Liban v. Gordon
MODIFICATIONFacts
The Antecedents: Petitioners Dante V. Liban, Reynaldo M. Bernardo, and Salvador M. Viari, officers of the Quezon City Red Cross Chapter, filed a petition seeking to declare Senator Richard J. Gordon as having forfeited his seat in the Senate. Their contention is that by accepting the chairmanship of the Philippine National Red Cross (PNRC) Board of Governors while serving as a Senator, Gordon violated Section 13, Article VI of the Constitution, which prohibits Senators from holding any other office or employment in the government or its instrumentalities during their term without forfeiting their seat. Petitioners cited previous rulings that the PNRC is a government-owned or controlled corporation and that holding another government office leads to forfeiture of a legislative seat. Procedural History: The case originated from a petition filed directly with the Supreme Court by the petitioners. The respondent, Senator Gordon, filed a Comment asserting that the petitioners lacked standing and that the petition was barred by prescription if considered a quo warranto action. He also argued against the petition being treated as a taxpayer's suit or a declaratory relief action, contending that the PNRC is not a government-owned or controlled corporation and that his service to the PNRC is voluntary and not an office or employment. The petitioners, in their Reply, maintained their petition was a taxpayer's suit questioning unlawful disbursement of funds and that the Court had jurisdiction due to the transcendental importance of the constitutional issue. The Petition: The petitioners filed a petition directly with the Supreme Court, seeking a declaration that Senator Richard J. Gordon forfeited his Senate seat. They argued that his acceptance of the PNRC Chairmanship constituted holding another office in a government-controlled entity, violating Section 13, Article VI of the Constitution. The core of their argument relied on the premise that the PNRC is a government-owned or controlled corporation, citing Camporedondo v. NLRC. They sought to have Gordon removed from his Senate position, asserting that he was unlawfully occupying it and drawing salary. The petition was framed as a challenge to the constitutionality of holding dual public offices.
Issue(s)
Whether the petitioners have the legal standing to institute the petition. Whether the Philippine National Red Cross (PNRC) is a Government-Owned or Controlled Corporation (GOCC). Whether the office of the PNRC Chairman is a government office for purposes of the prohibition in Section 13, Article VI of the Constitution. Whether the PNRC Charter is constitutional insofar as it creates a private corporation by special law.
Ruling
The Supreme Court DISMISSED the petition. It declared that the office of the Chairman of the Philippine National Red Cross (PNRC) is NOT a government office or an office in a GOCC for purposes of the prohibition in Section 13, Article VI of the 1987 Constitution. However, the Court also declared Sections 1, 2, 3, 4(a), 5, 6, 7, 8, 9, 10, 11, 12, and 13 of the PNRC Charter (Republic Act No. 95, as amended) VOID because they unconstitutionally create a private corporation by special law.
Ratio Decidendi
On Issue 1: The Court ruled that the petition is essentially an action for Quo Warranto under Rule 66, Section 1(b) of the Rules of Court, as it seeks the forfeiture of a public office. Under Section 5, Rule 66, an individual may only bring such an action if he claims to be entitled to the office in question. Since the petitioners do not claim Gordon's Senate seat, they lack the standing to bring the suit. Furthermore, it cannot be treated as a taxpayer's suit because there is no allegation of illegal disbursement of public funds or wastage of public money through an invalid law. On Issue 2: The Court held that the PNRC is not a GOCC. Applying Section 2(13) of the Administrative Code of 1987, a GOCC must be owned by the government. The PNRC is donor-funded and does not receive congressional appropriations. While it was created by a special charter, it lacks government ownership and control. The Court distinguished Camporedondo v. NLRC, stating that the 'special charter test' is insufficient without the elements of ownership and control. The PNRC is a private organization performing public functions, necessitated by its need for neutrality and independence under the Geneva Conventions. On Issue 3: The prohibition in Section 13, Article VI applies only to 'office or employment in the Government... including government-owned or controlled corporations.' Since the PNRC is not a GOCC and the Chairman is not appointed by the President or any government head under Section 16, Article VII, the position is private. The President only appoints 6 of the 30 board members, meaning 4/5 of the board is private-sector controlled. Therefore, Gordon did not hold an 'other office' that would trigger the forfeiture of his Senate seat. On Issue 4: The Court found that the PNRC Charter violates Section 16, Article XII of the Constitution, which prohibits Congress from creating private corporations except by general law. Since the PNRC is a private corporation, it cannot have a special charter. The Court declared the provisions creating the PNRC as a 'body corporate and politic' void. However, it clarified that the PNRC remains a recognized National Society, and the provisions granting it privileges and implementing treaty obligations remain valid. The PNRC was directed to incorporate under the Corporation Code to maintain its private corporate personality.
Main Doctrine
To be classified as a Government-Owned or Controlled Corporation (GOCC), an entity must not only be created by a special charter but must also be owned or controlled by the government. Ownership is determined by the government's possession of at least 51% of capital stock or, in non-stock corporations, a majority of members being government officials. Control is evidenced by the President's power to appoint the majority of the governing board and the power to reverse or modify their decisions. The PNRC, being 4/5 controlled by the private sector and receiving no government appropriations, is a private organization performing public functions, and its Chairman does not hold a 'government office.'