G.R. No. 159418-19 - De Joya vs. Jail Warden of Batangas City

Case Summary (G.R. No. 159418-19)

Petitioner

Leopoldo T. Bacani and Mateo A. Matoto

Respondent

National Coconut Corporation and Board of Liquidators

Key Dates

January 19, 1953: Auditor General demands reimbursement of P714
February 6, 1954: Order to deduct P25 from Bacani’s salary and P10 from Matoto’s salary each payday
November 29, 1956: Supreme Court decision

Applicable Law

Section 16, Rule 130, Rules of Court (exemption of the Government from legal fees)
Section 8, Rule 130, Rules of Court (stenographers’ transcript fees)
Section 2, Revised Administrative Code of 1917 (definition of “Government of the Philippine Islands”)
Commonwealth Act No. 518 (charter of NCCC)
Corporation Law (Republic Act No. 1459)

Factual Background

During the hearing of Civil Case No. 2293 (Francisco Sycip vs. NCCC), the plaintiffs delivered a 714-page transcript to NCCC’s counsel at P1 per page. NCCC paid P564 to Bacani and P150 to Matoto. The Auditor General, citing a Department of Justice circular, disallowed these payments on the ground that NCCC, as a government entity, was exempt from such fees, and ordered reimbursement through salary deductions.

Procedural Posture

To enjoin salary deductions and obtain a judicial declaration that NCCC is not a government entity under Section 16, Rule 130, the stenographers filed a petition for prohibition in the Court of First Instance of Manila. The trial court ruled in their favor. NCCC appealed.

Issue

Whether National Coconut Corporation is included within the “Government of the Republic of the Philippines” under Section 16, Rule 130 of the Rules of Court, thus exempt from paying stenographers’ fees.

Analysis – Definition of “Government of the Philippines”

Section 16, Rule 130 exempts the Government from legal fees, including those charged by stenographers under Section 8. Section 2 of the Revised Administrative Code defines the Government as the corporate governmental entity through which sovereign functions are exercised, encompassing central, provincial, municipal, or other local branches.

Analysis – Government-Owned or Controlled Corporations

Although NCCC is government-owned and promotes national economic interests, it was organized under Commonwealth Act No. 518 with a separate corporate personality, subject to the Corporation Law, and capable of suing or being sued without sovereign immunity. Such entities perform ministrant (optional) functions and are distinct from municipal corporations that exercise attributes of sovereignty. A majority government shareholder does not convert a corporation into a public (municipal) corporation for exemption purposes.

Contractual Validity of Fees

NCCC agreed to and paid the P1 per-page rate without

Case Syllabus (G.R. No. 159418-19)

Facts

Plaintiffs are court stenographers assigned to Branch VI of the Court of First Instance of Manila.
During Civil Case No. 2293 (Francisco Sycip vs. National Coconut Corporation), Assistant Corporate Counsel requested a transcript of stenographic notes.
Plaintiffs prepared and delivered a 714-page transcript and billed P1.00 per page: P564 to Leopoldo T. Bacani and P150 to Mateo A. Matoto.
The National Coconut Corporation (NCC) paid the full amounts without objection.
The Auditor General, relying on a Department of Justice circular, disallowed the payments on the ground that NCC, as a government entity, was exempt from such fees.
On January 19, 1953, the Auditor General demanded reimbursement.
On February 6, 1954, an order was issued to deduct P25 every payday from Bacani’s salary and P10 every payday from Matoto’s salary, beginning March 30, 1954.
To prevent these deductions and obtain a judicial declaration that NCC is not a government entity under section 16, Rule 130 of the Rules of Court, plaintiffs instituted an action in the Court of First Instance of Manila.

Procedural History

Plaintiffs sought a writ of prohibition to restrain the Auditor General and Department of Justice cashier from making the salary deductions.
Defendants pleaded that NCC is a government entity under section 2 of the Revised Administrative Code and thus exempt from paying stenographers’ fees under Rule 130.
The trial court ruled in favor of plaintiffs, holding that NCC is not exempt and that the payments were valid.
NCC and the Board of Liquidators appealed the decision to the Supreme Court.

Issue

Whether the National Coconut Corporation is a “Government of the Republic of the Philippines” under section 2 of the Revised Administrative Code, thereby qualifying for the exemption from stenographers’ fees provided in section 16, Rule 130 of the Rules of Court.

Applicable Legal Provisions

Section 16, Rule 130, Rules of Court – Exempts the Government of the Philippines from paying the prescribed legal fees, i