Association of Small Landowners in the Philippines, Inc.

vs Secretary of Agrarian
Reform

Eminent Domain Just Compensation

Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and
229) on the ground that these laws already valuated their lands for the agrarian reform
program and that the specific amount must be determined by the Department of Agrarian
Reform (DAR). Manaay averred that this violated the principle in eminent domain which
provides that only courts can determine just compensation. This, for Manaay, also violated
due process for under the constitution, no property shall be taken for public use without just
compensation.

These are four consolidated cases questioning the constitutionality of the Comprehensive
Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or
R.A. No. 3844).

Manaay also questioned the provision which states that landowners may be paid for their land
in bonds and not necessarily in cash. Manaay averred that just compensation has always been
in the form of money and not in bonds.

Brief background: Article XIII of the Constitution on Social Justice and Human Rights
includes a call for the adoption by the State of an agrarian reform program. The State shall,
by law, undertake an agrarian reform program 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 farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted
in 1963. P.D. No. 27 was promulgated in 1972 to provide for the compulsory acquisition of
private lands for distribution among tenant-farmers and to specify maximum retention limits
for landowners. In 1987, President Corazon Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of PD 27 and providing for the valuation of still
unvalued lands covered by the decree as well as the manner of their payment. In 1987, P.P.
No. 131, instituting a comprehensive agrarian reform program (CARP) was enacted; later,
E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also enacted.
Afterwhich is the enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in
1988. This law, while considerably changing the earlier mentioned enactments, nevertheless
gives them suppletory effect insofar as they are not inconsistent with its provisions.

ISSUE:

175 SCRA 343 Political Law Constitutional Law Bill of Rights Equal Protection
Valid Classification

[Two of the consolidated cases are discussed below]

G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from the land
distribution scheme provided for in R.A. 6657. The Association is comprised of landowners
of ricelands and cornlands whose landholdings do not exceed 7 hectares. They invoke that
since their landholdings are less than 7 hectares, they should not be forced to distribute their
land to their tenants under R.A. 6657 for they themselves have shown willingness to till their
own land. In short, they want to be exempted from agrarian reform program because they
claim to belong to a different class.
G.R. No. 79777: (Manaay vs Juico)

1. Whether or not there was a violation of the equal protection clause.

2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of
cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt
from the agrarian reform program. Under the law, classification has been defined as the
grouping of persons or things similar to each other in certain particulars and different from
each other in these same particulars. To be valid, it must conform to the following
requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated
alike both as to the rights conferred and the liabilities imposed. The Association have not
shown that they belong to a different class and entitled to a different treatment. The argument
that not only landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a substantial distinction

between these two classes of owners that is clearly visible except to those who will not see.
There is no need to elaborate on this matter. In any event, the Congress is allowed a wide
leeway in providing for a valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to the detriment of the Bill
of Rights. In the contrary, it appears that Congress is right in classifying small landowners as
part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts.
However, there is no law which prohibits administrative bodies like the DAR from
determining just compensation. In fact, just compensation can be that amount agreed upon by
the landowner and the government even without judicial intervention so long as both parties
agree. The DAR can determine just compensation through appraisers and if the landowner
agrees, then judicial intervention is not needed. What is contemplated by law however is that,
the just compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an administrative body,
then it can go to court and the determination of the latter shall be the final determination. This
is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional
exercise of eminent domain. The agrarian reform program is a revolutionary exercise of
eminent domain. The program will require billions of pesos in funds if all compensation have
to be made in cash if everything is in cash, then the government will not have sufficient
money hence, bonds, and other securities, i.e., shares of stocks, may be used for just
compensation.

Association of Small Landowners in the Philippines, Inc. vs Secretary of Agrarian

Reform
175 SCRA 343 Political Law Constitutional Law Bill of Rights Equal Protection
Valid Classification
Eminent Domain Just Compensation
These are four consolidated cases questioning the constitutionality of the Comprehensive
Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or
R.A. No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights
includes a call for the adoption by the State of an agrarian reform program. The State shall,
by law, undertake an agrarian reform program 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 farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted
in 1963. P.D. No. 27 was promulgated in 1972 to provide for the compulsory acquisition of
private lands for distribution among tenant-farmers and to specify maximum retention limits
for landowners. In 1987, President Corazon Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of PD 27 and providing for the valuation of still
unvalued lands covered by the decree as well as the manner of their payment. In 1987, P.P.
No. 131, instituting a comprehensive agrarian reform program (CARP) was enacted; later,
E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also enacted.
Afterwhich is the enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in
1988. This law, while considerably changing the earlier mentioned enactments, nevertheless
gives them suppletory effect insofar as they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from the land
distribution scheme provided for in R.A. 6657. The Association is comprised of landowners
of ricelands and cornlands whose landholdings do not exceed 7 hectares. They invoke that
since their landholdings are less than 7 hectares, they should not be forced to distribute their
land to their tenants under R.A. 6657 for they themselves have shown willingness to till their
own land. In short, they want to be exempted from agrarian reform program because they
claim to belong to a different class.
G.R. No. 79777: (Manaay vs Juico)

Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and
229) on the ground that these laws already valuated their lands for the agrarian reform
program and that the specific amount must be determined by the Department of Agrarian
Reform (DAR). Manaay averred that this violated the principle in eminent domain which
provides that only courts can determine just compensation. This, for Manaay, also violated
due process for under the constitution, no property shall be taken for public use without just
compensation.
Manaay also questioned the provision which states that landowners may be paid for their land
in bonds and not necessarily in cash. Manaay averred that just compensation has always been
in the form of money and not in bonds.
ISSUE:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of
cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt
from the agrarian reform program. Under the law, classification has been defined as the
grouping of persons or things similar to each other in certain particulars and different from
each other in these same particulars. To be valid, it must conform to the following
requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated
alike both as to the rights conferred and the liabilities imposed. The Association have not
shown that they belong to a different class and entitled to a different treatment. The argument
that not only landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a substantial distinction
between these two classes of owners that is clearly visible except to those who will not see.

There is no need to elaborate on this matter. In any event, the Congress is allowed a wide
leeway in providing for a valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to the detriment of the Bill
of Rights. In the contrary, it appears that Congress is right in classifying small landowners as
part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts.
However, there is no law which prohibits administrative bodies like the DAR from
determining just compensation. In fact, just compensation can be that amount agreed upon by
the landowner and the government even without judicial intervention so long as both parties
agree. The DAR can determine just compensation through appraisers and if the landowner
agrees, then judicial intervention is not needed. What is contemplated by law however is that,
the just compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an administrative body,
then it can go to court and the determination of the latter shall be the final determination. This
is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional
exercise of eminent domain. The agrarian reform program is a revolutionary exercise of
eminent domain. The program will require billions of pesos in funds if all compensation have
to be made in cash if everything is in cash, then the government will not have sufficient
money hence, bonds, and other securities, i.e., shares of stocks, may be used for just
compensation.

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al.,
G.R. No. 171101, November 22, 2011
RESOLUTION
VELASCO, JR., J.:
I.

THE FACTS

(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?

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 HLIs 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.

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.]

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) Cant the Court order that DARs 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 HLIs SDP?
(4) Is the date of the taking (for purposes of determining the just compensation payable to
HLI) November 21, 1989, when PARC approved HLIs SDP?

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 lismota 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 DARs compulsory acquisition of Hacienda Lusita
cover the full 6,443 hectares and not just the 4,915.75 hectares covered by HLIs 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 HLIs SDP.
[For the purpose of determining just compensation, the date of taking is
November 21, 1989 (the date when PARC approved HLIs 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
PARCs 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.]

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al.,
G.R. No. 171101, November 22, 2011
RESOLUTION
VELASCO, JR., J.:
I.

THE FACTS

(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?

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 HLIs 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.

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.]

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) Cant the Court order that DARs 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 HLIs SDP?
(4) Is the date of the taking (for purposes of determining the just compensation payable to
HLI) November 21, 1989, when PARC approved HLIs SDP?

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 lismota 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 DARs compulsory acquisition of Hacienda Lusita
cover the full 6,443 hectares and not just the 4,915.75 hectares covered by HLIs 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 HLIs SDP.
[For the purpose of determining just compensation, the date of taking is
November 21, 1989 (the date when PARC approved HLIs 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
PARCs 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.]