Liban vs.
Gordon (2009)
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 Govt, or any
subdivision, agency, or instrumentality thereof,
including govt-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 govt-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 officers 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 govt 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 taxpayers 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 petitioners allegations. Petitioners
do not claim to be entitled to the Senate office of
respondent.
WON PNRC is a Private or Government-
Owned or 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 govt
policy to merit the trust of all and effectively
carry out its mission therefore, it cannot be
owned/controlled by the govt
The Philippine govt does not own the PNRC
does not have govt 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 govt 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 govt 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 govt-owned or
controlled corporation must be owned by the
govt, and in case of a stock corporation, at least
a majority of its capital stock must be owned by
the govt. In case of a non-stock corporation, at
least a majority of the members must be govt
officials holding such membership by
appointment/designation by the govt.
WON the office of the PNRC Chairman is a
govt 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. Govt-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 govt ownership and
control (e.g. capital assets and operating funds
from govt) are clearly lacking in the PNRC. It
therefore cannot be considered a govt-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. Govts
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
govt have kept themselves w/in the limits of the
Consti & laws and have not abused discretion
given them.
PNRC is a govt-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
govts public functions.
PNRC is endowed w/ corporate powers. It
administers special funds contributions of
members, aid given by govt, 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 Govt,
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. Gordons 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.