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LIBAN vs. GORDON - Flores vs. Drilon: held that incumbent national
G.R. No. 175352, January 18, 2011 legislators lose their elective posts upon their
appointment to another government office
DOCTRINE:
The Philippine National Red Cross (PNRC) Respondent:
Chairman is not an official or employee of the - Asserts that petitioners have no standing to file
Executive branch since his appointment does this petition which appears to be an action for
not fall under Section 16, Article VII of the quo warranto, since the petition alleges that
Constitution; Not being a government official respondent commited an act, which, by
or employee, the Philippine National Red provision of law, constitutes a ground for
Cross (PNRC) Chairman, as such, does not forfeiture of his public office.
hold a government office or employment. - Petitioners do not claim to be entitlted to the
The PNRC is not government-owned but Senate office of the respondent.
privately owned. The vast majority of the
thousands of PNRC members are private Under Section 5, Rule 66 of the Rules of
individuals, including students. Civil Procedure, only a person claiming to
be entitled to a public office usurped or
unlawfully held by another may bring an
FACTS:
action for quo warranto in his own name
This is a petition to declare respondent Senator .
Richard J. Gordon as having forfeited his seat in - under Section 11, Rule 66 of the Rules of Civil
the Senate. Procedure should be commenced within one
year after the cause of the public officer’s
Petitioners Dante Liban, Reynaldo Bernardo and forfeiture of office. In this case, respondent
Salvador Viari, officers of the Board of Directors of has been working as a Red Cross volunteer for
the QC Red Cross Chapter filed the said petition the past 40 years.
while respondent is the Chairman of the PNRC - Respondent further insists that the PNRC is
Board of Governors. not a government-owned or controlled
corporation and that the prohibition
During respondent’s incumbency as a member of under Section 13, Article VI of the
the Senate of the PH, he was elected as Chairman Constitution does not apply in the present
of the PNRC. Petitioners allege that by accepting case since volunteer service to the PNRC
the chairmanship of the PNRC Board of is neither an office nor an employment.
Governors, respondent has ceased to be a
member of the Senate as provided in Sec. 13, Art. ISSUE:
VI of the Constitution. Whether the office of the PNRC Chairman is a
government office or an office in a government-
“SEC. 13. No Senator or Member of the House owned or controlled corporation for purposes of
of Representatives may hold any other office
the prohibition in Section 13, Article VI of the
or employment in the Government, or any
subdivision, agency, or instrumentality thereof, Constitution.
including government-owned or controlled
corporations or their subsidiaries, during his HELD:
term without forfeiting his seat. Neither shall he The PNRC is not government-owned but privately
be appointed to any office which may have owned. The vast majority of the thousands of
been created or the emoluments thereof PNRC members are private individuals, including
increased during the term for which he was students. Under the PNRC Charter, those who
elected.”
contribute to the annual fund campaign of the
PNRC are entitled to membership in the PNRC for
Petitioners: one year. Thus, any one between 6 and 65 years
- Camporendondo v. NLRC: PNRC is a govt of age can be a PNRC member for one year upon
owned corporation contributing P35, P100, P300, P500 or P1,000 for the
PNRC is a gocc – test: whether the corp year. Even foreigners, whether residents or not,
was created by its own special charter for can be members of the PNRC. Section 5 of the
the exercise of a public function or by PNRC Charter, as
incorporation under the general amendedbyPresidentialDecreeNo.1264,21 reads:
corporation law.
PNRC – created by a special charter RA “SEC. 5. Membership in the Philippine National Red
No. 95 Cross shall be open to the entire population in the
Philippines regardless of citizenship. Any
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contribution to the Philippine National Red Cross “SEC. 2. General Terms Defined.—x x x
Annual Fund Campaign shall entitle the (13) Government-owned or controlled
contributor to membership for one year and said corporation refers to any agency organized
contribution shall be deductible in full for taxation as a stock or non-stock corporation, vested
purposes.” with functions relating to public needs
whether governmental or proprietary in
Thus, the PNRC is a privately owned, privately nature, and owned by the Government
funded, and privately run charitable organization. directly or through its instrumentalities either
The PNRC is not a government-owned or wholly, or where applicable as in the case of
controlled corporation. stock corporations, to the extent of at least
fifty-one (51) percent of its capital stock:
Senator Gordon and the PNRC files a motion Provided, That government-owned or
controlled corporations may be further
for reconsideration in the case decided by categorized by the Department of the
the SC, declaring that Senator Gordon did not Budget, the Civil Service Commission, and the
Commission on Audit for purposes of the
relinquish his position in the Senate when he
exercise and discharge of their respective
accepted chairmanship of the PNRC, but at powers, functions and responsibilities with
the same declaring that RA 95, the law which respect to such corporations.” (Boldfacing
and underscoring supplied)
created the PNRC as an separate
incorporation only serving as an auxiliary to
A government-owned or controlled
the government, as unconstitutional, asking it
corporation must be owned by the
to register itself under SEC the Corporation government, and in the case of a stock
Code. corporation, at least a majority of its capital
stock must be owned by the government. In
the case of a non-stock corporation, by
DOCTRINES: analogy at least a majority of the members
must be government officials holding such
The issue of constitutionality was not raised so membership by appointment or designation
by the government. Under this criterion, and
the Court resolves to rescind its earlier decision
as discussed earlier, the government does not
declaring RA 95 unconstitutional. own or control PNRC.
PNRC is a sui generis institution, shown by
Local water districts – gocc – control & ownership
several laws which amended the original
PNRC – govt controlled but not owned – private
charter despite the fact that Article XII,
Section 16 of the 1987 Constitution proscribes
NACHURA. Dissenting
the creation of corporations via special law.
1. Petitioners have legal standing – not a
National Societies of the Red Cross are sui quo warranto but a prohibition
generis in character, regulated directly by 2. PNRC is a GOCC – created by a special
charter
international humanitarian law in contract to
- Consti recognizes 2 corporations:
other private entities. o Private corporation – general law
In Feliciano v COMELEC, the court said that o GOOC corp – special charter
the purpose of the constitutional ban is to
prevent grants of special privileges to families,
groups, etc. PNRC was created not to grant
special privileges but for the common good.
The PNRC, though created by law, is not an
instrumentality of the state, so as not to lose its
character of neutrality. It is an auxiliary.
Section 2(13) of the Introductory Provisions of
the Administrative Code of 1987:
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PHILIPPINE SOCIETY FOR THE PREVENTION OF Subsequently, however, the power to make
CRUELTY TO ANIMALS VS. COMMISSION ON AUDIT, arrests as well as the privilege to retain a portion of
G.R. No. 169752. September 25, 2007 the fines collected for violation of animal-related
laws were recalled by virtue
DOCTRINES: of .. Whereas,
the cruel treatment of animals is now an offense
Amendments introduced by C.A. No. 148 against the State, penalized under our statutes,
made it clear that the petitioner was a private which the Government is duty bound to enforce;
corporation and not an agency of the When the COA was to perform an audit on them
government. they refuse to do so, by the reason that they are a
A reading of petitioner’s charter shows that it private entity and not under the said commission.
is not subject to the control or supervision by It argued that COA covers only government
any agency of the State, unlike government- entities. On the other hand the COA decided that
owned and controlled corporations. it is a government entity.
Another indication that petitioner’s nature as
a private entity is the fact that its employees
are registered and covered by the SSS at
petitioner’s initiative and not through the GSIS. ISSUE: WON the said petitioner is a private entity.
Fact that a certain juridical entity is impressed
with public interest does not, by that
RULING:
circumstance alone, make the entity a public
YES. First, the Court agrees with the petitioner that
corporation, inasmuch as a corporation may
the “charter test” cannot be applied. Essentially,
be private though its charter contains
the “charter test” provides that the test to
provisions of a public character incorporated
determine whether a corporation is government
solely for the public good.
owned or controlled, or private in nature is simple.
The true criterion to determine whether a
Is it created by its own charter for the exercise of
corporation is public or private is found in the
a public function, or by incorporation under the
totality of the relation of the corporation to
general corporation law? Those with special
the State.
charters are government corporations subject to
its provisions, and its employees are under the
FACTS: jurisdiction of the CSC, and are compulsory
members of the GSIS.
The petitioner was incorporated as a juridical And since the “charter test” had been introduced
entity over one hundred years ago by virtue of Act by the 1935 Constitution and not earlier, it follows
No. 1285, enacted on January 19, 1905, by the that the test cannot apply to the petitioner, which
Philippine Commission. The petitioner, at the time was incorporated by virtue of Act No. 1285,
it was created, was composed of animal enacted on January 19, 1905. Settled is the rule
aficionados and animal propagandists. The that laws in general have no retroactive effect,
objects of the petitioner, as stated in Section 2 of unless the contrary is provided. All statutes are to
its charter, shall be to enforce laws relating to be construed as having only a prospective
cruelty inflicted upon animals or the protection of operation, unless the purpose and intention of the
animals in the Philippine Islands, and generally, to legislature to give them a retrospective effect is
do and perform all things which may tend in any expressly declared or is necessarily implied from
way to alleviate the suffering of animals and the language used. In case of doubt, the doubt
promote their welfare. must be resolved against the retrospective
effect.
At the time of the enactment of Act No. 1285, the Second, a reading of petitioner’s charter
original Corporation Law, Act No. 1459, was not shows that it is not subject to control or supervision
yet in existence. Act No. 1285 antedated both the by any agency of the State, unlike GOCCs. No
Corporation Law and the constitution of the SEC. government representative sits on the board of
For the purpose of enhancing its powers in trustees of the petitioner. Like all private
promoting animal welfare and enforcing laws for corporations, the successors of its members are
the protection of animals, the petitioner was determined voluntarily and solely by the petitioner
initially imbued under its charter with the power to in accordance with its by-laws, and may exercise
apprehend violators of animal welfare laws. In those powers generally accorded to private
addition, the petitioner was to share 1/2 of the corporations, such as the powers to hold property,
fines imposed and collected through its efforts for to sue and be sued, to use a common seal, and
violations of the laws related thereto. so forth. It may adopt by-laws for its internal
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operations: the petitioner shall be managed or exemplify public corporations. They are created
operated by its officers “in accordance with its by- by the State as its own device and agency for the
laws in force.” accomplishment of parts of its own public works.
Third. The employees of the petitioner are Fifth. The respondents argue that since the
registered and covered by the SSS at the latter’s charter of the petitioner requires the latter to
initiative, and not through the GSIS, which should render periodic reports to the Civil Governor,
be the case if the employees are considered whose functions have been inherited by the
government employees. This is another indication President, the petitioner is, therefore, a
of petitioner’s nature as a private entity. government instrumentality.
Fourth. The respondents contend that the This contention is inconclusive. By virtue of
petitioner is a “body politic” because its primary the fiction that all corporations owe their very
purpose is to secure the protection and welfare of existence and powers to the State, the reportorial
animals which, in turn, redounds to the public requirement is applicable to all corporations of
good. This argument, is not tenable. The fact that whatever nature, whether they are public, quasi-
a certain juridical entity is impressed with public public, or private corporations—as creatures of
interest does not, by that circumstance alone, the State, there is a reserved right in the legislature
make the entity a public corporation, inasmuch as to investigate the activities of a corporation to
a corporation may be private although its charter determine whether it acted within its powers. In
contains provisions of a public character, other words, the reportorial requirement is the
incorporated solely for the public good. This class principal means by which the State may see to it
of corporations may be considered quasi-public that its creature acted according to the powers
corporations, which are private corporations that and functions conferred upon it.
render public service, supply public wants, or
pursue other eleemosynary objectives. While
purposely organized for the gain or benefit of its
members, they are required by law to discharge
functions for the public benefit. Examples of these
corporations are utility, railroad, warehouse,
telegraph, telephone, water supply corporations
and transportation companies. It must be stressed
that a quasi-public corporation is a species of
private corporations, but the qualifying factor is
the type of service the former renders to the
public: if it performs a public service, then it
becomes a quasi-public corporation.
Authorities are of the view that the purpose alone
of the corporation cannot be taken as a safe
guide, for the fact is that almost all corporations
are nowadays created to promote the interest,
good, or convenience of the public. A bank, for
example, is a private corporation; yet, it is created
for a public benefit. Private schools and
universities are likewise private corporations; and
yet, they are rendering public service. Private
hospitals and wards are charged with heavy
social responsibilities. More so with all common
carriers. On the other hand, there may exist a
public corporation even if it is endowed with gifts
or donations from private individuals.
The true criterion, therefore, to determine whether
a corporation is public or private is found in the
totality of the relation of the corporation to the
State. If the corporation is created by the State as
the latter’s own agency or instrumentality to help
it in carrying out its governmental functions, then
that corporation is considered public; otherwise, it
is private. Applying the above test, provinces,
chartered cities, and barangays can best