DANTE V. LIBAN, REYNALDO M. BERNARDO, and SALVADOR M.

VIARI
vs.
RICHARD J. GORDON

FACTS:

Petitioners Dante V. Liban, Reynaldo M. Bernardo, and Salvador M. Viari

(petitioners) filed with this Court a Petition to Declare Richard J. Gordon as Having
Forfeited His Seat in the Senate. Petitioners are officers of the Board of Directors of the
Quezon City Red Cross Chapter while respondent is Chairman of the Philippine National
Red Cross (PNRC) Board of Governors.

During respondent’s incumbency as a member of the Senate of the Philippines, he

was elected Chairman of the PNRC during the meeting of the PNRC Board of Governors.
Petitioners allege that by accepting the chairmanship of the PNRC Board of Governors,
respondent has ceased to be a member of the Senate as provided in Section 13, Article
VI of the Constitution.

Petitioners cite Camporedondo v. NLRC, which held that the PNRC is a

government-owned or controlled corporation. Petitioners claim that in accepting and
holding the position of Chairman of the PNRC Board of Governors, respondent has
automatically forfeited his seat in the Senate.

Respondent contends that the PNRC is not a government-owned or controlled

corporation and that the prohibition under Section 13, Article VI of the Constitution does
not apply in the present case since volunteer service to the PNRC is neither an office nor
an employment.

ISSUE:
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.

RATIONALE:

Adhering to the Geneva Conventions, established the PNRC as a voluntary

organization for the purpose contemplated in the said Convention of 27 July 1929.

PNRC is a non-profit, donor-funded, voluntary, humanitarian organization, whose

mission is to bring timely, effective, and compassionate humanitarian assistance for the
most vulnerable without consideration of nationality, race, religion, gender, social status,
or political affiliation.

The Fundamental Principles provide a universal standard of reference for all

members of the Movement. The PNRC, as a member National Society of the Movement,
has the duty to uphold the Fundamental Principles and ideals of the Movement. In order
to be recognized as a National Society, the PNRC has to be autonomous and must
operate in conformity with the Fundamental Principles of the Movement.

Thus, the PNRC must not only be, but must also be seen to be, autonomous,
neutral and independent in order to conduct its activities in accordance with the
Fundamental Principles. The PNRC must not appear to be an instrument or agency that
implements government policy; otherwise, it cannot merit the trust of all and cannot
effectively carry out its mission as a National Red Cross Society. It is imperative that the
PNRC must be autonomous, neutral, and independent in relation to the State.

RULING:

No, the PNRC is a privately owned, privately funded, and privately run charitable
organization. The PNRC is not a government-owned or controlled corporation.

Petitioners anchor their petition on the 1999 case of Camporedondo v. NLRC, which ruled
that the PNRC is a government-owned or controlled corporation. In ruling that the PNRC
is a government-owned or controlled corporation, the simple test used was whether the
corporation was created by its own special charter for the exercise of a public function or
by incorporation under the general corporation law. Since the PNRC was created under
a special charter, the Court then ruled that it is a government corporation. However, the
Camporedondo ruling failed to consider the definition of a government-owned or
controlled corporation as provided under Section 2(13) of the Introductory Provisions of
the Administrative Code of 1987:

SEC. 2. General Terms Defined. – x x x

(13) Government-owned or controlled corporation refers to any agency organized

as a stock or non-stock corporation, vested with functions relating to public needs
whether governmental or proprietary in nature, and owned by the Government
directly or through its instrumentalities either wholly, or where applicable as in the
case of stock corporations, to the extent of at least fifty-one (51) percent of its
capital stock: x x x

A government-owned or controlled corporation must be owned by the government,

and in the case of a stock corporation, at least a majority of its capital stock must be
owned by the government. In the case of a non-stock corporation, by analogy at least a
majority of the members must be government officials holding such membership by
appointment or designation by the government. Under this criterion, and as discussed
earlier, the government does not own or control PNRC.