Bacani vs NACOCO

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Political Law – Two-fold Function of the Government

Bacani and Matoto are court stenographers assigned in the CFI of Manila. During the pendency of Civil Case No. 2293 of said court, entitled Francisco Sycip vs. NACOCO, Alikpala, 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 Leopoldo T. Bacani and P150 to Mateo A. Matoto for said transcript at the rate of P1 per page. On January 19, 1953, the Auditor General required the plaintiffs to reimburse said amounts on the strength of a circular of the DOJ it was expressed that NACOCO, being a government entity, was exempt from the payment of the fees in question. Petitioners counter that NACOCO is not a government entity within the purview of section 16, Rule 130 of the Rules of Court. Defendants set up as a defense that the NACOCO 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.

ISSUE: Whether or not NACOCO is a government entity.

HELD: GOCCs do not acquire that status for the simple reason that they do not come under the classification of municipal or public corporation. Take for instance the 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). It may sue and be sued in the same manner as any other private corporations, and in this sense it is an entity different from our government.

** President Wilson enumerates the constituent functions as follows:

“‘(1)  The keeping of order and providing for the protection of persons and property from violence and robbery.

‘(2)  The fixing of the legal relations between man and wife and between parents and children.

‘(3)  The regulation of the holding, transmission, and interchange of property, and the determination of its liabilities for debt or for crime.

‘(4)  The determination of contract rights between individuals.

‘(5)  The definition and punishment of crime.

‘(6)  The administration of justice in civil cases.

‘(7)  The determination of the 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 its international interests.’”

The most important of the ministrant functions are: public works, public education, public charity, health and safety regulations, and regulations of trade and industry. The principles deter mining whether or not a government shall exercise certain of these optional functions are: (1) that a government should do for the public welfare those things which private capital would not naturally undertake and (2) that a government should do these things which by its very nature it is better equipped to administer for the public welfare than is any private individual or group of individuals.


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