Liban vs Gordon
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 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.
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 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.
Republic vs Villanueva
Republic v. Villanueva
Facts:
Lots Nos. 568 and 569, located at Barrio Dampol, Plaridel, Bulacan,
with an area of 313 square meters and an assessed value of P1,350
were acquired by INC on January 9, 1953 from Andres Perez in
exchange for a lot with an area of 247 square meters owned by the said
church.
The said lots were already possessed by Perez in 1933. They are not
included in any military reservation. They are inside an area which
was certified as alienable or disposable by the Bureau of Forestry in
1927. The lots are planted to santol and mango trees and banana
plants. A chapel exists on the said land. The land had been declared for
realty tax purposes. Realty taxes had been paid therefor.
On September 13, 1977, INC filed with the CFI Bulacan an
application for the registration of the two lots. It alleged that it and its
predecessors-in-interest had possessed the land for more than thirty
years.
The trial court ordered the registration of the two lots.
Issue:
Whether or not the trial court erred in ordering the registration of two
lots.
Held:
Section 11, Article XIV of the Constitution stated that "no private
corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area".
INC, as a corporation sole or a juridical person, is disqualified to
acquire or hold alienable lands of the public domain, like the two lots
in question, because of the constitutional prohibition already
mentioned and because the said church is not entitled to avail itself of
the benefits of section 48(b) which applies only to Filipino citizens or
natural persons. A corporation sole has no nationality (Roman Catholic
Apostolic Adm. of Davao, Inc. vs. Land Registration Commission, 102
Phil. 596. See Register of Deeds vs. Ung Siu Si Temple, 97 Phil. 58
and sec. 49 of the Public Land Law).
The contention in the comments of the INC that the two lots are
private lands, following the rule laid down in Susi vs. Razon and
Director of Lands, 48 Phil. 424, is not correct. What was considered
private land in the Susi case was a parcel of land possessed by a
Filipino citizen since time immemorial, as in Cariño vs. Insular
Government, 212 U.S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil. 132.
The lots sought to be registered in this case do not fall within that
category. They are still public lands. A land registration proceeding
under section 48(b) "presupposes that the land is public" (Mindanao
vs. Director of Lands, L-19535, July 10, 1967, 20 SCRA 641, 644).
As held in Oh Cho vs. Director of Lands, 75 Phil. 890, "all lands that
were not acquired from the Government, either by purchase or by
grant, belong to the public domain. An exception to the rule would be
any land that should have been in the possession of an occupant and of
his predecessors-in-interest since time immemorial, for such
possession would justify the presumption that the land had never been
part of the public domain or that it had been a private property even
before the Spanish conquest."
In Uy Un vs. Perez, 71 Phil. 508, it was noted that the right of an
occupant of public agricultural land to obtain a confirmation of his title
under section 48(b) of the Public Land Law is a "derecho dominical
incoativo" and that before the issuance of the certificate of title the
occupant is not in the juridical sense the true owner of the land since it
still pertains to the State.
The lower court's judgment is reversed and set aside. The application
for registration of INC is dismissed with costs against said applicant.
 Feliciano vs Commission on Audit years. The board of directors of LWDs are not co-owners of the LWDs. LWD have
GR No. 147402 January 14, 2004 no private stockholders or members. The board of directors and other personnel of
LWDs are government emp
Facts: A special audit team from COA Regional office no. VIII audited the accounts
of LMWD. Subsequently, LMWD received a letter from COA dated July 19, 1999
requesting payment of auditing fees. As general manager of LMWD, petitioner sent
a reply dated October 12, 1999 informing COA’s regional director that the water
district could not pay the auditing fees. Petitioner cited as basis for his action section
6 and 20 of Presidential Decree no. 198 as well as section 18 of RA 6758. The
regional director referred petitioner to reply o the COA Chairman on October 18,
1999. On October 19, 1999, petitioner wrote COA through the Regional Director
asking for refund of all auditing fees LMWD previously paid to COA. On March 16,
2000, petitioner received COA Chairman Celso D. Gangans resolution dated January
3, 2o00 denying his requests. Petitioner filed a motion for reconsideration on March
31, 2000, which COA denied on January 30, 2001.

Issue: Whether or not petitioner LMWD is a private corporation exempt from the
auditing jurisdiction of COA.

Held: No. Private corporations may exist only under a general law. If the corporation
is private, it must necessarily exist under a general law. Stated differently, only
corporations created under a general law can qualify as private corporations under
existing laws, that general law is the corporation code, except that the cooperative
code governs the incorporation of cooperatives.

Obviously, LWDs are not private corporations because they are not created under the
corporation code. LWDs are registered with the Securities and Exchange
Commission (SEC). Section 14 of the corporation code states that all corporations
under this code shall file with the SEC articles of incorporation. LWDs have no
articles of incorporation, no incorporators and no stockholders or members. There
are no stockholders or members to elect the board of directors of LWDs as in the
case of all corporations registered with the SEC. The local mayor or the provincial
governor appoints the directors of LWDs for a fixed term of office. This court has
ruled that LWDs are not created under the corporation code.

The determining factor of COA’s audit jurisdiction is government ownership or

control of the corporation. The criterion of ownership and control is more important
than the issue of original charter.

Certainly, the government owns and controls LWDs. The government organizes
LWDs in accordance with a specific law, PD 198. There is no private party involved
as co-owner in the creation of and LWD. Just prior to the creation of LWDs, the
national or local government owns and controls all their assets. The government
controls LWDs because under PD 198 the municipal or city mayor, or the provincial
governor, appoints all the board of directors of an LWD for a fixed term of six (6)