DANTE V. LIBAN, REYNALDO M.
BERNARDO, and By accepting the chairmanship of the PNRC Board of
SALVADOR M. VIARI v. RICHARD GORDON
July 15, 2009 |Carpio, J. | Disqualifications
Digester: Castro, Rachel Ann M.
SUMMARY: Petitioners prayed to declare Senator Gordon as
having forfeited his seat in the Senate by accepting the position of
being Chairman of PNRC, pursuant to Section 13, Article VI of the
Constitution. The Court said the question to ask was whether or
not a government office or an office in a GOCC to be considered
within the prohibition in the said section. The requisites looked at
were (1) creation under a special charter and (2) government
ownership and control. While the PNRC was created under a
special charter, the 2nd element was missing. Thus, it did not fall
within the prohibition. The Court also invalidated several
provisions in the charter because the Constitution prohibited
creation of private corporations under a special charter.
DOCTRINE: In order to fall under the prohibition in Section 13,
the office must be a government office or an office under a GOCC.
(based on my understanding)
FACTS:
This is a petition to declare Senator Richard J. Gordon
(respondent) as having forfeited his seat in the Senate.
Petitioners Dante V. Liban, Reynaldo M. Bernardo, and
Salvador M. Viari (petitioners) filed with this Court a Petition
to Declare Richard J. Gordon as Having Forfeited His Seat in
the Senate.
o They are officers of the Board of Directors of the
Quezon City Red Cross Chapter while respondent is
Chairman of the Philippine National Red Cross (PNRC)
Board of Governors.
During respondents incumbency as a member of the Senate of
the Philippines, he was elected Chairman of the PNRC
during the 23 February 2006 meeting of the PNRC Board
of Governors. The PNRC is a government-owned or controlled
corporation.
Petitioners:
Governors, respondent has ceased to be a member of the
Senate as provided in Section 13, Article VI of the Constitution1
In accepting and holding the position of Chairman of the PNRC
Board of Governors, respondent has automatically forfeited his
seat in the Senate, pursuant to Flores v. Drilon, which held that
incumbent national legislators lose their elective posts upon
their appointment to another government office.
Their petition is neither an action for quo warranto nor an
action for declaratory relief.
Petitioners maintain that the present petition is a taxpayers
suit questioning the 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. Petitioners point out that this Court has
jurisdiction over this petition since it involves a legal or
constitutional issue which is of transcendental importance.
Camporedondo v NLRC: The PNRC is a government-owned or
controlled corporation. In ruling that the PNRC is a
government-owned or controlled corporation, the simple test
used was whether the corporation was created by its own
special charter for the exercise of a public function or by
incorporation under the general corporation law. Since the
PNRC was created under a special charter, the Court then
ruled that it is a government corporation.
Respondent:
Petitioners have no standing to file this petition which appears
to be an action for quo warranto, since the petition alleges that
respondent committed an act which, by provision of law,
constitutes a ground for forfeiture of his public office. Neither
do they claim to be entitled to the Senate office of respondent.
o Under Section 5, Rule 66 of the Rules of Civil
Procedure, only a person claiming to be entitled to a
public office usurped or unlawfully held by another may
bring an action for quo warranto in his own name. If the
petition is one for quo warranto, it is already barred by
1 SEC. 13. No Senator or Member of the House of Representatives may
hold any other office or employment in the Government, or any
subdivision, agency, or instrumentality thereof, including government-
owned or controlled corporations or their subsidiaries, during his term
without 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.
 prescription since under Section 11, Rule 66 of the
Rules of Civil Procedure, the action should be
commenced within one year after the cause of the
public officers forfeiture of office. In this case,
respondent has been working as a Red Cross volunteer
for the past 40 years. Respondent was already
Chairman of the PNRC Board of Governors when he was
elected Senator in May 2004, having been elected
Chairman in 2003 and re-elected in 2005.
Even if the present petition is treated as a taxpayers suit,
petitioners cannot be allowed to raise a constitutional question
in the absence of any claim that they suffered some actual
damage or threatened injury as a result of the allegedly illegal
act of respondent.
o Taxpayers are allowed to sue only when there is a claim
of illegal disbursement of public funds, or that public
money is being diverted to any improper purpose, or
where petitioners seek to restrain respondent from
enforcing an invalid law that results in wastage of
public funds.
If the petition is treated as one for declaratory relief, this Court
would have no jurisdiction since original jurisdiction for
declaratory relief lies with the Regional Trial Court.
The PNRC is not a government-owned or controlled
corporation and that the prohibition under Section 13, Article
VI of the Constitution does not apply in the present case since
volunteer service to the PNRC is neither an office nor an
employment.
RULING: WHEREFORE, we declare that the office of the
Chairman of the Philippine National Red Cross is not a
government office or an office in a government-owned or
controlled corporation for purposes of the prohibition in Section
13, Article VI of the 1987 Constitution.
Whether the office of the PNRC Chairman is a government
office or an office in a government-owned or controlled
corporation for purposes of the prohibition in Section 13,
Article VI of the Constitution NO
Preliminary matters
Petitioners have no legal standing
It is an action for quo warranto.
o Petitioners filed an action for
o usurpation of public office against respondent,
o a public officer who allegedly committed an act which
constitutes a ground for the forfeiture of his public
office.
o Clearly, such an action is for quo warranto, specifically
under Section 1(b), Rule 66 of the Rules of Court.
Quo warranto is generally commenced by the Government as
the proper party plaintiff. However, under Section 5, Rule 66 of
the Rules of Court, an individual may commence such an action
if he claims to be entitled to the public office allegedly usurped
by another, in which case he can bring the action in his own
name. The person instituting quo warranto proceedings in his
own behalf must claim and be able to show that he is entitled
to the office in dispute, otherwise the action may be dismissed
at any stage. In the present case, petitioners do not claim to be
entitled to the Senate office of respondent. Clearly, petitioners
have no standing to file the present petition.
Even if the Court disregards the infirmities and treats this as a
taxpayers suit, it will still fail on the merits.
PNRC is a Private Organization Performing Public Functions
March 22, 1947: President Manuel A. Roxas signed Republic
Act No. 95 (PNRC Charter)
The 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 without consideration of nationality, race,
religion, gender, social status, or political affiliation. It provides
six major services: Blood Services, Disaster Management,
Safety Services, Community Health and Nursing, Social
Services and Voluntary Service.
The Republic of the Philippines, adhering to the Geneva
Conventions, established the PNRC as a voluntary organization
for the purpose contemplated in the Geneva Convention of 27
July 1929. (See whereas clause in NOTES)
The PNRC is a member National Society of the International
Red Cross and Red Crescent Movement (Movement), which is
composed of the International Committee of the Red Cross
(ICRC), the International Federation of Red Cross and Red
Crescent Societies (International Federation), and the National
Red Cross and Red Crescent Societies (National Societies).
(Seven principles in the NOTES)
The Fundamental Principles provide a universal standard of
reference for all members of the Movement. The PNRC, as a
 member National Society of the Movement, has the duty to
uphold the Fundamental Principles and ideals of the
Movement. In order to be recognized as a National Society, the
PNRC has to be autonomous and must operate in conformity
with the Fundamental Principles of the Movement.
o The reason for this autonomy is fundamental. To be
accepted by warring belligerents as neutral workers
during international or internal armed conflicts, the
PNRC volunteers must not be seen as belonging to any
side of the armed conflict.
o In the Philippines where there is a communist
insurgency and a Muslim separatist rebellion, the PNRC
cannot be seen as government-owned or controlled, and
neither can the PNRC volunteers be identified as
government personnel or as instruments of government
policy.
o Otherwise, the insurgents or separatists will treat PNRC
volunteers as enemies when the volunteers tend to the
wounded in the battlefield or the displaced civilians in
conflict areas.
Thus, the PNRC must not only be, but must also be seen to be,
autonomous, neutral and independent in order to conduct its
activities in accordance with the Fundamental Principles. It
must not appear to be an instrument or agency that
implements government policy; otherwise, it cannot merit the
trust of all and cannot effectively carry out its mission as a
National Red Cross Society. It is imperative that the PNRC
must be autonomous, neutral, and independent in relation to
the State.
o To ensure and maintain its autonomy, neutrality, and
independence, the PNRC cannot be owned or controlled
by the government. Indeed, the Philippine government
does not own the PNRC. The PNRC does not have
government assets and does not receive any
appropriation from the Philippine Congress. The PNRC
is financed primarily by contributions from private
individuals and private entities obtained through
solicitation campaigns organized by its Board of
Governors2.
2 SECTION 11. As a national voluntary organization, the Philippine
National Red Cross shall be financed primarily by contributions
obtained through solicitation campaigns throughout the year
which shall be organized by the Board of Governors and conducted
by the Chapters in their respective jurisdictions. These fund raising
The government has no control over the PNRC
The government does not control the PNRC. Under the PNRC
Charter, as amended, only six of the thirty members of the
PNRC Board of Governors are appointed by the President
of the Philippines. Thus, twenty-four members, or four-fifths
(4/5), of the PNRC Board of Governors are not appointed by the
President.3 Thus, of the twenty-four members of the PNRC
Board, eighteen are elected by the chapter delegates of the
PNRC, and six are elected by the twenty-four members already
chosen a select group where the private sector members have
three-fourths majority. Clearly, an overwhelming majority of
four-fifths of the PNRC Board are elected or chosen by
the private sector members of the PNRC.
The PNRC Board of Governors, which exercises all corporate
powers of the PNRC, elects the PNRC Chairman and all other
officers of the PNRC. The incumbent Chairman of PNRC,
respondent Senator Gordon, was elected, as all PNRC
Chairmen are elected, by a private sector-controlled PNRC
Board four-fifths of whom are private sector members of the
PNRC.
o The PNRC Chairman is not appointed by the President
or by any subordinate government official.
Under Section 16, Article VII of the Constitution, the President
appoints all officials and employees in the Executive branch
whose appointments are vested in the President by the
Constitution or by law. The President also appoints those
whose appointments are not otherwise provided by law. Under
this, the law may also authorize the heads of departments,
agencies, commissions, or boards to appoint officers lower in
rank than such heads of departments, agencies, commissions
or boards.
o Rufino v Endriga: Under Section 16, Article VII of the
1987 Constitution, the President appoints three groups
of officers.
The first group refers to the heads of the
Executive departments, ambassadors, other
campaigns shall be conducted independently of other fund drives by other
organizations.
3 SECTION 6. The governing powers and authority shall be vested in a
Board of Governors composed of thirty members, six of whom shall be
appointed by the President of the Philippines, eighteen shall be elected by
chapter delegates in biennial conventions and the remaining six shall be
selected by the twenty-four members of the Board already chosen. x x x.
 public ministers and consuls, officers of the
armed forces from the rank of colonel or naval
captain, and other officers whose appointments
are vested in the President by the Constitution.
The second group refers to those whom the
President may be authorized by law to appoint.
The third group refers to all other officers of the
Government whose appointments are not
otherwise provided by law.
Under the same Section 16, there is a fourth group
of lower-ranked officers whose appointments Congress
may by law vest in the heads of departments, agencies,
commissions, or boards. x x x
xxx
In a department in the Executive branch, the head is
the Secretary. The law may not authorize the
Undersecretary, acting as such Undersecretary, to
appoint lower-ranked officers in the Executive
department. In an agency, the power is vested in the
head of the agency for it would be preposterous to vest
it in the agency itself. In a commission, the head is the
chairperson of the commission. In a board, the head is
also the chairperson of the board. In the last three
situations, the law may not also authorize officers other
than the heads of the agency, commission, or board to
appoint lower-ranked officers.
xxx
The Constitution authorizes Congress to vest the
power to appoint lower-ranked officers specifically in
the heads of the specified offices, and in no other
person. The word heads refers to the chairpersons of
the commissions or boards and not to their members,
for several reasons.
The President does not appoint the Chairman of the PNRC.
Neither does the head of any department, agency, commission
or board appoint the PNRC Chairman. Thus, the PNRC
Chairman is not an official or employee of the Executive branch
since his appointment does not fall under Section 16, Article
VII of the Constitution. Certainly, the PNRC Chairman is not an
official or employee of the Judiciary or Legislature. This leads
us to the obvious conclusion that the PNRC Chairman is not an
official or employee of the Philippine Government. Not being a
government official or employee, the PNRC Chairman, as
such, does not hold a government office or employment.
Under Section 17, Article VII of the Constitution, the President
exercises control over all government offices in the Executive
branch. If an office is legally not under the control of the
President, then such office is not part of the Executive
branch.
o Rufina case: (only included the part in bold) The
Presidents power of control applies to the acts or
decisions of all officers in the Executive branch. This is
true whether such officers are appointed by the
President or by heads of departments, agencies,
commissions, or boards. The power of control means the
power to revise or reverse the acts or decisions of a
subordinate officer involving the exercise of discretion.
An overwhelming four-fifths majority of the PNRC Board are
private sector individuals elected to the PNRC Board by the
private sector members of the PNRC. The PNRC Board
exercises all corporate powers of the PNRC. The PNRC is
controlled by private sector individuals. Decisions or actions of
the PNRC Board are not reviewable by the President. The
President cannot reverse or modify the decisions or
actions of the PNRC Board. Neither can the President
reverse or modify the decisions or actions of the PNRC
Chairman. It is the PNRC Board that can review, reverse or
modify the decisions or actions of the PNRC Chairman. This
proves again that the office of the PNRC Chairman is a private
office, not a government office.
Although the State is often represented in the governing bodies
of a National Society, this can be justified by the need for
proper coordination with the public authorities, and the
government representatives may take part in decision-making
within a National Society. However, the freely-elected
representatives of a National Societys active members must
remain in a large majority in a National Societys governing
bodies.
The PNRC is privately owned
The PNRC is not government-owned but privately owned. The
vast majority of the thousands of PNRC members are
private individuals, including students. Under the PNRC
Charter, those who contribute to the annual fund campaign of
the PNRC are entitled to membership in the PNRC for one
year. Thus, any one between 6 and 65 years of age can be a
PNRC member for one year upon
contributing P35, P100, P300, P500 or P1,000 for the
 year. Even foreigners, whether residents or not, can be
members of the PNRC.4
The PNRC is a privately owned, privately funded, and privately
run charitable organization. The PNRC is not a government-
owned or controlled corporation.
As regards the Camporedondo case: However,
the Camporedondo ruling failed to consider the definition of a
government-owned or controlled corporation as provided under
Section 2(13) of the Introductory Provisions of the
Administrative Code of 19875. A GOCC must be owned by the
government, and in the case of a stock corporation, at least a
majority of its capital stock must be owned by the
government. In the case of a non-stock corporation, by analogy
at least a majority of the members must be government
officials holding such membership by appointment or
designation by the government. Under this criterion, and as
discussed earlier, the government does not own or control
PNRC.
The PNRC Charter is Violative of the Constitutional
Proscription against the Creation of Private Corporations by
Special Law
The 1935 Constitution6, as amended, was in force when the
PNRC was created by special charter on March 22, 1947.
4 SEC. 5 of PNRC charter as amended by PD 1264. Membership in the
Philippine National Red Cross shall be open to the entire population in the
Philippines regardless of citizenship. Any contribution to the Philippine
National Red Cross Annual Fund Campaign shall entitle the contributor to
membership for one year and said contribution shall be deductible in full
for taxation purposes.
5 SEC. 2. General Terms Defined. x x x
(13) Government-owned or controlled corporation refers to any agency
organized as a stock or non-stock corporation, vested with functions
relating to public needs whether governmental or proprietary in
nature, and owned by the Government directly or through its
instrumentalities either wholly, or where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51) percent of its capital
stock: Provided, That government-owned or controlled corporations may
be further categorized by the Department of the Budget, the Civil Service
Commission, and the Commission on Audit for purposes of the exercise
and discharge of their respective powers, functions and responsibilities
with respect to such corporations
6 SEC. 7. The Congress shall not, except by general law, provide for the
formation, organization, or regulation of private corporations, unless such
corporations are owned or controlled by the Government or any
The subsequent 1973 and 1987 Constitutions contain similar
provisions prohibiting Congress from creating private
corporations except by general law. Section 1 of the PNRC
Charter7, as amended, creates the PNRC as a body corporate
and politic.
Feliciano v Commission on Audit: Congress cannot enact a law
creating a private corporation with a special charter. Such
legislation would be unconstitutional. Private corporations may
exist only under a general law. If the corporation is private, it
must necessarily exist under a general law. (SC held that the
Local Water Districts are government-owned or controlled
corporations since they exist by virtue of Presidential Decree
No. 198, which constitutes their special charter.)
o No private capital invested in LWDs. The government
also controls the LWDs because the municipal or city
mayor, or the provincial governor, appoints all the board
directors of LWDs. Furthermore, the board directors
and other personnel of the LWDs are government
employees subject to civil service laws and anti-graft
laws.
o However, unlike the Local Water Districts, the
elements of government ownership and control are
clearly lacking in the PNRC. Thus, although the
PNRC is created by a special charter, it cannot be
considered a government-owned or controlled
corporation in the absence of the essential elements of
ownership and control by the government.
In creating the PNRC as a corporate entity, Congress was in
fact creating a private corporation. However, the constitutional
prohibition against the creation of private corporations by
special charters provides no exception even for non-profit or
charitable corporations.
o Feliciano v Commission on Audit: The Constitution
emphatically prohibits the creation of private
corporations except by general law applicable to all
citizens. The purpose of this constitutional provision is
to ban private corporations created by special charters,
subdivision or instrumentality thereof.
7 SECTION 1. There is hereby created in the Republic of the Philippines a
body corporate and politic to be the voluntary organization officially
designated to assist the Republic of the Philippines in discharging the
obligations set forth in the Geneva Conventions and to perform such other
duties as are inherent upon a National Red Cross Society. The national
headquarters of this Corporation shall be located in Metropolitan Manila.
 which historically gave certain individuals, families or
groups special privileges denied to other citizens.
Consequently, the PNRC Charter, insofar as it creates the
PNRC as a private corporation and grants it corporate powers,
is void for being unconstitutional. Sections 1 to 13 of the
Charter are void.
The other provisions remain valid as they can be considered as
a recognition by the State that the unincorporated 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. The
other provisions of the PNRC Charter implement the Philippine
Governments treaty obligations under Article 4(5) of the
Statutes of the International Red Cross and Red Crescent
Movement, which provides that to be recognized as a National
Society, the Society must be duly recognized by the legal
government of its country on the basis of the Geneva
Conventions and of the national legislation as a voluntary aid
society, auxiliary to the public authorities in the humanitarian
field.
Summary: The office of the PNRC Chairman is not a
government office or an office in a government-owned or
controlled corporation for purposes of the prohibition in
Section 13, Article VI of the 1987 Constitution. However, since
the PNRC Charter is void insofar as it creates the PNRC as a
private corporation, the PNRC should incorporate under the
Corporation Code and register with the Securities and
Exchange Commission if it wants to be a private corporation.
(2) Seven principles:
- Humanity
- Impartiality
- Neutrality (in bold in the decision) In order to continue to
enjoy the confidence of all, the Movement may not take
sides in hostilities or engage at any time in controversies of
a political, racial, religious or ideological nature.
- Independence (in bold in the decision) The Movement is
independent. The National Societies, while auxiliaries in
the humanitarian services of their governments and subject
to the laws of their respective countries, must always
maintain their autonomy so that they may be able at all
times to act in accordance with the principles of the
Movement.
- Voluntary service
- Unity
- Universality

NOTES:

(1) Whereas clause:

xxx WHEREAS, the Geneva Red Cross Convention envisages the

establishment in each country of a voluntary organization to assist
in caring for the wounded and sick of the armed forces and to
furnish supplies for that purpose;
WHEREAS, the Republic of the Philippines became an independent
nation on July 4, 1946 and proclaimed its adherence to the Geneva
Red Cross Convention on February 14, 1947, and by that action
indicated its desire to participate with the nations of the world in
mitigating the suffering caused by war and to establish in the
Philippines a voluntary organization for that purpose as
contemplated by the Geneva Red Cross Convention; xxx