No.

L-9657
November 29, 1956
Bacani and Matoto v Natl. Coconut Corp., et al.
Plaintiffs and Appellees, Leopoldo T. Bacani and Mateo A. Matoto
Defendants, National Coconut Corporation, et.al.
Defendants-appellants, National Coconut Corporation and Board of Liquidators
Ponente, Bautista, Angelo
Provisions
Revised Administrative Code:
Sec 2. 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 branchces or other form of local government.
Facts

Bacani and Matoto are court stenographers assigned in Branch VI of Court

of First Instance of Manila

During Francisco Sycip v National Coconut Corporation, Asst. Corporate

Counsel Federico Alikpala (counsel for defendants) requested
stenographers for copies of transcript of stenographic notes taken during
hearing. Delivered 714 pages and bill (paid P564 to Bacani, P150 to Matoto
at rate of P1/page)

Upon inspecting books of corporation, Auditor General disallowed payment

of fees and sought recovery of amounts paid.

Jan 19 1953 Auditor General required plaintiffs to reimburse amount on

strength of circular of Department of Justice wherein opinion was expressed
that the National Coconut Corporation, being govt entity, was exempt from
payment of fees in question

Feb 6 1954 Auditor General issued an order directing Cashier of DOJ to

deduct from salary of Bacani P25 every payday and from Matoto P10
beginning Mar 30 1954.
To prevent deduction of fees from salaries and secure judicial ruling that the National
Coconut Corporation is not a government entity whithin purview of Sec 16 Rule 130
of Rules of Court, this action was instituted in the Court of First Instance Manila
CoFI Ruling: (1) National Coconut Corporation NOT a government entity; (2)
payment made are valid, just and legal (3) plaintiffs under no obligation to make
refund of payments already received by them
Issues
WON National Coconut Corporation may be considered as included in the term
Government of the Republic of the Philippines for the purpose of exemption of legal
fees
Government 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 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 (US v Dorr)
Functions of Government: (1) constitute and (2) ministrant
(1) those which constitute the very bonds of society and are compulsory in nature
(2) those that are undertaken only by way of advancing the general interests of
society, and are merely optional
Constitute Functions:
1. Keeping of order and providing for the protection of persons and property
form violence and robbery
2. Fixing of legal relations between man and wife and between parents and
children
3. Regulation of holding, transmission and interchange of property and
determination of liabilities for debt or crime
4. Determination of contract rights between individuals
5. Definition and punishment of crime
6. Administration of justice in civil cases
7. Determination of political duties, privileges and relations of citizens
8. Dealings of the state with foreign powers: the preservation of the state from
external danger or encroachment and the advancement of tits international
interests
Most important of the ministrant functions: public works, public education, public
charity, health and safety regulations, and regulations of trade and industry
Principles determining WON government shall exercise certain of these optional
functions are:
1) Government should do for the public welfare those things which private
capital would not naturally undertake
2) Government should do things which by its very nature it is better equipped to
administer for public welfare than is any private individual or group of
individuals
National Coconut Corporation owned or controlled by government which takes
the form of private enterprise; they DO NOT acquire status of being part of
government because they do not come under the classification of municipal or public
corporation.
The mere fact that the Government is major stockholder does not make it a public
corporation
Ruling
Decision appealed from is AFFIRMED
Digest Made by: Ramos & Galandines