Liban Vs Auditor General

G.R. No. 175352. January 18, 2011.
DANTE V. LIBAN, REYNALDO M. BERNARDO and

SALVADOR M. VIARI, petitioners, vs. RICHARD J. GORDON,
respondent, PHILIPPINE NATIONAL RED CROSS, intervenor.
Corporation Law; Philippine National Red Cross; A closer look at the

nature of the Philippine National Red Cross (PNRC) would show that there
is none like it not just in terms of structure, but also in terms of history,
public service and official status.—The passage of several laws relating to
the PNRC’s corporate existence notwithstanding the effectivity of the
constitutional proscription on the creation of private corporations by law, is
a recognition that the PNRC is not strictly in the nature of a private
corporation contemplated by the aforesaid constitutional ban. A closer look
at the nature of the PNRC would show that there is none like it not just in
terms of structure, but also in terms of history, public service and official
status accorded to it by the State and the international community. There is
merit in PNRC’s contention that its structure is sui generis.
Same; Same; The sui generis character of Philippine National Red
Cross (PNRC) requires us to approach controversies involving the PNRC on
a case-to-case basis.—Although it is neither a subdivision, agency, or
instrumentality of the government, nor a government-owned or controlled
corporation or a subsidiary thereof, as succinctly explained in the Decision
of July 15, 2009, so much so that respondent, under the Decision, was
correctly allowed to hold his position as Chairman thereof concurrently
while he served as a Senator, such a conclusion does not ipso facto imply
that the PNRC is a “private corporation” within the contemplation of the
provision of the Constitution, that must be organized under the Corporation
Code. As correctly mentioned by Justice Roberto A. Abad, the sui generis
character of PNRC requires us to approach controversies involving the
PNRC on a case-to-case basis.
_______________
* EN BANC.
710
710 SUPREME COURT REPORTS ANNOTATED
Liban vs. Gordon
Same; Same; The Philippine National Red Cross (PNRC) has

responded to almost all national disasters since 1947, and is widely known
to provide a substantial portion of the country’s blood requirements.—It
bears emphasizing that the PNRC has responded to almost all national
disasters since 1947, and is widely known to provide a substantial portion of
the country’s blood requirements. Its humanitarian work is unparalleled. The
Court should not shake its existence to the core in an untimely and drastic
manner that would not only have negative consequences to those who
depend on it in times of disaster and armed hostilities but also have adverse
effects on the image of the Philippines in the international community. The
sections of the PNRC Charter that were declared void must therefore
stay.
CARPIO, J., Dissenting Opinion:
Corporation Law; Philippine National Red Cross; Constitutional Law;
View that the creation of the Philippine National Red Cross (PNRC) through
a special charter is violative of the constitutional proscription against the
creation of private corporations by special law.—Since the PNRC is a
private corporation, the creation of the PNRC through a special charter is
violative of the constitutional proscription against the creation of private
corporations by special law. The creation of the PNRC by special charter on
22 March 1947 through RA 95 contravenes Section 7, Article XIV of the
1935 Constitution, as amended, which reads: 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 subdivision or instrumentality thereof.
Same; Same; Same; View that there is no prescription to declare a law
unconstitutional.—The fact that the constitutionality of RA 95 has not been
questioned for more than sixty (60) years does not mean that it could no
longer be declared unconstitutional. One is not estopped from assailing the
validity of a law just because such law has been relied upon in the past and
all that time has not been attacked as unconstitutional. Indeed, there is no
prescription to declare a law unconstitutional.
711
VOL. 639, JANUARY 18, 2011 711
Liban vs. Gordon
Same; Same; Same; View that President Marcos could not issue
decrees or orders contrary to the provisions of the Constitution.—Even if
the PNRC derived its existence from PD 1264, still the constitutional
prohibition will apply. President Marcos issued PD 1264 on 5 December
1977 during martial law period when the President assumed extensive
legislative power. Such assumption of legislative power did not place
President Marcos above the Constitution. President Marcos could not issue
decrees or orders contrary to the provisions of the Constitution. The exercise
of legislative power by President Marcos under martial law must still be in
accordance with the Constitution because legislative power cannot be
exercised in violation of the Constitution from which legislative power
draws its existence.
Same; Same; Same; View that the Philippine National Red Cross
(PNRC) cannot claim that it is sui generis just because it is a private
organization performing certain public or governmental functions.—All
private charitable organizations are doing public service or activities that
also constitute governmental functions. Hence, the PNRC cannot claim that
it is sui generis just because it is a private organization performing certain
public or governmental functions. That the PNRC is rendering public
service does not exempt it from the constitutional prohibition against the
creation of a private corporation through a special law since the PNRC is,
admittedly, still a private organization. The express prohibition against the
creation of private corporations by special charter under Section 16, Article
XII of the 1987 Constitution cannot be disregarded just because a private
corporation claims to be sui generis. The constitutional prohibition admits
of no exception.
(PNRC) could either choose to remain unincorporated or it could
incorporate under the Corporation Code.—The PNRC could either choose
to remain unincorporated or it could adopt its own articles of incorporation
and by-laws and incorporate under the Corporation Code and register with
the Securities and Exchange Commission if it wants to be a private
corporation.
712
Liban vs. Gordon
ABAD, J., Concurring Opinion:

Corporation Law; Philippine National Red Cross; Constitutional Law;
View that when Congress created the Philippine National Red Cross
(PNRC), it did not intend to form either a private or government-owned
corporation with the usual powers and attributes that such entities might
possess.—The PNRC’s creation derived primarily from the Geneva
Conventions. When Congress created the PNRC, it did not intend to form
either a private or government-owned corporation with the usual powers and
attributes that such entities might possess. Rather, it set out to form an
organization that would be responsive to the requirements of the Geneva
Conventions.
(PNRC) was not established by private individuals for profit or gain, but by
the State itself pursuant to the objectives of international humanitarian law.
—The State organized the PNRC to assist it in discharging its commitments
under the Geneva Conventions as an “auxiliary of the public authorities in
the humanitarian field.” It was not established by private individuals for
profit or gain, but by the State itself pursuant to the objectives of
international humanitarian law.
(PNRC) cannot be regarded as a government corporation or
instrumentality.—The PNRC cannot also be regarded as a government
corporation or instrumentality. To begin with, it is not owned or controlled
by the government or part of the government machinery. The conditions for
its recognition as a National Society also militate against its classification as
a government entity.
(PNRC) cannot be classified as either a purely private or government entity.
—The PNRC cannot be classified as either a purely private or government
entity. It is a hybrid organization that derives certain peculiarities from
international humanitarian law. For this reason, its organizational character
does not fit the parameters provided by either the Corporation Code or
Administrative Code. It is a sui generis entity that draws its nature from the
Geneva Conventions, the Statutes of the Movement and the law creating it.
713
VOL. 639, JANUARY 18, 2011 713
Liban vs. Gordon
Same; Same; Same; View that the Constitution does not preclude the
creation of corporations that may neither be classified as private nor
governmental.—The Constitution does not preclude the creation of
corporations that may neither be classified as private nor governmental. Sec.
7, Article XIV of the 1935 Constitution, which was carried over in
subsequent versions of the fundamental law, does not prohibit Congress
from creating other types of organizations that may not fall strictly within
the terms of what is deemed a private or government corporation. The
Constitution simply provides that Congress cannot create private
corporations, except by general law, unless such corporations are owned or
controlled by the government. It does not forbid Congress from creating
organizations that do not belong to these two general types.
Same; Same; Same; View that the special status of the Philippine
National Red Cross (PNRC) under international humanitarian law justifies
the special manner of its creation.—The special status of the PNRC under
international humanitarian law justifies the special manner of its creation.
The State itself committed the PNRC’s formation to the community of
nations, and no less than an act of Congress should be deemed sufficient
compliance with such an obligation. To require the PNRC to incorporate
under the general law is to disregard its unique standing under international
conventions. It also ignores the very basic premise for the PNRC’s creation.
MOTION FOR CLARIFICATION AND/OR FOR

RECONSIDERATION of a decision of the Supreme Court and
MOTION FOR PARTIAL RECONSIDERATION of a decision
of the Supreme Court.
The facts are stated in the resolution of the Court.
Castro, Castro & Associates for petitioners.
Agabin, Verzola, Hermoso & Layaoen Law Offices for
respondent.
Lorna Patajo-Kapunan for movant-intervenor.
Rodolfo O. Reyes and Reynaldo A. Dario co-counsels for
movant-intervenor.
714

Liban vs. Gordon
RESOLUTION
LEONARDO-DE CASTRO, J.:
This resolves the Motion for Clarification and/or for
Reconsideration1 filed on August 10, 2009 by respondent Richard
J. Gordon (respondent) of the Decision promulgated by this Court
on July 15, 2009 (the Decision), the Motion for Partial
Reconsideration2 filed on August 27, 2009 by movant-intervenor
Philippine National Red Cross (PNRC), and the latter’s
Manifestation and Motion to Admit Attached Position Paper3
filed on December 23, 2009.
In the Decision,4 the Court held that respondent did not forfeit his
seat in the Senate when he accepted the chairmanship of the PNRC
Board of Governors, as “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.”5 The Decision, however, further declared
void the PNRC Charter “insofar as it creates the PNRC as a private
corporation” and consequently ruled that “the PNRC should
incorporate under the Corporation Code and register with the
Securities and Exchange Commission if it wants to be a private
_______________
1 Rollo, pp. 256-264.

2 Id., at pp. 397-418.
3 Id., at pp. 434-439.
4 Liban v. Gordon, G.R. No. 175352, July 15, 2009, 593 SCRA 68.
5 Section 13, Article VI of the Constitution reads:
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.
715
VOL. 639, JANUARY 18, 2011 715

Liban vs. Gordon
corporation.”6 The dispositive portion of the Decision reads as

follows:
“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. We also declare that
Sections 1, 2, 3, 4(a), 5, 6, 7, 8, 9, 10, 11, 12, and 13 of the Charter of the
Philippine National Red Cross, or Republic Act No. 95, as amended by
Presidential Decree Nos. 1264 and 1643, are VOID because they create the
PNRC as a private corporation or grant it corporate powers.”7
In his Motion for Clarification and/or for Reconsideration,
respondent raises the following grounds: (1) as the issue of
constitutionality of Republic Act (R.A.) No. 95 was not raised by the
parties, the Court went beyond the case in deciding such issue; and
(2) as the Court decided that Petitioners did not have standing to file
the instant Petition, the pronouncement of the Court on the validity
of R.A. No. 95 should be considered obiter.8
Respondent argues that the validity of R.A. No. 95 was a non-
issue; therefore, it was unnecessary for the Court to decide on that
question. Respondent cites Laurel v. Garcia,9 wherein the Court
said that it “will not pass upon a constitutional question although
properly presented by the record if the case can be disposed of on
some other ground” and goes on to claim that since this Court, in the
Decision, disposed of the petition on some other ground, i.e., lack of
standing of petitioners, there was no need for it to delve into the
validity of R.A. No. 95, and the rest of the judgment should be
deemed obiter.
_______________
6 Liban v. Gordon, supra note 4 at pp. 97-98.

7 Id., at p. 98.
8 Rollo, p. 256.
9 G.R. Nos. 92013 and 92047, July 25, 1990, 187 SCRA 797, 813.
716

Liban vs. Gordon
In its Motion for Partial Reconsideration, PNRC prays that the

Court sustain the constitutionality of its Charter on the following
grounds:
A. THE ASSAILED DECISION DECLARING UNCONSTITUTIONAL

REPUBLIC ACT NO. 95 AS AMENDED DEPRIVED INTERVENOR
PNRC OF ITS CONSTITUTIONAL RIGHT TO DUE PROCESS.
1. INTERVENOR PNRC WAS NEVER A PARTY TO THE INSTANT
CONTROVERSY.
2. THE CONSTITUTIONALITY OF REPUBLIC ACT NO. 95, AS
AMENDED WAS NEVER AN ISSUE IN THIS CASE.
B. THE CURRENT CHARTER OF PNRC IS PRESIDENTIAL DECREE
NO. 1264 AND NOT REPUBLIC ACT NO. 95. PRESIDENTIAL DECREE
NO. 1264 WAS NOT A CREATION OF CONGRESS.
C. PNRC’S STRUCTURE IS SUI GENERIS; IT IS A CLASS OF ITS OWN.
WHILE IT IS PERFORMING HUMANITARIAN FUNCTIONS AS AN
AUXILIARY TO GOVERNMENT, IT IS A NEUTRAL ENTITY
SEPARATE AND INDEPENDENT OF GOVERNMENT CONTROL, YET
IT DOES NOT QUALIFY AS STRICTLY PRIVATE IN
CHARACTER
In his Comment and Manifestation10 filed on November 9,

2009, respondent manifests: (1) that he agrees with the position
taken by the PNRC in its Motion for Partial Reconsideration dated
August 27, 2009; and (2) as of the writing of said Comment and
Manifestation, there was pending before the Congress of the
Philippines a proposed bill entitled “An Act Recognizing the PNRC
as an Independent, Autonomous, Non-Governmental Organization
Auxiliary to the Authorities of the Republic of the Philippines in the
Humanitarian Field, to be Known as The Philippine Red Cross.”11
_______________
10 Rollo, pp. 421-431.

11 Id., at p. 421.
717
VOL. 639, JANUARY 18, 2011 717

Liban vs. Gordon
After a thorough study of the arguments and points raised by the

respondent as well as those of movant-intervenor in their respective
motions, we have reconsidered our pronouncements in our Decision
dated July 15, 2009 with regard to the nature of the PNRC and the
constitutionality of some provisions of the PNRC Charter, R.A. No.
95, as amended.
As correctly pointed out in respondent’s Motion, the issue of
constitutionality of R.A. No. 95 was not raised by the parties, and
was not among the issues defined in the body of the Decision; thus,
it was not the very lis mota of the case. We have reiterated the rule
as to when the Court will consider the issue of constitutionality in
Alvarez v. PICOP Resources, Inc.,12 thus:
“This Court will not touch the issue of unconstitutionality unless it is

the very lis mota. It is a well-established rule that a court should not
pass upon a constitutional question and decide a law to be
unconstitutional or invalid, unless such question is raised by the parties
and that when it is raised, if the record also presents some other ground
upon which the court may [rest] its judgment, that course will be adopted
and the constitutional question will be left for consideration until such
question will be unavoidable.”13
Under the rule quoted above, therefore, this Court should not
have declared void certain sections of R.A. No. 95, as amended by
Presidential Decree (P.D.) Nos. 1264 and 1643, the PNRC Charter.
Instead, the Court should have exercised judicial restraint on this
matter, especially since there was some other ground upon which the
Court could have based its judgment. Furthermore, the PNRC, the
entity most adversely affected by this declaration of
unconstitutionality, which was not even originally a party to this
case, was being compelled, as a consequence of the Decision, to
suddenly reorganize and
_______________
12 G.R. No. 162243, November 29, 2006, 508 SCRA 498.

13 Id., at p. 552, citing Sotto v. Commission on Elections, 76 Phil. 516, 522 (1946).
718

Liban vs. Gordon
incorporate under the Corporation Code, after more than sixty (60)
years of existence in this country.
Its existence as a chartered corporation remained unchallenged
on ground of unconstitutionality notwithstanding that R.A. No. 95
was enacted on March 22, 1947 during the effectivity of the 1935
Constitution, which provided for a proscription against the creation
of private corporations by special law, to wit:
“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 and controlled by the Government or any
subdivision or instrumentality thereof.” (Art. XIV, 1935 Constitution.)
Similar provisions are found in Article XIV, Section 4 of the

1973 Constitution and Article XII, Section 16 of the 1987
Constitution. The latter reads:
“SECTION 16. The Congress shall not, except by general law, provide

for the formation, organization, or regulation of private corporations.
Government-owned or controlled corporations may be created or
established by special charters in the interest of the common good and
subject to the test of economic viability.”
Since its enactment, the PNRC Charter was amended several

times, particularly on June 11, 1953, August 16, 1971, December 15,
1977, and October 1, 1979, by virtue of R.A. No. 855, R.A. No.
6373, P.D. No. 1264, and P.D. No. 1643, respectively. The passage
of several laws relating to the PNRC’s corporate existence
notwithstanding the effectivity of the constitutional proscription on
the creation of private corporations by law, is a recognition that the
PNRC is not strictly in the nature of a private corporation
contemplated by the aforesaid constitutional ban.
A closer look at the nature of the PNRC would show that there is
none like it not just in terms of structure, but also in terms of history,
public service and official status accorded to
719
VOL. 639, JANUARY 18, 2011 719

Liban vs. Gordon
it by the State and the international community. There is merit in

PNRC’s contention that its structure is sui generis.
The PNRC succeeded the chapter of the American Red Cross
which was in existence in the Philippines since 1917. It was created
by an Act of Congress after the Republic of the Philippines became
an independent nation on July 6, 1946 and proclaimed on February
14, 1947 its adherence to the Convention of Geneva of July 29, 1929
for the Amelioration of the Condition of the Wounded and Sick of
Armies in the Field (the “Geneva Red Cross Convention”). By that
action the Philippines 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
and like other volunteer organizations established in other countries
which have ratified the Geneva Conventions, to promote the health
and welfare of the people in peace and in war.14
The provisions of R.A. No. 95, as amended by R.A. Nos. 855 and
6373, and further amended by P.D. Nos. 1264 and 1643, show the
historical background and legal basis of the creation of the PNRC by
legislative fiat, as a voluntary organization impressed with public
interest. Pertinently R.A. No. 95, as amended by P.D. 1264,
provides:
“WHEREAS, during the meeting in Geneva, Switzerland, on 22 August

1894, the nations of the world unanimously agreed to diminish within their
power the evils inherent in war;
WHEREAS, more than one hundred forty nations of the world have
ratified or adhered to the Geneva Conventions of August 12, 1949 for the
Amelioration of the Condition of the Wounded and Sick of Armed Forces in
the Field and at Sea, The Prisoners of War, and The Civilian Population in
Time of War referred to in this Charter as the Geneva Conventions;
WHEREAS, the Republic of the Philippines became an independent
nation on July 4, 1946, and proclaimed on Feb-
_______________
14 Whereas clause, Republic Act No. 95 (1947).
720

Liban vs. Gordon
ruary 14, 1947 its adherence to the Geneva Conventions of 1929, and by
the 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 Conventions;
WHEREAS, there existed in the Philippines since 1917 a chapter of the
American National Red Cross which was terminated in view of the
independence of the Philippines; and
WHEREAS, the volunteer organizations established in other countries
which have ratified or adhered to the Geneva Conventions assist in
promoting the health and welfare of their people in peace and in war,
and through their mutual assistance and cooperation directly and through
their international organizations promote better understanding and sympathy
among the people of the world;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines and
pursuant to Proclamation No. 1081 dated September 21, 1972, and General
Order No. 1 dated September 22, 1972, do hereby decree and order that
Republic Act No. 95, Charter of the Philippine National Red Cross (PNRC)
as amended by Republic Acts No. 855 and 6373, be further amended as
follows:
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.” (Emphasis
supplied.)
The significant public service rendered by the PNRC can be

gleaned from Section 3 of its Charter, which provides:
“Section 3. That the purposes of this Corporation shall be as follows:
720

Liban vs. Gordon
(a) To provide volunteer aid to the sick and wounded of armed forces
in time of war, in accordance with the spirit of and under the conditions
prescribed by the Geneva Conventions to which the Republic of the
Philippines proclaimed its adherence;
(b) For the purposes mentioned in the preceding sub-section, to
perform all duties devolving upon the Corporation as a result of the
adherence of the Republic of the Philippines to the said Convention;
(c) To act in matters of voluntary relief and in accordance with the
authorities of the armed forces as a medium of communication between
people of the Republic of the Philippines and their Armed Forces, in time of
peace and in time of war, and to act in such matters between similar national
societies of other governments and the Governments and people and the
Armed Forces of the Republic of the Philippines;
(d) To establish and maintain a system of national and international
relief in time of peace and in time of war and apply the same in meeting and
emergency needs caused by typhoons, flood, fires, earthquakes, and other
natural disasters and to devise and carry on measures for minimizing the
suffering caused by such disasters;
(e) To devise and promote such other services in time of peace and in
time of war as may be found desirable in improving the health, safety and
welfare of the Filipino people;
(f) To devise such means as to make every citizen and/or resident of
the Philippines a member of the Red Cross.”
The PNRC is one of the National Red Cross and Red Crescent
Societies, which, together with the International Committee of the
Red Cross (ICRC) and the IFRC and RCS, make up the International
Red Cross and Red Crescent Movement (the Movement). They
constitute a worldwide humanitarian movement, whose mission is:
“[T]o prevent and alleviate human suffering wherever it may be found, to

protect life and health and ensure respect for the human being, in particular
in times of armed conflict and other emergencies, to work for the prevention
of disease and for the promotion of health and social welfare, to encourage
voluntary service and a constant
722

Liban vs. Gordon
readiness to give help by the members of the Movement, and a universal

sense of solidarity towards all those in need of its protection and
assistance.”15
The PNRC works closely with the ICRC and has been involved
in humanitarian activities in the Philippines since 1982. Among
others, these activities in the country include:
1. Giving protection and assistance to civilians displaced or
otherwise affected by armed clashes between the government
and armed opposition groups, primarily in Mindanao;
2. Working to minimize the effects of armed hostilities and
violence on the population;
3. Visiting detainees; and
4. Promoting awareness of international humanitarian law in
the public and private sectors.16
National Societies such as the PNRC act as auxiliaries to the
public authorities of their own countries in the humanitarian field
and provide a range of services including disaster relief and health
and social programmes.
The International Federation of Red Cross (IFRC) and Red
Crescent Societies (RCS) Position Paper,17 submitted by the PNRC,
is instructive with regard to the elements of the specific nature of the
National Societies such as the PNRC, to wit:
“National Societies, such as the Philippine National Red Cross and its
sister Red Cross and Red Crescent Societies, have certain specificities
deriving from the 1949 Geneva Convention and the Statutes of the
International Red Cross and Red Crescent Movement (the Movement). They
are also guided by the seven Fundamental
_______________
15 Pamphlet entitled “The Fundamental Principles of the Red Cross and Red Crescent
Movement” (April 2009), available with the ICRC, http://www.icrc.org.
16 Id.
17 Rollo, pp. 440-442.
723
VOL. 639, JANUARY 18, 2011 723

Liban vs. Gordon
Principles of the Red Cross and Red Crescent Movement: Humanity,

Impartiality, Neutrality, Independence, Voluntary Service, Unity and
Universality.
A National Society partakes of a sui generis character. It is a
protected component of the Red Cross movement under Articles 24 and 26
of the First Geneva Convention, especially in times of armed conflict. These
provisions require that the staff of a National Society shall be respected and
protected in all circumstances. Such protection is not ordinarily afforded by
an international treaty to ordinary private entities or even non-governmental
organizations (NGOs). This sui generis character is also emphasized by the
Fourth Geneva Convention which holds that an Occupying Power cannot
require any change in the personnel or structure of a National Society.
National societies are therefore organizations that are directly regulated
by international humanitarian law, in contrast to other ordinary
private entities, including NGOs.
x x x x
In addition, National Societies are not only officially recognized by their
public authorities as voluntary aid societies, auxiliary to the public
authorities in the humanitarian field, but also benefit from recognition at the
International level. This is considered to be an element distinguishing
National Societies from other organizations (mainly NGOs) and other forms
of humanitarian response.
x x x. No other organization belongs to a world-wide Movement in
which all Societies have equal status and share equal responsibilities and
duties in helping each other. This is considered to be the essence of the
Fundamental Principle of Universality.
Furthermore, the National Societies are considered to be auxiliaries to
the public authorities in the humanitarian field. x x x.
The auxiliary status of [a] Red Cross Society means that it is at one and
the same time a private institution and a public service organization
because the very nature of its work implies cooperation with the
authorities, a link with the State. In carrying out their major functions,
Red Cross Societies give their humanitarian support to official bodies, in
general having larger resources than the Societies, working towards
comparable ends in a given sector.
724

Liban vs. Gordon
x x x No other organization has a duty to be its government’s

humanitarian partner while remaining independent.”18 (Emphases ours.)
It is in recognition of this sui generis character of the PNRC that

R.A. No. 95 has remained valid and effective from the time of its
enactment in March 22, 1947 under the 1935 Constitution and
during the effectivity of the 1973 Constitution and the 1987
Constitution.
The PNRC Charter and its amendatory laws have not been
questioned or challenged on constitutional grounds, not even in this
case before the Court now.
In the Decision, the Court, citing Feliciano v. Commission on
Audit,19 explained that the purpose of the constitutional provision
prohibiting Congress from creating private corporations was to
prevent the granting of special privileges to certain individuals,
families, or groups, which were denied to other groups. Based on the
above discussion, it can be seen that the PNRC Charter does not
come within the spirit of this constitutional provision, as it does not
grant special privileges to a particular individual, family, or group,
but creates an entity that strives to serve the common good.
Furthermore, a strict and mechanical interpretation of Article XII,
Section 16 of the 1987 Constitution will hinder the State in adopting
measures that will serve the public good or national interest. It
should be noted that a special law, R.A. No. 9520, the Philippine
Cooperative Code of 2008, and not the general corporation code,
vests corporate power and capacities upon cooperatives which are
private corporations, in order to implement the State’s avowed
policy.
In the Decision of July 15, 2009, the Court recognized the public
service rendered by the PNRC as the government’s
_______________
18 Id., at pp. 440-441.

19 464 Phil. 439; 419 SCRA 363 (2004).
725
VOL. 639, JANUARY 18, 2011 725

Liban vs. Gordon
partner in the observance of its international commitments, to wit

“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 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. x x x.”20 (Citations
omitted.)
So must this Court recognize too the country’s adherence to

the Geneva Convention and respect the unique status of the
PNRC in consonance with its treaty obligations. The Geneva
Convention has the force and effect of law.21 Under the
Constitution, the Philippines adopts the generally accepted
principles of international law as part of the law of the land.22 This
constitutional provision
_______________
20 Liban v. Gordon, supra note 4 at p. 77.

21 Ebro III v. National Labor Relations Commission, 330 Phil. 93, 101; 261
SCRA 399, 404 (1996).
22 1935 Constitution, ARTICLE II, SECTION 3. The Philippines renounces
war as an instrument of national policy and adopts the generally accepted principles
of international law as part of the law of the Nation.
1973 CONSTITUTION, ARTICLE II, SECTION 3. The Philippines renounces
war as an instrument of national policy, adopts the generally accepted principles of
international law as part of the law of the land, and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity with all nations.
1987 CONSTITUTION, ARTICLE II, SECTION 2. The Philippines renounces
war as an instrument of national policy, adopts the generally accepted principles of
international law as part of the
726

Liban vs. Gordon
must be reconciled and harmonized with Article XII, Section 16 of

the Constitution, instead of using the latter to negate the former.
By requiring the PNRC to organize under the Corporation Code
just like any other private corporation, the Decision of July 15, 2009
lost sight of the PNRC’s special status under international
humanitarian law and as an auxiliary of the State, designated to
assist it in discharging its obligations under the Geneva
Conventions. Although the PNRC is called to be independent under
its Fundamental Principles, it interprets such independence as
inclusive of its duty to be the government’s humanitarian partner. To
be recognized in the International Committee, the PNRC must have
an autonomous status, and carry out its humanitarian mission in a
neutral and impartial manner.
However, in accordance with the Fundamental Principle of
Voluntary Service of National Societies of the Movement, the PNRC
must be distinguished from private and profit-making entities. It is
the main characteristic of National Societies that they “are not
inspired by the desire for financial gain but by individual
commitment and devotion to a humanitarian purpose freely chosen
or accepted as part of the service that National Societies through its
volunteers and/or members render to the Community.”23
The PNRC, as a National Society of the International Red Cross
and Red Crescent Movement, can neither “be classified as an
instrumentality of the State, so as not to lose its character of
neutrality” as well as its independence, nor strictly as a private
corporation since it is regulated by international humanitarian law
and is treated as an auxiliary of the State.24
_______________
law of the land and adheres to the policy of peace, equality, justice, freedom,
cooperation, and amity with all nations.
23 Supra note 15.

24 Rollo, p. 433.
727
VOL. 639, JANUARY 18, 2011 727

Liban vs. Gordon
Based on the above, the sui generis status of the PNRC is now
sufficiently established. Although it is neither a subdivision, agency,
or instrumentality of the government, nor a government-owned or -
controlled corporation or a subsidiary thereof, as succinctly
explained in the Decision of July 15, 2009, so much so that
respondent, under the Decision, was correctly allowed to hold his
position as Chairman thereof concurrently while he served as a
Senator, such a conclusion does not ipso facto imply that the PNRC
is a “private corporation” within the contemplation of the provision
of the Constitution, that must be organized under the Corporation
Code. As correctly mentioned by Justice Roberto A. Abad, the sui
generis character of PNRC requires us to approach controversies
involving the PNRC on a case-to-case basis.
In sum, the PNRC enjoys a special status as an important ally and
auxiliary of the government in the humanitarian field in accordance
with its commitments under international law. This Court cannot all
of a sudden refuse to recognize its existence, especially since the
issue of the constitutionality of the PNRC Charter was never raised
by the parties. It bears emphasizing that the PNRC has responded to
almost all national disasters since 1947, and is widely known to
provide a substantial portion of the country’s blood requirements. Its
humanitarian work is unparalleled. The Court should not shake its
existence to the core in an untimely and drastic manner that would
not only have negative consequences to those who depend on it in
times of disaster and armed hostilities but also have adverse effects
on the image of the Philippines in the international community. The
sections of the PNRC Charter that were declared void must
therefore stay.
WHEREFORE, premises considered, respondent Richard J.
Gordon’s Motion for Clarification and/or for Reconsideration and
movant-intervenor PNRC’s Motion for Partial Reconsideration of
the Decision in G.R. No. 175352 dated July 15, 2009 are
GRANTED. The constitutionality of R.A. No. 95, as
728

Liban vs. Gordon
amended, the charter of the Philippine National Red Cross, was not
raised by the parties as an issue and should not have been passed
upon by this Court. The structure of the PNRC is sui generis¸ being
neither strictly private nor public in nature. R.A. No. 95 remains
valid and constitutional in its entirety. The dispositive portion of the
Decision should therefore be MODIFIED by deleting the second
sentence, to now read as follows:
“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.”
SO ORDERED.
Velasco, Jr., Nachura, Peralta, Bersamin, Del Castillo,
Villarama, Jr. and Perez, JJ., concur.
Corona (C.J.), No part.
Carpio, J., See Dissenting Opinion.
Carpio-Morales, J., I join the Dissent of J. Carpio.
Brion, J., I join the Dissent of J. Carpio.
Abad, J., See my concurring opinion.
Mendoza, J., I join J. Carpio in his dissent.
Sereno, J., I agree with the dissent of J. Carpio.
DISSENTING OPINION
CARPIO, J.:
I vote to deny the motions for reconsideration filed by
Respondent Richard J. Gordon (respondent Gordon) and movant-
intervenor Philippine National Red Cross (PNRC).
729
VOL. 639, JANUARY 18, 2011 729

Liban vs. Gordon
Respondent Gordon and the PNRC seek partial reconsideration

of the Court’s Decision dated 15 July 2009, declaring that Republic
Act No. 95 (RA 95), insofar as it creates the PNRC as a private
corporation and grants it corporate powers, is void for being
unconstitutional. The Decision also declared that the Office of the
Chairman of the PNRC 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, which
reads:
“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.”
Respondent Gordon and the PNRC are seeking reconsideration

of the portion of the Decision relating to the unconstitutionality of
certain provisions of RA 95.
This case originated from a petition filed by petitioners, seeking
to declare respondent Gordon as having forfeited his seat in the
Senate when he accepted the chairmanship of the PNRC Board of
Governors.
In the assailed Decision, this Court held that the PNRC is a
private organization performing public functions. The Philippine
government does not own or control the PNRC and neither the
President nor the head of any department, agency, commission or
board appoints the PNRC Chairman. Thus, the prohibition in
Section 13, Article VI of the 1987 Constitution is not applicable to
the office of the PNRC Chairman, which is not a government office
or an office in a government-owned or controlled corporation.
Since the PNRC is a private corporation, the creation of the
PNRC through a special charter is violative of the constitutional
proscription against the creation of private corporations
730

Liban vs. Gordon
by special law. The creation of the PNRC by special charter on 22

March 1947 through RA 95 contravenes Section 7, Article XIV of
the 1935 Constitution, as amended, which reads:
“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
subdivision or instrumentality thereof.”
This provision prohibiting Congress from creating private

corporations, except by general law, is reiterated in the 19731 and
19872 Constitutions.
In its Motion for Partial Reconsideration, the PNRC maintains
that the decision declaring unconstitutional certain provisions of RA
95 deprived the PNRC of its right to due process considering that the
PNRC was not a party to the case. Furthermore, the PNRC states
that the constitutionality of RA 95 was never an issue in the case.
Similarly, respondent Gordon posits in his Motion for Clarification
and Reconsideration that the Court should not have passed upon the
constitutionality of RA 95 since such issue was not raised by the
parties.
_______________
1 Section 4, Article XIV of the 1973 Constitution reads:

SEC. 4. The National Assembly 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 subdivision or
instrumentality thereof.
2 Section 16, Article XII of the 1987 Constitution reads:
SEC. 16. The Congress, shall not, except by general law, provide for the
formation, organization, or regulation of private corporations. Government-owned or
controlled corporations may be created or established by special charters in the
interest of the common good and subject to the test of economic viability.
731
VOL. 639, JANUARY 18, 2011 731

Liban vs. Gordon
Generally, the Court will not pass upon a constitutional question

unless such question is raised by the parties.3 However, as explained
by the Court in Fabian v. Hon. Desierto,4 the rule that a challenge on
constitutional grounds must be raised by a party to the case is not an
inflexible rule. In the Fabian case, the issue of the constitutionality
of Section 27 of Republic Act No. 67705 (RA 6770) was not
presented as an issue by the parties. Nevertheless, the Court ruled
that Section 27 of RA 6770, which provides for appeals in
administrative disciplinary cases from the Office of the Ombudsman
to the Supreme Court, infringes on the constitutional proscription
against laws increasing the appellate jurisdiction of the Supreme
Court without its advice and consent.
In this case, the constitutional issue was inevitably thrust upon
the Court upon its finding that the PNRC is a private corporation,
whose creation by a special charter is proscribed by the Constitution.
In view of the Court’s finding that the PNRC is a private
corporation, it was imperative for the Court to address the issue of
the creation of the PNRC through a special charter. The Constitution
prohibits the creation of a private corporation through a special law.
The Court could not declare the PNRC a private corporation created
by the special law RA 95 without running afoul of Section 16,
Article XII of the 1987 Constitution. To declare the PNRC a private
corporation necessarily meant declaring RA 95 unconstitutional. To
declare the PNRC, a creation of RA 95, a private corporation
without declaring RA 95 unconstitutional would mean that Congress
can create a private corporation through a special law. This the Court
could not do.
The fact that the constitutionality of RA 95 has not been
questioned for more than sixty (60) years does not mean that
_______________
3 Moldex Realty, Inc. v. Housing and Land Use Regulatory Board, G.R. No.
149719, 21 June 2007, 525 SCRA 198.
4 356 Phil. 787; 295 SCRA 470 (1998).
5 Ombudsman Act of 1989.
732

Liban vs. Gordon
it could no longer be declared unconstitutional. One is not estopped

from assailing the validity of a law just because such law has been
relied upon in the past and all that time has not been attacked as
unconstitutional.6 Indeed, there is no prescription to declare a law
unconstitutional. Thus, in the case of Moldex Realty, Inc. v. Housing
and Land Use Regulatory Board,7 this Court held that constitutional
challenge can be made anytime:
“That the question of constitutionality has not been raised before is

not a valid reason for refusing to allow it to be raised later. A contrary
rule would mean that a law, otherwise unconstitutional, would lapse into
constitutionality by the mere failure of the proper party to promptly file a
case to challenge the same.” (Emphasis supplied)
More importantly, the Court granted the PNRC’s motion to
intervene and the PNRC then filed its Motion for Partial
Reconsideration, in which the PNRC argued that its charter is
valid and constitutional. Thus, the PNRC, the entity that is
directly affected by the issue of the constitutionality of RA 95, is
in law and in fact a party to this case, raising specifically the
issue that its charter is valid and constitutional. Moreover,
although the original parties did not raise as an issue the
constitutionality of RA 95, they were still afforded the opportunity
to be heard on this constitutional issue when they filed their
respective motions for reconsideration.
In its Motion for Partial Reconsideration, the PNRC claims that
the constitutional proscription against the creation of private
corporations by special law is not applicable in this case since the
PNRC was not created by Congress but by then President Ferdinand
Marcos, who issued Presidential Decree
_______________
6 British American Tobacco v. Camacho, G.R. No. 163583, 20 August 2008, 562
SCRA 511.
7 G.R. No. 149719, 21 June 2007, 525 SCRA 198, 204.
733
VOL. 639, JANUARY 18, 2011 733

Liban vs. Gordon
No. 12648 (PD 1264) which repealed RA 95. The PNRC insists that
PD 1264 repealed and superseded RA 95. The PNRC maintains that
since PD 1264 was issued by President Marcos in the exercise of his
legislative power during the martial law period pursuant to
Proclamation 1081, then the constitutional prohibition does not
apply. Respondent Gordon agrees with the position taken by the
PNRC.
I disagree. Even if the PNRC derived its existence from PD 1264,
still the constitutional prohibition will apply. President Marcos
issued PD 1264 on 5 December 1977 during martial law period
when the President assumed extensive legislative power. Such
assumption of legislative power did not place President Marcos
above the Constitution. President Marcos could not issue decrees or
orders contrary to the provisions of the Constitution. The exercise of
legislative power by President Marcos under martial law must still
be in accordance with the Constitution because legislative power
cannot be exercised in violation of the Constitution from which
legislative power draws its existence. The limits on legislative power
is explained by the Court in Government v. Springer,9 thus:
“Someone has said that the powers of the legislative department of the
Government, like the boundaries of the ocean, are unlimited. In
constitutional governments, however, as well as governments acting
under delegated authority, the powers of each of the departments of the
same are limited and confined within the four wall of the constitution or
the charter, and each department can only exercise such powers as are
expressly given and such other powers as are necessarily implied from
the given powers. The constitution is the shore of legislative authority
against which the waves of legislative enactment may dash, but over
which it cannot leap.” (Emphasis supplied)
_______________
8 AMENDING REPUBLIC ACT No. 95 (As amended by Republic Acts No. 855
and 6373). An Act To INCORPORATE THE PHILIPPINE NATIONAL RED CROSS.
9 50 Phil. 259, 309 (1927).
734

Liban vs. Gordon
The 1973 Constitution, as amended, was in force when President

Marcos issued PD 1264. Under Section 1, Article VIII of the 1973
Constitution, legislative power is vested in the National Assembly.
By virtue of Amendment No. 610 of the 1973 Constitution, the
President was granted legislative power. Thus, under Amendment
No. 6, President Marcos was granted concurrent legislative authority
with the interim Batasang Pambansa.11 Considering that the
legislative power of the interim Batasang Pambansa and the regular
National Assembly is subject to the limitations imposed by the
Constitution, then more so for the emergency legislative power
granted to the President during the period of martial law. In fact, the
Court has declared void several Presidential Decrees or provisions
thereof for being unconstitutional.
In Demetria v. Alba,12 the Court declared void Paragraph 1 of
Section 44 of PD 1177 for being unconstitutional since it empowers
the President to indiscriminately transfer funds and unduly extends
the privilege granted under Section 16(5), Article VIII of the 1973
Constitution. In Export Processing Zone Authority v. Judge Dulay,13
the Court held that PD 1533 is unconstitutional because it deprives
the courts of their function of determining just compensation in
eminent domain cases and eliminates the courts’ discretion to
appoint commissioners pursuant to Rule 67 of the Rules of Court. In
subse-
_______________
10 Amendment No. 6 reads:

Whenever in the judgment of the President (Prime Minister), there exists a grave
emergency or a threat or imminence thereof, or whenever the interim Batasang
Pambansa or the regular National Assembly fails or is unable to act adequately on
any matter for any reason that in his judgment requires immediate action, he may, in
order to meet the exigency, issue the necessary decrees, orders or letters of
instruction, which shall form part of the law of the land.
11 Legaspi v. Minister of Finance, No. L-58289, 24 July 1982, 115 SCRA 418.
12 232 Phil. 222; 148 SCRA 208 (1987).
13 233 Phil. 313; 149 SCRA 305 (1987).
735
VOL. 639, JANUARY 18, 2011 735
Liban vs. Gordon
quent cases, similar provisions on just compensation found in

expropriation laws such as PD 42, 76, 464, 794, 1224, 1259, 1313,
and 1517 were also declared void and unconstitutional for the same
reason and for being violative of due process.14 In Tuason v.
Register of Deeds, Caloocan City,15 PD 293 was declared void and
unconstitutional since it allows the President to exercise judicial
function and to take property without due process and without
compensation. In Manotok v. National Housing Authority,16 the
Court held that PD 1669 and 1670, which expropriated certain
properties, were void and unconstitutional for violating due process
of law.
In this case, PD 1264 contravenes Section 4, Article XIV of the
1973 Constitution which provides that “[t]he National Assembly
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
subdivision or instrumentality thereof.” This same prohibition is
found in Section 16, Article XII of the present Constitution. Thus,
just like RA 95, PD 1264 is also void insofar as it creates the PNRC
as a private corporation.
The PNRC further submits that “due to its peculiar nature, it
should be considered as a private, neutral and separate entity
independent of government control and supervision, but acting as an
auxiliary to government when performing humanitarian functions,
and specially created pursuant to the treaty obligations of the
Philippines to the Geneva Conven-
_______________
14 Municipality of Talisay v. Ramirez, G.R. No. 77071, 22 March 1990, 183
SCRA 528; Belen v. Court of Appeals, 243 Phil. 443; 160 SCRA 291 (1988); Leyva
v. Intermediate Appellate Court, 239 Phil. 47; 155 SCRA 39 (1987); Sumulong v.
Hon. Guerrero, 238 Phil. 462; 154 SCRA 461 (1987); Ignacio v. Judge Guerrero, 234
Phil. 364; 150 SCRA 369 (1987).
15 241 Phil. 650; 157 SCRA 613 (1988).
16 Nos. L-55166 and L-55167, 21 MAY 1987, 150 SCRA 89.
736

Liban vs. Gordon
tions.”17 Thus, the PNRC maintains that its structure is sui generis
and that it is not strictly private in character since it performs certain
governmental functions. The PNRC posits that its argument is
reinforced by the Position Paper18 dated 7 December 2009 of the
International Federation of Red Cross and Red Crescent Societies
(“International Federation”), which reads in part:
“A National Society partakes of a sui generis CHARACTER. It is a
protected component of the Red Cross Movement under Articles 24 and 26
of the First Geneva Convention, especially in times of armed conflict. These
provisions require that the staff of a National Society shall be respected and
protected in all circumstances. Such protection is not ordinarily afforded by
an international treaty to ordinary private entities or even non-governmental
organizations (NGOs). This sui generis character is also emphasized by the
Fourth Geneva Convention which holds that an Occupying Property cannot
require any change in the personnel or structure of a National Society.
National Societies are therefore organizations that are directly regulated by
international humanitarian law, in contrast to other ordinary private entities,
including NGOs.
x x x
Once recognized by its Government as an independent National Society
auxiliary to the public authorities in humanitarian field, a National Society,
if it fulfills the ten (10) conditions for recognition, can be recognized by the
International Committee of the Red Cross and be admitted as member of the
International Federation of the Red Cross and Red Crescent Societies. No
other organization belongs to a world-wide Movement in which all Societies
have equal status and share equal responsibilities and duties in helping each
other. This is considered to be the essence of the Fundamental Principle of
Universality.
_______________
17 PNRC’s Motion for Partial Reconsideration, p. 17; Rollo, p. 413. (Boldfacing supplied)
18 Annex “A.” The Position Paper was written by Razia Essack-Kauaria, Director of
Governance Support and Global Monitoring, International Federation of Red Cross and Red
Crescent Societies.
737
VOL. 639, JANUARY 18, 2011 737

Liban vs. Gordon
Furthermore, the National Societies are considered to be auxiliaries to the

public authorities in the humanitarian field. The concept of National
Societies auxiliary to the public authorities was reaffirmed in Resolution 3
of the 30th International Conference of the Red Cross and Red Crescent, on
26-30 November 2007. This status, as you may see, is not only a positive
and distinct feature of any organization, but it is a precondition of its
existence and functioning as a member of the International Red Cross and
Red Crescent Movement.
The auxiliary status of Red Cross Society means that it is at one and the
same time a private institution and a public service organization
because the very nature of its work implies cooperation with the
authorities, a link with the State. In carrying out their major functions,
Red Cross Societies give their humanitarian support to official bodies, in
general having larger resources than the Societies, working towards
comparable ends in a given sector.
This is also the essence of the Fundamental Principle of Independence. No
other humanitarian organization gives such interpretation to its
independence, although many claim that they are independent. No other
organization has a duty to be its government’s humanitarian partner
while remaining independent.
The Movement places much importance on the Principle of
Independence and the duty of the States Parties to the Geneva
Conventions to respect the adherence by all the components of the
Movement to the Fundamental Principles. Before it can be recognized
by the International Committee, a National Society must have
autonomous status which allows it to operate in conformity with the
Fundamental Principles of the Movement.
Thus, in protecting the independence of the National Society in carrying
out its humanitarian mission in a neutral and impartial manner, it is
crucial that it must be free from any form of intervention from the
government at the level of the internal organization of the National
Society mainly its governance and management structure.” (Boldfacing
supplied. Underscoring in the original.)
738

Liban vs. Gordon
All private charitable organizations are doing public service or

activities that also constitute governmental functions.19 Hence, the
PNRC cannot claim that it is sui generis just because it is a private
organization performing certain public or governmental functions.
That the PNRC is rendering public service does not exempt it from
the constitutional prohibition against the creation of a private
corporation through a special law since the PNRC is, admittedly,
still a private organization. The express prohibition against the
creation of private corporations by special charter under Section 16,
Article XII of the 1987 Constitution cannot be disregarded just
because a private corporation claims to be sui generis. The
constitutional prohibition admits of no exception.
Even the International Federation specifies the nature of the
National Red Cross Society as a “private institution and a public
service organization.” Furthermore, it emphasizes the importance
of maintaining and protecting the independence of the National
Society, free from any form of intervention from the government
particularly concerning its governance and management
_______________
19 The following are some of the private charitable organizations in the
Philippines: (1) CHILDHOPE Asia Philippines, Inc.–is registered in 1995 under the
Securities and Exchange Commission and whose principal purpose is to advocate for
the cause of street children [CHILDHOPE Asia Website,
http://www.childhope.org.ph/
about-us.html (visited 2 September 2010)]; (2) PATH Foundation Philippines, Inc.
(PFPI)–is a private, charitable organization whose mission is to improve health and
contribute to environmentally sustainable development, particularly in under-served
areas of the Philippines. [PFPI Website, http://www.pfpi.org/about.html (visited 2
September 2010)]; (3) The Philippine Community Fund–is a registered charitable
organization, whose mission is to permanently improve the quality of life for the
poorest Filipino communities, through education, nutrition, health, medical and
family enhancement programs, regardless of religion, race or political boundaries
[The Philippine Community Fund Website, http://p-c-f.org/about_us/index.php
(visited 2 September 2010)].
739
VOL. 639, JANUARY 18, 2011 739

Liban vs. Gordon
structure. Full independence means that the National Societies are

prohibited from being owned or controlled by their host government
or from becoming government instrumentalities as this would
undermine their independence, neutrality, and autonomy.
Indeed, the PNRC, as a member National Society of the
International Red Cross and Red Crescent Movement (Movement)
must meet the stringent requirement of independence, autonomy,
and neutrality in order to be recognized as a National Society by the
International Committee of the Red Cross (ICRC). The conditions
for recognition of National Societies are enumerated in Article 4 of
the Statutes of the Movement, thus:
“Article 4
Conditions for Recognition of National Societies
In order to be recognized in terms of Article 5, paragraph 2 b)20 as a
National Society, the Society shall meet the following conditions:
1. Be constituted on the territory of an independent State where the
Geneva Convention for the Amelioration of the Condition of the Wounded
and Sick in Armed Forces in the Field is in force.
2. Be the only National Red Cross or Red Crescent Society of the said
State and be directed by a central body which shall alone be competent to
represent it in its dealings with other components of the Movement.
3. Be duly recognized by the legal government of its country on the
basis of the Geneva Conventions and of the
_______________
20 Article 5, paragraph 2 b) states:

2. The role of the International Committee, in accordance with its Statutes, is in particular:
x x x
b) to recognize any newly established or reconstituted National Society, which fulfils the
conditions for recognition set out in Article 4, and to notify other National Societies of such
recognition.
740

Liban vs. Gordon
national legislation as a voluntary aid society, auxiliary to the public

authorities in the humanitarian field.
4. Have an autonomous status which allows it to operate in
conformity with the Fundamental Principles of the Movement.
5. Use a name and distinctive emblem in conformity with the
Geneva Conventions and their Additional Protocols.
6. Be so organized as to be able to fulfil the tasks defined in its own
statutes, including the preparation in peace time for its statutory tasks in
case of armed conflict.
7. Extend its activities to the entire territory of the State.
8. Recruit its voluntary members and its staff without consideration of
race, sex, class, religion or political opinions.
9. Adhere to the present Statutes, share in the fellowship which unites
the components of the Movement and cooperate with them.
10. Respect the Fundamental Principles of the Movement and be
guided in its work by the principles of international humanitarian law.”21
The conditions for recognition of National Societies do not

require that the State itself create the National Society through a
special charter. The absence of such requirement is proper and
necessary considering the Movement’s emphasis on the importance
of maintaining the independence of the National Society, free from
any form of intervention from the government. However, it is
required that the National Society be officially recognized by the
government of its country as auxiliary to the public authorities in the
humanitarian field.
A decree granting official recognition to the National Society is
essential in order to distinguish it from other charitable organizations
in the country and to be entitled to the protection of the Geneva
Conventions in the event of armed con-
_______________
21 Statutes and Rules of Procedure of the International Red Cross and Red
Crescent Movement, ICRC Publication, p. 9.
741
VOL. 639, JANUARY 18, 2011 741

Liban vs. Gordon
flict. 22The content of the decree of recognition may vary from one
country to another but it should explicitly specify:
1. That the National Society is the country’s only Red Cross or Red Crescent
organization;
2. That it is autonomous in relation to the State;
3. That it performs its activities in conformity with the Fundamental Principles;
and
4. The conditions governing the use of the emblem.23
Thus, there is no specific requirement for the creation of the

National Society through a special charter. The State does not
have the obligation to create the National Society, in our case, the
PNRC. What is important is that the National Society is officially
recognized by the government as auxiliary to the public authorities
in the humanitarian services of the government. This the Philippine
government can accomplish even without creating the PNRC
through a special charter.
Besides, as auxiliaries in the humanitarian services of their host
governments, the National Societies are subject to the laws of
their respective countries.24 Thus, the National Societies are
bound by the laws of their host countries and must submit to the
Constitution of their respective host countries.
The Philippine Constitution prohibits Congress from creating
private corporations except by general law. I agree with the PNRC
that it is a private organization performing public functions.
Precisely because it is a private organization, the PNRC charter—
whether it be RA 95 or PD 1264—is violative of the constitutional
proscription against the creation of pri-
_______________
22 The Fundamental Principles of the Red Cross and Red Crescent, ICRC
Publication, p. 18.
23 The Fundamental Principles of the Red Cross and Red Crescent, ICRC
Publication, pp. 18-19.
24 Discover the ICRC, ICRC Publication, p. 10.
742

Liban vs. Gordon
vate corporations by special law. Nevertheless, keeping in mind the

treaty obligations of the Philippines under the Geneva Conventions,
the assailed Decision only held void those provisions of the PNRC
charter which create PNRC as a private corporation or grant it
corporate powers. The other provisions respecting the government’s
treaty obligations remain valid, thus:
The other provisions25 of the PNRC Charter remain valid as they

can be considered as a recognition by the State
_______________
25 The valid provisions are Sections 4(b) and (c), 14, 15, 16, and 17:
SEC. 4. In furtherance of the purposes mentioned in the preceding sub-paragraphs, the
Philippine National Red Cross shall:
x x x
b. Be exempt from payment of all duties, taxes, fees, and other charges of all kinds on all
importations and purchases for its exclusive use, on donations for its disaster relief work and
other Red Cross services, and in its benefits and fund raising drives all provisions of law to the
contrary notwithstanding.
c. Be allotted by the Philippine Charity Sweepstakes Office one lottery draw yearly for the
support of its disaster relief operations in addition to its existing lottery draws for the Blood
Program.
SEC. 14. It shall be unlawful for any person to solicit, collect or receive money,
materials, or property of any kind by falsely representing or pretending himself to be a member,
agent or representative of the Philippine National Red Cross.
SEC. 15. The use of the name Red Cross is reserved exclusively to the Philippine
National Red Cross and the use of the emblem of the red Greek cross on a white ground is
reserved exclusively to the Philippine National Red Cross, medical services of the Armed
Forces of the Philippines and such other medical facilities or other institutions as may be
authorized by the Philippine National Red Cross as provided under Article 44 of the Geneva
Conventions. It shall be unlawful for any other person or entity to use the words Red Cross or
Geneva Cross or to use the emblem of the red Greek cross on a white ground or any
designation, sign, or insignia constituting an imitation thereof for any purpose whatsoever.
743
VOL. 639, JANUARY 18, 2011 743

Liban vs. Gordon
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 Government’s 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.”26
(Emphasis supplied)
This Court’s paramount duty is to faithfully apply the provisions

of the Constitution to the present case. The Constitutional
prohibition under Section 16, Article XII of the 1987 Constitution is
clear, categorical, and absolute:
“SEC. 16. The Congress, shall not, except by general law, provide

for the formation, organization, or regulation of private corporations.
Government-owned or controlled corporations may be created or
established by special charters in the interest of the common good and
subject to the test of economic viability.” (Emphasis supplied)
Since the constitutional prohibition admits of no exception, this

Court has no recourse but to apply the prohibition to the
_______________
SEC. 16. As used in this Decree, the term person shall include any legal person,
group, or legal entity whatsoever nature, and any person violating any section of this
Article shall, upon conviction therefore be liable to a fin[e] of not less than one
thousand pesos or imprisonment for a term not exceeding one year, or both, at the
discretion of the court, for each and every offense. In case the violation is committed
by a corporation or association, the penalty shall devolve upon the president, director
or any other officer responsible for such violation.
SEC. 17. All acts or parts of acts which are inconsistent with the provisions of
this Decree are hereby repealed.
26 Decision dated 15 July 2009, pp. 22-23.
744
Liban vs. Gordon
present case. This Court has no power to make PNRC an exception

to Section 16, Article XII of the 1987 Constitution.
The PNRC could either choose to remain unincorporated or it
could adopt its own articles of incorporation and by-laws and
incorporate under the Corporation Code and register with the
Securities and Exchange Commission if it wants to be a private
corporation.
Accordingly, I vote to DENY the Motions for Reconsideration.
CONCURRING OPINION
ABAD, J.:
On July 15, 2009 the Court rendered a decision partially voiding
Republic Act 95 (R.A. 95), the charter of the Philippine National
Red Cross (PNRC) as amended by Presidential Decrees 1264 and
1643 (P.D. 1264 and 1643). The Court ruled that Congress enacted
the PNRC Charter in violation of Section 7, Article XIV of the 1935
Constitution, which states:
“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 subdivision or instrumentality thereof.”
The Court based its decision on a finding that the PNRC is a

private corporation which Congress could not create by special law.
Like any other private corporation, the PNRC can only be formed
and organized under a general enabling law like the Corporation
Code.
The decision stemmed from a petition that petitioners Dante
Liban, et al. (Liban, et al.) filed with the Court to declare respondent
Senator Richard J. Gordon (Sen. Gordon) as having forfeited his
Senate seat under Section 13, Article VI
745
VOL. 639, JANUARY 18, 2011 745

Liban vs. Gordon
of the 1987 Constitution.1 Sen. Gordon had been elected

Chairman of the Board of Governors of the PNRC, which the Court
classified in Camporedondo v. NLRC2 as a government-owned and
controlled corporation (GOCC). Consequently, he automatically
forfeited his Senate seat for holding an incompatible office in a
GOCC.
Parenthetically, in resolving the case, the Court held that Liban,
et al. had no standing to file the petition, as it is a quo warranto case
that could only be brought by the Government or an individual who
claims entitlement to the public office. Since Liban, et al. did not
seek the Senator’s seat, they were not proper parties to bring the
action.
Despite Liban, et al.’s lack of standing, however, the Court chose
to address the merits of their petition. The main issue was: “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.”3
According to the Court, the PNRC is a private organization
performing public functions. Congress established it in adherence to
the Geneva Conventions for the purpose contemplated under the
treaties. The PNRC is a member National Society of the
International Red Cross and Red Crescent Movement and is guided
and bound by its seven Fundamental Princi-
_______________
1 The provision reads:

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.
2 Camporedondo v. National Labor Relations Commission, 370 Phil. 901; 312
SCRA 47 (1999).
3 Main Decision in G.R. 175352, p. 5.
746

Liban vs. Gordon
ples.4 To be recognized as a National Society, the Statutes of the

International Red Cross and Red Crescent Movement required that
the PNRC be autonomous or independent.
Due to this requirement, the PNRC must not appear to be an
instrument or agency of the government for, “otherwise, it cannot
merit the trust of all and cannot effectively carry out its mission.”5 It
must, in case of invasion or an internal war, maintain its neutrality
and independence to be able to fulfill its humanitarian tasks. It
cannot choose to treat only the wounded on one side.
Moreover, the PNRC cannot be government-owned because it
does not receive appropriations from Congress or possess
government assets. It is funded by voluntary donations from private
contributors. The government does not have control over its affairs.
While the President of the Philippines appoints six of the PNRC
Board of Governors, the overwhelming majority of the thirty-
member board is elected by private sector members. The PNRC
Chairman is not appointed by or under the control of the President of
the Philippines. He is elected by the organization’s governing board.
These all prove that the position of PNRC Chairman is a private, not
a government office.
Additionally, the Court held that the Camporedondo ruling relied
on by Liban, et al. was erroneous. The Court’s conclusion in that
case—that the PNRC is a GOCC—is based solely on the fact that it
was Congress which created PNRC under a special law. The case
failed to consider, however, that the 1987 Administrative Code
defines a GOCC as “any agency organized as a stock or non-stock
corporation, vested with functions relating to public needs x x x, and
owned by the
_______________
4 These principles are: Humanity, Impartiality, Neutrality, Independence,

Voluntary Service, Unity and Universality.
5 Supra note 3, at p. 10.
747
VOL. 639, JANUARY 18, 2011 747

Liban vs. Gordon
Government directly or through its instrumentalities x x x.”6 Since

the government did not own PNRC, it cannot be a GOCC under
such definition.
The Court thus concluded that Sen. Gordon did not forfeit his
Senate seat.
As stated earlier, the Court partially voided the PNRC Charter on
the ground that Congress has been constitutionally prohibited from
creating private corporations by special law. The Court declared as
void those provisions of the PNRC Charter that related to its
creation and those that granted it corporate powers.7 What remained
of the Charter, said the Court,8 served “as recognition by the State
that the unincorporated PNRC is the local National Society of the
International Red Cross and Red Crescent Movement.” The
surviving provisions supposedly implemented the Philippine
Government’s treaty obligations under Article 4(5) of the Statutes of
the Movement which required a National Society to be “duly
recognized by the legal government of its country on the basis of the
Geneva Conventions and of the national legislation.”9
Justice Antonio Eduardo B. Nachura dissented and was joined by
four other members of the Court.10 First, he argued that Liban, et al.
had standing to file the petition, which he characterized as one for
prohibition and not quo warranto. The petition actually sought an
injunction against a continuing violation of the Constitution and
involved a constitutional issue with great impact on public interest.
Thus, the petition
_______________
6 Section 2(13), Introductory Provisions, 1987 Administrative Code.

7 These void provisions are Sections 1 to 13 of the PNRC Charter.
8 These include Sections 4(b) and (c), 14, 15, 16 and 17 of the PNRC Charter.
9 Supra note 3, at pp. 22-23.
10 All in all, seven (7) members of the Court voted in favor of the main decision
penned by Justice Antonio T. Carpio, while five (5) members dissented. One (1)
associate justice took no part.
748
Liban vs. Gordon
deserved the attention of the Court in view of its seriousness,

novelty, and weight as precedent.
According to Justice Nachura, since no private corporation can
have a special charter under the Constitution, it follows that the
PNRC is a GOCC. As held in Camporedondo and Baluyot v.
Holganza,11 the test for determining whether a corporation is a
GOCC is simply whether it was created under its own charter for the
exercise of a public function or by incorporation under the general
corporation law. The definition of a GOCC under the 1987
Administrative Code, on the other hand, is broad enough to admit of
other distinctions as to the kinds of GOCCs.
The more crucial factor to consider, said Justice Nachura, is the
definition’s reference to the corporation being vested with functions
relating to public needs. In this regard, the PNRC Charter states that
it is created as a “voluntary organization officially designated to
assist the Republic of the Philippines in discharging the obligations
set forth in the Geneva Convention x x x.”12 These obligations are
undoubtedly public or governmental in character. Hence, the PNRC
is engaged in the performance of the government’s public functions.
Justice Nachura added that, at the very least, the PNRC should be
regarded as a government instrumentality under the 1987
Administrative Code. An instrumentality “refers to any agency of
the National Government not integrated within the department
framework, vested with special functions or jurisdiction by law,
endowed with some if not all corporate powers, administering
special funds, and enjoying operational autonomy, usually through a
charter.”13 The PNRC’s organ-
_______________
11 382 Phil. 131; 325 SCRA 248 (2000).

12 Section 1, P.D. 1643.
13 Section 2 (10), Introductory Provisions, 1987 Administrative Code.
749
VOL. 639, JANUARY 18, 2011 749

Liban vs. Gordon
izational attributes, said Justice Nachura, are consistent with this

definition.
The dissent then cites the unsettling ripple effect which the main
ruling could create on numerous Court decisions, such as those
dealing with the jurisdiction of the Civil Service Commission (CSC)
and the authority of the Commission on Audit (COA). It also noted
the absurdity of partially invalidating the PNRC Charter as this
would have the consequence of imposing obligations and providing
an operational framework for a legally non-existing entity.
Justice Nachura finally warns against the PNRC’s ultimate
demise if it were regarded as a private corporation. Because of
possible violations of the equal protection clause and penal statutes,
the PNRC may no longer be extended tax exemptions and official
immunity or be given any form of support by the National
Government, local government units, and the Philippine Charity
Sweepstakes Office (PCSO). If the PNRC is consequently
obliterated, the Philippines will be shirking its obligations under the
Geneva Conventions.
The dissent finally concluded that Sen. Gordon forfeited his
Senate seat for holding two incompatible offices.
Although the main ruling favored Sen. Gordon, he filed a motion
for clarification and reconsideration of the Court’s decision.14 He
said that the Court decided the case beyond what was necessary,
considering that the parties never raised the constitutionality of the
PNRC Charter as an issue. He invoked the rule that the Court will
not pass upon a constitutional issue unless it is the very lis mota of
the case or if it can be disposed of on some other ground. Since the
Court held that Liban, et al. had no personality to file the petition,
the Court should have simply refrained from delving into the
constitutionality of the PNRC Charter. Sen. Gordon thus submits
that the Court should regard the declaration of unconstitutionality of
the PNRC Charter obiter dictum.
_______________
14 Rollo, pp. 256-263.
750

Liban vs. Gordon
Liban, et al. also filed a motion for reconsideration of the Court’s

decision, essentially adopting the thesis of Justice Nachura.15
Subsequently, the PNRC, which was not a party to the case,
sought to intervene and filed a motion for reconsideration of the
Court’s decision.16 It claimed that, although the Court annulled its
very existence, it did not give the PNRC the chance to defend itself
and prove the validity of its creation. The PNRC pointed out that
P.D. 1264 and 1643 completely repealed R.A. 95. Consequently, the
PNRC no longer owed its creation to Congress but to President
Marcos pursuant to his power of executive legislation. The
constitutional bar is on Congress.
As for its organizational nature, the PNRC asserts that it is
neither a private nor a government corporation but a sui generis
entity, a unique being with no equivalent in corporate organizations.
While the PNRC performs certain public services, its neutrality and
independence would be compromised if it were to be deemed as a
government-owned corporation or instrumentality. Besides, it is in
fact neither owned nor controlled by the government.
The PNRC also stressed that, although it has private
characteristics, it was not created for profit or gain but in compliance
with treaty obligations under the Geneva Conventions. As such, it is
an auxiliary of government in the performance of humanitarian
functions under international law.
To support its stand that it is a sui generis entity, the PNRC
submitted a position paper17 prepared by the International
Federation of Red Cross and Red Crescent Societies (the Federation)
explaining the specific nature of National Societies like the PNRC.
_______________
15 Id., at pp. 264-285.

16 Id., at pp. 388-413.
17 See temporary Rollo.
751
VOL. 639, JANUARY 18, 2011 751

Liban vs. Gordon
There is a need to examine the Court’s decision in this case

considering its far reaching effects. Allowing such decision to stand
will create innumerable mischief that would hamper the PNRC’s
operations. With a void juridical personality, it cannot open a bank
account, issue tax-exempt receipts for donations, or enter into
contracts for delivery of rescue reliefs like blood, medicine, and
food. Its officers would be exposed to suits in their personal
capacities. The validity of its past transactions would be open to
scrutiny and challenge. Neither the country nor the PNRC needs
this.
FIRST. Congress created the PNRC to comply with the country’s
commitments under the Geneva Conventions. The treaties
envisioned the establishment in each country of a voluntary
organization that would assist in caring for the wounded and sick of
the armed forces during times of armed conflict. Upon proclaiming
its adherence to the Geneva Conventions, the Republic of the
Philippines forthwith created the PNRC for the purpose
contemplated by the treaties. Its creation was not privately
motivated, but borne of the Republic’s observance of treaty
obligations. The “whereas clause” of P.D. 1643 or the revised PNRC
Charter lays down this basic premise:
x x x x
WHEREAS, more than one hundred forty nations of the world have
ratified or adhered to the Geneva Conventions of August 12, 1949 for
the Amelioration of the Condition of the Wounded and Sick of Armed
Forces and at Sea, The Prisoners of War, and The Civilian Population
in Time of War referred to in this Charter as the Geneva Conventions;
WHEREAS, the Republic of the Philippines became an independent
nation on July 4, 1946, and proclaimed on February 14, 1947 its
adherence to the Geneva Conventions of 1929, and by the 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 organiza-
752
Liban vs. Gordon
tion for that purpose as contemplated by the Geneva Conventions;

x x x x
It is thus evident that the PNRC’s creation derived primarily from

the Geneva Conventions. When Congress created the PNRC, it did
not intend to form either a private or government-owned corporation
with the usual powers and attributes that such entities might possess.
Rather, it set out to form an organization that would be responsive to
the requirements of the Geneva Conventions. Section 1 of the PNRC
Charter thus provides:
“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.”
As a voluntary organization tasked to assist the Republic in

fulfilling its commitments under the Geneva Conventions, the PNRC
is imbued with characteristics that ordinary private or government
organizations do not possess. Its charter’s direct reference to the
Geneva Conventions gives the PNRC a special status in relation to
governments of any form, as well as a unique place in international
humanitarian law.18 Since the impetus for the PNRC’s creation
draws from the country’s
_______________
18 See The Relevance of the 50th Anniversary of the Geneva Conventions to
National Red Cross and Red Crescent Societies: Reviewing the Past to Address the
Future; International Review of the Red Cross 835, pp. 649-668 by Michael A. Meyer
(http./www.icrc.org/web/eng/siteen0.nsf/htmlall/57jq3j?opendocument; last visited
July 12, 2010).
753
VOL. 639, JANUARY 18, 2011 753

Liban vs. Gordon
adherence to the treaties, it is in this context that its organizational

nature should be viewed and understood.
SECOND. The PNRC is a National Society of the Red Cross
Movement and is recognized by both the International Committee of
the Red Cross (ICRC) and the International Federation of Red Cross
and Red Crescent Societies. The PNRC is regarded as a component
of the Movement with concomitant rights and obligations under
international humanitarian law. Its status as a recognized National
Society has imbued it with attributes that ordinary private
corporations or government entities do not possess. It is a sui generis
entity that has no precise legal equivalent under our statutes.
The PNRC is not an ordinary private corporation within the
meaning of the Corporation Code. As stated earlier, its creation was
not privately motivated but originated from the State’s obligation to
comply with international law. The State organized the PNRC to
assist it in discharging its commitments under the Geneva
Conventions as an “auxiliary of the public authorities in the
humanitarian field.”19 It was not established by private individuals
for profit or gain, but by the State itself pursuant to the objectives of
international humanitarian law.
The PNRC is not an ordinary charitable organization, foundation,
or non-governmental organization (NGO). As a component of the
international Movement, it enjoys protection not afforded to any
charitable organization or NGO under the Geneva Conventions. For
instance, Articles 24 and 26 of the First Geneva Convention vests
National Society personnel with the same status as the armed forces
medical services in times of armed conflict, subject to certain
conditions. Also, only recognized National Societies enjoy exclusive
use of the protective red cross emblem in conformity with the
treaties.20 National Societies like the PNRC are thus directly regu-
_______________
19 Article 4 (3), Statutes of the Movement.

20 Article 44 (2) of the First Geneva Convention.
754

Liban vs. Gordon
lated by international humanitarian law, unlike ordinary

charitable organizations or NGOs.
The PNRC also has rights and obligations under international
humanitarian law that ordinary charitable organizations and NGOs
do not have. Foremost of these rights is the privilege to participate
as a full member in the International Conference of the Red Cross
and Red Crescent, in which States also participate as members
pursuant to the Geneva Conventions.21 States Parties and all
components of the Movement attend the conference to discuss
humanitarian matters on equal footing.22 No other organization has
this exceptional privilege in relation to a State.
Significantly, both States Parties and the Movement’s
components adopt the Statutes of the Movement during the
conference held every four (4) years.23 The Statutes underscore the
special relationship that National Societies have in relation to the
State. Article 2 of the Statutes lays down reciprocal rights and
obligations between States Parties to the Geneva Conventions and
the National Societies, thus:
1. The States Parties to the Geneva Conventions cooperate with the

components of the Movement in accordance with these Conventions, the
present Statutes and the resolutions of the International Conference.
2. Each State shall promote the establishment on its territory of a National
Society and encourage its development.
3. The States, in particular those which have recognized the National
Society constituted on their territory, support, whenever possible, the
work of
_______________
21 Supra note 18.

22 See The Legal Status of National Red Cross and Red Crescent Societies by
Christophe Lanord; (http://www.icrc.org/web/eng/
siteen0.nsf/html/57JQT9; last visited June 25, 2010).
23 Supra note 18.
755
VOL. 639, JANUARY 18, 2011 755

Liban vs. Gordon
the components of the Movement. The same components, in

their turn and in accordance with their respective statutes,
support as far as possible humanitarian activities of the States.
4. The States shall at all times respect the adherence by all components of
the Movement to the Fundamental Principles.
5. The implementation of the present Statutes by the components of the
Movement shall not affect the sovereignty of States, with due respect for
the provisions of international humanitarian law.
As can be seen, therefore, the PNRC is unlike ordinary charitable

organizations or NGOs in many respects due to the distinct features
it directly derives from international law. Although it is a local
creation, it was so organized as a national Red Cross Society with
direct reference to the Geneva Conventions. The PNRC was
explicitly “designated as the organization which is authorized to act
in matters of relief under said Convention.”24 Consequently, its
organizational status cannot be assessed independently of the treaties
that prompted its establishment.
The PNRC cannot also be regarded as a government corporation
or instrumentality. To begin with, it is not owned or controlled by
the government or part of the government machinery. The conditions
for its recognition as a National Society also militate against its
classification as a government entity. Article 4 (4) of the Statutes
requires a National Society to “(h)ave an autonomous status which
allows it to operate in conformity with the Fundamental Principles
of the Movement.”
Thus, a National Society must maintain its impartiality,
neutrality, and independence. In its mission “to prevent and alleviate
human suffering wherever it may be found,” it must make “no
discrimination as to nationality, race, religious
_______________
24 Section 2, P.D. 1643.

756

Liban vs. Gordon
beliefs, class or political opinions.” It must enjoy the confidence of

all and not take sides in hostilities or controversies of a political,
racial, religious or ideological nature.25 It cannot be seen, therefore,
as an instrument of the State or under governmental control.
The Statutes require, however, that a National Society like the
PNRC “(b)e 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.”26 This signifies a
partnership with government in implementing State obligations
based on international humanitarian law.27
The status of being an “auxiliary” of government in the
humanitarian field is a precondition to a National Society’s existence
and recognition as a component of the Movement. In its position
paper, the Federation explained that the status of auxiliary “means
that it is at one and the same time a private institution and a public
service organization because the very nature of its work implies
cooperation with the authorities, a link with the State.” In other
words, the status confers upon the PNRC the duty to be the
government’s humanitarian partner while, at the same time,
remaining independent and free from government intervention. As a
recognized National Society, the PNRC must be autonomous, even
as it assists government in the discharge of its humanitarian
obligations.
_______________
25 Preamble, Statutes of the Movement.

26 Supra note 19.
27 See National Red Cross and Red Crescent Societies as Auxiliaries to the Public
Authorities in the Humanitarian Field: Conclusions from the Study Undertaken by the
International Federation of Red Cross and Red Crescent Societies; Prepared by the
International Federation of Red Cross and Red Crescent Societies in consultation
with the International Committee of the Red
Cross(http./www.icrc.org/web/eng/siteen0.nsf/htmlall/5xrfbm?opendocument; last
visited July 12, 2010).
757
VOL. 639, JANUARY 18, 2011 757

Liban vs. Gordon
Notably, the PNRC Charter is also reflective of the organization’s

dual nature. It does not only vest the PNRC with corporate powers,
but imposes upon it duties related to the performance of government
functions. Under Section 1 of the charter, the PNRC is “officially
designated to assist the Republic of the Philippines in discharging
the obligations set forth in the Geneva Conventions.” As such, it is
obligated “to provide volunteer aid to the sick and wounded of the
armed forces in time of war” and “to perform all duties devolving
upon the Corporation as a result of the adherence of the Republic of
the Philippines to the said Convention.”
Moreover, the charter clearly established the PNRC as a National
Red Cross Society pursuant to the treaties and Statutes of the
Movement. It was authorized “to act in such matters between similar
national societies of other governments and the governments and
people and the Armed Forces of the Republic of the Philippines.”
The PNRC was to establish and maintain a system of national and
international relief and to apply the same in meeting natural
disasters, all in the spirit of the Geneva Conventions.
In the pursuit of its humanitarian tasks, the PNRC was thus
granted the power of perpetual succession, the capacity to sue and be
sued, and the power to hold real and personal property. It was
authorized to adopt a seal, but was given exclusive use of the Red
Cross emblem and badge in accordance with the treaties. It may
likewise adopt by-laws and regulations and do all acts necessary to
carry its purposes into effect.
The PNRC is financed primarily by contributions obtained
through solicitation campaigns and private donations. And yet, it is
required to submit to the President of the Philippines an annual
report of its activities including its financial condition, receipts and
disbursements. It is allotted one annual national lottery draw and is
exempt from taxes, duties, and fees on importations and purchases,
as well as on donations for its disaster relief work and other services.
758

Liban vs. Gordon
Consequently, the PNRC cannot be classified as either a purely

private or government entity. It is a hybrid organization that derives
certain peculiarities from international humanitarian law. For this
reason, its organizational character does not fit the parameters
provided by either the Corporation Code or Administrative Code. It
is a sui generis entity that draws its nature from the Geneva
Conventions, the Statutes of the Movement and the law creating it.
THIRD. The Constitution does not preclude the creation of
corporations that may neither be classified as private nor
governmental. Sec. 7, Article XIV of the 1935 Constitution, which
was carried over in subsequent versions of the fundamental law,
does not prohibit Congress from creating other types of
organizations that may not fall strictly within the terms of what is
deemed a private or government corporation. The Constitution
simply provides that Congress cannot create private corporations,
except by general law, unless such corporations are owned or
controlled by the government. It does not forbid Congress from
creating organizations that do not belong to these two general types.
In Feliciano v. Commission on Audit,28 the Court explained that
the purpose of the ban against the creation of private corporations by
special charter is to prevent the grant to certain individuals, families,
or groups of special privileges that are denied to other citizens. The
creation of the PNRC does not traverse the purpose of the
prohibition, as Congress established the PNRC to comply with State
obligations under international law. The PNRC Charter is simply a
manifestation of the State’s adherence to the Geneva Conventions.
By enacting the PNRC Charter, Congress merely implemented the
will of the State to join other nations of the world in the
humanitarian cause.
The special status of the PNRC under international humanitarian
law justifies the special manner of its creation.
_______________
28 464 Phil. 439, 454; 419 SCRA 363, 369 (2004).
759
VOL. 639, JANUARY 18, 2011 759

Liban vs. Gordon
The State itself committed the PNRC’s formation to the community

of nations, and no less than an act of Congress should be deemed
sufficient compliance with such an obligation. To require the PNRC
to incorporate under the general law is to disregard its unique
standing under international conventions. It also ignores the very
basic premise for the PNRC’s creation.
FOURTH. The main issue in this case is whether or not the
office of PNRC Chairman is a government office or an office in a
GOCC for purposes of the prohibition in Section 13, Article VI of
the Constitution. The resolution of this question lies in the
determination of whether or not the PNRC is in fact a GOCC. As
explained earlier, the PNRC is not a GOCC, but a sui generis entity
that has no legal equivalent under any of our statutes. Consequently,
Senator Gordon did not forfeit his Senate seat under the
constitutional prohibition.
In view of the PNRC’s sui generis character, the Court need not
even dwell on the issue of whether or not the PNRC Charter was
validly enacted. Congress is proscribed only from creating private
corporations which, as demonstrated, the PNRC is not. The issue of
constitutionality was not raised by any of the original parties and
could have been avoided in the first place. Neither was the PNRC a
party to the case, despite being the entity whose creation was
declared void under the main decision.
Finally, the sui generis character of the PNRC does not
necessarily overturn the rulings of the Court in Camporedondo and
Baluyot. The PNRC’s exceptional nature admits of the conclusions
reached in those cases that the PNRC is a GOCC for the purpose of
enforcement of labor laws and penal statutes. The PNRC’s sui
generis character compels us to approach controversies involving
the PNRC on a case-to-case basis, bearing in mind its distinct
nature, purposes and special functions. Rules that govern traditional
private or public entities may thus be adjusted in relation to the
PNRC and in accordance with the circumstances of each case.
© Copyright 2018 Central Book Supply, Inc. All rights reserved.

Liban Vs Auditor General

Uploaded by

Copyright:

Available Formats

Liban Vs Auditor General

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Liban Vs Auditor General

Uploaded by

Copyright:

Available Formats

G.R. No. 175352. January 18, 2011.

DANTE V. LIBAN, REYNALDO M. BERNARDO and

Corporation Law; Philippine National Red Cross; A closer look at the

710 SUPREME COURT REPORTS ANNOTATED

Liban vs. Gordon

Same; Same; The Philippine National Red Cross (PNRC) has

VOL. 639, JANUARY 18, 2011 711

Liban vs. Gordon

712 SUPREME COURT REPORTS ANNOTATED

Liban vs. Gordon

ABAD, J., Concurring Opinion:

VOL. 639, JANUARY 18, 2011 713

Liban vs. Gordon

MOTION FOR CLARIFICATION AND/OR FOR

714 SUPREME COURT REPORTS ANNOTATED

1 Rollo, pp. 256-264.

VOL. 639, JANUARY 18, 2011 715

corporation.”6 The dispositive portion of the Decision reads as

“WHEREFORE, we declare that the ofﬁce of the Chairman of the

6 Liban v. Gordon, supra note 4 at pp. 97-98.

716 SUPREME COURT REPORTS ANNOTATED

In its Motion for Partial Reconsideration, PNRC prays that the

A. THE ASSAILED DECISION DECLARING UNCONSTITUTIONAL

In his Comment and Manifestation10 ﬁled on November 9,

10 Rollo, pp. 421-431.

VOL. 639, JANUARY 18, 2011 717

After a thorough study of the arguments and points raised by the

“This Court will not touch the issue of unconstitutionality unless it is

12 G.R. No. 162243, November 29, 2006, 508 SCRA 498.

718 SUPREME COURT REPORTS ANNOTATED

“SEC. 7. The Congress shall not, except by general law, provide for

Similar provisions are found in Article XIV, Section 4 of the

“SECTION 16. The Congress shall not, except by general law, provide

Since its enactment, the PNRC Charter was amended several

VOL. 639, JANUARY 18, 2011 719

it by the State and the international community. There is merit in

“WHEREAS, during the meeting in Geneva, Switzerland, on 22 August

14 Whereas clause, Republic Act No. 95 (1947).

720 SUPREME COURT REPORTS ANNOTATED

The signiﬁcant public service rendered by the PNRC can be

“Section 3. That the purposes of this Corporation shall be as follows:

720 SUPREME COURT REPORTS ANNOTATED

“[T]o prevent and alleviate human suffering wherever it may be found, to

722 SUPREME COURT REPORTS ANNOTATED

readiness to give help by the members of the Movement, and a universal

VOL. 639, JANUARY 18, 2011 723

Principles of the Red Cross and Red Crescent Movement: Humanity,

724 SUPREME COURT REPORTS ANNOTATED

x x x No other organization has a duty to be its government’s

It is in recognition of this sui generis character of the PNRC that

18 Id., at pp. 440-441.

VOL. 639, JANUARY 18, 2011 725

partner in the observance of its international commitments, to wit

“The PNRC is a non-proﬁt, donor-funded, voluntary, humanitarian

So must this Court recognize too the country’s adherence to

20 Liban v. Gordon, supra note 4 at p. 77.

726 SUPREME COURT REPORTS ANNOTATED

must be reconciled and harmonized with Article XII, Section 16 of