Hacienda Luisita vs PARC Case Digests

July 13, 2019 | Author: Angel Eilise | Category: Leasehold Estate, Agriculture, Government, Politics, Business
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Hacienda Luisita vs PARC Case Digest GR 171101 July 5 2011 Nov 22 2011

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Facts: In 1988, RA 6657 or the CARP law was passed. It is a program aimed at redistributing public and private agricultural lands to farmers and farmworkers who are landless. One of the lands covered by this law is the Hacienda Luisita, a 6,443-hectare mixed agricultural-industrial-residential expanse straddling several municipalities of Tarlac. Hacienda Luisita was bought in 1958 from the Spanish owners by the Tarlac Development Corporation (TADECO), which is owned and/or controlled by Jose Cojuanco Sr., Group. Back in 1980, the Martial Law administration filed an expropriation suit against TADECO to surrender the Hacienda to the then Ministry of Agrarian Reform (now DAR) so that the land can be distributed to the farmers at cost. The RTC rendered  judgment ordering ordering TADECO TADECO to surrender surrender Hacienda Hacienda Luisita Luisita to the MAR. In 1988, the OSG moved to dismiss the government’s case against TADECO. The CA dismissed it, but the dismissal was subject to the condition that TADECO shall obtain the approval of FWB (farm worker beneficiaries) to the SDP (Stock Distribution Plan) and to ensure its implementation. Sec 31 of the CARP Law allows either land transfer or stock transfer as two alternative modes in distributing land ownership to the FWBs. Since the stock distribution scheme is the preferred option of TADECO, it organized a spin-off corporation, the Hacienda Luisita Inc. (HLI), as vehicle to facilitate stock acquisition by the farmers.  After conducting a follow-up referendum and revision of terms of the Stock Distribution Option  Agreement  Agreement (SDOA) proposed by TADECO, T ADECO, the Presidential Presidential Agrarian Reform Council (PARC), led by then DAR Secretary Miriam Santiago, approved the SDP of TADECO/HLI through Resolution 89-12-2 dated Nov 21, 1989. From 1989 to 2005, the HLI claimed to have extended those benefits to the farmworkers. Such claim was subsequently contested by two groups representing the interests of the farmers  – the  – the HLI Supervisory Group and the AMBALA. In 2003, each of them wrote letter petitions before the DAR asking for the renegotiation of terms and/or revocation of the SDOA. They claimed that they haven’t actually received those benefits in full, that HLI violated the terms, and that their lives haven’t really improved contrary to the promise and rationale of the SDOA. The DAR created a Special Task Force to attend to the issues and to review the terms of the SDOA and the Resolution 89-12-2. Adopting the report and the recommendations of the Task Force, the DAR Sec recommended to the PARC (1) the revocation of Resolution 89-12-2 and (2) the acquisition of Hacienda Luisita through compulsory acquisitionscheme. Consequently, the PARC revoked the SDP of TADECO/HLI and subjected those lands covered by the SDP to the mandated land acquisitionscheme under the CARP law. These acts of the PARC was assailed by HLI via Rule 65. On the other hand, FARM, an intervenor, asks for the invalidation of Sec. 31 of RA 6657, insofar as it affords the corporation, as a mode of CARP compliance, to resort to stock transfer in lieu of outright agricultural land transfer. For FARM, this modality of distribution is an anomaly to be annulled for being inconsistent with the basic concept of agrarian reform ingrained in Sec. 4, Art. XIII of the Constitution.  Administrative  Administrative Law

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Issue 1: W/N PARC has the authority to revoke the Stock Distribution Plan or SDP Constitutional Law Issue 2: W/N the Court may exercise its power of judicial review over the constitutionality of Sec 31 of RA 6657 Statutory Construction Issue 3: W/N Sec 31 of RA 6657 is consistent with the Constitution’s concept of agrarian reform

* The SC, through a resolution dated Nov 21 2011 of the motion for reconsideration filed by HLI, affirmed the revocation of HLI’s SDP and the placing of Hacienda Luisita under the compulsory land distribution scheme of the CARP law. It was also held that the date of taking was Nov 21 1989, when the PARC, by Resolution 89-12-2, approved the SDP of HLI.

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Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No. 171101, July 5, 2011 DECISION

VELASCO, JR., J.:

I.

THE FACTS

In 1958, the Spanish owners of Compañia General de Tabacos de Filipinas (Tabacalera) sold Hacienda Luisita and the Central Azucarera Azucare ra de Tarlac, the sugar mill of the hacienda, to the Tarlac Development Corpor Corporation ation (Tadeco), then owned and controlled by the Jose Cojuangco Sr. Group. The Central Bank of the Philippines assisted Tadeco in obtaining a dollar loan from a US bank.  Also, the GSIS extended extended a PhP5.911 million loan in favor of Tadeco to pay the peso price component of the sale, with the condition that “the lots comprising the Hacienda Luisita be subdivided by the applicant-corporation and sold at cost to the tenants, should there be any, and whenever conditions should exist warranting such action under the provisions of the Land Tenure  Act.” Tadeco  Act.” Tadeco however did not comply with this condition. On May 7, 1980, the martial law administration filed a suit before the Manila RTC against Tadeco, et al., for them to surrender Hacienda Luisita to the then Ministry of Agrarian Reform

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On March 17, 1988, during the administration of President Corazon Cojuangco Aquino, the Office of the Solicitor General moved to withdraw the government’s case against Tadeco,  et al. The CA dismissed the case, subject to the PARC’s approval of Tadeco’s proposed stock distribution plan (SDP) in favor of its farmworkers. [Under EO 229 and later RA 6657, Tadeco had the option of availing stock distribution distri bution as an alternative modality to actual land transfer to the farmworkers.] On  August 23, 1988, Tadeco Tadeco organized a spin-off corporation, herein petitioner HLI, as vehicle to facilitate stock acquisition by the farmworkers. For this purpose, Tadeco conveyed to HLI the agricultural land portion (4,915.75 hectares) and other farm-related properties of Hacienda Luisita in exchange for HLI shares of stock. On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement of Hacienda Luisita signified in a referendum their acceptance of the proposed HLI’s Stock Distribution Distribut ion Option Plan (SODP). On May 11, 1989, the SDOA was formally entered into by Tadeco, HLI, and the 5,848 qualified FWBs. This attested to by then DAR Secretary Philip Juico. The SDOA embodied the basis and mechanics of HLI’s SDP, which was eventually approved by the PARC after a follow-up referendum conducted by the DAR on October 14, 1989, in which 5,117 FWBs, out of 5,315 who participated, opted to receive shares in HLI. On August 15, 1995, HLI applied for the conversion of 500 hectares of land of the hacienda from agricultural to industrial use, pursuant to Sec. 65 of RA 6657. The DAR approved the application on August 14, 1996, subject to payment of three percent (3%) of the gross selling price to the FWBs and to HLI’s continued compliance with its undertakings under the SDP, among other conditions. On December 13, 1996, HLI, in exchange for subscription of 12,000,000 shares of stocks of Centennary Holdings, Inc. (Centennary), ceded 300 hectares of the converted area to the latter. Subsequently, Centennary sold the entire 300 hectares for PhP750 million to Luisita Industrial Park Corporation (LIPCO), which used it in developing an industrial complex. From this area was carved out 2 parcels, for which 2 separate titles were issued in the name of LIPCO. Later, LIPCO transferred these 2 parcels to the Rizal Commercial Banking Corporation (RCBC) in payment of LIPCO’s PhP431,695,732.10 loan obligations to RCBC. LIPCO’s titles were cancelled and new ones were issued to RCBC. Apart from the 500 hectares, another 80.51 hectares were later detached from Hacienda Luisita and acquired acquir ed by the government as part of the Subic-Clark-Tar lac Expressway (SCTEX) complex. Thus, 4,335.75 hectares remained of the original 4,915 hectares Tadeco ceded to HLI. Such, was the state of things when two separate petitions reached the DAR in the latter part of 2003. The first was filed by the Supervisory Group of HLI (Supervisory Group), praying for a renegotiation of the SDOA, or, in the alternative, its revocation. The second petition, praying for the revocation and nullification of the SDOA and the distribution of the lands in the hacienda, was filed by Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA). The DAR then constituted a Special Task Force (STF) to attend to issues relating to the SDP of HLI. After investigation and evaluation, the STF found that HLI has not complied with its obligations under RA 6657 despite the implementation of the SDP. On December 22, 2005, the PARC issued the

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From the foregoing resolution, HLI sought reconsideration. Its motion notwithstanding, HLI also filed a petition before the Supreme Court in light of what it considers as the DAR’s hasty placing of Hacienda Luisita under CARP even before PARC could rule or even read the motion for reconsideration. PARC would eventually deny HLI’s motion for reconsideration  via Resolution No. 2006-34-01 dated May 3, 2006.

II.

THE ISSUES

(1) Does the PARC possess jurisdiction to recall or revoke HLI’s SDP? (2) [Issue raised by intervenor FARM (group of farmworkers)] Is I s Sec. 31 of RA 6657, which which allows stock transfer in lieu of outright land transfer, unconstitutional? (3) Is the revocation of the HLI’s SDP valid?  [Did PARC gravely abuse its discretion in revoking the subject SDP and placing the hacienda under CARP’s compulsory acquisition and distribution scheme?] (4) Should those portions of the converted land within Hacienda Luisita that RCBC and LIPCO acquired by purchase be excluded from the coverage of the assailed PARC resolution? [Did the PARC gravely abuse its discretion when it included LIPCO’s and RCBC’s respective properties that once formed part of Hacienda Luisita under the CARP compulsory acquisition scheme via the assailed Notice of Coverage?]

III. THE RULING [The Court DENIED the petition of HLI and AFFIRMED the PARC resolution placing the lands subject of HLI’s SDP under compulsory cove rage on mandated land acquisition scheme of the CARP, with the MODIFICATION that the original 6,296 qualified FWBs were given the option to remain as stockholders of HLI. It also excluded from the mandatory CARP coverage that part of Hacienda Luisita that had been acquired by RCBC and LIPCO.]

(1) YES, the PARC has jurisdiction to revoke HLI’s SDP under the doctrine of necessary implication. Under Sec. 31 of RA 6657, as implemented imp lemented by DAO 10, the authority to t o approve the plan for stock distribution of the corporate landowner belongs to PARC. Contrary to petitioner HLI’s posture, PARC also has the power to revoke the SDP which it previously approved. It may be, as urged, that RA 6657 or other executive issuances on agrarian reform do not explicitly vest the PARC with the power to revoke/recall an approved SDP. Such power or authority, however, is deemed possessed by PARC under the principle of necessary implication, a basic postulate that what is implied in a statute is as much a part of it as that which is expressed.

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agency tasked to ensure compliance by the corporate landowner with the approved SDP would be without authority to impose sanctions for non-compliance with it.

(2) NO, Sec. 31 of of RA 6657 is not unconstitutional. [The Court actually refused to pass upon the constitutional question because it was not raised at the earliest opportunity and because the resolution thereof is not the lis motaof the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the modes of acquisition under RA 9700.] When the Court is called upon to exercise its power of judicial review over, and pass upon the constitutionality of, acts of the executive or legislative departments, it does so only when the following essential requirements are first met, to wit: (1) there is an actual case or controversy; (2) that the constitutional question is raised at the earliest possible opportunity by a proper party or one with locus standi; and (3) the issue of constitutionality must be the very lis mota of the case. Not all the foregoing requirements are satisfied in the case at bar. While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 31 of RA 6657 as early as November 21, 1989 when PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter, and why its members received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP that said plan and approving resolution were sought to be revoked, but not, to stress, by FARM or any of its members, but by petitioner AMBALA. Furthermore, the AMBALA petition did NOT question the constitutionality constituti onality of Sec. 31 of RA 6657, but concentrated on the purported fl aws and gaps in the subsequent implementation of the SDP. Even the public respondents, as represented by the Solicitor General, did not not question the constitutionality constitutionalit y of the provision. On the other hand, FARM, whose 27 members formerly belonged to AMBALA, raised the constitutionality of Sec. 31 only on May 3, 2007 when it filed its Supplemental Comment with the Court. Thus, it took FARM some so me eighteen (18) years from November Novem ber 21, 1989 before it challenged the constitutionality constit utionality of Sec. 31 of RA 6657 which is quite too late in the day. The FARM members slept on their rights and even accepted benefits from the SDP with nary a complaint on the alleged unconstitutionality of Sec. 31 upon which the benefits were derived. The Court cannot now be goaded into resolving a constitutional issue that FARM failed to assail after the lapse of a long period of time and the occurrence of numerous events and activities which resulted from the application of an alleged unconstitutional legal provision. The last but the most important requisite that the constitutional issue must be the very lis mota of the case does not likewise obtain. The lis mota aspect is not present, the constitutional issue tendered not being critical to the resolution of the case. The unyielding rule has been to avoid, whenever plausible, an issue assailing the constitutionality of a statute or governmental act. If some other grounds exist by which judgment can be made without touching the constitutionality of a law, such recourse is favored.

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the recall of the SDP for such non-compliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions. To be sure, any of these key issues may be resolved without plunging into the constitutionality of Sec. 31 of RA 6657. Moreover, looking deeply into the underlying petitions of AMBALA, et al., it is not the said section per se that is invalid, but rather it is the alleged application of the said provision in the SDP that is flawed. It may be well to note at this juncture that Sec. 5 of RA 9700, amending Sec. 7 of RA 6657, has all but superseded Sec. 31 of RA 6657 vis-à-vis the stock distribution component of said Sec. 31. In its pertinent part, Sec. 5 of RA 9700 provides: “[T]hat after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to sell and compulsory acquisition.” Thus,  for all intents and purposes, the stock distribution scheme under Sec. 31 of RA 6657 is no longer an available option under existing law. The question of whether or not it is unconstitutional should be a moot issue.

(3) YES, the revocation of the HLI’s SDP valid. [NO, the PARC did NOT gravely abuse its discretion in revoking the subject SDP and placing the hacienda under CARP’s compulsory acquisition and distribution scheme.] The revocation of the approval of the SDP is valid: (1) the mechanics and timelines of HLI’s stock distribution violate DAO 10 because the minimum individual allocation of each original FWB of 18,804.32 shares was diluted as a result of the use of “man days” and the hiring of additional farmworkers; (2) the 30-year timeframe for HLI-to-FWBs stock transfer is contrary to what Sec. 11 of DAO 10 prescribes. In our review and analysis of par. 3 of the SDOA on the mechanics and timelines of stock distribution, We find that it violates two (2) provisions of DAO 10. Par. 3 of the SDOA states:

3. At the end of each fiscal year, for a period of 30 years, the SECOND PARTY [HLI] shall arr ange with the FIRST PARTY [TDC] the acquisition and distribution to the THIRD PARTY [FWBs] on the basis of number of days worked and at no cost to them of one-thirtieth (1/30) of 118,391,976.85 shares of the capital stock of the SECOND PARTY that are presently owned and held by the FIRST PARTY, until such time as the entire block of 118,391,976.85 shares shall have been completely acquired and distributed to the THIRD PARTY. [I]t is clear as day that the original 6,296 FWBs, who were qualified beneficiaries at the time of the approval of the SDP, suffered suffered from watering down of shares. As determined earlier, each original FWB is entitled to 18,804.32 HLI shares. The original FWBs got less than the guaranteed 18,804.32 HLI shares per beneficiary, because the acquisition and distribution of the HLI shares were based on “man days” or “number “ number of days worked” by the FWB FW B in a year’s time. As explained by HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he or she becomes entitled to HLI shares. If it falls below 37 days, the FWB, FWB, unfortunately, does not get any share

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farmworkers, farmworker s, which include the original 6,296 FWBs, were given shar es out of the 118,931,976.85 HLI shares representing the 33.296% of the total outstanding capital stock of HLI. Clearly, the minimum individual allocation of each original FWB of 18,804.32 shares was diluted as a result of the use of “man days” and the hiring of additional farmworkers. Going into another but related matter, par. 3 of the SDOA expressly providing for a 30-year timeframe for HLI-to-FWBs stock transfer is an arrangement contrary to what Sec. 11 of DAO 10 prescribes. Said Sec. 11 provides for the implementation implementati on of the approved stock distribution plan within three (3) months from receipt by the corporate landowner of the approval of the plan by PARC. In fact, based on the said provision, the transfer of the shares of stock in the names of the qualified FWBs should be recorded in the stock and transfer books and must be submitted to the SEC within sixty (60) days from implementation. To the Court, there is a purpose, which is at once discernible as it is practical, for the three-month threshold. Remove this timeline timeli ne and the corporate landowner can veritably evade compliance with agrarian reform by simply deferring to absurd limits the implementation of the stock distribution scheme. Evidently, the land transfer beneficiaries are given thirty (30) years within which to pay the cost of the land thus awarded them to make it less cumbersome for them to pay the government. To be sure, the reason underpinning the 30-year accommodation does not apply to corporate landowners in distributing shares of stock to the qualified beneficiaries, as the shares may be issued in a much shorter period of time. Taking into account the above discussion, the revocation of the SDP by PARC should be upheld [because of violations of] DAO 10. It bears stressing that under Sec. 49 of RA 6657, the PARC and the DAR have the power to issue rules and regulations, substantive or procedural. Being a product of such rule-making power, DAO 10 has the force and effect of law and must be duly complied with. The PARC is, therefore, correct in revoking the SDP.Consequently, the PARC Resolution No. 89-12-2 89-12- 2 dated November 21, l989 approving the HLI’s SDP is null ified and voided.

(4) YES, those portions of the converted land within Hacienda Luisita that RCBC and LIPCO acquired by purchase should be excluded from the coverage of the assailed PARC resolution.

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The same is true with respect to RCBC. At the time it acquired portions of Hacienda Luisita, only the following general annotations appeared on the TCTs of LIPCO: the Deed of Restrictions, limiting its use solely as an industrial estate; the Secretary’s Certificate in favor of Koji Komai and Kyosuke Hori; and the Real Estate Mortgage in favor of RCBC to guarantee the payment of PhP 300 million. To be sure, intervenor RCBC and LIPCO knew that the lots they bought were subjected to CARP coverage by means of a stock distribution plan, as the DAR conversion order was annotated at the back of the titles of the lots they acquired. However, they are of the honest belief that the subject lots were validly converted to commercial or industrial purposes and for which said lots were taken out of the CARP coverage subject of PARC Resolution No. 89-12-2 and, hence, can be legally and validly acquired by them. After all, Sec. 65 of RA 6657 explicitly allows conversion and disposition of agricultural lands previously covered by CARP land acquisition “after the lapse of five (5) years from its award when the land ceases to be economically feasible and sound for agricultural purposes or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes.” Moreover, DAR notified all the affected parties, more particularly the FWBs, and gave them the opportunity to comment or oppose the proposed conversion. DAR, after going through the necessary processes, granted the conversion of 500 hectares of Hacienda Luisita pursuant to its primary jurisdiction under Sec. 50 of RA 6657 to determine and adjudicate agrarian reform matters and its original exclusive  jurisdiction over all matters matters involving the implementation implementation of agrarian agrarian reform. The DAR DAR conversion conversion order became final and executory after none of of the FWBs interposed an appeal to the CA. In this factual setting, RCBC and LIPCO purchased the lots in question on their honest and well-founded belief that the previous registered regis tered owners could legally sell sel l and convey the lots though these were previously subject of CARP coverage. Ergo, RCBC and LIPCO acted in good faith in acquiring the subject lots.  And second, second, both LIPCO and RCBC purchased purchased portions of Hacienda Hacienda Luisita for value. Undeniably, LIPCO acquired 300 hectares of land from Centennary for the amount of PhP750 million pursuant to a Deed of Sale dated July 30, 1998. On the other hand, in a Deed of Absolute  Assignment dated November November 25, 25, 2004, LIPCO LIPCO conveyed conveyed portions portions of Hacienda Hacienda Luisita in in favor of RCBC by way of dacion en pago to pay for a loan of PhP431,695,732.10. In relying upon the above-mentioned approvals, proclamation and conversion order, both RCBC

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the meantime. The actual existence of a statute or executive act is, prior to such a determination, an operative fact and may have consequences which cannot justly be ignored; the past cannot always be erased by a new judicial declaration. While the assailed PARC resolutions effectively nullifying the Hacienda Luisita SDP are upheld, the revocation must, by application of the operative fact principle, give way to the right of the original 6,296 qualified FWBs to choose whether they want to remain as HLI stockholders or not. The Court cannot turn a blind eye to the fact that in 1989, 93% of the FWBs agreed to the SDOA (or the MOA), which became the basis of the SDP approved by PARC per its Resolution No. 89-12-2 dated November 21, 1989. From 1989 to 2005, the FWBs were said to have rec eived from HLI salaries and cash benefits, hospital and medical benefits, 240-square meter homelots, 3% of the gross produce from agricultural lands, and 3% of the proceeds of the sale of the 500hectare converted land and the 80.51-hectare lot sold to SCTEX. HLI shares totaling 118,391,976.85 were distributed di stributed as of April 22, 2005. On August 6, 20l0, HLI and private pr ivate respondents submitted a Compromise Agreement, in which HLI gave the FWBs the option of acquiring a piece of agricultural land or remain as HLI stockholders, and as a matter of fact, most FWBs indicated their choice of remaining as stockholders. These facts and circumstances tend to indicate that some, if not all, of the FWBs may actually desire to continue as HLI shareholders. A matter best left to their own discretion.] discreti on.]

[WHEREFORE, the instant petition is DENIED. PARC Resolution Resolut ion No. 2005-32-01 dated December 22, 2005 and Resolution No. 2006-34-01 dated May 3, 2006, placing the lands subject of HLI’s SDP under compulsory coverage on mandated land acquisition scheme of the CARP, are hereby AFFIRMED with the MODIFICATION MODIFICATIO N that the original 6,296 qualified FWBs shall have the option to remain as stockholders of HLI. DAR shall immediately schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as the case may be, over their printed names.]

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Hacienda Luisita Incorporated vs Presidential Agrarian Reform Council, et al.,

Facts: The SC en banc voted 11-0 dismissing the petition filed by HLI Affirm with modifications the resolutions of the Presidential Agrarian Reform Council (PARC for brevity) revoking Hacienda Luisita Inc. (HLI for brevity) Stock Distribution Plan (SDP) and placing the subject land in HL under compulsory coverage of the CARP of the government. Thereafter, the SC voting 6-5 averred that there are operative facts that occurred in the premises. The SC thereat declared that the revocation of the SDP shall, by application of the operative fact principle, give the 5296 qualified Farmworkers Beneficiaries (FWBs for brevity) to choose whether they want to remain as HLI stockholders or choose actual land distribution. Considering the premises, DAR immediately scheduled a meeting regarding the effects of their choice and therefrom proceeded to secret voting of their choice. The parties, thereafter, filed their respective Motion for Reconsideration regarding the SC’s decision.

Issue: 1) Whether or not not operative fact doctrine is applicable in the said case. 2) Whether or not Sec. 31 of R.A. 6657 unconstitutional. 3) Whether or not the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10, 1999, since Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11, 1989, and thus the qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita to third parties, whether they have fully paid for the lands or not? 4) Whether or not qualified FWBs shall be entitled to the option of remaining as stockholder be reconsidered.

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3) The SC ruled that it has not yet lapsed on May 10, 1999, and qualified FWBs are not allowed to sell their land interest in HL to third parties; That the start of the counting of the prohibitive period shall be ten years from the issuance and registration of the Emancipation Patent (EP for brevity) or Certificate of Land Ownership Award (CLOA for brevity), and considering that the EPs and CLOAs have not yet been issued, the prohibitive period has not started yet. 4) The SC ruled in the affirmative, giving qualified FWBs FWBs the option to remain as stockholder

YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI should be reconsidered. [The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders, which is unlikely, control will never be in the hands of the FWBs. Control means the majority of [sic] 50% plus at at least one share of of the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus one [1] HLI share). The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control over HLI.] The SC PARTIALLY GRANTED the motions for reconsiderat ion of respondents PARC, et al., The 6,296 original FWBs shall forfeit and relinquish their rights over the HLI shares of stock issued to them in favor of HLI. The HLI Corporate Secretary shall cancel the t he shares issued to the said FWBs and transfer them to HLI in the stocks and transfer book. The 4,206 non-qualified FWBs shall remain as stockholders of HLI.

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What is CARP (Comprehensive Agrarian Reform Program), or RA 6657? CARP, or the Comprehensive Agrarian Reform Program, is the redistribution of public and private agricultural lands to farmers and farmworkers who are landless, irrespective of tenurial arrangement. CARP’s vision is to have an equitable land ownership with empowered agrarian reform beneficiaries who can effectively manage their economic and social development to have a better quality of life. One of the major programs of CARP is Land Tenure Improvement, which seeks to hasten distribution of lands to landless farmers. Similarly, the Department offers Support Services to the beneficiaries such as infrastructure facilities, marketing assistance program, credit assistance program, and technical support programs. Furthermore, the department seeks to facilitate, resolve cases and deliver Agrarian Justice. The legal basis for CARP is the Republic Act No. 6657 otherwise known as Comprehensive  Agrarian Reform Reform Law (CARL) (CARL) signed by President President Corazon Corazon C. Aquino Aquino on June 10, 10, 1988. It is an act which aims to promote social justice and industrialization, providing the mechanism for its implementation, and for other purposes.

REPUBLIC ACT NO. 6657

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The agrarian reform program is founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the  just distribution distribution of all agricultural agricultural lands, subject subject to the priorities and retention limits set forth in this  Act, having having taken into account account ecological, ecological, developmental, developmental, and and equity equity considerations, considerations, and subject subject to the payment of just compensation. The State shall respect the right of small landowners, and shall provide incentives for voluntary land-sharing. The State shall recognize the right rig ht of farmers, f armworkers and landowners, la ndowners, as well as cooperatives and a nd other independent farmers' farme rs' organizations, organizations , to participate participat e in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial production, marketing and other support services. The State shall apply the principles of agrarian reform, or stewardship, whenever applicable, in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain, under lease or concession, suitable to agriculture, subject to prior rights, homestead rights of small settlers and the rights of indigenous communities to their ancestral lands. The State may resettle landless farmers and farmworkers in its own agricultural estates, which shall be distributed to them in the manner provided by law. By means of appropriate incentives, the State shall encourage the formation and maintenance of economic-size family farms to be constituted by individual beneficiaries and small landowners. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of communal

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as production pro duction or profit-sharing, labor administration, administrati on, and the distribution of shares of stocks, which will allow beneficiaries to receive a just share of the fruits of the lands they work. (b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities act ivities and practices pr actices performed perf ormed by a farmer in conjunction with such farming operations done by person whether natural or juridical. (c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land. (d) Agrarian Agrari an Dispute refers to any controversy r elating to tenurial tenur ial arrangements, whether leasehold, tenancy, tena ncy, stewardship or otherwise, oth erwise, over lands l ands devoted to agriculture, agricultur e, including disputes concerning farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee. (e) Idle or Abandoned Land refers to any agricultural land not cultivated, tilled or developed to produce any crop nor devoted to any specific economi c purpose pur pose continuously for a period of three (3) years immediately prior to the receipt of notice of acquisition by the government as provided under this Act, but does not include land that has become permanently or regularly devoted to non-agricultural purposes. It does not include land which has become unproductive by reason

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(k) Cooperatives shall refer to organizations organizations composed primarily of small agricultural producers, producers, farmers, farmworkers, or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose of pooling land, human, technological, financial or other economic resources, and operated on the principle of one member, one vote. A juridical person may be a member of a cooperative, with the same rights and duties as a natural person.

CHAPTER II Coverage SECTION 4. Scope. — The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands, as provided in Proclamation Proclamatio n No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. More specifically specif ically the following foll owing lands are ar e covered by the Comprehensive Co mprehensive Agrarian Reform Ref orm Program: (a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until unti l Congress, taking tak ing into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain. (b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph; (c) All other lands owned by the Government devoted to or suitable for agriculture; and

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lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural agricultur al land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention. In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be respected. Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of the Act shall be null and void: Provided, however, That those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares. SECTION 7. Priorities. —  The Department of Agrarian Reform (DAR) in coordination with the Presidential Agrarian Reform Refor m Council (PARC) ( PARC) shall plan and program the acquisition acqui sition and distribution of all agricultural lands through a period of ten (10) years from the effectivity of this  Act. Lands Lands shall be acquired and and distributed distributed as follows: follows: Phase One: Rice and corn lands under Presidential Decree No. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform; all lands foreclosed by the government financial institutions; all lands acquired by the Presidential Commission on Good Government (PCGG); and all other lands owned by the government devoted to or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of not more than four (4) years;

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time; the need to enhance agricultural productivity; and the availability of funds and resources to implement and support the program. In any case, the PARC, upon recommendation by the Provincial Agrarian Reform Coordinating Committee (PARCCOM), may declare certain provinces or region as priority land reform areas, in which the acquisition and distribution of private agricultural lands therein may be implemented ahead of the above schedules. In effecting the transfer within these guidelines, priority must be given to lands that are tenanted. The PARC shall establish guidelines to implement the above priorities and distribution scheme, including the determination of who are qualified beneficiaries: Provided, That an owner-tiller may be a beneficiary of the land he does not own but is actually cultivating to the extent of the difference between the area of the land he owns and the award ceiling of three (3) hectares. SECTION 8. Multinational Corporations. —  All lands l ands of the th e public domain leased, held or

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effectivity of the Act. However during the said period of effectivity, the th e government shall take steps to acquire these lands for immediate distribution thereafter. In general, lands shall be distributed directly to the individual workerbeneficiaries. In case it is not economically feasible and sound to divide the land, then they shall form a workers' cooperative or association which will deal with the corporation or business association or any other proper party for the purpose of entering into a lease or growers agreement and for all other legitimate purposes. Until Unti l a new agreement is entered enter ed into by and between the workers' work ers' cooperative cooper ative or association and the corporation corporati on or business busi ness association associati on or any other o ther proper party, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be respected by both the workers' cooperative or association a nd the corporation, business, association as sociation or such s uch other proper party. In no case cas e shall the implementation implement ation or application of this Act justify or result in the reduction of status or diminution of any benefits received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time this Act becomes effective,.

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SECTION 11. Commercial Farming. —  Commercial farms, which are private agricultural lands devoted to commercial livestock, poultry and swine raising, and aquaculture including saltbeds, fishponds and prawn ponds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations, shall s hall be subject to immediate imm ediate compulsory compulsor y acquisition acquisiti on and distribution after (10) years from the effectivity of the Act. In the case of new farms, the ten-year period shall begin from the first year of commercial production and operation, as determined by the DAR. During the tenyear period, the government shall initiate the steps necessary to acquire these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor of organized cooperatives or associations, which shall hereafter manage the said lands for the worker-beneficiaries. If the DAR determines that the purposes for which this deferment is granted no longer exist, such areas shall automatically be subject to redistribution. The provisions of Section 32 of the Act, with regard to production-and incomesharing,

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(a) the description and area of the property; (b) the average gross income from the property for at least three (3) years; (c) the names of all tenants and farmworkers therein; cda (d) the crops planted in the property and the area covered by each crop as of June 1, 1987; (e) the terms of mortgages, lease, and management contracts subsisting as of June 1, 1987, and (f) the latest declared market value of the land as determined by the city or provincial assessor. SECTION 15. Registration of Beneficiaries. —  The DAR in coordination coordinat ion with the Barangay  Agrarian Reform Committee (BARC) as organized organized in this Act, shall register all agricultural agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the assistance of the BARC and the DAR shall provide the following data: (a) (b)

names owners or

and members administrators of

of their immediate the lands they work on

farm and the

household; length of

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deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision. (e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. (f) Any party who disagrees dis agrees with the decis decision ion may bring the matter to the court of proper  jurisdiction for for final determination determination of just compensatio compensation. n.

CHAPTER VI Compensation

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(i) Acquisition of land or other real properties of the government, including assets under the  Asset Privatization Privatization Program and other assets foreclosed by government financial institutions in the same province or region r egion where the t he lands for which the bonds were paid are situated; situ ated; (ii) Acquisition of shares of stock of governmentowned or -controlled corporations or shares of stocks owned by the government in private corporations;

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to be mutually agreed upon by both parties, which shall be binding upon them, upon registration with the approval by the DAR. Said approval shall be considered given, unless notice of disapproval is received by the farmer-beneficiary within thirty (30) days from the date of registration. In the event they cannot agree on the price of land, the procedure for compulsory acquisition as provided in Section 16 shall apply. The LBP shall extend financing to the

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the award limit above prescribed, except in meritorious cases as determined by the PARC. Title to the property shall be issued in the name of the co-owners or the cooperative or collective organization as the case may be. SECTION 26. Payment by Beneficiaries. —Lands awarded pursuant to this Act shall be paid for

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workers' cooperative or association and the corporation or business association, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be respected by both the workers' cooperative or association and the corporation or business association.

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determined by the DAR, shall be established. During this transitory period, at least one percent (1%) of the gross sales of the entity shall be distributed to the managerial, supervisory and technical group in place at the time of the effectivity of this Act, as compensation for such transitory managerial and technical functions as it will perform, pursuant to an agreement that the farmworker-beneficiaries and the managerial, supervisory and technical group may conclude,

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