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LIBAN V.

GORDON
G.R. NO. 175352, JULY 15 2009 HELD: NO. PNRC IS A PRIVATE ORGANIZATION PERFORMING
PUBLIC FUNCTIONS.

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


The PNRC is a member of the National Society of the
known as the Philippine National Red Cross (PNRC) Charter.
International Red Cross and Red Crescent Movement
The Republic of the Philippines, adhering to the Geneva
(Movement). The Fundamental Principles of the Movement
Conventions, established the PNRC as a voluntary organization
provide a universal standard of reference for all its members.
for the purpose contemplated in the Geneva Red Cross
The PNRC, as a member, has the duty to uphold the
Convention.
Fundamental Principles and ideals of the Movement. In order to
The PNRC is a non-profit, donor-funded, voluntary, humanitarian be recognized as a National Society, the PNRC has to be
organization, whose mission is to bring timely, effective, and autonomous. The reason for this autonomy is fundamental. To
compassionate humanitarian assistance for the most vulnerable be accepted by warring belligerents as neutral workers during
without consideration of nationality, race, religion, gender, social international or internal armed conflicts, the PNRC volunteers
status, or political affiliation. The PNRC provides 6 major services: must not be seen as belonging to any side of the armed conflict.
Blood Services, Disaster Management, Safety Services, Community The PNRC cannot be seen as a GOCC, and neither can the PNRC
Health and Nursing, Social Services and Voluntary Service. volunteers be identified as government personnel or as
instruments of government policy. Otherwise, the insurgents or
Liban et al. are officers of the Board of Directors of the Quezon separatists will treat PNRC volunteers as enemies. Thus, the
City Red Cross Chapter. In 2006, during Gordons incumbency PNRC must not only be, but must also be seen to be,
as a member of the Senate, he was elected Chairman of the autonomous, neutral and independent.
PNRC Board of Governors.
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 any appropriation from Congress. The PNRC is financed primarily by
Chairman of the PNRC Board of Governors, Gordon has automatically private contributions.
forfeited his seat in the Senate. Incumbent national legislators lose (2) The PNRC is not controlled by the government. Under its Charter,
their elective posts upon their appointment to another government only 6 of the 30 members of the Board of Governors are appointed by
office. 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
Gordons position: already chosen). The PNRC Board of Governors elects the Chairman
(1) He has been working as a Red Cross volunteer for the past 40 and all its other officers. Gordon was elected, as all PNRC Chairmen
years. He was already Chairman of the PNRC Board of Governors when are elected, by a private sector-controlled PNRC Board
he was elected Senator in May 2004, having been elected Chairman in (3) The PNRC Chairman is neither appointed by the President nor by
2003 and re-elected in 2005. the head of any department, agency, commission or board of the
(2) PNRC is not a GOCC Executive, Judicial or Legislative branches. Hence, the PNRC Chairman
(3) The prohibition under Art. 6, 13 of the Constitution does not apply is not an official or employee of the Philippine Government. Not being
in the present case since volunteer service to the PNRC is neither an a government official or employee, the PNRC Chairman, as such, does
office nor an employment not hold a government office or employment.
(4) The PNRC boards decisions or actions are not reviewable by the
ISSUE: Whether the office of the PNRC Chairman is a President. Neither can the President reverse or modify the decisions or
actions of the Chairman, it is the Board that can review, reverse or
government office or an office in a GOCC.
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
In the Camporedondo ruling, the test used was whether the a special charter. Such legislation would be unconstitutional.
corporation was created by its own special charter for the Private corporations may exist only under a general law. If the
exercise of a public function or by incorporation under the corporation is private, it must necessarily exist under a general
general corporation law. Since the PNRC was created under a law. Under existing laws, the general law is the Corporation
special charter, the Court then ruled that it is a government Code, except that the Cooperative Code governs the
corporation. However, it failed to consider the definition of a incorporation of cooperatives. The Constitution authorizes
GOCC in the Administrative Code. 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.
Government-owned or controlled corporations may be created or

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