R E S O L U T I O N
VELASCO, JR., J.:
I. THE FACTS
On July 5, 2011, the Supreme Court en banc voted unanimously
(11-0) to DISMISS/DENY the petition filed by HLI and AFFIRM with MODIFICATIONS the
resolutions of the PARC revoking HLI’s Stock Distribution Plan (SDP) and
placing the subject lands in Hacienda Luisita under compulsory coverage of the
Comprehensive Agrarian Reform Program (CARP) of the government.
The Court
however did not order outright land distribution. Voting 6-5, the Court
noted that there are operative facts that occurred in the interim and
which the Court cannot validly ignore. Thus, the Court declared that the
revocation of the SDP must, by application of the operative fact principle,
give way to the right of the original 6,296 qualified farmworkers-beneficiaries
(FWBs) to choose whether they want to remain as HLI stockholders or [choose
actual land distribution]. It thus ordered the Department of Agrarian Reform (DAR) to “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.”
The
parties thereafter filed their respective motions for reconsideration of the Court
decision.
II. THE ISSUES
(1) Is the operative fact doctrine
available in this case?
(2) Is Sec. 31 of RA 6657 unconstitutional?
(3) Can’t the Court order that DAR’s
compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares allegedly covered by RA 6657 and previously held by
Tarlac Development Corporation (Tadeco), and not just the 4,915.75 hectares covered
by HLI’s SDP?
(4) Is the date of the “taking” (for purposes
of determining the just compensation payable to HLI) November 21, 1989, when
PARC approved HLI’s SDP?
(5) Has 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?
(6) THE CRUCIAL ISSUE: Should the ruling in the July 5,
2011 Decision that the qualified FWBs be given an option to remain as
stockholders of HLI be reconsidered?
III. THE RULING
[The Court PARTIALLY GRANTED the
motions for reconsideration of respondents PARC, et al. with respect to
the option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda
Luisita to remain with petitioner HLI, which option the Court
thereby RECALLED and SET ASIDE. It reconsidered its earlier
decision that the qualified FWBs should be given an option to remain as
stockholders of HLI, and UNANIMOUSLY directed immediate land distribution to the qualified FWBs.]
1. YES, the operative fact doctrine
is applicable in this case.
[The Court maintained its stance that the operative
fact doctrine is applicable in this case since, contrary to the suggestion of
the minority, the doctrine is not limited only to invalid or unconstitutional
laws but also applies to decisions made by the President or the administrative
agencies that have the force and effect of laws. Prior to the
nullification or recall of said decisions, they may have produced acts and
consequences that must be respected. It is on this score that the operative
fact doctrine should be applied to acts and consequences that resulted from the
implementation of the PARC Resolution approving the SDP of HLI. The
majority stressed that the application of the operative fact doctrine by the
Court in its July 5, 2011 decision was in fact favorable to the FWBs because
not only were they allowed to retain the benefits and homelots they received
under the stock distribution scheme, they were also given the option to choose
for themselves whether they want to remain as stockholders of HLI or not.]
2. NO, Sec. 31 of RA 6657 NOT unconstitutional.
[The Court maintained that the Court is NOT
compelled to rule on the constitutionality of Sec. 31 of RA 6657, reiterating
that it was not raised at the earliest opportunity and that
the resolution thereof is not the lis mota of 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. The majority clarified that
in its July 5, 2011 decision, it made no ruling in favor of the
constitutionality of Sec. 31 of RA 6657, but found nonetheless that there was
no apparent grave violation of the Constitution that may justify the resolution
of the issue of constitutionality.]
3. NO, the Court CANNOT order that DAR’s
compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares and not just the 4,915.75 hectares covered by HLI’s SDP.
[Since what is put in issue before the Court is the propriety of the
revocation of the SDP, which only involves 4,915.75 has. of agricultural land
and not 6,443 has., then the Court is constrained to rule only as regards the
4,915.75 has. of agricultural land. Nonetheless, this should
not prevent the DAR, under its mandate under the agrarian reform law, from
subsequently subjecting to agrarian reform other agricultural lands originally
held by Tadeco that were allegedly not transferred to HLI but were supposedly
covered by RA 6657.
However since the area to be awarded to each FWB in the July 5,
2011 Decision appears too restrictive – considering that there are roads,
irrigation canals, and other portions of the land that are considered commonly-owned
by farmworkers, and these may necessarily result in the decrease of the area
size that may be awarded per FWB – the Court reconsiders its Decision and
resolves to give the DAR leeway in adjusting the area that may be awarded per
FWB in case the number of actual qualified FWBs decreases. In order to ensure
the proper distribution of the agricultural lands of Hacienda Luisita per
qualified FWB, and considering that matters involving strictly the
administrative implementation and enforcement of agrarian reform laws are
within the jurisdiction of the DAR, it is the latter
which shall determine the area with which each qualified FWB will be awarded.
On the
other hand, the majority likewise reiterated its holding that the 500-hectare portion of Hacienda Luisita that
have been validly converted to industrial use and have been acquired by
intervenors Rizal Commercial Banking Corporation (RCBC) and Luisita Industrial
Park Corporation (LIPCO), as well as the separate 80.51-hectare SCTEX lot
acquired by the government, should be excluded from the coverage of the
assailed PARC resolution. The Court however ordered that the unused balance of
the proceeds of the sale of the
500-hectare converted land and of the 80.51-hectare land used for the SCTEX be
distributed to the FWBs.]
4. YES, the date of “taking” is November
21, 1989, when PARC approved HLI’s SDP.
[For the purpose of determining just compensation, the date of “taking” is November 21, 1989 (the date
when PARC approved HLI’s SDP) since this is the time that the FWBs were
considered to own and possess the agricultural lands in Hacienda Luisita. To be
precise, these lands became subject of the agrarian reform coverage through the
stock distribution scheme only upon the approval of the SDP, that is, on
November 21, 1989. Such approval is akin to a notice of coverage ordinarily
issued under compulsory acquisition. On the contention of the minority (Justice
Sereno) that the date of the notice of coverage [after PARC’s revocation of the
SDP], that is, January 2, 2006, is determinative of the just compensation that
HLI is entitled to receive, the Court majority noted that none of the cases
cited to justify this position involved the stock distribution scheme. Thus,
said cases do not squarely apply to the instant case. The foregoing
notwithstanding, it bears stressing that the DAR's land valuation is only
preliminary and is not, by any means, final and conclusive upon the landowner.
The landowner can file an original action with the RTC acting as a special
agrarian court to determine just compensation. The court has the right to
review with finality the determination in the exercise of what is admittedly a
judicial function.]
5. NO, the 10-year period
prohibition on the transfer of awarded lands under RA 6657 has NOT lapsed on
May 10, 1999; thus, the qualified FWBs should NOT yet be allowed to sell their
land interests in Hacienda Luisita to third parties.
[Under RA 6657 and DAO 1, the
awarded lands may only be transferred or conveyed after 10 years from the issuance and registration of the emancipation
patent (EP) or certificate of land ownership award (CLOA). Considering that the
EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case,
the 10-year prohibitive period has not even started. Significantly, the
reckoning point is the issuance of
the EP or CLOA, and not the
placing of the agricultural lands under CARP coverage. Moreover, should the
FWBs be immediately allowed the option to sell or convey their interest in the subject
lands, then all efforts at agrarian reform would be rendered nugatory, since,
at the end of the day, these lands will just be transferred to persons not
entitled to land distribution under CARP.]
6. 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 least one share 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.]
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