LIBAN V.

GORDON

HELD:

G.R. NO. 175352, JULY 15 2009

NO. PNRC IS A PRIVATE ORGANIZATION PERFORMING

PUBLIC FUNCTIONS.

FACTS: In 1947, President Roxas signed R.A. 95, otherwise

known as the Philippine National Red Cross (PNRC) Charter.
The Republic of the Philippines, adhering to the Geneva
Conventions, established the PNRC as a voluntary organization
for the purpose contemplated in the Geneva Red Cross
Convention.
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. The PNRC provides 6 major services:
Blood Services, Disaster Management, Safety Services, Community
Health and Nursing, Social Services and Voluntary Service.

Liban et al. are officers of the Board of Directors of the Quezon

City Red Cross Chapter. In 2006, during Gordons incumbency
as a member of the Senate, he was elected Chairman of the
PNRC Board of Governors.

The PNRC is a member of the National Society of the

International Red Cross and Red Crescent Movement
(Movement). The Fundamental Principles of the Movement
provide a universal standard of reference for all its members.
The PNRC, as a member, 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. 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.
The PNRC cannot be seen as a GOCC, and neither can the PNRC
volunteers be identified as government personnel or as
instruments of government policy. Otherwise, the insurgents or
separatists will treat PNRC volunteers as enemies. Thus, the
PNRC must not only be, but must also be seen to be,
autonomous, neutral and independent.

The following are proof that the PNRC is not a GOCC:

Liban et al.s position: In Camporedondo v. NLRC, it was held that (1) The PNRC does not have government assets and does not receive
the PNRC is a GOCC. In accepting and holding the position of
Chairman of the PNRC Board of Governors, Gordon has automatically
forfeited his seat in the Senate. Incumbent national legislators lose
their elective posts upon their appointment to another government
office.

Gordons position:
(1) He has been working as a Red Cross volunteer for the past 40
years. He 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.
(2) PNRC is not a GOCC
(3) The prohibition under Art. 6, 13 of the Constitution does not apply
in the present case since volunteer service to the PNRC is neither an
office nor an employment

ISSUE: Whether the office of the PNRC

government office or an office in a GOCC.

Chairman

is a

any appropriation from Congress. The PNRC is financed primarily by

private contributions.
(2) The PNRC is not controlled by the government. Under its Charter,
only 6 of the 30 members of the Board of Governors are appointed by
the President (of the 24 remaining, 18 are elected by the chapter
delegates of the PNRC and the other 6 are elected by the 24 members
already chosen). The PNRC Board of Governors elects the Chairman
and all its other officers. Gordon was elected, as all PNRC Chairmen
are elected, by a private sector-controlled PNRC Board
(3) The PNRC Chairman is neither appointed by the President nor by
the head of any department, agency, commission or board of the
Executive, Judicial or Legislative branches. Hence, 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.
(4) The PNRC boards decisions or actions are not reviewable by the
President. Neither can the President reverse or modify the decisions or
actions of the Chairman, it is the Board that can review, reverse or

POLITICAL LAW REVIEW | ATTY. JACK JIMENEZ | MARK JOREL O. CALIDA

modify the decisions or actions of the Chairman. This proves again established by special charters in the interest of the common good
that the office of the Chairman is a private office, not a government and subject to the test of economic viability.
office.

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. Under existing laws, the general law is the Corporation
Code, except that the Cooperative Code governs the
incorporation of cooperatives. The Constitution authorizes
Congress to create GOCCs through special charters. Since
private corporations cannot have special charters, it follows that
A GOCC must be owned by the government, and in the case of Congress can create corporations with special charters only if
a stock corporation, at least a majority of its capital stock must such corporations are government-owned or controlled.
be owned by the government. In the case of a non-stock
corporation, by analogy at least a majority of the members Thus, although the PNRC is created by a special charter, it
must be government officials holding such membership by cannot be considered a GOCC in the absence of the essential
appointment or designation by the government. Under this elements of ownership and control by the government. In
criterion, and as discussed earlier, the government does not creating the PNRC as a corporate entity, Congress was in fact
own or control PNRC.
creating a private corporation. However, the constitutional
prohibition against the creation of private corporations by
Section 16, Article XII of the Constitution provides:
special charters provides no exception even for non-profit or
charitable corporations. Consequently, the provisions of the
The Congress shall not, except by general law, provide for the PNRC Charter, insofar as it creates a private corporation and
formation, organization, or regulation of private corporations. grants it corporate powers is void for being unconstitutional.
In the Camporedondo ruling, the 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. However, it failed to consider the definition of a
GOCC in the Administrative Code.

Government-owned or controlled corporations may be created or

POLITICAL LAW REVIEW | ATTY. JACK JIMENEZ | MARK JOREL O. CALIDA