Liban vs.
Gordon (2009) WON PNRC is a Private or Government-Owned or
Ponente: Carpio, J.
Facts:
Petitioners are officers of the Board of Directors of the
QC Red Cross Chapter while Respondent is the Chairman of
the Philippine National Red Cross (PNRC) Board of
Governors.
Petitioners allege that by accepting the chairmanship of
the PNRC Board of Governors, respondent has ceased to be
a member of the Senate - Sec. 13, Art. VI, 1987 Consti: No
Senator or Member of the HoR may hold any other
office/employment in the Gov’t, or any subdivision, agency,
or instrumentality thereof, including gov’t-owned or
controlled corporations or their subsidiaries, during his
term w/o forfeiting his seat. Neither shall he be appointed
to any office which may have been created or the
emoluments thereof increased during the term for which
he was elected).
Petitioners cite Camporedondo v. NLRC which held that
PNRC is a gov’t-owned or controlled corporation. Flores v.
Drilon held that incumbent national legislators lose their
elective posts upon their appointment to another
government office.
Respondent:
 Petitioners have no standing to file petition w/c
appears to be an action for quo warranto – they do not
claim to be entitled to the Senate office of respondent.
 Sec. 11, Rule 66, Rules of Civil Procedure: action should
be commenced w/in 1 year after the cause of public
officer’s forfeiture of office – respondent has been
working as a Red Cross volunteer for 40 yrs
 Petitioners cannot raise a constitutional question as
taxpayers – no claim that they suffered some actual
damage/threatened injury or illegal disbursement of
public funds
 If petition is for declaratory relief, SC has no jurisdiction
 original jurisdiction in RTC
 PNRC is not a gov’t owned/controlled corporation
 Sec. 13, Art. VI of Consti does not apply because
volunteer service to PNRC is not an office/employment
Petitioners: present petition is a taxpayer’s suit
questioning unlawful disbursement of funds considering
that respondent has been drawing his salaries and other
compensation as a Senator even if he is no longer entitled
to his office. Court has jurisdiction because it involves a
legal/constitutional issue of transcendental importance.
Issues, Holding & Ratio:
WON petitioners have standing.
SC: NO. The petition is an action for quo warranto (Sec. 1,
Rule 66, Rules of Court – an action for the usurpation of a
public office against a public officer who does or suffers an
act which constitutes a ground for forfeiture of his office).
See facts for petitioner’s allegations. Petitioners do not
claim to be entitled to the Senate office of respondent.
Controlled Corporation.
SC: PNRC is a Private Corporation.
May 22, 1947 – Pres. Manuel Roxas signed RA 95 (PNRC
Charter) adhering to the Geneva Convention of July 27,
1929. PNRC is:
- A non-profit, donor-funded, voluntary, humanitarian
organization whose mission is to bring timely, effective,
and compassionate humanitarian assistance for the
most vulnerable w/o consideration of nationality, race,
religion, gender, social status, or political affiliation.
- A member of National Society of the International Red
Cross and Red Crescent Movement. 7 Fundamental
Principles: Humanity, Impartiality, Neutrality,
Independence, Voluntary Service, Unity, Universality.
- Must be autonomous, neutral and independent; not
appear to be instrument/agency that implements gov’t
policy to merit the trust of all and effectively carry out
its mission – therefore, it cannot be owned/controlled
by the gov’t
The Philippine gov’t does not own the PNRC – does not
have gov’t assets and does not receive any appropriation
from the Congress. It is financed primarily by contributions
from private individuals/entities obtained through
solicitation campaigns organized by its Board of Governors
(Sec. 11, PNRC Charter).
The gov’t does not control the PNRC. Only 6 of the 30
members of the PNRC Board of Governors are appointed
by the President of the Philippines (Sec. 6, PNRC Charter).
A majority of 4/5 of the PNRC Board are elected/chosen by
the private sector members of the PNRC.
The PNRC Chairman is not appointed by the President or
any subordinate gov’t official, therefore, he is not an
official/employee of the Philippine Government. Sec. 16, Art.
VII of Consti – President appoints all officials & employees
in the Executive branch whose appointments are vested in
the President by the Consti or by law. President also
appoints those whose appointments are not otherwise
provided by law. The law may also authorize the “heads of
deparments, agencies, commissions, or boards” to appoint
officers lower in rank.
The vast majority of the thousands of PNRC members
are private individuals, including students and foreigners;
those contribute to the annual fund campaign of the PNRC
(Sec. 5, PNRC Charter amended by PD 1264).
Sec. 2(13) of he Introductory Provisions of the
Administrative Code of 1987: A gov’t-owned or controlled
corporation must be owned by the gov’t, and in case of a
stock corporation, at least a majority of its capital stock
must be owned by the gov’t. In case of a non-stock
corporation, at least a majority of the members must be
gov’t officials holding such membership by
appointment/designation by the gov’t.
WON the office of the PNRC Chairman is a gov’t office
or an office in a government-owned or controlled
corporation for purposes of the prohibition in Sec. 13,
Art. VI of Consti.
SC: The office of the PNRC Chairman is a private office.
The President cannot review, reverse or modify the
decisions/actions of the PNRC Board and the PNRC
Chairman. Only the PNRC Board can review, reverse or
modify the decisions/actions of the PNRC Chairman.
*The PNRC Charter is Violative of the Constitutional
Proscription against the Creation of Private
Corporations by Special Law
1935 (Sec. 7 was in force when PNRC was created by
special character on March 22, 1947), 1973 & 1987 (Sec.
16) Constitutions provide that: The Congress shall not,
except by general law, provide for the formation,
organization, or regulation of private corporations. Gov’t-
owned or controlled corporations may be
created/established by special charters in the interest of
the common good and subject to the test of economic
viability.
Feliciano v. CoA – Sec. 16 of 1987 Consti bans private
corporations to be created by special charters, which
historically gave individuals, families or groups special
privileges denied to other citizens.
PNRC was created through a special charter, however,
the elements of gov’t ownership and control (e.g. capital
assets and operating funds from gov’t) are clearly lacking
in the PNRC. It therefore cannot be considered a gov’t-
owned or controlled corporation.
In creating PNRC as a corporate entity, Congress was in
fact creating a private corporation, which is not exempt
from constitutional prohibition (Sec. 16 above) even as a
non-profit/charitable corporation.
PNRC Charter insofar as it creates the PNRC as a private
corporation and grants it corporate powers is void for
being unconstitutional  Sec. 1-13 are void. Other
provisions remain valid as they can be considered as a
recognition by the State that PNRC is the local National
Society of the International Red Cross and Red Crescent
Movement and thus entitled to the benefits, exemptions
and privileges set forth in the PNRC Charter. They also
implement the Phil. Gov’t’s treaty obligations based on the
Geneva Conventions.
Judgment: Office of the PNRC Chairman declared not a
government office.
Dissent: Nachura, J.
The petition is one for prohibition and petitioners
have legal standing as citizens and taxpayers. The
remedy sought is preventive and restrictive, an injunction
against an alleged continuing violation of the fundamental
law. They raise a constitutional issue, w/o claiming any
entitlement to either the Senate seat or chairmanship of
PNRC. The Court has full authority and bounden duty to
assume jurisdiction to determine WON other branches of
gov’t have kept themselves w/in the limits of the Consti &
laws and have not abused discretion given them.
PNRC is a gov’t-owned or controlled corporation
(GOCC). Its charter does not violate the constitutional
proscription against creation of private corporations
by special law. PNRC was incorporated under RA 95, a
special law. It cannot be anything but a GOCC. PNRC was
not impliedly converted into a private corporation simply
because its charter was amended to vest in it authority to
secure loans, be exempted from payment of all duties, tax
fees, etc.
The use of Sec. 2(13) of Introductory Provisions of
Administrative Code of 1987 by the ponencia to define a
GOCC does not pronounce a definition of a GOCC that
strays from Sec. 16, Art. XII of Consti. It merely declares
that a GOCC may either be a stock or non-stock
corporation.
Sec. 1 of PNRC Charter – PNRC is officially designated to
assist the RP in discharging the obligations set forth in the
Geneva Conventions – therefore, it is engaged in the
performance of the gov’ts public functions.
PNRC is endowed w/ corporate powers. It administers
special funds – contributions of members, aid given by
gov’t, supported by PCSO and LGUs. It submits annual
reports receipts and disbursement to the President.
ANRC (precursor of PNRC) is considered a federal
instrumentality – immunity from state taxation, subjected
to governmental supervision & regular financial audit,
principal officer appointed by the President – but remains
an independent, volunteer-led org. No basis to assume that
it cannot merit the trust of all and cannot effectively carry
out mission as a National Red Cross Society. Separatists &
insurgents do not consider them as the enemy but as the
entity to turn to in the event of injury.
Considering that PNRC is a GOCC, its charter does not
violate the constitutional provision (Sec. 16, Art. XII).
To declare Sec. 1 of PNRC Charter (creation and
incorporation of the org) invalid and the rest valid is to
reach an absurd situation in w/c obligations are imposed
on and a framework for its operation is laid down for a
legally non-existing entity. Sec. 2-17 of RA 95 are not
separable from Sec. 1 – cannot stand independently – no
separability clause.
Presumption of constitutionality of law is presumed.
There is no clear showing that the PNRC Charter runs
counter to the consti. All reasonable doubts should be
resolved in favor of the constitutionality of the statute.
Deleterious effects will result if PNRC is declared a
private corporation – employees will no longer be covered
by the GSIS; it can no longer be extended tax exemptions
and official immunity; and cannot anymore be given
support, financial or otherwise, by the National Gov’t,
LGUs, and PCSO. The Court must not arbitrarily declare a
law unconstitutional just to save a single individual from
unavoidable consequences of his transgression of the
Consti even if done in good faith.
Sen. Gordon’s continuous occupancy of 2
incompatible positions is a clear violation of the Consti
(Sec. 13, Art. VI). The language in the provision is
unambiguous; requires no in-depth construction. A
position held in an ex officio capacity (a second post held
by virtue of the functions of the first office) does not
violate such constitutional proscription. The chairmanship
of the PNRC Board is not held in an ex officio capacity by a
member of Congress.
Vote to grant Petition.