EN BANC be a member of the Senate as provided in claiming to be entitled to a public office

Section 13, Article VI of the Constitution, usurped or unlawfully held by another may
[G.R. NO. 175352 : July 15, 2009] which reads: bring an action for quo warranto in his own
name. If the petition is one for quo warranto,
DANTE V. LIBAN, REYNALDO M. SEC. 13. No Senator or Member of the it is already barred by prescription since
BERNARDO, and SALVADOR M. VIARI, House of Representatives may hold any other under Section 11, Rule 66 of the Rules of
Petitioners, v. RICHARD J. GORDON, office or employment in the Government, or Civil Procedure, the action should be
Respondent. any subdivision, agency, or instrumentality commenced within one year after the cause of
thereof, including government-owned or the public officer's forfeiture of office. In this
DECISION controlled corporations or their subsidiaries, case, respondent has been working as a Red
during his term without forfeiting his seat. Cross volunteer for the past 40 years.
CARPIO, J.: Neither shall he be appointed to any office Respondent was already Chairman of the
which may have been created or the PNRC Board of Governors when he was
The Case emoluments thereof increased during the term elected Senator in May 2004, having been
for which he was elected. elected Chairman in 2003 and re-elected in
This is a petition to declare Senator Richard 2005.
J. Gordon (respondent) as having forfeited his Petitioners cite Camporedondo v. NLRC,2
seat in the Senate. which held that the PNRC is a government- Respondent contends that even if the present
owned or controlled corporation. Petitioners petition is treated as a taxpayer's suit,
The Facts claim that in accepting and holding the petitioners cannot be allowed to raise a
position of Chairman of the PNRC Board of constitutional question in the absence of any
Petitioners Dante V. Liban, Reynaldo M. Governors, respondent has automatically claim that they suffered some actual damage
Bernardo, and Salvador M. Viari (petitioners) forfeited his seat in the Senate, pursuant to or threatened injury as a result of the
filed with this Court a Petition to Declare Flores v. Drilon,3 which held that incumbent allegedly illegal act of respondent.
Richard J. Gordon as Having Forfeited His national legislators lose their elective posts Furthermore, taxpayers are allowed to sue
Seat in the Senate. Petitioners are officers of upon their appointment to another only when there is a claim of illegal
the Board of Directors of the Quezon City government office. disbursement of public funds, or that public
Red Cross Chapter while respondent is money is being diverted to any improper
Chairman of the Philippine National Red In his Comment, respondent asserts that purpose, or where petitioners seek to restrain
Cross (PNRC) Board of Governors. petitioners have no standing to file this respondent from enforcing an invalid law that
petition which appears to be an action for quo results in wastage of public funds.
During respondent's incumbency as a warranto, since the petition alleges that
member of the Senate of the Philippines,1 he respondent committed an act which, by Respondent also maintains that if the petition
was elected Chairman of the PNRC during provision of law, constitutes a ground for is treated as one for declaratory relief, this
the 23 February 2006 meeting of the PNRC forfeiture of his public office. Petitioners do Court would have no jurisdiction since
Board of Governors. Petitioners allege that by not claim to be entitled to the Senate office of original jurisdiction for declaratory relief lies
accepting the chairmanship of the PNRC respondent. Under Section 5, Rule 66 of the with the Regional Trial Court.
Board of Governors, respondent has ceased to Rules of Civil Procedure, only a person
Respondent further insists that the PNRC is Constitution; andcralawlibrary (c) An association which acts as a corporation
not a government-owned or controlled within the Philippines without being legally
corporation and that the prohibition under 4. Whether petitioners may legally institute incorporated or without lawful authority so to
Section 13, Article VI of the Constitution this petition against respondent.4 act. (Emphasis supplied)cralawlibrary
does not apply in the present case since
volunteer service to the PNRC is neither an The substantial issue boils down to whether Petitioners allege in their petition that:
office nor an employment. the office of the PNRC Chairman is a
government office or an office in a 4. Respondent became the Chairman of the
In their Reply, petitioners claim that their government-owned or controlled corporation PNRC when he was elected as such during
petition is neither an action for quo warranto for purposes of the prohibition in Section 13, the First Regular Luncheon-Meeting of the
nor an action for declaratory relief. Article VI of the Constitution. Board of Governors of the PNRC held on
Petitioners maintain that the present petition February 23, 2006, the minutes of which is
is a taxpayer's suit questioning the unlawful The Court's Ruling hereto attached and made integral part hereof
disbursement of funds, considering that as Annex "A."
respondent has been drawing his salaries and We find the petition without merit.
other compensation as a Senator even if he is 5. Respondent was elected as Chairman of the
no longer entitled to his office. Petitioners Petitioners Have No Standing to File this PNRC Board of Governors, during his
point out that this Court has jurisdiction over Petition incumbency as a Member of the House of
this petition since it involves a legal or Senate of the Congress of the Philippines,
constitutional issue which is of transcendental A careful reading of the petition reveals that having been elected as such during the
importance. it is an action for quo warranto. Section 1, national elections last May 2004.
Rule 66 of the Rules of Court provides:
The Issues 6. Since his election as Chairman of the
Section 1. Action by Government against PNRC Board of Governors, which position
Petitioners raise the following issues: individuals. - An action for the usurpation of he duly accepted, respondent has been
a public office, position or franchise may be exercising the powers and discharging the
1. Whether the Philippine National Red Cross commenced by a verified petition brought in functions and duties of said office, despite the
(PNRC) is a government - owned or the name of the Republic of the Philippines fact that he is still a senator.
controlled corporation; against:
7. It is the respectful submission of the
2. Whether Section 13, Article VI of the (a) A person who usurps, intrudes into, or petitioner[s] that by accepting the
Philippine Constitution applies to the case of unlawfully holds or exercises a public office, chairmanship of the Board of Governors of
respondent who is Chairman of the PNRC position or franchise; the PNRC, respondent has ceased to be a
and at the same time a Member of the Senate; Member of the House of Senate as provided
(b) A public officer who does or suffers an act in Section 13, Article VI of the Philippine
3. Whether respondent should be which by provision of law, constitutes a Constitution, x x x
automatically removed as a Senator pursuant ground for the forfeiture of his office; or
to Section 13, Article VI of the Philippine x x x
10. It is respectfully submitted that in specifically under Section 1(b), Rule 66 of Disaster Management, Safety Services,
accepting the position of Chairman of the the Rules of Court. Community Health and Nursing, Social
Board of Governors of the PNRC on Services and Voluntary Service.9
February 23, 2006, respondent has Quo warranto is generally commenced by the
automatically forfeited his seat in the House Government as the proper party plaintiff. The Republic of the Philippines, adhering to
of Senate and, therefore, has long ceased to However, under Section 5, Rule 66 of the the Geneva Conventions, established the
be a Senator, pursuant to the ruling of this Rules of Court, an individual may commence PNRC as a voluntary organization for the
Honorable Court in the case of FLORES, ET such an action if he claims to be entitled to purpose contemplated in the Geneva
AL. v. DRILON AND GORDON, G.R. No. the public office allegedly usurped by Convention of 27 July 1929.10 The Whereas
104732, x x x another, in which case he can bring the action clauses of the PNRC Charter read:
in his own name. The person instituting quo
11. Despite the fact that he is no longer a warranto proceedings in his own behalf must WHEREAS, there was developed at Geneva,
senator, respondent continues to act as such claim and be able to show that he is entitled Switzerland, on August 22, 1864, a
and still performs the powers, functions and to the office in dispute, otherwise the action convention by which the nations of the world
duties of a senator, contrary to the may be dismissed at any stage.6 In the present were invited to join together in diminishing,
constitution, law and jurisprudence. case, petitioners do not claim to be entitled to so far lies within their power, the evils
the Senate office of respondent. Clearly, inherent in war;
12. Unless restrained, therefore, respondent petitioners have no standing to file the
will continue to falsely act and represent present petition. WHEREAS, more than sixty nations of the
himself as a senator or member of the House world have ratified or adhered to the
of Senate, collecting the salaries, emoluments Even if the Court disregards the infirmities of subsequent revision of said convention,
and other compensations, benefits and the petition and treats it as a taxpayer's suit, namely the "Convention of Geneva of July 29
privileges appertaining and due only to the the petition would still fail on the merits. [sic], 1929 for the Amelioration of the
legitimate senators, to the damage, great and Condition of the Wounded and Sick of
irreparable injury of the Government and the PNRC is a Private Organization Performing Armies in the Field" (referred to in this
Filipino people.5(Emphasis Public Functions Charter as the Geneva Red Cross
supplied)cralawlibrary Convention);
On 22 March 1947, President Manuel A.
Thus, petitioners are alleging that by Roxas signed Republic Act No. 95,7 WHEREAS, the Geneva Red Cross
accepting the position of Chairman of the otherwise known as the PNRC Charter. The Convention envisages the establishment in
PNRC Board of Governors, respondent has PNRC is a non-profit, donor-funded, each country of a voluntary organization to
automatically forfeited his seat in the Senate. voluntary, humanitarian organization, whose assist in caring for the wounded and sick of
In short, petitioners filed an action for mission is to bring timely, effective, and the armed forces and to furnish supplies for
usurpation of public office against compassionate humanitarian assistance for that purpose;
respondent, a public officer who allegedly the most vulnerable without consideration of
committed an act which constitutes a ground nationality, race, religion, gender, social WHEREAS, the Republic of the Philippines
for the forfeiture of his public office. Clearly, status, or political affiliation.8 The PNRC became an independent nation on July 4,
such an action is for quo warranto, provides six major services: Blood Services, 1946 and proclaimed its adherence to the
Geneva Red Cross Convention on February 1. HUMANITY - The International Red any manner by desire for gain.
14, 1947, and by that action indicated its Cross and Red Crescent Movement, born of a
desire to participate with the nations of the desire to bring assistance without 6. UNITY - There can be only one Red Cross
world in mitigating the suffering caused by discrimination to the wounded on the or one Red Crescent Society in any one
war and to establish in the Philippines a battlefield, endeavors, in its international and country. It must be open to all. It must carry
voluntary organization for that purpose as national capacity, to prevent and alleviate on its humanitarian work throughout its
contemplated by the Geneva Red Cross human suffering wherever it may be found. territory.
Convention; Its purpose is to protect life and health and to
ensure respect for the human being. It 7. UNIVERSALITY - The International Red
WHEREAS, there existed in the Philippines promotes mutual understanding, friendship, Cross and Red Crescent Movement, in which
since 1917 a Charter of the American cooperation and lasting peace amongst all all Societies have equal status and share equal
National Red Cross which must be peoples. responsibilities and duties in helping each
terminated in view of the independence of the other, is worldwide. (Emphasis
Philippines; andcralawlibrary 2. IMPARTIALITY - It makes no supplied)cralawlibrary
discrimination as to nationality, race,
WHEREAS, the volunteer organizations religious beliefs, class or political opinions. It The Fundamental Principles provide a
established in the other countries which have endeavors to relieve the suffering of universal standard of reference for all
ratified or adhered to the Geneva Red Cross individuals, being guided solely by their members of the Movement. The PNRC, as a
Convention assist in promoting the health and needs, and to give priority to the most urgent member National Society of the Movement,
welfare of their people in peace and in war, cases of distress. has the duty to uphold the Fundamental
and through their mutual assistance and Principles and ideals of the Movement. In
cooperation directly and through their 3. NEUTRALITY - In order to continue to order to be recognized as a National Society,
international organizations promote better enjoy the confidence of all, the Movement the PNRC has to be autonomous and must
understanding and sympathy among the may not take sides in hostilities or engage at operate in conformity with the Fundamental
peoples of the world. (Emphasis any time in controversies of a political, racial, Principles of the Movement.11
supplied)cralawlibrary religious or ideological nature.
The reason for this autonomy is fundamental.
The PNRC is a member National Society of 4. INDEPENDENCE - The Movement is To be accepted by warring belligerents as
the International Red Cross and Red Crescent independent. The National Societies, while neutral workers during international or
Movement (Movement), which is composed auxiliaries in the humanitarian services of internal armed conflicts, the PNRC
of the International Committee of the Red their governments and subject to the laws of volunteers must not be seen as belonging to
Cross (ICRC), the International Federation of their respective countries, must always any side of the armed conflict. In the
Red Cross and Red Crescent Societies maintain their autonomy so that they may be Philippines where there is a communist
(International Federation), and the National able at all times to act in accordance with the insurgency and a Muslim separatist rebellion,
Red Cross and Red Crescent Societies principles of the Movement. the PNRC cannot be seen as government-
(National Societies). The Movement is united owned or controlled, and neither can the
and guided by its seven Fundamental 5. VOLUNTARY SERVICE - It is a PNRC volunteers be identified as government
Principles: voluntary relief movement not prompted in personnel or as instruments of government
policy. Otherwise, the insurgents or organized by the Board of Governors and The PNRC Board of Governors, which
separatists will treat PNRC volunteers as conducted by the Chapters in their respective exercises all corporate powers of the PNRC,
enemies when the volunteers tend to the jurisdictions. These fund raising campaigns elects the PNRC Chairman and all other
wounded in the battlefield or the displaced shall be conducted independently of other officers of the PNRC. The incumbent
civilians in conflict areas. fund drives by other organizations. Chairman of PNRC, respondent Senator
(Emphasis supplied)cralawlibrary Gordon, was elected, as all PNRC Chairmen
Thus, the PNRC must not only be, but must are elected, by a private sector-controlled
also be seen to be, autonomous, neutral and The government does not control the PNRC. PNRC Board four-fifths of whom are private
independent in order to conduct its activities Under the PNRC Charter, as amended, only sector members of the PNRC. The PNRC
in accordance with the Fundamental six of the thirty members of the PNRC Board Chairman is not appointed by the President or
Principles. The PNRC must not appear to be of Governors are appointed by the President by any subordinate government official.
an instrument or agency that implements of the Philippines. Thus, twenty-four
government policy; otherwise, it cannot merit members, or four-fifths (4/5), of the PNRC Under Section 16, Article VII of the
the trust of all and cannot effectively carry Board of Governors are not appointed by the Constitution,14 the President appoints all
out its mission as a National Red Cross President. Section 6 of the PNRC Charter, as officials and employees in the Executive
Society.12 It is imperative that the PNRC must amended, provides: branch whose appointments are vested in the
be autonomous, neutral, and independent in President by the Constitution or by law. The
relation to the State. SECTION 6. The governing powers and President also appoints those whose
authority shall be vested in a Board of appointments are not otherwise provided by
To ensure and maintain its autonomy, Governors composed of thirty members, six law. Under this Section 16, the law may also
neutrality, and independence, the PNRC of whom shall be appointed by the President authorize the "headsof departments, agencies,
cannot be owned or controlled by the of the Philippines, eighteen shall be elected commissions, or boards" to appoint officers
government. Indeed, the Philippine by chapter delegates in biennial conventions lower in rank than such heads of departments,
government does not own the PNRC. The and the remaining six shall be selected by the agencies, commissions or boards.15 In Rufino
PNRC does not have government assets and twenty-four members of the Board already v. Endriga,16 the Court explained
does not receive any appropriation from the chosen. x x x. appointments under Section 16 in this wise:
Philippine Congress.13 The PNRC is financed
primarily by contributions from private Thus, of the twenty-four members of the Under Section 16, Article VII of the 1987
individuals and private entities obtained PNRC Board, eighteen are elected by the Constitution, the President appoints three
through solicitation campaigns organized by chapter delegates of the PNRC, and six are groups of officers. The first group refers to
its Board of Governors, as provided under elected by the twenty-four members already the heads of the Executive departments,
Section 11 of the PNRC Charter: chosen - a select group where the private ambassadors, other public ministers and
sector members have three-fourths majority. consuls, officers of the armed forces from the
SECTION 11. As a national voluntary Clearly, an overwhelming majority of four- rank of colonel or naval captain, and other
organization, the Philippine National Red fifths of the PNRC Board are elected or officers whose appointments are vested in the
Cross shall be financed primarily by chosen by the private sector members of the President by the Constitution. The second
contributions obtained through solicitation PNRC. group refers to those whom the President may
campaigns throughout the year which shall be be authorized by law to appoint. The third
group refers to all other officers of the of the PNRC. Neither does the head of any constitutional bodies. Neither is the CCP a
Government whose appointments are not department, agency, commission or board quasi-judicial body nor a local government
otherwise provided by law. appoint the PNRC Chairman. Thus, the unit. Thus, the CCP must fall under the
PNRC Chairman is not an official or Executive branch. Under the Revised
Under the same Section 16, there is a fourth employee of the Executive branch since his Administrative Code of 1987, any agency
group of lower-ranked officers whose appointment does not fall under Section 16, "not placed by law or order creating them
appointments Congress may by law vest in Article VII of the Constitution. Certainly, the under any specific department" falls "under
the heads of departments, agencies, PNRC Chairman is not an official or the Office of the President."
commissions, or boards. x x x employee of the Judiciary or Legislature.
This leads us to the obvious conclusion that Since the President exercises control over "all
xxx the PNRC Chairman is not an official or the executive departments, bureaus, and
employee of the Philippine Government. Not offices," the President necessarily exercises
In a department in the Executive branch, the being a government official or employee, the control over the CCP which is an office in the
head is the Secretary. The law may not PNRC Chairman, as such, does not hold a Executive branch. In mandating that the
authorize the Undersecretary, acting as such government office or employment. President "shall have control of all executive .
Undersecretary, to appoint lower-ranked . . offices," Section 17, Article VII of the
officers in the Executive department. In an Under Section 17, Article VII of the 1987 Constitution does not exempt any
agency, the power is vested in the head of the Constitution,17 the President exercises control executive office - one performing executive
agency for it would be preposterous to vest it over all government offices in the Executive functions outside of the independent
in the agency itself. In a commission, the branch. If an office is legally not under the constitutional bodies - from the President's
head is the chairperson of the commission. In control of the President, then such office is power of control. There is no dispute that the
a board, the head is also the chairperson of not part of the Executive branch. In Rufino CCP performs executive, and not legislative,
the board. In the last three situations, the law v. Endriga,18 the Court explained the judicial, or quasi-judicial functions.
may not also authorize officers other than the President's power of control over all
heads of the agency, commission, or board to government offices as follows: The President's power of control applies to
appoint lower-ranked officers. the acts or decisions of all officers in the
Every government office, entity, or agency Executive branch. This is true whether such
xxx must fall under the Executive, Legislative, or officers are appointed by the President or by
Judicial branches, or must belong to one of heads of departments, agencies, commissions,
The Constitution authorizes Congress to vest the independent constitutional bodies, or or boards. The power of control means the
the power to appoint lower-ranked officers must be a quasi-judicial body or local power to revise or reverse the acts or
specifically in the "heads" of the specified government unit. Otherwise, such decisions of a subordinate officer involving
offices, and in no other person. The word government office, entity, or agency has no the exercise of discretion.
"heads" refers to the chairpersons of the legal and constitutional basis for its existence.
commissions or boards and not to their In short, the President sits at the apex of the
members, for several reasons. The CCP does not fall under the Legislative Executive branch, and exercises "control of
or Judicial branches of government. The CCP all the executive departments, bureaus, and
The President does not appoint the Chairman is also not one of the independent offices." There can be no instance under the
Constitution where an officer of the a National Society's active members must or controlled corporation. In ruling that the
Executive branch is outside the control of the remain in a large majority in a National PNRC is a government-owned or controlled
President. The Executive branch is unitary Society's governing bodies.19 corporation, the simple test used was whether
since there is only one President vested with the corporation was created by its own
executive power exercising control over the The PNRC is not government-owned but special charter for the exercise of a public
entire Executive branch. Any office in the privately owned. The vast majority of the function or by incorporation under the
Executive branch that is not under the control thousands of PNRC members are private general corporation law. Since the PNRC was
of the President is a lost command whose individuals, including students. Under the created under a special charter, the Court then
existence is without any legal or PNRC Charter, those who contribute to the ruled that it is a government corporation.
constitutional basis. (Emphasis annual fund campaign of the PNRC are However, the Camporedondo ruling failed to
supplied)cralawlibrary entitled to membership in the PNRC for one consider the definition of a government-
year. Thus, any one between 6 and 65 years owned or controlled corporation as provided
An overwhelming four-fifths majority of the of age can be a PNRC member for one year under Section 2(13) of the Introductory
PNRC Board are private sector individuals upon contributing P35, P100, P300, P500 or Provisions of the Administrative Code of
elected to the PNRC Board by the private P1,000 for the year.20 Even foreigners, 1987:
sector members of the PNRC. The PNRC whether residents or not, can be members of
Board exercises all corporate powers of the the PNRC. Section 5 of the PNRC Charter, as SEC. 2. General Terms Defined. - x x x
PNRC. The PNRC is controlled by private amended by Presidential Decree No. 1264,21
sector individuals. Decisions or actions of the reads: (13) Government-owned or controlled
PNRC Board are not reviewable by the corporation refers to any agency organized as
President. The President cannot reverse or SEC. 5. Membership in the Philippine a stock or non-stock corporation, vested with
modify the decisions or actions of the PNRC National Red Cross shall be open to the entire functions relating to public needs whether
Board. Neither can the President reverse or population in the Philippines regardless of governmental or proprietary in nature, and
modify the decisions or actions of the PNRC citizenship. Any contribution to the owned by the Government directly or through
Chairman. It is the PNRC Board that can Philippine National Red Cross Annual Fund its instrumentalities either wholly, or where
review, reverse or modify the decisions or Campaign shall entitle the contributor to applicable as in the case of stock
actions of the PNRC Chairman. This proves membership for one year and said corporations, to the extent of at least fifty-one
again that the office of the PNRC Chairman contribution shall be deductible in full for (51) percent of its capital stock: Provided,
is a private office, not a government taxation purposes. That government-owned or controlled
office.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ corporations may be further categorized by
Thus, the PNRC is a privately owned, the Department of the Budget, the Civil
Although the State is often represented in the privately funded, and privately run charitable Service Commission, and the Commission on
governing bodies of a National Society, this organization. The PNRC is not a government- Audit for purposes of the exercise and
can be justified by the need for proper owned or controlled corporation. discharge of their respective powers,
coordination with the public authorities, and functions and responsibilities with respect to
the government representatives may take part Petitioners anchor their petition on the 1999 such corporations.(Boldfacing and
in decision-making within a National Society. case of Camporedondo v. NLRC,22 which underscoring supplied)
However, the freely-elected representatives of ruled that the PNRC is a government-owned
A government-owned or controlled SECTION 1. There is hereby created in the general law applicable to all citizens. The
corporation must be owned by the Republic of the Philippines a body corporate purpose of this constitutional provision is to
government, and in the case of a stock and politic to be the voluntary organization ban private corporations created by special
corporation, at least a majority of its capital officially designated to assist the Republic of charters, which historically gave certain
stock must be owned by the government. In the Philippines in discharging the obligations individuals, families or groups special
the case of a non-stock corporation, by set forth in the Geneva Conventions and to privileges denied to other citizens.
analogy at least a majority of the members perform such other duties as are inherent
must be government officials holding such upon a National Red Cross Society. The In short, Congress cannot enact a law creating
membership by appointment or designation national headquarters of this Corporation a private corporation with a special charter.
by the government. Under this criterion, and shall be located in Metropolitan Manila. Such legislation would be unconstitutional.
as discussed earlier, the government does not (Emphasis supplied)cralawlibrary Private corporations may exist only under a
own or control PNRC. general law. If the corporation is private, it
In Feliciano v. Commission on Audit, 23 the must necessarily exist under a general law.
The PNRC Charter is Violative of the Court explained the constitutional provision Stated differently, only corporations created
Constitutional Proscription against the prohibiting Congress from creating private under a general law can qualify as private
Creation of Private Corporations by Special corporations in this wise: corporations. Under existing laws, the general
Law law is the Corporation Code, except that the
We begin by explaining the general Cooperative Code governs the incorporation
The 1935 Constitution, as amended, was in framework under the fundamental law. The of cooperatives.
force when the PNRC was created by special Constitution recognizes two classes of
charter on 22 March 1947. Section 7, Article corporations. The first refers to private The Constitution authorizes Congress to
XIV of the 1935 Constitution, as amended, corporations created under a general law. The create government-owned or controlled
reads: second refers to government-owned or corporations through special charters. Since
controlled corporations created by special private corporations cannot have special
SEC. 7. The Congress shall not, except by charters. Section 16, Article XII of the charters, it follows that Congress can create
general law, provide for the formation, Constitution provides: corporations with special charters only if
organization, or regulation of private such corporations are government-owned or
corporations, unless such corporations are Sec. 16. The Congress shall not, except by controlled.24 (Emphasis
owned or controlled by the Government or general law, provide for the formation, supplied)cralawlibrary
any subdivision or instrumentality thereof. organization, or regulation of private
corporations. Government-owned or In Feliciano, the Court held that the Local
The subsequent 1973 and 1987 Constitutions controlled corporations may be created or Water Districts are government-owned or
contain similar provisions prohibiting established by special charters in the interest controlled corporations since they exist by
Congress from creating private corporations of the common good and subject to the test of virtue of Presidential Decree No. 198, which
except by general law. Section 1 of the PNRC economic viability. constitutes their special charter. The seed
Charter, as amended, creates the PNRC as a capital assets of the Local Water Districts,
"body corporate and politic," thus: The Constitution emphatically prohibits the such as waterworks and sewerage facilities,
creation of private corporations except by were public property which were managed,
operated by or under the control of the city, special charter, it cannot be considered a In sum, we hold that the office of the PNRC
municipality or province before the assets government-owned or controlled corporation Chairman is not a government office or an
were transferred to the Local Water Districts. in the absence of the essential elements of office in a government-owned or controlled
The Local Water Districts also receive ownership and control by the government. In corporation for purposes of the prohibition in
subsidies and loans from the Local Water creating the PNRC as a corporate entity, Section 13, Article VI of the 1987
Utilities Administration (LWUA). In fact, Congress was in fact creating a private Constitution. However, since the PNRC
under the 2009 General Appropriations Act,25 corporation. However, the constitutional Charter is void insofar as it creates the PNRC
the LWUA has a budget amounting to prohibition against the creation of private as a private corporation, the PNRC should
P400,000,000 for its subsidy corporations by special charters provides no incorporate under the Corporation Code and
requirements.26There is no private capital exception even for non-profit or charitable register with the Securities and Exchange
invested in the Local Water Districts.The corporations. Consequently, the PNRC Commission if it wants to be a private
capital assets and operating funds of the Charter, insofar as it creates the PNRC as a corporation.
Local Water Districts all come from the private corporation and grants it corporate
government, either through transfer of assets, powers,27 is void for being unconstitutional. WHEREFORE, we declare that the office of
loans, subsidies or the income from such Thus, Sections 1,28 2,29 3,30 4(a),31 5,32 6,33 7,34 the Chairman of the Philippine National Red
assets or funds. 8,35 9,36 10,37 11,38 12,39 and 1340of the PNRC Cross is not a government office or an office
Charter, as amended, are void. in a government-owned or controlled
The government also controls the Local corporation for purposes of the prohibition in
Water Districts because the municipal or city The other provisions41 of the PNRC Charter Section 13, Article VI of the 1987
mayor, or the provincial governor, appoints remain valid as they can be considered as a Constitution. We also declare that Sections 1,
all the board directors of the Local Water recognition by the State that the 2, 3, 4(a), 5, 6, 7, 8, 9, 10, 11, 12, and 13 of
Districts. Furthermore, the board directors unincorporated PNRC is the local National the Charter of the Philippine National Red
and other personnel of the Local Water Society of the International Red Cross and Cross, or Republic Act No. 95, as amended
Districts are government employees subject Red Crescent Movement, and thus entitled to by Presidential Decree Nos. 1264 and 1643,
to civil service laws and anti-graft laws. the benefits, exemptions and privileges set are VOID because they create the PNRC as a
Clearly, the Local Water Districts are forth in the PNRC Charter. The other private corporation or grant it corporate
considered government-owned or controlled provisions of the PNRC Charter implement powers.
corporations not only because of their the Philippine Government's treaty
creation by special charter but also because obligations under Article 4(5) of the Statutes SO ORDERED.
the government in fact owns and controls the of the International Red Cross and Red
Local Water Districts. Crescent Movement, which provides that to
be recognized as a National Society, the
Just like the Local Water Districts, the PNRC Society must be "duly recognized by the legal
was created through a special charter. government of its country on the basis of the
However, unlike the Local Water Districts, Geneva Conventions and of the national
the elements of government ownership and legislation as a voluntary aid society,
control are clearly lacking in the PNRC. auxiliary to the public authorities in the
Thus, although the PNRC is created by a humanitarian field."