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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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[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.

DECISION
BAUTISTA ANGELO, J.:
Plaintiffs 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, entitled Francisco Sycip vs.
National Coconut Corporation, 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. 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
Leopoldo T. Bacani and P150 to Mateo A. 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 19, 1953, the Auditor
DebtKollect Company, Inc. General required the Plaintiffs to reimburse said amounts on the strength of a circular of the
Department of Justice wherein the opinion was expressed that the National Coconut Corporation,
being a government entity, was exempt from the payment of the fees in question. On February 6,
1954, the Auditor General issued an order directing the Cashier of the Department of Justice 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 deduction of these fees from their salaries and secure a judicial ruling that the National
Coconut Corporation is not a government entity within the purview of section 16, Rule 130 of the
Rules of Court, this action was instituted in the Court of First Instance of Manila.
Defendants set up as a defense that the National Coconut Corporation is a government entity
within the purview of section 2 of the Revised Administrative Code of 1917 and, hence, it is
exempt from paying the stenographers’ fees under Rule 130 of the Rules of Court. After trial, the
court found for the Plaintiffs declaring (1) “that Defendant National Coconut Corporation is not a
government entity within the purview of section 16, Rule 130 of the Rules of Court; (2) that the chan roblesvirtualawlibrary

ChanRobles Intellectual Property payments already made by said Defendant to Plaintiffs herein and received by the latter from the
former in the total amount of P714, for copies of the stenographic transcripts in question, are
Division
valid, just and legal; and (3) that Plaintiffs are under no obligation whatsoever to make a refund
chan roblesvirtualawlibrary

of these payments already received by them.” This is an appeal from said decision.
Under section 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 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 a case 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: chanroblesvirtuallawlibrary

“‘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 arms 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.”
The question now to be determined is whether the National Coconut Corporation may be
considered as included in the term “Government of the Republic of the Philippines” for the
purposes of the exemption 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 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. This requires a little digression on the nature and functions of our government
as instituted in our Constitution.
November-1956 Jurisprudence To begin with, we state that the term “Government” may be defined as “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
[G.R. No. L-9123. November 7, 1956.] THE PEOPLE
OF THE PHILIPPINES, Plaintiff-Appellee, vs. people forming that society by those who possess the power or authority of prescribing them”
CORNELIO MELGAR, Defendant-Appellant. (U.S. vs. Dorr, 2 Phil., 332). This institution, when referring to the national government, has
[G.R. No. L-9023. November 13, 1956.] BISLIG BAY
reference to what our Constitution has established composed of three great departments, the
LUMBER COMPANY. INC., Plaintiff-Appellee, vs. THE legislative, executive, and the judicial, through which the powers and functions of government
PROVINCIAL GOVERNMENT OF SURIGAO, Defendant- are exercised. These functions are twofold: constitute and ministrant. The former are those chanroblesvirtuallawlibrary

Appellant.
which constitute the very bonds of society and are compulsory in nature; the latter are those that chan roblesvirtualawlibrary

[G.R. Nos. L-9238-39. November 13, 1956.] THE are undertaken only by way of advancing the general interests of society, and are merely optional.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, vs. President Wilson enumerates the constituent functions as follows: chanroblesvirtuallawlibrary

VICTORIO JABAJAB, accused-Appellee.

“‘(1) The keeping of order and providing for the protection of persons and property from
[G.R. No. L-10128. November 13, 1956.] MAMERTO
C. CORRE, Plaintiff-Appellant, vs. GUADALUPE TAN
violence and robbery.
CORRE, Defendant-Appellee.
‘(2) The fixing of the legal relations between man and wife and between parents and children.
[G.R. No. L-9523. November 15, 1956.] GALICANO
‘(3) The regulation of the holding, transmission, and interchange of property, and the
E. YAP, Plaintiff-Appellant, vs. FRANCISCO BOLTRON,
ET AL., Defendants-Appellees. determination of its liabilities for debt or for crime.

[G.R. No. L-9202. November 19, 1956.] THE ‘(4) The determination of contract rights between individuals.
COLLECTOR OF INTERNAL REVENUE, Petitioner, vs.
JOSE AVELINO and COURT OF TAX APPEALS, ‘(5) The definition and punishment of crime.
Respondents.
‘(6) The administration of justice in civil cases.
[G.R. No. L-8717. November 20, 1956.] GENERAL
FOODS CORPORATION, Plaintiff-Appellant, vs.
‘(7) The determination of the political duties, privileges, and relations of citizens.
NATIONAL COCONUT CORPORATION, Defendant-
‘(8) Dealings of the state with foreign powers: the preservation of the state from external
Appellee.
chanroblesvirtuallawlibrary

danger or encroachment and the advancement of its international interests.’“ (Malcolm, The
[G.R. No. L-8774. November 26, 1956.] In the Government of the Philippine Islands, p. 19.)
matter of the testate estate of the deceased JUANA
JUAN VDA. DE MOLO. EMILIANA MOLO-PECKSON and The most important of the ministrant functions are: public works, public education, public chanroblesvirtuallawlibrary

PILAR PEREZ-NABLE, Petitioners-Appellees, vs.

charity, health and safety regulations, and regulations of trade and industry. The principles deter
ENRIQUE TANCHUCO, FAUSTINO GOMEZ, ET AL.,
Oppositors-Appellants. mining whether or not a government shall exercise certain of these optional functions are: (1) chanroblesvirtuallawlibrary

that a government should do for the public welfare those things which private capital would not
[G.R. No. L-9098. November 26, 1956.] A.
MAGSAYSAY, INC., Plaintiff-Appellee, vs. CEBU
naturally undertake and (2) that a government should do these things which by its very nature it is
PORTLAND CEMENT CO., Defendant-Appellant. better equipped to administer for the public welfare than is any private individual or group of
individuals. (Malcolm, The Government of the Philippine Islands, pp. 19-20.)
[G.R. No. L-9551. November 26, 1956.] THE
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, vs. From the above we may infer that, strictly speaking, there are functions which our government is
ALEJANDRO PAET Y VELASCO, Defendant-Appellee.
required to exercise to promote its objectives as expressed in our Constitution and which are
[G.R. No. L-9627. November 26, 1956.] exercised by it as an attribute of sovereignty, and those which it may exercise to promote merely
MARGARITA ABARCA VASQUEZ, assisted by her the welfare, progress and prosperity of the people. To this latter class belongs the organization of
husband, GUIDO N. VASQUEZ, Plaintiffs-Appellees,
vs. ISIDORA LANDRITO MESAGAL, assisted by her
those corporations owned or controlled by the government to promote certain aspects of the
husband, VENTURA MESAGAL, Defendants- economic life of our people such as the National Coconut Corporation. These are what we call
Appellants. government-owned or controlled corporations which may take on the form of a private enterprise
[G.R. No. L-7644. November 27, 1956.] HENRY or one organized with powers and formal characteristics of a private corporations under the
LITAM, ETC., ET AL., Plaintiffs-Appellants, vs. Corporation Law.
REMEDIOS R. ESPIRITU, as guardian of the
incompetent MARCOSA RIVERA, and ARMINIO The question that now arises is: Does the fact that these corporation perform certain functions
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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
chanroblesvirtuallawlibrary

GREGORIO DY TAM, Petitioner-Appellant, vs.

REMEDIOS R. ESPIRITU, in her capacity as judicial
come under the classification of municipal or public corporation. Take for instance the National
guardian of the incompetent MARCOSA RIVERA, Coconut Corporation. While it was organized with the purpose of “adjusting the coconut industry
counter-Petitioner, ARMINIO RIVERA, administrator- to a position independent of trade preferences in the United States” and of providing “Facilities
Appellee.
for the better curing of copra products and the proper utilization of coconut by-products”, a
[G.R. No. L-9709. November 27, 1956.] function which our government has chosen to exercise to promote the coconut industry, however,
CONCEPCION R. LIM DE PLANAS and ILUMINADO it was given a corporate power separate and distinct from our government, for it was made
PLANAS, Plaintiffs-Appellants, vs. RICARDO L.
CASTELLO, Defendant-Appellee. 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). It
[G.R. No. L-10060. November 27, 1956.] MARIA S.
may sue and be sued in the same manner as any other private corporations, and in this sense it is
PASCUAL, Plaintiff-Appellee, vs. JOSE LACSAMANA,
Defendant-Appellant. an entity different from our government. As this Court has aptly said, “The mere fact that the
Government happens to be a majority stockholder does not make it a public corporation”
[G.R. No. L-7617. November 28, 1956.] THE
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs.
(National Coal Co. vs. Collector of Internal Revenue, 46 Phil., 586-587). “By becoming a
PELAGIO G. YANGA, Defendant-Appellant. stockholder in the National Coal Company, the Government divested itself of its sovereign
character so far as respects the transactions of the corporation . Unlike the Government, the cralaw

[G.R. No. L-8437. November 28, 1956.] ESTATE OF

K. H. HEMADY, deceased, vs. LUZON SURETY CO.,
corporation may be sued without its consent, and is subject to taxation. Yet the National Coal
INC., claimant-Appellant. Company remains an agency or instrumentality of government.” (Government of the Philippine
Islands vs. Springer, 50 Phil., 288.)
[G.R. No. L-8940. November 28, 1956.] CAPITAL
INSURANCE & SURETY COMPANY, INC., Plaintiff- To recapitulate, we may mention that the term “Government of the Republic of the Philippines”
Appellee, vs. JOE EBERLY, Defendant-Appellant.
used in section 2 of the Revised Administrative Code refers only to that government entity
[G.R. No. L-8961. November 28, 1956.] ALTO through which the functions of the government are exercised as an attribute of sovereignty, and in
SURETY & INSURANCE CO., INC., Plaintiff-Appellant, this are included those arms through which political authority is made effective whether they be
vs. ALEJANDRO ANDAN, UY SIOK KIAO, TAN LEE and
QUIEN TONG, Defendants-Appellees. 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 personality
[G.R. Nos. L-9391-9392. November 28, 1956.] RIO separate and distinct from the government and which are governed by the Corporation Law. Their
Y COMPAÑIA (Succesor of Rio y Olabarrieta),
Plaintiff-Appellant, vs. VICENTE SANDOVAL, MARIA powers, duties and liabilities have to be determined in the light of that law and of their corporate
R. DE SANDOVAL, and RAFAEL R. SANDOVAL, charters. They do not therefore come within the exemption clause prescribed in section 16, Rule
Defendants-Appellees.
130 of our Rules of Court.
[G.R. No. L-9476. November 28, 1956.] G. “Public corporations are those formed or organized for the government of a portion of the State.”
ASSANMAL, Petitioner, vs. UNIVERSAL TRADING CO.,
INC., Respondent. (Section 3, Republic Act No. 1459, Corporation Law).

[G.R. No. L-6584. November 29, 1956.] THE “‘The generally accepted definition of a municipal corporation would only include organized
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. cities and towns, and like organizations, with political and legislative powers for the local, civil
GUIALIL KAMAD alias MORO JOSE, Defendant- government and police regulations of the inhabitants of the particular district included in the
Appellant.
boundaries of the corporation.’ Heller vs. Stremmel, 52 Mo. 309, 312.”
[G.R. No. L-6897. November 29, 1956.] In the
Matter of the Claim for Attorney’s Fees. CLARO M. “In its more general sense the phrase ‘municipal corporation’ may include both towns and
RECTO, claimant-Appellee, vs. ESPERANZA P. DE counties, and other public corporations created by government for political purposes. In its more
HARDEN and FRED M. HARDEN, Defendants- common and limited signification, it embraces only incorporated villages, towns and cities. Dunn
Appellants.
vs. Court of County Revenues, 85 Ala. 144, 146, 4 So. 661.” (McQuillin, Municipal
[G.R. No. L-8502. November 29, 1956.] LEONORA Corporations, 2nd ed., Vol. 1, p. 385.)
T. ROXAS, Petitioner-Appellant, vs. ISAAC SAYOC, as
Collector of Customs of Manila, Respondent. “We may, therefore, define a municipal corporation in its historical and strict sense to be the
incorporation, by the authority of the government, of the inhabitants of a particular place or
[G.R. No. L-8508. November 29, 1956.] MARIA B.
CASTRO, Plaintiff-Appellee, vs. SATURNINO DAVID, district, and authorizing them in their corporate capacity to exercise subordinate specified powers
in his capacity as Collector of Internal Revenue, of legislation and regulation with respect to their local and internal concerns. This power of local
Defendant-Appellee. E. AWAD AND CO., INC.,
government is the distinctive purpose and the distinguishing feature of a municipal corporation
Intervenor-Appellant.
proper.” (Dillon, Municipal Corporations, 5th ed., Vol. I, p. 59.)
[G.R. No. L-9147. November 29, 1956.] RAFAELA
CAMPO, ERNESTO GILUANO, REMEDIOS GILUANO, It is true that under section 8, Rule 130, stenographers may only charge as fees P0.30 for each
ROSALINA GILUANO, and FELIX GILUANO, Plaintiffs- page of transcript of not less than 200 words before the appeal is taken and P0.15 for each page
Appellees, vs. JUAN CAMAROTE and GREGORIO
after the filing of the appeal, but in this case the National Coconut Corporation has agreed and in
GEMILGA, Defendants. JUAN CAMAROTE, Appellant.
fact has paid P1.00 per page for the services rendered by the Plaintiffs and has not raised any
[G.R. No. L-9352. November 29, 1956.] Intestate objection to the amount paid until its propriety was disputed by the Auditor General. The
Estate of the late JOVITO CO, FLORA ROBERSON CO,
Administratrix, Petitioner-Appellee, vs. COLLECTOR
payment of the fees in question became therefore contractual and as such is valid even if it goes
OF INTERNAL REVENUE, Defendant-Appellant. beyond the limit prescribed in section 8, Rule 130 of the Rules of Court.

[G.R. No. L-9657. November 29, 1956.] LEOPOLDO As regards the question of procedure raised by Appellants, suffice it to say that the same is
T. BACANI and MATEO A. MATOTO, Plaintiffs- insubstantial, considering that this case refers not to a money claim disapproved by the Auditor
Appellees, vs. NATIONAL COCONUT CORPORATION,
ET AL., Defendants, NATIONAL COCONUT
General but to an action of prohibition the purpose of which is to restrain the officials concerned
CORPORATION and BOARD OF LIQUIDATORS, from deducting from Plaintiffs’ salaries the amount paid to them as stenographers’ fees. This case
Defendants-Appellants. does not come under section 1, Rule 45 of the Rules of Court relative to appeals from a decision
[G.R. No. L-9941. November 29, 1956.] PEDRO Z.
of the Auditor General.
CLARAVALL, Petitioner-Appellant, vs. FRANCISCO
PARAAN, ET AL., Respondents-Appellees.
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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