The concept of State

Collector of Internal revenue v Campos Rueda

Facts: Petitioner Antonio Campos Rueda, administrator of the estate of the deceased Doa Maria de la
Estrella Soriano Vda. de Cerdeira, appealed the decision of the respondent Collector of Internal Revenue,
assessing against and demanding the deficiency state and inheritance taxes, including interests and
penalties, on the transfer of intangible personal properties situated in the Philippines belonging to one
Maria de la Estrella Soriano Vda. de Cerdeira. Cerdeira is a Spanish national, by reason of her marriage to
a Spanish citizen and was a resident of Tangier, Morocco from 1931 up to her death on January, 1955. At
the time of her demise she left, among others, intangible personal properties in the Philippines. On
November, 1955, respondent, pending investigation, issued an assessment for estate and inheritance
taxes. Petitioner filed a provisional estate and inheritance tax return on all the properties of Cerdeira
however respondent denied the request for exemption on the ground that the law of Tangier is not
reciprocal to Section 122 of the National Internal Revenue Code. Respondent premised the denial on the
grounds that there was no reciprocity [with Tangier, which was moreover] a mere principality, not a
foreign country.

Issue: WON Tangier is a foreign country

Held: Yes. It does not admit of doubt that if a foreign country is to be identified with a state, it is
required in line with Pound's formulation that it be a politically organized sovereign community
independent of outside control bound by ties of nationhood, legally supreme within its territory, acting
through a government functioning under a regime of law. It is thus a sovereign person with the people
composing it viewed as an organized corporate society under a government with the legal competence to
exact obedience its commands. It has been referred to as a body-politic organized by common consent
for mutual defense and mutual safety and to promote the general welfare. Correctly has it been
described by Esmein as "the juridical personification of the nation."

Bacani v Nacoco

Facts: The plaintiffs are court stenographers in the Court of First Instance of Manila. During the
pendency of the case of Francisco Sycip vs. National Coconut Corporation (NACOCO), 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 and thereafter submitted to
him their bills for the payment of their fees. The National Coconut Corporation paid the amount for said
transcript. Upon inspecting the books of this corporation, the Auditor General disallowed the payment of
these fees and sought the recovery of the amounts paid. The respondents contended that NACOCO 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.

Issue: WON NACOCO can be exempted from the legal fees it being included in the term
government

Held: NO. They do not come under the classification of municipal or public corporation. NACOCO falls
under corporations owned or controlled by the government to promote certain aspects of the economic
life of our people. 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. The mere fact that the Government happens to be a majority
stockholder does not make it a public corporation.
 Philippine Virginia Tobacco Administration v CIR

Facts: Private respondents filed with the CIR a petition alleging that their employment relationship, the
overtime services in excess of the regular eight hours a day rendered by them, and the failure to pay
them overtime compensation in accordance with Commonwealth Act No. 444. Their prayer was for the
differential between the amount actually paid to them and the amount allegedly due them. Petitioner
denied the allegations. Thereafter, Presiding Judge Arsenio T. Martinez sustained the claims of private
respondents for overtime services and directed petitioner to pay the same, minus what it had already
paid. Petitioner claims that the matter is beyond the jurisdiction of the respondent court as it is exercising
governmental functions and that it is exempt from the operation of C.A. 444.

Issue: WON the traditional classification of function of government is applicable in this case

Held: NO. The irrelevance of such a distinction considering the needs of the times was clearly pointed
out by the present Chief Justice. The growing complexities of modern society, however, have rendered
this traditional classification of the functions of government quite unrealistic, not to say obsolete. The
areas which used to be left to private enterprise and initiative and which the government was called upon
to enter optionally, and only 'because it was better equipped to administer for the public welfare than is
any private individual or group of individuals,' continue to lose their well-defined boundaries and to be
absorbed within activities that the government must undertake in its sovereign capacity if it is to meet
the increasing social challenges of the times.

Government of the Philippine Islands v Montepiedad

Facts: About $400,000, were subscribed and paid into the treasury of the Philippine Islands by the
inhabitants of the Spanish Dominions of the relief of those damaged by the earthquake which took place
in the Philippine Islands on June, 1863. Subsequent thereto a central relief board was appointed to
distribute the moneys thus voluntarily contributed and allotted $365,703.50 to the various sufferers
named in its resolution. Upon the petition of the governing body of the Monte de Piedad, the Philippine
Government directed its treasurer to turn over to the former the sum of $80,000 of the relief fund in
installments of $20,000 each and were received on the following dates: February 15, March 12, April 14,
and June 2, 1883, and are still in the possession of the Monte de Piedad. On account of various petitions
of the persons, and heirs of others to whom the above-mentioned allotments were made, the Philippine
Islands filed a suit against the Monte de Piedad to recover the $80.000, together with interest. After due
trial, judgment was entered in favor of the plaintiff. Defendant appealed the judgment.

Issue: WON the Government is a proper party to the case under the doctrine of parens patriae

Held: YES. The ground upon which the right of the Government to maintain the action rests on the fact
that the money, being given to a charity became a public property, only applicable to the specific
purposes to which it was intended to be devoted. It is but within those limits consecrated to the public
use, and became part of the public resources for promoting the happiness and welfare of the Philippine
Government. To deny the Government's right to maintain this action would be contrary to sound public
policy.