Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al.

,
G.R. No. 171101
July 5, 2011


Facts: During the martial law regime, the administration filed a suit before the Manila RTC
against the Tadeco., et. al., for the surrender of Hacienda Luisita to the Ministry of
Agrarian Reform for its distribution to the famers. Tadeco alleged that Hacienda Luisita
does not have tenants and the sugar lands are not covered by existing agrarian reform.
The Manila RTC rendered judgment ordering Tadeco to surrender Hacienda Luisita to
the MAR of which the decision was brough through an appeal to the Court of Appeals.
On March 1988,the Office of the Solicitor General moved to withdraw the governments
case against Tadeco, et al. The CA dismissed the case, subject to the PARCs approval of
Tadecos proposed stock distribution plan (SDP) in favor of its farm workers. On May
9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) of Hacienda Luisita
signified in a referendum their acceptance of the proposed HLIs Stock Distribution
Option Plan (SODP). 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 such subject to payment of three percent (3%) of the gross selling price to the
FWBs and to HLIs continued compliance with its undertakings under the SDP, among
other conditions. HLI ceded 300 hectares of the converted area to the Centennary
Holdings, Inc. (Centennary). Subsequently, Centennary sold the entire 300 hectares for
PhP750 million to Luisita Industrial Park Corporation (LIPCO), which used it in
developing an industrial complex. Later, LIPCO transferred the 2 parcels to the Rizal
Commercial Banking Corporation (RCBC) in payment of LIPCOs PhP431,695,732.10
loan obligations in such bank. LIPCOs titles were cancelled and new ones were issued
to RCBC. 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, filed by Alyansa ng mga Manggagawang Bukid ng Hacienda
Luisita (AMBALA). DAR found out that HLI has not complied with its obligations under
RA 6657 notwithstanding the implementation of the SDP, for which the PARC issued the
assailed Resolution No. 2005-32-01, recalling and revoking the SDO plan of HLI. HLI
then sought for reconsideration.



Issues:

(1) Does the PARC possess jurisdiction to recall or to revoke HLIs SDP?

(2) Is Sec. 31 of RA 6657 unconstitutional?

(3) Is the revocation of the HLIs SDP valid?

(4) Should those portions of the land acquired by purchase of RCBC and LIPCO be
excluded from the coverage of the assailed PARC resolution?




Held:
(1) Under the doctrine of necessary implication the PARC has jurisdiction to revoke
HLIs SDP. Pursuant to Sec. 31 of RA 6657 the authority to approve the plan for stock
distribution of the corporate landowner belongs to PARC. PARC also has the power to
revoke the SDP which it previously approved. It may be said under the doctrine that the
power to approve includes the power to revoke or recall the approval of the plan.

(2) NO, Sec. 31 of RA 6657 is not unconstitutional. The Court refused to proceed with
the constitutional question because it was not raised at the earliest opportunity. The issue
has also been rendered moot and academic since SDO is no longer one of the modes of
acquisition under RA 9700.

(3) Yes, the revocation of the HLIs SDP valid. The revocation of the approval of the
SDP is valid because the mechanics and timelines of HLIs stock distribution violate
DAO 10 because the minimum individual allocation of each original FWB of 18,804.32
shares was diluted and the hiring of additional farmworkers and the 30-year timeframe
for HLI-to-FWBs stock transfer is contrary to what Sec. 11 of DAO 10 prescribes.

(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 since it was purchased in good faith. Being purchasers in good faith, LIPCO
and RCBC is entitled to the benefits arising from the acquisition of the lands.

The instant petition of HLI was denied, affirming the decision made by PARC Resolution
2005-32-01 and Resolution No. 2006-34-01.