. The answer is simple: they do not acquire that status for the simple reason that they do not
GREGORIO DY TAM, Petitioner-Appellant, vs.
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REMEDIOS R. ESPIRITU, in her capacity as judicial come under the classifica on of municipal or public corpora on. Take for instance the Na onal
guardian of the incompetent MARCOSA RIVERA, Coconut Corpora on. While it was organized with the purpose of “adjus ng the coconut industry

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7/15/2019 [G.R. No. L-9657. November 29, 1956.] LEOPOLDO T. BACANI and MATEO A. MATOTO, Plaintiffs-Appellees, vs. NATIONAL COCONU…
counter-Petitioner, ARMINIO RIVERA, administrator- to a posi on independent of trade preferences in the United States” and of providing “Facili es for
Appellee.
the be er curing of copra products and the proper u liza on of coconut by-products”, a func on
[G.R. No. L-9709. November 27, 1956.] which our government has chosen to exercise to promote the coconut industry, however, it was
CONCEPCION R. LIM DE PLANAS and ILUMINADO
PLANAS, Plaintiffs-Appellants, vs. RICARDO L. given a corporate power separate and dis nct from our government, for it was made subject to
CASTELLO, Defendant-Appellee. the provisions of our Corpora on Law in so far as its corporate existence and the powers that it
[G.R. No. L-10060. November 27, 1956.] MARIA S. may exercise are concerned (sec ons 2 and 4, Commonwealth Act No. 518). It may sue and be
PASCUAL, Plaintiff-Appellee, vs. JOSE LACSAMANA, sued in the same manner as any other private corpora ons, and in this sense it is an en ty
Defendant-Appellant.
different from our government. As this Court has aptly said, “The mere fact that the Government
[G.R. No. L-7617. November 28, 1956.] THE happens to be a majority stockholder does not make it a public corpora on” (Na onal Coal Co. vs.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs.
PELAGIO G. YANGA, Defendant-Appellant. Collector of Internal Revenue, 46 Phil., 586-587). “By becoming a stockholder in the Na onal Coal
Company, the Government divested itself of its sovereign character so far as respects the
[G.R. No. L-8437. November 28, 1956.] ESTATE OF
K. H. HEMADY, deceased, vs. LUZON SURETY CO., transac ons of the corpora on . Unlike the Government, the corpora on may be sued without its
cralaw

INC., claimant-Appellant. consent, and is subject to taxa on. Yet the Na onal Coal Company remains an agency or
[G.R. No. L-8940. November 28, 1956.] CAPITAL instrumentality of government.” (Government of the Philippine Islands vs. Springer, 50 Phil., 288.)
INSURANCE & SURETY COMPANY, INC., Plaintiff-
Appellee, vs. JOE EBERLY, Defendant-Appellant. To recapitulate, we may men on that the term “Government of the Republic of the Philippines”
[G.R. No. L-8961. November 28, 1956.] ALTO
used in sec on 2 of the Revised Administra ve Code refers only to that government en ty through
SURETY & INSURANCE CO., INC., Plaintiff-Appellant, which the func ons of the government are exercised as an a ribute of sovereignty, and in this are
vs. ALEJANDRO ANDAN, UY SIOK KIAO, TAN LEE and
QUIEN TONG, Defendants-Appellees.
included those arms through which poli cal authority is made effec ve whether they be
provincial, municipal or other form of local government. These are what we call municipal
[G.R. Nos. L-9391-9392. November 28, 1956.] RIO
Y COMPAÑIA (Succesor of Rio y Olabarrieta),
corpora ons. They do not include government en es which are given a corporate personality
Plaintiff-Appellant, vs. VICENTE SANDOVAL, MARIA R. separate and dis nct from the government and which are governed by the Corpora on Law. Their
DE SANDOVAL, and RAFAEL R. SANDOVAL,
Defendants-Appellees.
powers, du es and liabili es have to be determined in the light of that law and of their corporate
charters. They do not therefore come within the exemp on clause prescribed in sec on 16, Rule
[G.R. No. L-9476. November 28, 1956.] G.
ASSANMAL, Petitioner, vs. UNIVERSAL TRADING CO.,
130 of our Rules of Court.
INC., Respondent.
“Public corpora ons are those formed or organized for the government of a por on of the State.”
[G.R. No. L-6584. November 29, 1956.] THE (Sec on 3, Republic Act No. 1459, Corpora on Law).
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs.
GUIALIL KAMAD alias MORO JOSE, Defendant- “‘The generally accepted defini on of a municipal corpora on would only include organized ci es
Appellant.
and towns, and like organiza ons, with poli cal and legisla ve powers for the local, civil
[G.R. No. L-6897. November 29, 1956.] In the government and police regula ons of the inhabitants of the par cular district included in the
Matter of the Claim for Attorney’s Fees. CLARO M.
RECTO, claimant-Appellee, vs. ESPERANZA P. DE boundaries of the corpora on.’ Heller vs. Stremmel, 52 Mo. 309, 312.”
HARDEN and FRED M. HARDEN, Defendants-
Appellants. “In its more general sense the phrase ‘municipal corpora on’ may include both towns and
[G.R. No. L-8502. November 29, 1956.] LEONORA
coun es, and other public corpora ons created by government for poli cal purposes. In its more
T. ROXAS, Petitioner-Appellant, vs. ISAAC SAYOC, as common and limited significa on, it embraces only incorporated villages, towns and ci es. Dunn
Collector of Customs of Manila, Respondent.
vs. Court of County Revenues, 85 Ala. 144, 146, 4 So. 661.” (McQuillin, Municipal Corpora ons,
[G.R. No. L-8508. November 29, 1956.] MARIA B. 2nd ed., Vol. 1, p. 385.)
CASTRO, Plaintiff-Appellee, vs. SATURNINO DAVID, in
his capacity as Collector of Internal Revenue, “We may, therefore, define a municipal corpora on in its historical and strict sense to be the
Defendant-Appellee. E. AWAD AND CO., INC.,
Intervenor-Appellant. incorpora on, by the authority of the government, of the inhabitants of a par cular place or
district, and authorizing them in their corporate capacity to exercise subordinate specified powers
[G.R. No. L-9147. November 29, 1956.] RAFAELA
CAMPO, ERNESTO GILUANO, REMEDIOS GILUANO, of legisla on and regula on with respect to their local and internal concerns. This power of local
ROSALINA GILUANO, and FELIX GILUANO, Plaintiffs- government is the dis nc ve purpose and the dis nguishing feature of a municipal corpora on
Appellees, vs. JUAN CAMAROTE and GREGORIO
GEMILGA, Defendants. JUAN CAMAROTE, Appellant. proper.” (Dillon, Municipal Corpora ons, 5th ed., Vol. I, p. 59.)
[G.R. No. L-9352. November 29, 1956.] Intestate It is true that under sec on 8, Rule 130, stenographers may only charge as fees P0.30 for each
Estate of the late JOVITO CO, FLORA ROBERSON CO, page of transcript of not less than 200 words before the appeal is taken and P0.15 for each page
Administratrix, Petitioner-Appellee, vs. COLLECTOR
OF INTERNAL REVENUE, Defendant-Appellant. a er the filing of the appeal, but in this case the Na onal Coconut Corpora on has agreed and in
fact has paid P1.00 per page for the services rendered by the Plain ffs and has not raised any
[G.R. No. L-9657. November 29, 1956.] LEOPOLDO
T. BACANI and MATEO A. MATOTO, Plaintiffs- objec on to the amount paid un l its propriety was disputed by the Auditor General. The payment
Appellees, vs. NATIONAL COCONUT CORPORATION, of the fees in ques on became therefore contractual and as such is valid even if it goes beyond the
ET AL., Defendants, NATIONAL COCONUT
CORPORATION and BOARD OF LIQUIDATORS, limit prescribed in sec on 8, Rule 130 of the Rules of Court.
Defendants-Appellants.
As regards the ques on of procedure raised by Appellants, suffice it to say that the same is
[G.R. No. L-9941. November 29, 1956.] PEDRO Z.
CLARAVALL, Petitioner-Appellant, vs. FRANCISCO
insubstan al, considering that this case refers not to a money claim disapproved by the Auditor
PARAAN, ET AL., Respondents-Appellees. General but to an ac on of prohibi on the purpose of which is to restrain the officials concerned
from deduc ng from Plain ffs’ salaries the amount paid to them as stenographers’ fees. This case
does not come under sec on 1, Rule 45 of the Rules of Court rela ve to appeals from a decision of
the Auditor General.
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.
Paras, C.J., Bengzon, Padilla, Montemayor, Labrador, Concepcion, Reyes, J. B. L., Endencia and
Felix, JJ., concur.

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