G.R. No. 171101 Hacienda

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G.R.No.171101
RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
HACIENDALUISITA,
G.R.No.171101
INCORPORATED,
Petitioner,
Present:
LUISITAINDUSTRIALPARK
CORONA,C.J.,
CORPORATIONandRIZAL
CARPIO,
COMMERCIALBANKING
VELASCO,JR.,
CORPORATION,
LEONARDODECASTRO,
PetitionersinIntervention,
BRION,
PERALTA,
versus
BERSAMIN,
DELCASTILLO,
PRESIDENTIALAGRARIAN
ABAD,
REFORMCOUNCILSECRETARY
VILLARAMA,JR.,
NASSERPANGANDAMANOFTHE PEREZ,
DEPARTMENTOFAGRARIAN
MENDOZA,and
REFORMALYANSANGMGA
SERENO,
MANGGAGAWANGBUKIDNG
REYES,
HACIENDALUISITA,RENE
PERLASBERNABE,JJ.
GALANG,NOELMALLARI,and
[1]
JULIOSUNIGA andhis
SUPERVISORYGROUPOFTHE
HACIENDALUISITA,INC.and
Promulgated:
WINDSORANDAYA,
November22,2011
Respondents.
xx
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm
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RESOLUTION
VELASCO,JR.,J.:
Forresolutionarethe(1)MotionforClarificationandPartialReconsiderationdatedJuly21,2011filedbypetitionerHacienda
Luisita, Inc. (HLI) (2) Motion for Partial Reconsideration dated July 20, 2011 filed by public respondents Presidential Agrarian
Reform Council (PARC) and Department of Agrarian Reform (DAR) (3) Motion for Reconsideration dated July 19, 2011 filed by
privaterespondentAlyansangmgaManggagawangBukidsaHaciendaLuisita(AMBALA)(4)MotionforReconsiderationdatedJuly
21,2011filedbyrespondentintervenorFarmworkersAgrarianReformMovement,Inc.(FARM)(5)MotionforReconsiderationdated
July 21, 2011 filed by private respondents Noel Mallari, Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. (Supervisory
Group)andWindsorAndaya(collectivelyreferredtoasMallari,etal.)and(6)MotionforReconsiderationdatedJuly22,2011filed
[2]
byprivaterespondentsReneGalangandAMBALA.
[3]
On July 5, 2011, this Court promulgated a Decision in the abovecaptioned case, denying the petition filed by HLI and
affirmingPresidentialAgrarianReformCouncil(PARC)ResolutionNo.20053201datedDecember22,2005andPARCResolution
No. 20063401 dated May 3, 2006 with the modification that the original 6,296 qualified farmworkerbeneficiaries of Hacienda
Luisita(FWBs)shallhavetheoptiontoremainasstockholdersofHLI.
In its Motion for Clarification and Partial Reconsideration dated July 21, 2011, HLI raises the following issues for Our
consideration:
A
IT IS NOT PROPER, EITHER IN LAW OR IN EQUITY, TO DISTRIBUTE TO THE ORIGINAL FWBs OF 6,296THE UNSPENT OR
UNUSED BALANCE OF THE PROCEEDS OF THE SALE OF THE 500 HECTARES AND 80.51 HECTARES OF THE HLI LAND,
BECAUSE:
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(1) THE PROCEEDS OF THE SALE BELONG TO THE CORPORATION, HLI, AS CORPORATE CAPITAL AND ASSETS IN
SUBSTITUTIONFORTHEPORTIONSOFITSLANDASSETWHICHWERESOLDTOTHIRDPARTY
(2) TO DISTRIBUTE THE CASH SALES PROCEEDS OF THE PORTIONS OF THE LAND ASSET TO THE FWBs, WHO ARE
STOCKHOLDERS OF HLI, IS TO DISSOLVE THE CORPORATION AND DISTRIBUTE THE PROCEEDS AS LIQUIDATING
DIVIDENDSWITHOUTEVENPAYINGTHECREDITORSOFTHECORPORATION
(3) THE DOING OF SAID ACTS WOULD VIOLATE THE STRINGENT PROVISIONS OF THE CORPORATION CODE AND
CORPORATEPRACTICE.
B
ITISNOTPROPER,EITHERINLAWORINEQUITY,TORECKONTHEPAYMENTOFJUSTCOMPENSATIONFROMNOVEMBER
21, 1989 WHEN THE PARC, THEN UNDER THE CHAIRMANSHIP OF DAR SECRETARY MIRIAM DEFENSORSANTIAGO,
APPROVEDTHESTOCKDISTRIBUTIONPLAN(SDP)PROPOSEDBYTADECO/HLI,BECAUSE:
(1) THAT PARC RESOLUTION NO. 89122 DATED NOVEMBER 21, 1989 WAS NOT THE ACTUAL TAKING OF THE
TADECOs/HLIsAGRICULTURALLAND
(2) THE RECALL OR REVOCATION UNDER RESOLUTION NO. 20053201 OF THAT SDP BY THE NEW PARC UNDER THE
CHAIRMANSHIPOFDARSECRETARYNASSERPANGANDAMANONDECEMBER22,2005OR16YEARSEARLIERWHENTHE
SDPWASAPPROVEDDIDNOTRESULTINACTUALTAKINGONNOVEMBER21,1989
(3) TO PAYTHE JUST COMPENSATION AS OF NOVEMBER 21, 1989 OR 22 YEARS BACK WOULD BE ARBITRARY, UNJUST,
AND OPPRESSIVE, CONSIDERING THE IMPROVEMENTS, EXPENSES IN THE MAINTENANCE AND PRESERVATION OF THE
LAND,ANDRISEINLANDPRICESORVALUEOFTHEPROPERTY.
Ontheotherhand,PARCandDAR,throughtheOfficeoftheSolicitorGeneral(OSG),raisethefollowingissuesintheirMotion
forPartialReconsiderationdatedJuly20,2011:
THEDOCTRINEOFOPERATIVEFACTDOESNOTAPPLYTOTHISCASEFORTHEFOLLOWINGREASONS:
I
THEREISNOLAWORRULEWHICHHASBEENINVALIDATEDONTHEGROUNDOFUNCONSTITUTIONALITYAND
II
THISDOCTRINEISARULEOFEQUITYWHICHMAYBEAPPLIEDONLYINTHEABSENCEOFALAW.INTHISCASE,THERE
IS A POSITIVE LAW WHICH MANDATES THE DISTRIBUTION OF THE LAND AS A RESULT OF THE REVOCATION OF THE
STOCKDISTRIBUTIONPLAN(SDP).
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Foritspart,AMBALAposesthefollowingissuesinitsMotionforReconsiderationdatedJuly19,2011:
I
THEMAJORITYOFTHEMEMBERSOFTHEHONORABLECOURT,WITHDUERESPECT,ERREDINHOLDINGTHATSECTION
31OFREPUBLICACT6657(RA6657)ISCONSTITUTIONAL.
II
THEMAJORITYOFTHEMEMBERSOFTHEHONORABLECOURT,WITHDUERESPECT,ERREDINHOLDINGTHATONLYTHE
[PARCS] APPROVAL OF HLIs PROPOSAL FOR STOCK DISTRIBUTION UNDER CARPAND THE [SDP] WERE REVOKED AND
NOTTHESTOCKDISTRIBUTIONOPTIONAGREEMENT(SDOA).
III
THEMAJORITYOFTHEMEMBERSOFTHEHONORABLECOURT,WITHDUERESPECT,ERREDINAPPLYINGTHEDOCTRINE
OFOPERATIVEFACTSANDINMAKINGTHE[FWBs]CHOOSETOOPTFORACTUALLANDDISTRIBUTIONORTOREMAIN
ASSTOCKHOLDERSOF[HLI].
IV
THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT
IMPROVINGTHEECONOMICSTATUSOFFWBsISNOTAMONGTHELEGALOBLIGATIONSOFHLIUNDERTHESDPANDAN
IMPERATIVEIMPOSITIONBY[RA6657]ANDDEPARTMENTOFAGRARIANREFORMADMINISTRATIVEORDERNO.10(DAO
10).
V
THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT THE CONVERSION OF THE AGRICULTURAL
LANDSDIDNOTVIOLATETHECONDITIONSOFRA6657ANDDAO10.
VI
THEHONORABLECOURT,WITHDUERESPECT,ERREDINHOLDINGTHATPETITIONERISENTITLEDTOPAYMENTOFJUST
COMPENSATION. SHOULD THE HONORABLE COURT AFFIRM THE ENTITLEMENT OF THE PETITIONER TO JUST
COMPENSATION,THESAMESHOULDBEPEGGEDTOFORTYTHOUSANDPESOS(PhP40,000.00)PERHECTARE.
VII
THEHONORABLECOURT,WITHDUERESPECT,ERREDINHOLDINGTHATLUISITAINDUSTRIALPARKCORP.(LIPCO)AND
RIZALCOMMERCIALBANKINGCORPORATION(RCBC)AREINNOCENTPURCHASERSFORVALUE.
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InitsMotionforReconsiderationdatedJuly21,2011,FARMsimilarlyputsforththefollowingissues:
I
THE HONORABLE SUPREME COURT SHOULD HAVE STRUCK DOWN SECTION 31 OF [RA 6657] FOR BEING
UNCONSTITUTIONAL.THECONSTITUTIONALITYISSUETHATWASRAISEDBYTHERESPONDENTSINTERVENORSISTHE
LISMOTAOFTHECASE.
II
THEHONORABLESUPREMECOURTSHOULDNOTHAVEAPPLIEDTHEDOCTRINEOFOPERATIVEFACTTOTHECASE.THE
OPTIONGIVENTOTHEFARMERSTOREMAINASSTOCKHOLDERSOFHACIENDALUISITAISEQUIVALENTTOANOPTION
FOR HACIENDA LUISITA TO RETAIN LAND IN DIRECT VIOLATION OF THE COMPREHENSIVE AGRARIAN REFORM LAW.
THE DECEPTIVE STOCK DISTRIBUTION OPTION / STOCK DISTRIBUTION PLAN CANNOT JUSTIFY SUCH RESULT,
ESPECIALLYAFTERTHESUPREMECOURTHASAFFIRMEDITSREVOCATION.
III
THEHONORABLESUPREMECOURTSHOULDNOTHAVECONSIDERED[LIPCO]AND[RCBC]ASINNOCENTPURCHASERS
FORVALUEINTHEINSTANTCASE.
Mallari,etal.,ontheotherhand,advancethefollowinggroundsinsupportoftheirMotionforReconsiderationdatedJuly21,
2011:
(1)THEHOMELOTSREQUIREDTOBEDISTRIBUTEDHAVEALLBEENDISTRIBUTEDPURSUANTTOTHEMEMORANDUMOF
AGREEMENT.WHATREMAINSMERELYISTHERELEASEOFTITLEFROMTHEREGISTEROFDEEDS.
(2) THERE HAS BEEN NO DILUTION OF SHARES. CORPORATE RECORDS WOULD SHOW THAT IF EVER NOT ALL OF THE
18,804.32 SHARES WERE GIVEN TO THE ACTUAL ORIGINAL FARMWORKER BENEFICIARY, THE RECIPIENT OF THE
DIFFERENCE IS THE NEXT OF KIN OR CHILDREN OF SAID ORIGINAL [FWBs]. HENCE, WE RESPECTFULLY SUBMIT THAT
SINCE THE SHARES WERE GIVEN TO THE SAME FAMILY BENEFICIARY, THIS SHOULD BE DEEMED AS SUBSTANTIAL
COMPLIANCEWITHTHEPROVISIONSOFSECTION4OFDAO10.
(3)THEREHASBEENNOVIOLATIONOFTHE3MONTHPERIODTOIMPLEMENTTHE[SDP]ASPROVIDEDFORBYSECTION
11 OF DAO 10 AS THIS PROVISION MUST BE READ IN LIGHT OF SECTION 10 OF EXECUTIVE ORDER NO. 229, THE
PERTINENTPORTIONOFWHICHREADS,THEAPPROVALBYTHEPARCOFAPLANFORSUCHSTOCKDISTRIBUTION,AND
ITSINITIALIMPLEMENTATION,SHALLBEDEEMEDCOMPLIANCEWITHTHELANDDISTRIBUTIONREQUIREMENTOFTHE
CARP.
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(4)THEVALUATIONOFTHELANDCANNOTBEBASEDASOFNOVEMBER21,1989,THEDATEOFAPPROVALOFTHESTOCK
DISTRIBUTIONOPTION.INSTEAD,WERESPECTFULLYSUBMITTHATTHETIMEOFTAKINGFORVALUATIONPURPOSESIS
AFACTUALISSUEBESTLEFTFORTHETRIALCOURTSTODECIDE.
(5)TOTHOSEWHOWILLCHOOSELAND,THEYMUSTRETURNWHATWASGIVENTOTHEMUNDERTHESDP.ITWOULDBE
UNFAIRIFTHEYAREALLOWEDTOGETTHELANDANDATTHESAMETIMEHOLDONTOTHEBENEFITSTHEYRECEIVED
PURSUANTTOTHESDPINTHESAMEWAYASTHOSEWHOWILLCHOOSETOSTAYWITHTHESDO.
Lastly,ReneGalangandAMBALA,throughthePublicInterestLawCenter(PILC),submitthefollowinggroundsinsupportof
theirMotionforReconsiderationdatedJuly22,2011:
I
THE HONORABLE COURT, WITH DUE RESPECT, GRAVELY ERRED IN ORDERING THE HOLDING OF A VOTING OPTION
INSTEADOFTOTALLYREDISTRIBUTINGTHESUBJECTLANDSTO[FWBs]in[HLI].
A. THE HOLDING OF A VOTING OPTION HAS NO LEGAL BASIS. THE REVOCATION OF THE [SDP] CARRIES WITH IT THE
REVOCATIONOFTHE[SDOA].
B. GIVING THE [FWBs] THE OPTION TO REMAIN AS STOCKHOLDERS OF HLI WITHOUT MAKING THE NECESSARY
CHANGESINTHECORPORATESTRUCTUREWOULDONLYSUBJECTTHEMTOFURTHERMANIPULATIONANDHARDSHIP.
C. OTHER VIOLATIONS COMMITTED BY HLI UNDER THE [SDOA] AND PERTINENT LAWS JUSTIFY TOTAL LAND
REDISTRIBUTIONOFHACIENDALUISITA.
II
THE HONORABLE COURT, WITH DUE RESPECT, GRAVELY ERRED IN HOLDING THAT THE [RCBC] AND [LIPCO] ARE
INNOCENTPURCHASERSFORVALUEOFTHE300HECTAREPROPERTYINHACIENDALUISITATHATWASSOLDTOTHEM
PRIORTOTHEINCEPTIONOFTHEPRESENTCONTROVERSY.
Ultimately,theissuesforOurconsiderationarethefollowing:(1)applicabilityoftheoperativefactdoctrine(2)constitutionality
of Sec. 31 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988 (3) coverage of compulsory acquisition (4) just
compensation(5)saletothirdparties(6)theviolationsofHLIand(7)controloveragriculturallands.
Weshalldiscusstheseissuesaccordingly.
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I.ApplicabilityoftheOperativeFactDoctrine
Intheirmotionforpartialreconsideration,DARandPARCarguethatthedoctrineofoperativefactdoesnotapplytotheinstant
[4]
casesince:(1)thereisnolaworrulewhichhasbeeninvalidatedonthegroundofunconstitutionality (2)thedoctrineofoperative
factisaruleofequitywhichmaybeappliedonlyintheabsenceofalaw,andinthiscase,theymaintainthatthereisapositivelaw
[5]
whichmandatesthedistributionofthelandasaresultoftherevocationofthestockdistributionplan(SDP).
EchoingthestanceofDARandPARC,AMBALAsubmitsthattheoperativefactdoctrineshouldonlybemadetoapplyinthe
[6]
extremecaseinwhichequitydemandsit,whichallegedlyisnotintheinstantcase. Itfurtherarguesthattherewouldbenoundue
harshnessorinjurytoHLIincaselandsareactuallydistributedtothefarmworkers,andthatthedecisionwhichordersthefarmworkers
to choose whether to remain as stockholders of HLI or to opt for land distribution would result in inequity and prejudice to the
[7]
[8]
farmworkers. The foregoing views are also similarly shared by Rene Galang and AMBALA, through the PILC. In addition,
[9]
FARMpositsthattheoptiongiventotheFWBsisequivalenttoanoptionforHLItoretainlandindirectviolationofRA6657.
(a)OperativeFactDoctrineNotLimitedto
InvalidorUnconstitutionalLaws
Contrary to the stance of respondents, the operative fact doctrine does not only apply to laws subsequently declared
unconstitutionalorunlawful,asitalsoappliestoexecutiveactssubsequentlydeclaredasinvalid.AsWehavediscussedinOurJuly5,
2011Decision:
That the operative fact doctrine squarely applies to executive actsin this case, the approval by PARC of the HLI proposal for stock
distributioniswellsettledinourjurisprudence.InChavezv.NationalHousingAuthority,Weheld:
Petitionerpostulatesthattheoperativefactdoctrineisinapplicabletothepresentcasebecauseitisanequitabledoctrine
whichcouldnotbeusedtocountenanceaninequitableresultthatiscontrarytoitsproperoffice.
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Ontheotherhand,thepetitionerSolicitorGeneralarguesthattheexistenceofthevariousagreementsimplementingthe
SMDRPisanoperativefactthatcannolongerbedisturbedorsimplyignored,citingRietav.PeopleofthePhilippines.
TheargumentoftheSolicitorGeneralismeritorious.
TheoperativefactdoctrineisembodiedinDe Agbayani v.Court ofAppeals, wherein it is stated that a legislative or

executiveact,priortoitsbeingdeclaredasunconstitutionalbythecourts,isvalidandmustbecompliedwith,thus:
xxxxxxxxx
ThisdoctrinewasreiteratedinthemorerecentcaseofCityofMakativ.CivilServiceCommission, wherein we ruled

that:
Moreover,wecertainlycannotnullifytheCityGovernment'sorderofsuspension,aswehavenoreasontodoso,much
lessretroactivelyapplysuchnullificationtodepriveprivaterespondentofacompellingandvalidreasonfornotfilingtheleave
application.Foraswehaveheld,avoidactthoughinlawamerescrapofpapernonethelessconferslegitimacyuponpast
acts or omissions done in reliance thereof. Consequently, the existence of a statute or executive order prior to its being
adjudgedvoidisanoperativefacttowhichlegalconsequencesareattached.Itwouldindeedbeghastlyunfairtopreventprivate
respondentfromrelyingupontheorderofsuspensioninlieuofaformalleaveapplication.
TheapplicabilityoftheoperativefactdoctrinetoexecutiveactswasfurtherexplicatedbythisCourtinRietav.People,thus:
PetitionercontendsthathisarrestbyvirtueofArrestSearchandSeizureOrder(ASSO)No.4754wasinvalid,asthelaw
uponwhichitwaspredicatedGeneralOrderNo.60,issuedbythenPresidentFerdinandE.Marcoswassubsequentlydeclared
bytheCourt,inTaadav.Tuvera, 33 to have no force and effect. Thus, he asserts, any evidence obtained pursuant thereto is
inadmissibleinevidence.
We do not agree. In Taada, the Court addressed the possible effects of its declaration of the invalidity of various
presidentialissuances.Discussingthereinhowsuchadeclarationmightaffectactsdoneonapresumptionoftheirvalidity,the
Courtsaid:
....InsimilarsituationsinthepastthisCourthadtakenthepragmaticandrealisticcoursesetforthin
ChicotCountyDrainageDistrictvs.BaxterBanktowit:
The courts below have proceeded on the theory that the Act of Congress, having been found to be
unconstitutional,wasnotalawthatitwasinoperative,conferringnorightsandimposingnoduties,andhence
affordingnobasisforthechallengeddecree....Itisquiteclear,however,thatsuchbroadstatementsastothe
effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a
statute, prior to [the determination of its invalidity], is an operative fact and may have consequences which
cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the
subsequentrulingastoinvaliditymayhavetobeconsideredinvariousaspectswithrespecttoparticularconduct,
privateandofficial.Questionsofrightsclaimedtohavebecomevested,ofstatus,ofpriordeterminationsdeemed
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tohavefinalityandacteduponaccordingly,ofpublicpolicyinthelightofthenaturebothofthestatuteandofits
previous application, demand examination. These questions are among the most difficult of those which have
engagedtheattentionofcourts,stateandfederal,anditismanifestfromnumerousdecisionsthatanallinclusive
statementofaprincipleofabsoluteretroactiveinvaliditycannotbejustified.
xxxxxxxxx
Similarly, the implementation/ enforcement of presidential decrees prior to their publication in the
Official Gazette is an operative fact which may have consequences which cannot be justly ignored. The past
cannot always be erased by a new judicial declaration . . . that an allinclusive statement of a principle of
absoluteretroactiveinvaliditycannotbejustified.
TheChicotdoctrinecitedinTaadaadvocatesthat,priortothenullificationofastatute,thereisanimperativenecessity
of taking into account its actual existence as an operative fact negating the acceptance of a principle of absolute retroactive
invalidity. Whatever was done while the legislative or the executive act was in operation should be duly recognized and
presumed to be valid in all respects. The ASSO that was issued in 1979 under General Order No. 60 long before our
DecisioninTaada and the arrest of petitioner is an operative fact that can no longer be disturbed or simply ignored.
(Citationsomittedemphasisintheoriginal.)
[10]
BearinginmindthatPARCResolutionNo.89122
an executive actwas declared invalid in the instant case, the operative
factdoctrineisclearlyapplicable.
Nonetheless,theminorityisofthepersistentviewthattheapplicabilityoftheoperativefactdoctrineshouldbelimitedtostatutes
andrulesandregulationsissuedbytheexecutivedepartmentthatareaccordedthesamestatusasthatofastatuteorthosewhichare
quasilegislativeinnature.Thus,theminorityconcludesthatthephraseexecutiveactusedinthecaseofDeAgbayaniv.Philippine
[11]
NationalBank
refersonlytoacts,orders,andrulesandregulationsthathavetheforceandeffectoflaw.Theminorityalsomade
[12]
mentionoftheConcurringOpinionofJusticeEnriqueFernandoinMunicipalityofMalabangv.Benito,
whereitwassupposedly
madeexplicitthattheoperativefactdoctrineappliestoexecutiveacts,whichareultimatelyquasilegislativeinnature.
Wedisagree.Forone,neithertheDeAgbayanicasenortheMunicipalityofMalabangcaseelaborateswhatexecutiveactmean.
Moreover,whileorders,rulesandregulationsissuedbythePresidentortheexecutivebranchhavefixeddefinitionsandmeaninginthe
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AdministrativeCodeandjurisprudence,thephraseexecutiveactdoesnothavesuchspecificdefinitionunderexistinglaws.Itshould
be noted that in the cases cited by the minority, nowhere can it be found that the term executive act is confined to the foregoing.
Contrarily,thetermexecutiveactisbroadenoughtoencompassdecisionsofadministrativebodiesandagenciesundertheexecutive
departmentwhicharesubsequentlyrevokedbytheagencyinquestionornullifiedbytheCourt.
AcaseinpointistheconcurrentappointmentofMagdangalB.Elma(Elma)asChairmanofthePresidentialCommissionon
Good Government (PCGG) and as Chief Presidential Legal Counsel (CPLC) which was declared unconstitutional by this Court in
[13]
PublicInterestCenter,Inc.v.Elma.
Insaidcase,thisCourtruledthattheconcurrentappointmentofElmatotheseofficesisin
violationofSection7,par.2,ArticleIXBofthe1987Constitution,sincetheseareincompatibleoffices.Notably,theappointmentof
ElmaasChairmanofthePCGGandasCPLCis,withoutaquestion,anexecutiveact.Priortothedeclarationofunconstitutionalityof
thesaidexecutiveact,certainactsortransactionsweremadeingoodfaithandinrelianceoftheappointmentofElmawhichcannotjust
besetasideorinvalidatedbyitssubsequentinvalidation.
[14]
InTanv.Barrios,
thisCourt,inapplyingtheoperativefactdoctrine,heldthatdespitetheinvalidityofthejurisdictionofthe
militarycourtsovercivilians,certainoperativefactsmustbeacknowledgedtohaveexistedsoasnottotrampleupontherightsofthe
[15]
accused therein. Relevant thereto, in Olaguer v. Military Commission No. 34,
it was ruled that military tribunals pertain to the
ExecutiveDepartmentoftheGovernmentandaresimplyinstrumentalitiesoftheexecutivepower,providedbythelegislatureforthe
PresidentasCommanderinChieftoaidhiminproperlycommandingthearmyandnavyandenforcingdisciplinetherein,andutilized
[16]
underhisordersorthoseofhisauthorizedmilitaryrepresentatives.
Evidently,theoperativefactdoctrineisnotconfinedtostatutesandrulesandregulationsissuedbytheexecutivedepartmentthat
areaccordedthesamestatusasthatofastatuteorthosewhicharequasilegislativeinnature.
EvenassumingthatDeAgbayaniinitiallyappliedtheoperativefactdoctrineonlytoexecutiveissuanceslikeordersandrules
andregulations,saidprinciplecannonethelessbeapplied,byanalogy,todecisionsmadebythePresidentortheagenciesunderthe
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executivedepartment.Thisdoctrine,intheinterestofjusticeandequity,canbeappliedliberallyandinabroadsensetoencompasssaid
decisionsoftheexecutivebranch.Inkeepingwiththedemandsofequity,theCourtcanapplytheoperativefactdoctrinetoactsand
consequencesthatresultedfromthereliancenotonlyonalaworexecutiveactwhichisquasilegislativeinnaturebutalsoondecisions
or orders of the executive branch which were later nullified. This Court is not unmindful that such acts and consequences must be
recognizedinthehigherinterestofjustice,equityandfairness.
Significantly,adecisionmadebythePresidentortheadministrativeagencieshastobecompliedwithbecauseithastheforce
andeffectoflaw,springingfromthepowersofthePresidentundertheConstitutionandexistinglaws.Priortothenullificationorrecall
of said decision, it may have produced acts and consequences in conformity to and in reliance of said decision, which must be
respected. It is on this score that the operative fact doctrine should be applied to acts and consequences that resulted from the
implementationofthePARCResolutionapprovingtheSDPofHLI.
More importantly, respondents, and even the minority, failed to clearly explain how the option to remain in HLI granted to
individual farmers would result in inequity and prejudice. We can only surmise that respondents misinterpreted the option as a
referendumwherealltheFWBswillbeboundbyamajorityvotefavoringtheretentionofallthe6,296FWBsasHLIstockholders.
Respondentsaredefinitelymistaken.ThefalloofOurJuly5,2011DecisionisunequivocalthatonlythoseFWBswhosignifiedtheir
desiretoremainasHLIstockholdersareentitledto18,804.32shareseach,whilethosewhooptednottoremainasHLIstockholders
willbegivenlandbyDAR.Thus,referendumwasnotrequiredbutonlyindividualoptionsweregrantedtoeachFWBwhetherornot
theywillremaininHLI.
The application of the operative fact doctrine to the FWBs is not iniquitous and prejudicial to their interests but is actually
beneficialandfairtothem.First, they are granted the right to remain in HLI as stockholders and they acquired said shares without
payingtheirvaluetothecorporation.Ontheotherhand,thequalifiedFWBsarerequiredtopaythevalueofthelandtotheLandBank
ofthePhilippines(LBP)iflandisawardedtothembyDARpursuanttoRA6657.IfthequalifiedFWBsreallywantagriculturalland,
thentheycansimplysaynototheoption.Andsecond, if the operative fact doctrine is not applied to them, then the FWBs will be
requiredtoreturntoHLIthe3%productionshare,the3%shareintheproceedsofthesaleofthe500hectareconvertedland,andthe
80.51hectareSubicClarkTarlacExpressway(SCTEX)lot,thehomelotsandotherbenefitsreceivedbytheFWBsfromHLI.Withthe
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applicationoftheoperativefactdoctrine,saidbenefits,homelotsandthe3%productionshareand3%sharefromthesaleofthe500
hectareandSCTEXlotsshallberespectedwithnoobligationtorefundorreturnthem.Thereceiptofthesethingsisanoperativefact
thatcannolongerbedisturbedorsimplyignored.
(b)TheOperativeFactDoctrineasRecourseinEquity
Asmentionedabove,respondentscontendthattheoperativefactdoctrineisaruleofequitywhichmaybeappliedonlyinthe
absence of a law, and that in the instant case, there is a positive law which mandates the distribution of the land as a result of the
revocationoftheSDP.
[17]
Undeniably,theoperativefactdoctrineisaruleofequity.
Asacomplementoflegaljurisdiction,equityseekstoreachand
completejusticewherecourtsoflaw,throughtheinflexibilityoftheirrulesandwantofpowertoadapttheirjudgmentstothespecial
circumstancesofcases,areincompetenttodoso.Equityregardsthespiritandnottheletter,theintentandnottheform,thesubstance
[18]
rather than the circumstance, as it is variously expressed by different courts.
Remarkably, it is applied only in the absence of
[19]
statutorylawandneverincontraventionofsaidlaw.
In the instant case, respondents argue that the operative fact doctrine should not be applied since there is a positive law,
particularly,Sec.31ofRA6657,whichdirectsthedistributionofthelandasaresultoftherevocationoftheSDP.Pertinently,thelast
paragraphofSec.31ofRA6657states:
Ifwithintwo(2)yearsfromtheapprovalofthisAct,thelandorstocktransferenvisionedaboveisnotmadeorrealizedortheplanfor
suchstockdistributionapprovedbythePARCwithinthesameperiod,theagriculturallandofthecorporateownersorcorporationshallbe
subjecttothecompulsorycoverageofthisAct.(Emphasissupplied.)
Markedly, the use of the word or under the last paragraph of Sec. 31 of RA 6657 connotes that the law gives the corporate
landowneranoptiontoavailofthestockdistributionoptionortohavetheSDPapprovedwithintwo(2)yearsfromtheapprovalofRA
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6657.Thisinterpretationisconsistentwiththewellestablishedprincipleinstatutoryconstructionthat[t]hewordorisadisjunctive
termsignifyingdisassociationandindependenceofonethingfromtheotherthingsenumerateditshould,asarule,beconstruedinthe
[20]
senseinwhichitordinarilyimplies,asadisjunctiveword.
InPCILeasingandFinance,Inc.v.GiraffeXCreativeImaging,Inc.,
[21]
thisCourtheld:
Evidently,theletterdidnotmakeademandforthepaymentoftheP8,248,657.47ANDthereturnoftheequipmentonlyeitheroneof
thetwowasrequired.ThedemandletterwaspreparedandsignedbyAtty.FlorecitaR.Gonzales,presumablypetitionerscounsel.Assuch,the
useoforinsteadofandinthelettercouldhardlybetreatedasasimpletypographicalerror,bearinginmindthenatureofthedemand,the
amount involved, and the fact that it was made by a lawyer. Certainly Atty. Gonzales would have known that a world of difference exists
betweenandandorinthemannerthatthewordwasemployedintheletter.
Aruleinstatutoryconstructionisthatthewordorisadisjunctivetermsignifyingdissociationandindependenceofone
[22]
thingfromotherthingsenumeratedunlessthecontextrequiresadifferentinterpretation.
Initselementarysense,or,asusedinastatute,isadisjunctivearticleindicatinganalternative.Itoftenconnectsa
seriesofwordsorpropositionsindicatingachoiceofeither.Whenorisused,thevariousmembersoftheenumeration
[23]
aretobetakenseparately.
Thewordorisadisjunctivetermsignifyingdisassociationandindependenceofonethingfromeachoftheotherthings
[24]
enumerated.
(Emphasisintheoriginal.)
GiventhatHLIsecuredapprovalofitsSDPinNovember1989,wellwithinthetwoyearperiodreckonedfromJune1988when
RA6657tookeffect,thenHLIdidnotviolatethelastparagraphofSec.31ofRA6657.Pertinently,saidprovisiondoesnotbarUs
fromapplyingtheoperativefactdoctrine.
Besides,itshouldberecognizedthatthisCourt,initsJuly5,2011Decision,affirmedtherevocationofResolutionNo.89122
andruledforthecompulsorycoverageoftheagriculturallandsofHaciendaLuisitainviewofHLIsviolationoftheSDPandDAO10.
Byapplyingtheoperativefactdoctrine,thisCourtmerelygavethequalifiedFWBstheoptiontoremainasstockholdersofHLIand
ruledthattheywillretainthehomelotsandotherbenefitswhichtheyreceivedfromHLIbyvirtueoftheSDP.
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ItbearsstressingthattheapplicationoftheoperativefactdoctrinebytheCourtinitsJuly5,2011Decisionisfavorabletothe
FWBsbecausenotonlyweretheFWBsallowedtoretainthebenefitsandhomelotstheyreceivedunderthestockdistributionscheme,
they were also given the option to choose for themselves whether they want to remain as stockholders of HLI or not. This is in
recognitionofthefactthatdespitetheclaimsofcertainfarmergroupsthattheyrepresentthequalifiedFWBsinHaciendaLuisita,none
ofthemcanshowthattheyaredulyauthorizedtospeakontheirbehalf.AsWehavementioned,Todate,suchauthorizationdocument,
whichwouldlogicallyincludealistofthenamesoftheauthorizingFWBs,hasyettobesubmittedtobepartoftherecords.
II.ConstitutionalityofSec.31,RA6657
FARM insists that the issue of constitutionality of Sec. 31 of RA 6657 is the lis mota of the case, raised at the earliest
[25]
opportunity,andnottobeconsideredasmootandacademic.
Thiscontentionisunmeritorious.AsWehavesuccinctlydiscussedinOurJuly5,2011Decision:
Whilethereisindeedanactualcaseorcontroversy,intervenorFARM,composedofasmallminorityof27farmers,hasyettoexplain
its failure to challenge the constitutionality of Sec. 3l of RA 6657, since as early as November 21, l989 when PARC approved the SDP of
HaciendaLuisitaoratleastwithinareasonabletimethereafterandwhyitsmembersreceivedbenefitsfromtheSDPwithoutsomuchofa
protest.ItwasonlyonDecember4,2003or14yearsafterapprovaloftheSDPviaPARCResolutionNo.89122datedNovember21,1989
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 of Sec. 31 of RA 6657, but concentrated on the
purportedflawsandgapsinthesubsequentimplementationoftheSDP.Eventhepublicrespondents,asrepresentedbytheSolicitorGeneral,
didnotquestiontheconstitutionalityoftheprovision.Ontheotherhand,FARM,whose27membersformerlybelongedtoAMBALA,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
eighteen(18)yearsfromNovember21,1989beforeitchallengedtheconstitutionalityofSec.31ofRA6657whichisquitetoolateintheday.
TheFARMmemberssleptontheirrightsandevenacceptedbenefitsfromtheSDPwithnaryacomplaintontheallegedunconstitutionalityof
Sec.31uponwhichthebenefitswerederived.TheCourtcannotnowbegoadedintoresolvingaconstitutionalissuethatFARMfailedtoassail
afterthelapseofalongperiodoftimeandtheoccurrenceofnumerouseventsandactivitieswhichresultedfromtheapplicationofanalleged
unconstitutionallegalprovision.
It has been emphasized in a number of cases that the question of constitutionality will not be passed upon by the Court unless it is
properly raised and presented in an appropriate case at the first opportunity. FARM is, therefore, remiss in belatedly questioning the
constitutionality of Sec. 31 of RA 6657. The second requirement that the constitutional question should be raised at the earliest possible
opportunityisclearlywanting.
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Thelastbutthemostimportantrequisitethattheconstitutionalissuemustbetheverylismotaofthecasedoesnotlikewiseobtain.The
lismotaaspectisnotpresent,theconstitutionalissuetenderednotbeingcriticaltotheresolutionofthecase.Theunyieldingrulehasbeento
avoid, whenever plausible, an issue assailing the constitutionality of a statute or governmental act. If some other grounds exist by which
judgmentcanbemadewithouttouchingtheconstitutionalityofalaw,suchrecourseisfavored.Garciav.ExecutiveSecretaryexplainswhy:
LisMotathefourthrequirementtosatisfybeforethisCourtwillundertakejudicialreviewmeansthattheCourtwillnot
passuponaquestionofunconstitutionality,althoughproperlypresented,ifthecasecanbedisposedofonsomeotherground,
suchastheapplicationofthestatuteorthegenerallaw.Thepetitionermustbeabletoshowthatthecasecannotbelegally
resolvedunlesstheconstitutionalquestionraisedisdetermined.Thisrequirementisbasedontherulethateverylawhasinits
favor the presumption of constitutionality to justify its nullification, there must be a clear and unequivocal breach of the
Constitution,andnotonethatisdoubtful,speculative,orargumentative.
Thelismotainthiscase,proceedingfromthebasicpositionsoriginallytakenbyAMBALA(towhichtheFARMmemberspreviously
belonged) and the Supervisory Group, is the alleged noncompliance by HLI with the conditions of the SDP to support a plea for its
revocation.AndbeforetheCourt,thelismotaiswhetherornotPARCactedingraveabuseofdiscretionwhenitorderedtherecalloftheSDP
forsuchnoncomplianceandthefactthattheSDP,ascouchedandimplemented,offendscertainconstitutionalandstatutoryprovisions.Tobe
sure,anyofthesekeyissuesmayberesolvedwithoutplungingintotheconstitutionalityofSec.31ofRA6657.Moreover,lookingdeeplyinto
theunderlyingpetitionsofAMBALA,etal.,itisnotthesaidsectionpersethatisinvalid,butratheritistheallegedapplicationofthesaid
provisionintheSDPthatisflawed.
ItmaybewelltonoteatthisjuncturethatSec.5ofRA9700,amendingSec.7ofRA6657,hasallbutsupersededSec.31ofRA6657
visvisthestockdistributioncomponentofsaidSec.31.Initspertinentpart,Sec.5ofRA9700provides:[T]hatafterJune30,2009,the
modesofacquisitionshallbelimitedtovoluntaryoffertosellandcompulsoryacquisition.Thus,forallintentsandpurposes,thestock
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
unconstitutionalshouldbeamootissue.(Citationsomittedemphasisintheoriginal.)
Basedontheforegoingdisquisitions,WemaintainthatthisCourtisNOTcompelledtoruleontheconstitutionalityofSec.31of
RA6657.Inthisregard,WeclarifythatthisCourt,initsJuly5,2011Decision,madenorulinginfavoroftheconstitutionalityofSec.
31ofRA6657.Therewas,however,adeterminationoftheexistenceofanapparentgraveviolationoftheConstitutionthatmayjustify
theresolutionoftheissueofconstitutionality,towhichthisCourtruledinthenegative.Havingclarifiedthismatter,allotherpoints
raisedbybothFARMandAMBALAconcerningtheconstitutionalityofRA6657deservescantconsideration.
III.CoverageofCompulsoryAcquisition
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FARMarguesthatthisCourtignoredcertainmaterialfactswhenitlimitedthemaximumareatobecoveredto4,915.75hectares,
[26]
whereastheareathatshould,attheleast,becoveredis6,443hectares,
whichistheagriculturallandallegedlycoveredbyRA6657
[27]
andpreviouslyheldbyTarlacDevelopmentCorporation(Tadeco).
Wecannotsubscribetothisview.SincewhatisputinissuebeforetheCourtistheproprietyoftherevocationoftheSDP,which
onlyinvolves4,915.75has.ofagriculturallandandnot6,443has.,thenWeareconstrainedtoruleonlyasregardsthe4,915.75has.of
agriculturalland.
Moreover,asadmittedbyFARMitself,thisissuewasraisedforthefirsttimebyFARMinitsMemorandumdatedSeptember24,
[28]
2010filedbeforethisCourt.
Inthisregard,itshouldbenotedthat[a]salegalrecourse,thespecialcivilactionofcertiorariisa
[29]
limited form of review.
The certiorari jurisdiction of this Court is narrow in scope as it is restricted to resolving errors of
[30]
jurisdictionandgraveabuseofdiscretion,andnoterrorsofjudgment.
Toallowadditionalissuesatthisstageoftheproceedingsis
[31]
violativeoffairplay,justiceanddueprocess.
Nonetheless,itshouldbetakenintoaccountthatthisshouldnotpreventtheDAR,underitsmandateundertheagrarianreform
law, from subsequently subjecting to agrarian reform other agricultural lands originally held by Tadeco that were allegedly not
transferredtoHLIbutweresupposedlycoveredbyRA6657.
[32]
DAR, however, contends that the declaration of the area
to be awarded to each FWB is too restrictive. It stresses that in
agricultural landholdings like Hacienda Luisita, there are roads, irrigation canals, and other portions of the land that are considered
[33]
commonlyownedbyfarmworkers,andthismaynecessarilyresultinthedecreaseoftheareasizethatmaybeawardedperFWB.
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DARalsoarguesthattheJuly5,2011DecisionofthisCourtdoesnotgiveitanyleewayinadjustingtheareathatmaybeawardedper
[34]
FWBincasethenumberofactualqualifiedFWBsdecreases.
Theargumentismeritorious.InordertoensuretheproperdistributionoftheagriculturallandsofHaciendaLuisitaperqualified
FWB,andconsideringthatmattersinvolvingstrictlytheadministrativeimplementationandenforcementofagrarianreformlawsare
[35]
withinthejurisdictionoftheDAR,
itisthelatterwhichshalldeterminetheareawithwhicheachqualifiedFWBwillbeawarded.
(a)ConversionofAgriculturalLands
AMBALA insists that the conversion of the agricultural lands violated the conditions of RA 6657 and DAO 10, stating that
[36]
keepingthelandintactandunfragmentedisoneoftheessentialconditionsof[the]SD[P],RA6657andDAO10.
Itassertsthat
thisprovisionorconditionalityisnotmeredecorationandisintendedtoensurethatthefarmerscancontinuewiththetillageofthesoil
[37]
especiallysinceitistheonlyoccupationthatmajorityofthemknows.
Wedisagree.AsWeamplydiscussedinOurJuly5,2011Decision:
Contrary to the almost parallel stance of the respondents, keeping Hacienda Luisita unfragmented is also not among the imperative
impositionsbytheSDP,RA6657,andDAO10.
TheTerminalReportstatesthattheproposeddistributionplansubmittedin1989tothePARCeffectivelyassuredtheintendedstock
beneficiariesthatthephysicalintegrityofthefarmshallremaininviolate.Accordingly,theTerminalReportandthePARCassailedresolution
wouldtakeHLItotaskforsecuringapprovaloftheconversiontononagriculturalusesof500hectaresofthehacienda.Innottoomanywords,
theReportandtheresolutionviewtheconversionasaninfringementofSec.5(a)ofDAO10whichreads:a.thatthecontinuedoperationof
thecorporationwithitsagriculturallandintactandunfragmentedisviablewithpotentialforgrowthandincreasedprofitability.
ThePARCiswrong.
In the first place, Sec. 5(a)just like the succeeding Sec. 5(b) of DAO 10 on increased income and greater benefits to qualified
beneficiariesisbutoneofthestatedcriteriatoguidePARCindecidingonwhetherornottoacceptanSDP.SaidSec.5(a)doesnotexactfrom
thecorporatelandownerapplicanttheundertakingtokeepthefarmintactandunfragmentedadinfinitum.And there is logic to HLIs stated
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observationthatthekeyphraseintheprovisionofSec.5(a)isviabilityofcorporateoperations:[w]hatisthusrequiredisnottheagricultural
landremainingintactxxxbuttheviabilityofthecorporateoperationswithitsagriculturallandbeingintactandunfragmented.Corporate
[38]
operationmaybeviableevenifthecorporateagriculturallanddoesnotremainintactor[un]fragmented.
Itis,ofcourse,anticlimactictomentionthatDARviewedtheconversionasnotviolativeofanyissuance,letaloneunderminingthe
viabilityofHaciendaLuisitasoperation,astheDARSecretaryapprovedthelandconversionappliedforanditsdispositionviahisConversion
OrderdatedAugust14,1996pursuanttoSec.65ofRA6657whichreads:
Sec. 65. Conversion of Lands.After the lapse of five years from its award when the land ceases to be economically
feasibleandsoundforagriculturalpurposes,orthelocalityhasbecomeurbanizedandthelandwillhaveagreatereconomic
valueforresidential,commercialorindustrialpurposes,theDARuponapplicationofthebeneficiaryorlandownerwithdue
noticetotheaffectedparties,andsubjecttoexistinglaws,mayauthorizethexxxconversionofthelandanditsdispositions.x
xx
Moreover, it is worth noting that the application for conversion had the backing of 5,000 or so FWBs, including respondents
Rene Galang, and Jose Julio Suniga, then leaders of the AMBALA and the Supervisory Group, respectively, as evidenced by the
[39]
ManifestoofSupporttheysignedandwhichwassubmittedtotheDAR.
Ifatall,thismeansthatAMBALAshouldbeestopped
fromquestioningtheconversionofaportionofHaciendaLuisita,whichitsleaderhasfullysupported.
(b)LIPCOandRCBCasInnocentPurchasersforValue
The AMBALA, Rene Galang and the FARM are in accord that Rizal Commercial Banking Corporation (RCBC) and Luisita
IndustrialParkCorporation(LIPCO)arenotinnocentpurchasersforvalue.TheAMBALA,inparticular,arguesthatLIPCO,beinga
whollyownedsubsidiaryofHLI,isconclusivelypresumedtohaveknowledgeoftheagrariandisputeonthesubjectlandandcouldnot
[40]
feignignoranceofthisfact,especiallysincetheyhavethesamedirectorsandstockholders.
ThisissecondedbyReneGalangand
AMBALA,throughthePILC,whichintimatethatalookattheGeneralInformationSheetsofthecompaniesinvolvedinthetransfers
ofthe300hectareportionofHaciendaLuisita,specifically,CentennaryHoldings,Inc.(Centennary),LIPCOandRCBC,wouldreadily
[41]
revealthattheirdirectorsareinterlockedandconnectedtoTadecoandHLI.
ReneGalangandAMBALA,throughthePILC,also
allegethatwiththeclearcutinvolvementoftheleadershipofallthecorporationsconcerned,LIPCOandRCBCcannotfeignignorance
that the parcels of land they bought are under the coverage of the comprehensive agrarian reform program [CARP] and that the
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conditionsoftherespectivesalesareimbuedwithpublicinterestwherenormalpropertyrelationsintheCivilLawsensedonotapply.
[42]
Avowingthatthelandsubjectofconversionstillremainsundeveloped,ReneGalangandAMBALA,throughthePILC,further
insistthattheconditionthat[t]hedevelopmentofthelandshouldbecompletedwithintheperiodoffive[5]yearsfromtheissuanceof
thisOrderwasnotcompliedwith.AMBALAalsoarguesthatsinceRCBCandLIPCOmerelysteppedintotheshoesofHLI,thenthey
[43]
mustcomplywiththeconditionsimposedintheconversionorder.
Inaddition,FARMaversthatamongtheconditionsattachedtotheconversionorder,whichRCBCandLIPCOnecessarilyhave
knowledgeof,are(a)thatitsapprovalshallinnowayamend,diminish,oraltertheundertakingandobligationsofHLIascontainedin
the[SDP]approvedonNovember21,1989and(b)thatthebenefits,wagesandthelike,receivedbytheFWBsshallnotinanywaybe
[44]
reducedoradverselyaffected,amongothers.
The contentions of respondents are wanting. In the first place, there is no denying that RCBC and LIPCO knew that the
convertedlandstheyboughtwereunderthecoverageofCARP.Nevertheless,asWehavementionedinOurJuly5,2011Decision,this
does not necessarily mean that both LIPCO and RCBC already acted in bad faith in purchasing the converted lands. As this Court
explained:
ItcannotbeclaimedthatRCBCandLIPCOactedinbadfaithinacquiringthelotsthatwerepreviouslycoveredbytheSDP.Goodfaith
consistsinthepossessorsbeliefthatthepersonfromwhomhereceiveditwastheownerofthesameandcouldconveyhistitle.Goodfaith
requiresawellfoundedbeliefthatthepersonfromwhomtitlewasreceivedwashimselftheowneroftheland,withtherighttoconveyit.
Thereisgoodfaithwherethereisanhonestintentiontoabstainfromtakinganyunconscientiousadvantagefromanother.Itistheoppositeof
fraud.
Tobesure,intervenorRCBCandLIPCOknewthatthelotstheyboughtweresubjectedtoCARPcoveragebymeansofastock
distributionplan,astheDARconversionorderwasannotatedatthebackofthetitlesofthelotstheyacquired.However,theyareof
thehonestbeliefthatthesubjectlotswerevalidlyconvertedtocommercialorindustrialpurposesandforwhichsaidlotsweretaken
outoftheCARPcoveragesubjectofPARCResolutionNo.89122and,hence,canbelegallyandvalidlyacquiredbythem.Afterall,
Sec.65ofRA6657explicitlyallowsconversionanddispositionofagriculturallandspreviouslycoveredbyCARPlandacquisitionafterthe
lapseoffive(5)yearsfromitsawardwhenthelandceasestobeeconomicallyfeasibleandsoundforagriculturalpurposesorthelocalityhas
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becomeurbanizedandthelandwillhaveagreatereconomicvalueforresidential,commercialorindustrialpurposes.Moreover,DARnotified
alltheaffectedparties,moreparticularlytheFWBs,andgavethemtheopportunitytocommentoropposetheproposedconversion.DAR,after
goingthroughthenecessaryprocesses,grantedtheconversionof500hectaresofHaciendaLuisitapursuanttoitsprimaryjurisdictionunder
Sec.50ofRA6657todetermineandadjudicateagrarianreformmattersanditsoriginalexclusivejurisdictionoverallmattersinvolvingthe
implementationofagrarianreform.TheDARconversionorderbecamefinalandexecutoryafternoneoftheFWBsinterposedanappealtothe
CA. In this factual setting, RCBC and LIPCO purchased the lots in question on their honest and wellfounded belief that the previous
registeredownerscouldlegallysellandconveythelotsthoughthesewerepreviouslysubjectofCARPcoverage.Ergo, RCBC and LIPCO
actedingoodfaithinacquiringthesubjectlots.(Emphasissupplied.)
In the second place, the allegation that the converted lands remain undeveloped is contradicted by the evidence on record,
[45]
particularly,AnnexXofLIPCOsMemorandumdatedSeptember23,2010,
whichhasphotographsshowingthatthelandhasbeen
[46]
partlydeveloped.
Certainly,itisageneralrulethatthefactualfindingsofadministrativeagenciesareconclusiveandbindingonthe
[47]
Courtwhensupportedbysubstantialevidence.
However,thisruleadmitsofcertainexceptions,oneofwhichiswhenthefindings
[48]
offactarepremisedonthesupposedabsenceofevidenceandcontradictedbytheevidenceonrecord.
Inthethirdplace,byarguingthatthecompaniesinvolvedinthetransfersofthe300hectareportionofHaciendaLuisitahave
interlockingdirectorsand,thus,knowledgeofonemayalreadybeimputeduponalltheothercompanies,AMBALAandReneGalang,
ineffect,wantthisCourttopiercetheveilofcorporatefiction.However,piercingtheveilofcorporatefictioniswarrantedonlyin
caseswhentheseparatelegalentityisusedtodefeatpublicconvenience,justifywrong,protectfraud,ordefendcrime,suchthatinthe
[49]
caseoftwocorporations,thelawwillregardthecorporationsasmergedintoone.
AssuccinctlydiscussedbytheCourtinVelarde
[50]
v.Lopez,Inc.:
Petitionerarguesneverthelessthatjurisdictionoverthesubsidiaryisjustifiedbypiercingtheveilofcorporatefiction.Piercingtheveil
ofcorporatefictioniswarranted,however,onlyincaseswhentheseparatelegalentityisusedtodefeatpublicconvenience,justifywrong,
protectfraud,ordefendcrime,suchthatinthecaseoftwocorporations,thelawwillregardthecorporationsasmergedintoone.Therationale
behindpiercingacorporationsidentityistoremovethebarrierbetweenthecorporationfromthepersonscomprisingittothwartthefraudulent
andillegalschemesofthosewhousethecorporatepersonalityasashieldforundertakingcertainproscribedactivities.
Inapplyingthedoctrineofpiercingtheveilofcorporatefiction,thefollowingrequisitesmustbeestablished:(1)control,notmerely
majority or complete stock control (2) such control must have been used by the defendant to commit fraud or wrong, to perpetuate the
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violationofastatutoryorotherpositivelegalduty,ordishonestactsincontraventionofplaintiffslegalrightsand(3)theaforesaidcontroland
breachofdutymustproximatelycausetheinjuryorunjustlosscomplainedof.(Citationsomitted.)
Nowhere, however, in the pleadings and other records of the case can it be gathered that respondent has complete control over Sky
Vision,notonlyoffinancesbutofpolicyandbusinesspracticeinrespecttothetransactionattacked,sothatSkyVisionhadatthetimeofthe
transactionnoseparatemind,willorexistenceofitsown.Theexistenceofinterlockingdirectors,corporateofficersandshareholdersisnot
enoughjustificationtopiercetheveilofcorporatefictionintheabsenceoffraudorotherpublicpolicyconsiderations.
Absentanyallegationorproofoffraudorotherpublicpolicyconsiderations,theexistenceofinterlockingdirectors,officersand
stockholdersisnotenoughjustificationtopiercetheveilofcorporatefictionasintheinstantcase.
Andinthefourthplace,thefactthatthisCourt,initsJuly5,2011Decision,orderedthepaymentoftheproceedsofthesaleof
theconvertedland,andevenofthe80.51hectarelandsoldtothegovernment,throughtheBasesConversionDevelopmentAuthority,
tothequalifiedFWBs,effectivelyfulfilstheconditionsintheconversionorder,towit:(1)thatitsapprovalshallinnowayamend,
diminish,oraltertheundertakingandobligationsofHLIascontainedintheSDPapprovedonNovember21,1989and(2)thatthe
benefits,wagesandthelike,receivedbytheFWBsshallnotinanywaybereducedoradverselyaffected,amongothers.
Aviewhasalsobeenadvancedthatthe200hectarelottransferredtoLuisitaRealtyCorporation(LRC)shouldbeincludedinthe
compulsorycoveragebecausethecorporationdidnotintervene.
Wedisagree.Sincethe200hectarelotformedpartoftheSDPthatwasnullifiedbyPARCResolution20053201,thisCourtis
constrainedtomakearulingontherightsofLRCoverthesaidlot.Moreover,the500hectareportionofHaciendaLuisita,ofwhich
the200hectareportionsoldtoLRCandthe300hectareportionsubsequentlyacquiredbyLIPCOandRCBCwerepartof,wasalready
thesubjectoftheAugust14,1996DARConversionOrder.Byvirtueofthesaidconversionorder,thelandwasalreadyreclassifiedas
industrial/commerciallandnotsubjecttocompulsorycoverage.Thus,ifWeplacethe200hectarelotsoldtoLRCundercompulsory
coverage,thisCourtwould,ineffect,bedisregardingtheDARConversionOrder,whichhaslongattaineditsfinality.AndasthisCourt
[51]
held in Berboso v. CA,
Once final and executory, the Conversion Order can no longer be questioned. Besides, to disregard the
ConversionOrderthroughtherevocationoftheapprovaloftheSDPwouldcreateundueprejudicetoLRC,whichisnotevenapartyto
theproceedingsbelow,andwouldbetantamounttodeprivationofpropertywithoutdueprocessoflaw.
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Nonethess,theminorityisoftheadamantviewthatsinceLRCfailedtointerveneintheinstantcaseandwas,therefore,unable
topresentevidencesupportingitsgoodfaithpurchaseofthe200hectareconvertedland,thenLRCshouldbegivenfullopportunityto
presentitscasebeforetheDAR.Thisminorityviewisacontradictioninitself.GiventhatLRCdidnotinterveneandis,therefore,nota
partytotheinstantcase,thenitwouldbeincongruoustoorderthemtopresentevidencebeforetheDAR.Suchanorder,ifissuedby
thisCourt,wouldnotbebindingupontheLRC.
Moreover,LRCmaybeconsideredtohavewaiveditsrighttoparticipateintheinstantpetitionsinceitdidnotinterveneinthe
DARproceedingsforthenullificationofthePARCResolutionNo.89122whichapprovedtheSDP.
(c)Proceedsofthesaleofthe500hectareconvertedland
andofthe80.51hectarelandusedfortheSCTEX
Aspreviouslymentioned,WeruledinOurJuly5,2011DecisionthatsincetheCourtexcludedthe500hectarelotsubjectofthe
August14,1996ConversionOrderandthe80.51hectareSCTEXlotacquiredbythegovernmentfromcompulsorycoverage,thenHLI
anditssubsidiary,Centennary,shouldbeliabletotheFWBsforthepricereceivedforsaidlots.Thus:
Thereisaclaimthat,sincethesaleandtransferofthe500hectaresoflandsubjectoftheAugust14,1996ConversionOrderandthe
80.51hectareSCTEXlotcameaftercompulsorycoveragehastakenplace,theFWBsshouldhavetheircorrespondingshareofthelandsvalue.
Thereismeritintheclaim.SincetheSDPapprovedbyPARCResolutionNo.89122hasbeennullified,thenallthelandssubjectoftheSDP
willautomaticallybesubjectofcompulsorycoverageunderSec.31ofRA6657.SincetheCourtexcludedthe500hectarelotsubjectofthe
August14,1996ConversionOrderandthe80.51hectareSCTEXlotacquiredbythegovernmentfromtheareacoveredbySDP,thenHLIand
itssubsidiary,Centennary,shallbeliabletotheFWBsforthepricereceivedforsaidlots.HLIshallbeliableforthevaluereceivedforthesale
of the 200hectare land to LRC in the amount of PhP 500,000,000 and the equivalent value of the 12,000,000 shares of its subsidiary,
Centennary,forthe300hectarelotsoldtoLIPCOfortheconsiderationofPhP750,000,000.Likewise,HLIshallbeliableforPhP80,511,500
asconsiderationforthesaleofthe80.51hectareSCTEXlot.
We,however,notethatHLIhasallegedlypaid3%oftheproceedsofthesaleofthe500hectarelandand80.51hectareSCTEXlotto
theFWBs.WealsotakeintoaccountthepaymentoftaxesandexpensesrelatingtothetransferofthelandandHLIsstatementthatmost,ifnot
all,oftheproceedswereusedforlegitimatecorporatepurposes.Inordertodetermineonceandforallwhetherornotalltheproceedswere
properlyutilizedbyHLIanditssubsidiary,Centennary,DARwillengagetheservicesofareputableaccountingfirmtobeapprovedbythe
parties to audit the books of HLI to determine if the proceeds of the sale of the 500hectare land and the 80.51hectare SCTEX lot were
actuallyusedforlegitimatecorporatepurposes,titlingexpensesandincompliancewiththeAugust14,1996ConversionOrder.Thecostofthe
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auditwillbeshoulderedbyHLI.Ifaftersuchaudit,itisdeterminedthatthereremainsabalancefromtheproceedsofthesale,thenthebalance
shallbedistributedtothequalifiedFWBs.
HLI, however, takes exception to the abovementioned ruling and contends that it is not proper to distribute the unspent or
unusedbalanceoftheproceedsofthesaleofthe500hectareconvertedlandand80.51hectareSCTEXlottothequalifiedFWBsfor
thefollowingreasons:(1)theproceedsofthesalebelongtothecorporation,HLI,ascorporatecapitalandassetsinsubstitutionforthe
portionsofitslandassetwhichweresoldtothirdparties(2)todistributethecashsalesproceedsoftheportionsofthelandassettothe
FWBs,whoarestockholdersofHLI,istodissolvethecorporationanddistributetheproceedsasliquidatingdividendswithouteven
payingthecreditorsofthecorporationand(3)thedoingofsaidactswouldviolatethestringentprovisionsoftheCorporationCode
[52]
andcorporatepractice.
Apparently,HLIseeksrecoursetotheCorporationCodeinordertoavoiditsliabilitytotheFWBsforthepricereceivedforthe
500hectareconvertedlotandthe80.51hectareSCTEXlot.However,asWehaveestablishedinOurJuly5,2011Decision,therights,
obligationsandremediesofthepartiesintheinstantcaseareprimarilygovernedbyRA6657andHLIcannotshielditselffromthe
CARPcoveragemerelyundertheconvenienceofbeingacorporateentity.Inthisregard,itshouldbeunderscoredthattheagricultural
landsheldbyHLIbyvirtueoftheSDParenoordinaryassets.Thesearespecialassets,because,originally,theseshouldhavebeen
distributedtotheFWBswereitnotfortheapprovaloftheSDPbyPARC.Thus,thegovernmentcannotrenegeonitsresponsibility
overtheseassets.Likewise,HLIisnoordinarycorporationasitwasformedandorganizedpreciselytomakeuseoftheseagricultural
lands actually intended for distribution to the FWBs. Thus, it cannot shield itself from the coverage of CARP by invoking the
CorporationCode.AsexplainedbytheCourt:
HLI also parlays the notion that the parties to the SDOA should now look to the Corporation Code, instead of to RA 6657, in
determiningtheirrights,obligationsandremedies.TheCode,itadds,shouldbetheapplicablelawonthedispositionoftheagriculturallandof
HLI.
ContrarytotheviewofHLI,therights,obligationsandremediesofthepartiestotheSDOAembodyingtheSDPareprimarily
governedbyRA6657.ItshouldabundantlybemadeclearthatHLIwaspreciselycreatedinordertocomplywithRA6657,whichtheOSG
[53]
aptly described as the mother law of the SDOA and the SDP.
It is, thus, paradoxical for HLI to shield itself from the coverage of
CARPbyinvokingexclusiveapplicabilityoftheCorporationCodeundertheguiseofbeingacorporateentity.
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Without in any way minimizing the relevance of the Corporation Code since the FWBs of HLI are also stockholders, its
applicabilityislimitedastherightsofthepartiesarisingfromtheSDPshouldnotbemadetosupplantorcircumventtheagrarian
reformprogram.
Without doubt, the Corporation Code is the general law providing for the formation, organization and regulation of private
corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall
[54]
prevailgeneraliaspecialibusnonderogant.
Besides,thepresentimpassebetweenHLIandtheprivaterespondentsisnotanintracorporate
dispute which necessitates the application of the Corporation Code. What private respondents questioned before the DAR is the proper
implementation of the SDP and HLIs compliance with RA 6657. Evidently, RA 6657 should be the applicable law to the instant case.
(Emphasissupplied.)
Considering that the 500hectare converted land, as well as the 80.51hectare SCTEX lot, should have been included in the
compulsorycoveragewereitnotfortheirconversionandvalidtransfers,thenitisonlybutproperthatthepricereceivedforthesaleof
theselotsshouldbegiventothequalifiedFWBs.Ineffect,theproceedsfromthesaleshalltaketheplaceofthelots.
TheCourt,initsJuly5,2011Decision,however,takesintoaccount,interalia,thepaymentoftaxesandexpensesrelatingtothe
transfer of the land, as well as HLIs statement that most, if not all, of the proceeds were used for legitimate corporate purposes.
Accordingly,Weorderedthedeductionofthetaxesandexpensesrelatingtothetransferoftitlestothetransferees,andtheexpenditures
incurredbyHLIandCentennaryforlegitimatecorporatepurposes,amongothers.
Onthisnote,DARclaimsthatthe[l]egitimatecorporateexpensesshouldnotbedeductedasthereisnobasisforit,especially
sinceonlytheauditingtobeconductedonthefinancialrecordsofHLIwillrevealtheamountstobeoffsetbetweenHLIandtheFWBs.
[55]
Thecontentionisunmeritorious.ThepossibilityofanoffsettingshouldnotpreventUsfromdeductingthelegitimatecorporate
expensesincurredbyHLIandCentennary.Afterall,theCourthasorderedforaproperauditing[i]nordertodetermineonceandforall
whetherornotalltheproceedswereproperlyutilizedbyHLIanditssubsidiary,Centennary.Inthisregard,DARistaskedtoengage
theservicesofareputableaccountingfirmtobeapprovedbythepartiestoauditthebooksofHLItodetermineiftheproceedsofthe
saleofthe500hectarelandandthe80.51hectareSCTEXlotwereactuallyusedforlegitimatecorporatepurposes,titlingexpensesand
incompliancewiththeAugust14,1996ConversionOrder.Also,itshouldbenotedthatitisHLIwhichshallshoulderthecostofaudit
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toreducetheburdenonthepartoftheFWBs.Concomitantly,thelegitimatecorporateexpensesincurredbyHLIandCentennary,as
willbedeterminedbyareputableaccountingfirmtobeengagedbyDAR,shallbeamongtheallowabledeductionsfromtheproceeds
ofthesaleofthe500hectarelandandthe80.51hectareSCTEXlot.
We, however, find that the 3% production share should not be deducted from the proceeds of the sale of the 500hectare
convertedlandandthe80.51hectareSCTEXlot.The3%productionshare,likethehomelots,wasamongthebenefitsreceivedbythe
FWBsasfarmhandsintheagriculturalenterpriseofHLIand,thus,shouldnotbetakenawayfromtheFWBs.
Contrarily,theminorityisoftheviewthatasaconsequenceoftherevocationoftheSDP,thepartiesshouldberestoredtotheir
respectiveconditionspriortoitsexecutionandapproval,subjecttotheapplicationoftheprincipleofsetofforcompensation.Such
viewispatentlymisplaced.
Thelawoncontracts,i.e.mutualrestitution,doesnotapplytothecaseatbar.Toreiterate,whatwasactuallyrevokedbythis
Court,initsJuly5,2011Decision,isPARCResolutionNo.89122approvingtheSDP.Toelucidate,itwastheSDP,nottheSDOA,
[56]
whichwaspresentedforapprovalbyTadecotoDAR.
TheSDPexplainedthemechanicsofthestockdistributionbutdidnotmake
anyreferencenorcorrelationtotheSDOA.Thepertinentportionsoftheproposalread:
MECHANICSOFSTOCKDISTRIBUTIONPLAN
UnderSection31ofRepublicActNo.6657,acorporationowningagriculturallandmaydistributeamongthequalifiedbeneficiaries
such proportion or percentage of its capital stock that the value of the agricultural land actually devoted to agricultural activities, bears in
relation to the corporations total assets. Conformably with this legal provision, Tarlac Development Corporation hereby submits for
[57]
approvalastockdistributionplanthatenvisionsthefollowing:
(Termsandconditionsomittedemphasissupplied)
xxxx
The above stock distribution plan is hereby submitted on the basis of all these benefits that the farmworkerbeneficiaries of
HaciendaLuisitawillreceiveunderitsprovisionsinadditiontotheirregularcompensationasfarmhandsintheagriculturalenterpriseandthe
[58]
fringebenefitsgrantedtothembytheircollectivebargainingagreementwithmanagement.
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Also,PARCResolutionNo.89122readsasfollows:
RESOLUTION APPROVING THE STOCK DISTRIBUTION PLAN OF TARLAC DEVELOPMENT COMPANY/HACIENDA
LUISITAINCORPORATED(TDC/HLI)
NOWTHEREFORE,onmotiondulyseconded,
RESOLVED,asitisherebyresolved,toapprovethestockdistributionplanofTDC/HLI.
UNANIMOUSLYAPPROVED.
[59]
(Emphasissupplied)
Clearly,whatwasapprovedbyPARCistheSDPandnottheSDOA.Thereis,therefore,nobasisforthisCourttoapplythelaw
oncontractstotherevocationofthesaidPARCResolution.
IV.JustCompensation
InOurJuly5,2011Decision,WestatedthatHLIshallbepaidjustcompensationfortheremainingagriculturallandthatwillbe
transferredtoDARforlanddistributiontotheFWBs.WealsoruledthatthedateofthetakingisNovember21,1989,whenPARC
approvedHLIsSDPperPARCResolutionNo.89122.
InitsMotionforClarificationandPartialReconsideration,HLIdisagreeswiththeforegoingrulingandcontendsthatthetaking
shouldbereckonedfromfinalityoftheDecisionofthisCourt,orattheveryleast,thereckoningperiodmaybetackedtoJanuary2,
2006,thedatewhentheNoticeofCoveragewasissuedbytheDARpursuanttoPARCResolutionNo.20063401recalling/revoking
[60]
theapprovaloftheSDP.
Fortheirpart,Mallari,etal.arguethatthevaluationofthelandcannotbebasedonNovember21,1989,thedateofapprovalof
the SDP. Instead, they aver that the date of taking for valuation purposes is a factual issue best left to the determination of the trial
[61]
courts.
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Attheotherendofthespectrum,AMBALAallegesthatHLIshouldnolongerbepaidjustcompensationfortheagriculturalland
thatwillbedistributedtotheFWBs,sincetheManilaRegionalTrialCourt(RTC)alreadyrenderedadecisionorderingtheCojuangcos
to transfer the control of Hacienda Luisita to the Ministry of Agrarian Reform, which will distribute the land to small farmers after
[62]
compensating the landowners P3.988 million.
In the event, however, that this Court will rule that HLI is indeed entitled to
compensation,AMBALAcontendsthatitshouldbepeggedatfortythousandpesos(PhP40,000)perhectare,sincethiswasthesame
[63]
valuethatTadecodeclaredin1989tomakesurethatthefarmerswillnotownthemajorityofitsstocks.
Despitetheabovepropositions,WemaintainthatthedateoftakingisNovember21,1989,thedatewhenPARCapprovedHLIs
SDPperPARCResolutionNo.89122,inviewofthefactthatthisisthetimethattheFWBswereconsideredtoownandpossessthe
agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the agrarian reform coverage through the stock
distributionschemeonlyupontheapprovaloftheSDP,thatis,November21,1989.Thus,suchapprovalisakintoanoticeofcoverage
ordinarily issued under compulsory acquisition. Further, any doubt should be resolved in favor of the FWBs. As this Court held in
[64]
PerezRosariov.CA:
Itisanestablishedsocialandeconomicfactthattheescalationofpovertyisthedrivingforcebehindthepoliticaldisturbancesthathave
inthepastcompromisedthepeaceandsecurityofthepeopleaswellasthecontinuityofthenationalorder.Tosubduetheseacutedisturbances,
thelegislatureoverthecourseofthehistoryofthenationpassedaseriesoflawscalculatedtoaccelerateagrarianreform,ultimatelytoraise
the material standards of living and eliminate discontent. Agrarian reform is a perceived solution to social instability. The edicts of social
justice found in the Constitution and the public policies that underwrite them, the extraordinary national experience, and the
prevailing national consciousness, all command the great departments of government to tilt the balance in favor of the poor and
underprivileged whenever reasonable doubt arises in the interpretation of the law. But annexed to the great and sacred charge of
protectingtheweakisthediametricfunctiontoputeveryefforttoarriveatanequitablesolutionforallpartiesconcerned:thejuralpostulates
ofsocialjusticecannotshieldillegalacts,nordotheysanctionfalsesympathytowardsacertainclass,noryetshouldtheydenyjusticetothe
landowner whenever truth and justice happen to be on her side. In the occupation of the legal questions in all agrarian disputes whose
outcomes can significantly affect societal harmony, the considerations of social advantage must be weighed, an inquiry into the prevailing
socialinterestsisnecessaryintheadjustmentofconflictingdemandsandexpectationsofthepeople,andthesocialinterdependenceofthese
interests,recognized.(Emphasissupplied.)
Theminoritycontendsthatitisthedateofthenoticeofcoverage,thatis,January2,2006,whichisdeterminativeofthejust
compensation HLI is entitled to for its expropriated lands. To support its contention, it cited numerous cases where the time of the
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takingwasreckonedonthedateoftheissuanceofthenoticeofcoverage.
However,aperusalofthecasescitedbytheminoritywouldrevealthatnoneoftheminvolvedthestockdistributionscheme.
Thus,saidcasesdonotsquarelyapplytotheinstantcase.Moreover,itshouldbenotedthatitispreciselybecausethestockdistribution
optionisadistinctivemechanismunderRA6657thatitcannotbetreatedsimilarlywiththatofcompulsorylandacquisitionasthese
aretwo(2)differentmodalitiesundertheagrarianreformprogram.AsWehavestatedinOurJuly5,2011Decision,RA6657provides
two(2)alternativemodalities,i.e.,landorstocktransfer,pursuanttoeitherofwhichthecorporatelandownercancomplywithCARP.
Inthisregard,itshouldbenotedthatwhenHLIsubmittedtheSDPtoDARforapproval,itcannotbegainsaidthatthestock
distributionschemeisclearlyHLIspreferredmodalityinordertocomplywithCARP.AndwhentheSDPwasapproved,stockswere
given to the FWBs in lieu of land distribution. As aptly observed by the minority itself, [i]nstead of expropriating lands, what the
governmenttookanddistributedtotheFWBsweresharesofstockofpetitionerHLIinproportiontothevalueoftheagriculturallands
thatshouldhavebeenexpropriatedandturnedovertotheFWBs.Itcannot,therefore,bedeniedthatupontheapprovaloftheSDP
submittedbyHLI,theagriculturallandsofHaciendaLuisitabecamesubjectofCARPcoverage.Evidently,theapprovaloftheSDP
tooktheplaceofanoticeofcoverageissuedundercompulsoryacquisition.
Also,itissurprisingthatwhiletheminorityopinesthatunderthestockdistributionoption,titletothepropertyremainswiththe
corporate landowner, which should presumably be dominated by farmers with majority stockholdings in the corporation, it still
insists that the just compensation that should be given to HLI is to be reckoned on January 2, 2006, the date of the issuance of the
noticeofcoverage,evenafteritfoundthattheFWBsdidnothavethemajoritystockholdingsinHLIcontrarytothesupposedavowed
policyofthelaw.Ineffect,whattheminoritywantsistoprejudicetheFWBstwice.GiventhattheFWBsshouldhavehadmajority
stockholdings in HLI but did not, the minority still wants the government to pay higher just compensation to HLI. Even if it is the
governmentwhichwillpaythejustcompensationtoHLI,thiswillalsoaffecttheFWBsastheywillbepayinghigheramortizationsto
thegovernmentifthetakingwillbeconsideredtohavetakenplaceonlyonJanuary2,2006.
Theforegoingnotwithstanding,itbearsstressingthattheDAR'slandvaluationisonlypreliminaryandisnot,byanymeans,
finalandconclusiveuponthelandowner.ThelandownercanfileanoriginalactionwiththeRTCactingasaspecialagrariancourtto
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determinejustcompensation.Thecourthastherighttoreviewwithfinalitythedeterminationintheexerciseofwhatisadmittedlya
[65]
judicialfunction.
AviewhasalsobeenadvancedthatHLIshouldpaythequalifiedFWBsrentalfortheuseandpossessionofthelanduptothe
time it surrenders possession and control over these lands. What this view fails to consider is the fact that the FWBs are also
stockholders of HLI prior to the revocation of PARC Resolution No. 89122. Also, the income earned by the corporation from its
possessionanduseofthelandultimatelyredoundedtothebenefitoftheFWBsbasedonitsbusinessoperationsintheformofsalaries,
benefitsvoluntarilygrantedbyHLIandotherfringebenefitsundertheirCollectiveBargainingAgreement.Thatbeingso,therewould
beunjustenrichmentonthepartoftheFWBsifHLIwillstillberequiredtopayrentfortheuseofthelandinquestion.
V.SaletoThirdParties
There is a view that since the agricultural lands in Hacienda Luisita were placed under CARP coverage through the SDOA
schemeonMay11,1989,thenthe10yearperiodprohibitiononthetransferofawardedlandsunderRA6657lapsedonMay10,1999,
and,consequently,thequalifiedFWBsshouldalreadybeallowedtoselltheselandswithrespecttotheirlandintereststothirdparties,
includingHLI,regardlessofwhethertheyhavefullypaidforthelandsornot.
Thepropositioniserroneous.Sec.27ofRA6657states:
SEC. 27. Transferability of Awarded Lands. Lands acquired by beneficiaries under this Act may not be sold, transferred or
conveyedexceptthroughhereditarysuccession,ortothegovernment,ortotheLBP,ortootherqualifiedbeneficiariesforaperiodof
ten (10) years: Provided, however, That the children or the spouse of the transferor shall have a right to repurchase the land from the
government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to the Barangay
Agrarian Reform Committee (BARC) of the barangay where the land is situated. The Provincial Agrarian Coordinating Committee
(PARCCOM),ashereinprovided,shall,inturn,begivenduenoticethereofbytheBARC.
Ifthelandhasnotyetbeenfullypaidbythebeneficiary,therighttothelandmaybetransferredorconveyed,withpriorapprovalof
theDAR,toanyheirofthebeneficiaryortoanyotherbeneficiarywho,asaconditionforsuchtransferorconveyance,shallcultivate
thelandhimself.Failingcomplianceherewith,thelandshallbetransferredtotheLBPwhichshallgiveduenoticeoftheavailabilityofthe
landinthemannerspecifiedintheimmediatelyprecedingparagraph.
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In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the latter has
alreadypaid,togetherwiththevalueofimprovementshehasmadeontheland.(Emphasissupplied.)
Toimplementtheabovequotedprovision,interalia,DARissuedAdministrativeOrderNo.1,Seriesof1989(DAO1)entitled
RulesandProceduresGoverningLandTransactions.SaidRulessetforththerulesonvalidityoflandtransactions,towit:
II.RULESONVALIDITYOFLANDTRANSACTIONS
A.Thefollowingtransactionsarevalid:
1.ThoseexecutedbytheoriginallandownerinfavorofthequalifiedbeneficiaryfromamongthosecertifiedbyDAR.
2.Thoseinfavorofthegovernment,DARortheLandBankofthePhilippines.
3. Those covering lands retained by the landowner under Section 6 of R.A. 6657 duly certified by the designated DAR Provincial
AgrarianReformOfficer(PARO)asaretentionarea,executedinfavoroftransfereeswhosetotallandholdingsinclusiveofthelandto
be acquired do not exceed five (5) hectares subject, however, to the right of preemption and/or redemption of tenant/lessee under
Section11and12ofR.A.3844,asamended.
xxxx
4.Thoseexecutedbybeneficiariescoveringlandsacquiredunderanyagrarianreformlawinfavorofthegovernment,DAR,LBPorother
qualifiedbeneficiariescertifiedbyDAR.
5. Those executed after ten (10) years from the issuance and registration of the Emancipation Patent or Certificate of Land
OwnershipAward.
B.Thefollowingtransactionsarenotvalid:
1.Sale,disposition,leasemanagementcontractortransferofpossessionofprivatelandsexecutedbytheoriginallandownerpriortoJune
15,1988,whichareregisteredonorbeforeSeptember13,1988,orthoseexecutedafterJune15,1988,coveringanareainexcessof
thefivehectareretentionlimitinviolationofR.A.6657.
2. Those covering lands acquired by the beneficiary under R.A. 6657 and executed within ten (10) years from the issuance and
registrationofanEmancipationPatentorCertificateofLandOwnershipAward.
3.ThoseexecutedinfavorofapersonorpersonsnotqualifiedtoacquirelandunderR.A.6657.
4.Sale,transfer,conveyanceorchangeofnatureofthelandoutsideofurbancentersandcitylimitseitherinwholeorinpartasofJune
15,1988,whenR.A.6657tookeffect,exceptasprovidedforunderDARAdministrativeOrderNo.15,seriesof1988.
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5. Sale,transferorconveyancebybeneficiaryoftherighttouseoranyotherusufructuaryrightoverthelandheacquiredbyvirtueof
beingabeneficiary,inordertocircumventthelaw.
xxxx(Emphasissupplied.)
Withoutadoubt,underRA6657andDAO1,theawardedlandsmayonlybetransferredorconveyedafterten(10)yearsfrom
theissuanceandregistration of the emancipation patent (EP) or certificate of land ownership award (CLOA). Considering that the
EPsorCLOAshavenotyetbeenissuedtothequalifiedFWBsintheinstantcase,the10yearprohibitiveperiodhasnotevenstarted.
Significantly,thereckoningpointistheissuanceoftheEPorCLOA,andnottheplacingoftheagriculturallandsunderCARP
coverage.
Moreover,ifWemaintainthepositionthatthequalifiedFWBsshouldbeimmediatelyallowedtheoptiontosellorconveythe
agriculturallandsinHaciendaLuisita,thenalleffortsatagrarianreformwouldberenderednugatorybythisCourt,since,attheendof
theday,theselandswilljustbetransferredtopersonsnotentitledtolanddistributionunderCARP.AsaptlynotedbythelateSenator
NeptaliGonzalesduringtheJointCongressionalConferenceCommitteeontheComprehensiveAgrarianReformProgramBills:
SEN.GONZALES.Mypointis,asmuchaspossibleletthesaidlandsbedistributedunderCARPremainwiththebeneficiaries
andtheirheirsbecausethatisthelessonthatwehavetolearnfromPDNo.27.IfyouwilltalkwiththeCongressmenrepresentingNueva
Ecija, Pampanga and Central Luzon provinces, law or no law, you will find out that more than onethird of the original, of the lands
distributed under PD 27 are no longer owned, possessed or being worked by the grantees or the awardees of the same, something
[66]
whichweoughttoavoidundertheCARPbillthatwearegoingtoenact.
(Emphasissupplied.)
Worse,byraisingthatthequalifiedbeneficiariesmayselltheirinterestbacktoHLI,thissmacksofoutrightindifferencetothe
[67]
provisiononretentionlimits
underRA6657,asthisCourt,ineffect,wouldbeallowingHLI,thepreviouslandowner,toownmore
than five (5) hectares of agricultural land, which We cannot countenance. There is a big difference between the ownership of
agriculturallandsbyHLIunderthestockdistributionschemeanditseventualacquisitionoftheagriculturallandsfromthequalified
FWBsundertheproposedbuybackscheme.Theruleonretentionlimitsdoesnotapplytotheformerbutonlytothelatterinviewof
the fact that the stock distribution scheme is sanctioned by Sec. 31 of RA 6657, which specifically allows corporations to divest a
proportionoftheircapitalstockthattheagriculturalland,actuallydevotedtoagriculturalactivities,bearsinrelationtothecompanys
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totalassets.Ontheotherhand,nospecialrulesexistunderRA6657concerningtheproposedbuybackschemehence,thegeneral
rulesonretentionlimitsshouldapply.
Further,thepositionthatthequalifiedFWBsarenowfreetotransactwiththirdpartiesconcerningtheirlandinterests,regardless
ofwhethertheyhavefullypaidforthelandsornot,alsotransgressesthesecondparagraphofSec.27ofRA6657,whichplainlystates
that[i]fthelandhasnotyetbeenfullypaidbythebeneficiary,therighttothelandmaybetransferredorconveyed,withpriorapproval
of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall
cultivatethelandhimself.Failingcomplianceherewith,thelandshallbetransferredtotheLBPxxx.Whenthewordsandphrasesin
[68]
thestatuteareclearandunequivocal,thelawisappliedaccordingtoitsexpressterms.
Verbalegisnonestrecedendum,orfromthe
[69]
wordsofastatutethereshouldbenodeparture.
Theminority,however,positsthat[t]oinsistthattheFWBsrightssleepforaperiodoftenyearsisunrealistic,andmayseriously
deprivethemofrealopportunitiestocapitalizeandmaximizethevictoryofdirectlanddistribution.ByinsistingthatWedisregardthe
tenyearrestrictionunderthelawinthecaseatbar,theminority,ineffect,wantsthisCourttoengageinjudiciallegislation,whichis
[70]
violative of the principle of separation of powers.
The discourse by Ruben E. Agpalo, in his book on statutory construction, is
enlightening:
Wherethelawisclearandunambiguous,itmustbetakentomeanexactlywhatitsaysandthecourthasnochoicebuttoseetoitthat
its mandate is obeyed. Where the law is clear and free from doubt or ambiguity, there is no room for construction or interpretation. Thus,
wherewhatisnotclearlyprovidedinthelawisreadintothelawbyconstructionbecauseitismorelogicalandwise,itwouldbeto
encroach upon legislative prerogative to define the wisdom of the law, which is judicial legislation. For whether a statute is wise or
expedientisnotforthecourtstodetermine.Courtsmustadministerthelaw,notastheythinkitoughttobebutastheyfinditand
[71]
withoutregardtoconsequences.
(Emphasissupplied.)
[72]
AndasaptlystatedbyChiefJusticeRenatoCoronainhisDissentingOpinioninAngLadladLGBTPartyv.COMELEC:
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Regardlessofthepersonalbeliefsandbiasesofitsindividualmembers,thisCourtcanonlyapplyandinterprettheConstitutionandthe
laws.Itspowerisnottocreatepolicybuttorecognize,revieworreversethepolicycraftedbythepoliticaldepartmentsifandwhenaproper
caseisbroughtbeforeit.Otherwise,itwilltreadonthedangerousgroundsofjudiciallegislation.
Considerably,thisCourtisleftwithnootherrecoursebuttorespectandapplythelaw.
VI.GroundsforRevocationoftheSDP
AMBALAandFARMreiteratethatimprovingtheeconomicstatusoftheFWBsisamongthelegalobligationsofHLIunderthe
[73]
SDPandisanimperativeimpositionbyRA6657andDAO10.
FARMfurtherassertsthat[i]fthatminimumthresholdisnotmet,
[74]
whyallow[stockdistributionoption]atall,unlessthepurposeisnotsocialjusticebutapoliticalaccommodationtothepowerful.
ContrarytotheassertionsofAMBALAandFARM,nowhereintheSDP,RA6657andDAO10canitbeinferredthatimproving
theeconomicstatusoftheFWBsisamongthelegalobligationsofHLIundertheSDPorisanimperativeimpositionbyRA6657and
DAO10,aviolationofwhichwouldjustifydiscardingthestockdistributionoption.AsWehavepainstakinglyexplainedinOurJuly5,
2011Decision:
IntheTerminalReportadoptedbyPARC,itisstatedthattheSDPviolatestheagrarianreformpolicyunderSec.2ofRA6657,asthe
saidplanfailedtoenhancethedignityandimprovethequalityoflivesoftheFWBsthroughgreaterproductivityofagriculturallands.We
disagree.
Sec.2ofRA6657states:
SECTION2.DeclarationofPrinciplesandPolicies.It is the policy of the State to pursue a Comprehensive Agrarian

Reform Program (CARP). The welfare of the landless farmers and farm workers will receive the highest consideration to
promotesocialjusticeandtomovethenationtowardssoundruraldevelopmentandindustrialization,andtheestablishmentof
ownercultivatorshipofeconomicsizedfarmsasthebasisofPhilippineagriculture.
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To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to just
compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farm workers with the
opportunitytoenhancetheirdignityandimprovethequalityoftheirlivesthroughgreaterproductivityofagricultural
lands.
The agrarian reform program is founded on the right of farmers and regular farm workers, who are landless, to own
directlyorcollectivelythelandstheytillor,inthecaseofotherfarmworkers,toreceiveashareofthefruitsthereof.Tothis
end,theStateshallencouragethejustdistributionofallagriculturallands,subjecttotheprioritiesandretentionlimitssetforth
inthisAct,havingtakenintoaccountecological,developmental,andequityconsiderations,andsubjecttothepaymentofjust
compensation.TheStateshallrespecttherightofsmalllandownersandshallprovideincentivesforvoluntarylandsharing.
Paragraph2oftheabovequotedprovisionspecificallymentionsthatamoreequitabledistributionandownershipoflandxxxshallbe
undertakentoprovidefarmersandfarmworkerswiththeopportunitytoenhancetheirdignityandimprovethequalityoftheirlivesthrough
greater productivity of agricultural lands. Of note is the term opportunity which is defined as a favorable chance or opening offered by
circumstances. Considering this, by no stretch of imagination can said provision be construed as a guarantee in improving the lives of the
FWBs.Atbest,itmerelyprovidesforapossibilityorfavorablechanceofupliftingtheeconomicstatusoftheFWBs,whichmayormaynotbe
attained.
Pertinently,improvingtheeconomicstatusoftheFWBsisneitheramongthelegalobligationsofHLIundertheSDPnoranimperative
imposition by RA 6657 and DAO 10, a violation of which would justify discarding the stock distribution option. Nothing in that option
agreement,lawordepartmentorderindicatesotherwise.
Significantly, HLI draws particular attention to its having paid its FWBs, during the regime of the SDP (19892005), some PhP 3
billionbywayofsalaries/wagesandhigherbenefitsexclusiveoffreehospitalandmedicalbenefitstotheirimmediatefamily.Andattachedas
AnnexGtoHLIsMemorandumisthecertifiedtruereportofthefinancemanagerofJoseCojuangco&SonsOrganizationsTarlacOperations,
captionedasHACIENDALUISITA,INC.Salaries,BenefitsandCreditPrivileges(inThousandPesos)SincetheStockOptionwasApprovedby
PARC/CARP, detailing what HLI gave their workers from 1989 to 2005. The sum total, as added up by the Court, yields the following
numbers:TotalDirectCashOut(Salaries/Wages&CashBenefits)=PhP2,927,848TotalNonDirectCashOut(Hospital/MedicalBenefits)=
PhP303,040.Thecashoutfigures,asstatedinthereport,includethecostofhomelotsthePhP150millionorsorepresenting3%ofthegross
produceofthehaciendaandthePhP37.5millionrepresenting3%fromtheproceedsofthesaleofthe500hectareconvertedlands.Whilenot
included in the report, HLI manifests having given the FWBs 3% of the PhP 80 million paid for the 80 hectares of land traversed by the
SCTEX.Ontopofthese,itisworthrememberingthatthesharesofstocksweregivenbyHLItotheFWBsforfree.Verily,theFWBshave
benefitedfromtheSDP.
ToaddressurgingsthattheFWBsbeallowedtodisengagefromtheSDPasHLIhasnotanywayearnedprofitsthroughtheyears,it
cannotbeoveremphasizedthat,asamatterofcommonbusinesssense,nocorporationcouldguaranteeaprofitablerunallthetime.Ashas
beensuggested,oneofthekeyfeaturesofanSDPofacorporatelandowneristhelikelihoodofthecorporatevehiclenotearning,or,worse
still,losingmoney.
The Court is fully aware that one of the criteria under DAO 10 for the PARC to consider the advisability of approving a stock
distributionplanisthelikelihoodthattheplanwouldresultinincreasedincomeandgreaterbenefitsto[qualifiedbeneficiaries]thanif
thelandsweredividedanddistributedtothemindividually.Butasaptlynotedduringtheoralarguments,DAO10oughttohavenot,asit
cannot,actuallyexactassuranceofsuccessonsomethingthatissubjecttothewillofman,theforcesofnatureortheinherentriskynatureof
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[75]
business.
Justlikeinactuallanddistribution,anSDPcannotguarantee,asindeedtheSDOAdoesnotguarantee,acomfortablelifeforthe
FWBs.TheCourtcantakejudicialnoticeofthefactthatthereweremanyinstanceswhereinafterafarmworkerbeneficiaryhasbeenawarded
withanagriculturalland,hejustsubsequentlysellsitandiseventuallyleftwithnothingintheend.
Inallthen,theonerousconditionoftheFWBseconomicstatus,theirlifeofhardship,ifthatreallybethecase,canhardlybeattributed
toHLIanditsSDPandprovideavalidgroundfortheplansrevocation.(Citationsomittedemphasisintheoriginal.)
ThisCourt,despitetheaboveholding,stillaffirmedtherevocationbyPARCofitsapprovaloftheSDPbasedonthefollowing
grounds:(1)failureofHLItofullycomplywithitsundertakingtodistributehomelotstotheFWBsundertheSDP(2)distributionof
sharesofstocktotheFWBsbasedonthenumberofmandaysornumberofdaysworkedbytheFWBinayearstimeand(3)30year
timeframefortheimplementationordistributionofthesharesofstocktotheFWBs.
Justthesame,Mallari,etal.positthatthehomelotsrequiredtobedistributedhaveallbeendistributedpursuanttotheSDOA,
[76]
andthatwhatmerelyremainstobedoneisthereleaseoftitlefromtheRegisterofDeeds.
Theyfurtherassertthattherehasbeenno
dilution of shares as the corporate records would show that if ever not all of the 18,804.32 shares were given to the actual original
[77]
FWB,therecipientofthedifferenceisthenextofkinorchildrenofsaidoriginalFWB.
Thus,theysubmitthatsincetheshares
weregiventothesamefamilybeneficiary,thisshouldbedeemedassubstantialcompliancewiththeprovisionsofSec.4ofDAO10.
[78]
Also,theyarguethattherehasbeennoviolationofthethreemonthperiodtoimplementtheSDPasmandatedbySec.11ofDAO,
sincethisprovisionmustbereadinlightofSec.10ofExecutiveOrderNo.229,thepertinentportionofwhichreads,Theapprovalby
thePARCofaplanforsuchstockdistribution,anditsinitialimplementation,shallbedeemedcompliancewiththelanddistribution
[79]
requirementoftheCARP.
Again,themattersraisedbyMallari,etal.havebeenextensivelydiscussedbytheCourtinitsJuly5,2011Decision.Asstated:
OnTitlestoHomelots
Under RA 6657, the distribution of homelots is required only for corporations or business associations owning or operating farms
whichoptedforlanddistribution.Sec.30ofRA6657states:
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SEC. 30. Homelots and Farmlots for Members of Cooperatives.The individual members of the cooperatives or
corporationsmentionedintheprecedingsectionshallbeprovidedwithhomelotsandsmallfarmlotsfortheirfamilyuse,tobe
takenfromthelandownedbythecooperativeorcorporation.
Theprecedingsectionreferredtointheabovequotedprovisionisasfollows:
SEC.29.Farms Owned or Operated by Corporations or Other Business Associations.In the case of farms owned or
operatedbycorporationsorotherbusinessassociations,thefollowingrulesshallbeobservedbythePARC.
Ingeneral,landsshallbedistributeddirectlytotheindividualworkerbeneficiaries.
Incaseitisnoteconomicallyfeasibleandsoundtodividetheland,thenitshallbeownedcollectivelybytheworker
beneficiarieswhoshallformaworkerscooperativeorassociationwhichwilldealwiththecorporationorbusinessassociation.
Untilanewagreementisenteredintobyandbetweentheworkerscooperativeorassociationandthecorporationorbusiness
association,anyagreementexistingatthetimethisActtakeseffectbetweentheformerandthepreviouslandownershallbe
respectedbyboththeworkerscooperativeorassociationandthecorporationorbusinessassociation.
Noticeably, the foregoing provisions do not make reference to corporations which opted for stock distribution under Sec. 31 of RA
6657.Concomitantly,saidcorporationsarenotobligedtoprovideforitexceptbystipulation,asinthiscase.
UndertheSDP,HLIundertooktosubdivideandallocateforfreeandwithoutchargeamongthequalifiedfamilybeneficiariesxxx
residentialorhomelotsofnotmorethan240sq.m.each,witheachfamilybeneficiarybeingassuredofreceivingandowningahomelotinthe
barrioorbarangaywhereitactuallyresides,withinareasonabletime.
Morethansixteen(16)yearshaveelapsedfromthetimetheSDPwasapprovedbyPARC,andyet,itisstillthecontentionoftheFWBs
thatnotallwasgiventhe240squaremeterhomelotsand,ofthosewhowerealreadygiven,somestilldonothavethecorrespondingtitles.
During theoralarguments, HLI was afforded the chance to refute the foregoingallegationbysubmittingproofthattheFWBswere
alreadygiventhesaidhomelots:
JusticeVelasco:xxxThereisalsoanallegationthatthefarmerbeneficiaries,thequalifiedfamilybeneficiarieswerenot
giventhe240squaremeterseach.So,canyoualso[prove]thatthequalifiedfamilybeneficiarieswerealreadyprovidedthe240
squaremeterhomelots.
Atty.Asuncion:Wewill,yourHonorplease.
Otherthanthefinancialreport,however,noothersubstantialproofshowingthatallthequalifiedbeneficiarieshavereceivedhomelots
wassubmittedbyHLI.Hence,thisCourtisconstrainedtorulethatHLIhasnotyetfullycompliedwithitsundertakingtodistributehomelots
totheFWBsundertheSDP.
OnManDaysandtheMechanicsofStockDistribution
Inourreviewandanalysisofpar.3oftheSDOAonthemechanicsandtimelinesofstockdistribution,Wefindthatitviolatestwo(2)
provisionsofDAO10.Par.3oftheSDOAstates:
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3.Attheendofeachfiscalyear,foraperiodof30years,theSECONDPARTY[HLI]shallarrangewiththeFIRST
PARTY[TDC]theacquisitionanddistributiontotheTHIRDPARTY[FWBs]onthebasisofnumberofdaysworkedandatno
cost to them of onethirtieth (1/30) of 118,391,976.85 shares of the capital stock of the SECOND PARTY that are presently
ownedandheldbytheFIRSTPARTY,untilsuchtimeastheentireblockof118,391,976.85sharesshallhavebeencompletely
acquiredanddistributedtotheTHIRDPARTY.
Basedontheabovequotedprovision,thedistributionofthesharesofstocktotheFWBs,albeitnotentailingacashoutfromthem,is
contingentonthenumberofmandays,thatis,thenumberofdaysthattheFWBshaveworkedduringtheyear.Thisformuladeviatesfrom
Sec.1ofDAO10,whichdecreesthedistributionofequalnumberofsharestotheFWBsastheminimumratioofsharesofstockforpurposes
ofcompliancewithSec.31ofRA6657.AsstatedinSec.4ofDAO10:
Section 4. Stock Distribution Plan.The [SDP] submitted by the corporate landownerapplicant shall provide for the
distribution of an equal number of shares of the same class and value, with the same rights and features as all other
shares, to each of the qualified beneficiaries. This distribution plan in all cases, shall be at least the minimum ratio for
purposesofcompliancewithSection31ofR.A.No.6657.
On top of the minimum ratio provided under Section 3 of this Implementing Guideline, the corporate landowner
applicant may adopt additional stock distribution schemes taking into account factors such as rank, seniority, salary,
positionandothercircumstanceswhichmaybedeemeddesirableasamatterofsoundcompanypolicy.
Theaboveprovisogivestwo(2)setsorcategoriesofsharesofstockwhichaqualifiedbeneficiarycanacquirefromthecorporation
undertheSDP.Thefirstpertains,asearlierexplained,tothemandatoryminimumratioofsharesofstocktobedistributedtotheFWBsin
compliancewithSec.31ofRA6657.Thisminimumratiocontemplatesofthat proportionofthecapitalstockofthecorporationthatthe
agriculturalland,actuallydevotedtoagriculturalactivities,bearsinrelationtothecompanystotalassets.Itisthissetofsharesofstock
which,inlinewithSec.4ofDAO10,issupposedtobeallocatedforthedistributionofanequalnumberofsharesofstockofthesameclass
andvalue,withthesamerightsandfeaturesasallothershares,toeachofthequalifiedbeneficiaries.
Ontheotherhand,thesecondsetorcategoryofsharespartakesofagratuitousextragrant,meaningthatthissetorcategoryconstitutes
an augmentation share/s that the corporate landowner may give under an additional stock distribution scheme, taking into account such
variablesasrank,seniority,salary,positionandlikefactorswhichthemanagement,intheexerciseofitssounddiscretion,maydeemdesirable.
Beforeanythingelse,itshouldbestressedthat,atthetimePARCapprovedHLIsSDP,HLIrecognized6,296individualsasqualified
FWBs.Andunderthe30yearstockdistributionprogramenvisagedundertheplan,FWBswhocameinafter1989,newFWBsinfine,maybe
accommodated,astheyappeartohaveinfactbeenaccommodatedasevidencedbytheirreceiptofHLIshares.
Nowthen,byprovidingthatthenumberofsharesoftheoriginal1989FWBsshalldependonthenumberofmandays,HLIviolatedthe
aforequotedruleonstockdistributionandeffectivelydeprivedtheFWBsofequalsharesofstockinthecorporation,for,inneteffect,these
6,296qualifiedFWBs,whotheoreticallyhadgivenuptheirrightstothelandthatcouldhavebeendistributedtothem,sufferedadilutionof
theirdueshareentitlement.Ashasbeenobservedduringtheoralarguments,HLIhaschosentousethesharesearmarkedforfarmworkersas
rewardsystemchipstowaterdownthesharesoftheoriginal6,296FWBs.Particularly:
JusticeAbad:IftheSDOAdidnottakeplace,theotherthingthatwouldhavehappenedisthattherewouldbeCARP?
Atty.DelaMerced:Yes,YourHonor.
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JusticeAbad:ThatstheonlypointIwanttoknowxxx.Now,buttheychosetoenterSDOAinsteadofplacingtheland
underCARP.Andforthatreasonthosewhowouldhavegottentheirsharesofthelandactuallygaveuptheirrightstothisland
inplaceofthesharesofthestock,isthatcorrect?
Atty.DelaMerced:Itwouldbethatway,YourHonor.
Justice Abad: Right now, also the government, in a way, gave up its right to own the land because that way the
governmenttakesown[sic]thelandanddistributeittothefarmersandpayfortheland,isthatcorrect?
Justice Abad: And then you gave thirtythree percent (33%) of the shares of HLI to the farmers at that time that
numberedxxxthosewhosignedfivethousandfourhundredninetyeight(5,498)beneficiaries,isthatcorrect?
JusticeAbad:Butlateron,afterassigningthemtheirshares,someworkerscameinfrom1989,1990,1991,1992andthe
restoftheyearsthatyougaveadditionalshareswhowerenotintheoriginallistofowners?
Justice Abad: Did those new workers give up any right that would have belong to them in 1989 when the land was
supposedtohavebeenplacedunderCARP?
Atty.DelaMerced:Ifyouaretalkingorreferring(interrupted)
JusticeAbad:None!Youtellme.None.Theygaveupnorightstoland?
Atty.DelaMerced:Theydidnotdothesamethingaswedidin1989,YourHonor.
JusticeAbad:No,iftheywerenotworkersin1989whatlanddidtheygiveup?None,iftheybecomeworkerslateron.
Atty.DelaMerced:None,YourHonor,Iwasreferring,YourHonor,totheoriginal(interrupted)
JusticeAbad:Sowhyisitthattherightsofthosewhogaveuptheirlandswouldbediluted,becausethecompanyhas
chosentousethesharesasrewardsystemfornewworkerswhocomein?Itisnotthatthenewworkers,ineffect,becomejust
workersofthecorporationwhosestockholderswerealreadyfixed.TheTADECOwhohassharesthereaboutsixtysixpercent
(66%)andthefivethousandfourhundredninetyeight(5,498)farmersatthetimeoftheSDOA?Explaintome.Why,whywill
youxxxwhatrightorwheredidyougetthatrighttousethisshares,towaterdownthesharesofthosewhoshouldhavebeen
benefited,andtouseitasarewardsystemdecidedbythecompany?
Fromtheabovediscourse,itisclearasdaythattheoriginal6,296FWBs,whowerequalifiedbeneficiariesatthetimeoftheapproval
oftheSDP,sufferedfromwateringdownofshares.Asdeterminedearlier,eachoriginalFWBisentitledto18,804.32HLIshares.Theoriginal
FWBsgotlessthantheguaranteed18,804.32HLIsharesperbeneficiary,becausetheacquisitionanddistributionoftheHLIshareswerebased
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onmandaysornumberofdaysworkedbytheFWBinayearstime.AsexplainedbyHLI,abeneficiaryneedstoworkforatleast37daysina
fiscalyearbeforeheorshebecomesentitledtoHLIshares.Ifitfallsbelow37days,theFWB,unfortunately,doesnotgetanyshareatyear
end.ThenumberofHLIsharesdistributedvariesdependingonthenumberofdaystheFWBswereallowedtoworkinoneyear.Worse,HLI
hiredfarmworkersinadditiontotheoriginal6,296FWBs,suchthat,asindicatedintheCompliancedatedAugust2,2010submittedbyHLIto
theCourt,thetotalnumberoffarmworkersofHLIasofsaiddatestoodat10,502.Allthesefarmworkers,whichincludetheoriginal6,296
FWBs,weregivensharesoutofthe118,931,976.85HLIsharesrepresentingthe33.296%ofthetotaloutstandingcapitalstockofHLI.Clearly,
theminimumindividualallocationofeachoriginalFWBof18,804.32shareswasdilutedasaresultoftheuseofmandaysandthehiringof
additionalfarmworkers.
Goingintoanotherbutrelatedmatter,par.3oftheSDOAexpresslyprovidingfora30yeartimeframeforHLItoFWBsstocktransfer
is an arrangement contrary to what Sec. 11 of DAO 10 prescribes. Said Sec. 11 provides for the implementation of the approved stock
distributionplanwithinthree(3)monthsfromreceiptbythecorporatelandowneroftheapprovaloftheplanbyPARC.Infact,basedonthe
saidprovision,thetransferofthesharesofstockinthenamesofthequalifiedFWBsshouldberecordedinthestockandtransferbooksand
mustbesubmittedtotheSECwithinsixty(60)daysfromimplementation.Asstated:
Section 11. Implementation/Monitoring of Plan.The approved stock distribution plan shall be implemented within
three (3) months from receipt by the corporate landownerapplicant of the approval thereof by the PARC, and the
transfer of the shares of stocks in the names of the qualified beneficiaries shall be recorded in stock and transfer books and
submittedtotheSecuritiesandExchangeCommission(SEC)withinsixty(60)daysfromthesaidimplementationofthe
stockdistributionplan.
Itisevidentfromtheforegoingprovisionthattheimplementation,thatis,thedistributionofthesharesofstocktotheFWBs,mustbe
madewithinthree(3)monthsfromreceiptbyHLIoftheapprovalofthestockdistributionplanbyPARC.Whileneitheroftheclashingparties
has made a compelling case of the thrust of this provision, the Court is of the view and so holds that the intent is to compel the corporate
landownertocomplete,notmerelyinitiate,thetransferprocessofshareswithinthatthreemonthtimeframe.Reinforcingthisconclusionisthe
60daystocktransferrecording(withtheSEC)requirementreckonedfromtheimplementationoftheSDP.
TotheCourt,thereisapurpose,whichisatoncediscernibleasitispractical,forthethreemonththreshold.Removethistimelineand
thecorporatelandownercanveritablyevadecompliancewithagrarianreformbysimplydeferringtoabsurdlimitstheimplementationofthe
stockdistributionscheme.
Theargumentisurgedthatthethirty(30)yeardistributionprogramisjustifiedbythefactthat,underSec.26ofRA6657,paymentby
beneficiaries of land distribution under CARP shall be made in thirty (30) annual amortizations. To HLI, said section provides a justifying
dimensiontoits30yearstockdistributionprogram.
HLIs reliance on Sec. 26 of RA 6657, quoted in part below, is obviously misplaced as the said provision clearly deals with land
distribution.
SEC.26.PaymentbyBeneficiaries.LandsawardedpursuanttothisActshallbepaidforbythebeneficiariestotheLBP
inthirty(30)annualamortizationsxxx.
Then,too,theonesobligedtopaytheLBPunderthesaidprovisionarethebeneficiaries.Ontheotherhand,intheinstantcase,aside
fromthefactthatwhatisinvolvedisstockdistribution,itisthecorporatelandownerwhohastheobligationtodistributethesharesofstock
amongtheFWBs.
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Evidently,thelandtransferbeneficiariesaregiventhirty(30)yearswithinwhichtopaythecostofthelandthusawardedthemtomake
it less cumbersome for them to pay the government. To be sure, the reason underpinning the 30year accommodation does not apply to
corporatelandownersindistributingsharesofstocktothequalifiedbeneficiaries,asthesharesmaybeissuedinamuchshorterperiodoftime.
Taking into account the above discussion, the revocation of the SDP by PARC should be upheld for violating 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.
Beingaproductofsuchrulemakingpower,DAO10hastheforceandeffectoflawandmustbedulycompliedwith.ThePARCis,therefore,
correctinrevokingtheSDP.Consequently,thePARCResolutionNo.89122datedNovember21,l989approvingtheHLIsSDPisnullified
andvoided.(Citationsomittedemphasisintheoriginal.)
Basedontheforegoingruling,thecontentionsofMallari,etal.areeithernotsupportedbytheevidenceonrecordorareutterly
misplaced. There is, therefore, no basis for the Court to reverse its ruling affirming PARC Resolution No. 20053201 and PARC
ResolutionNo.20063401,revokingthepreviousapprovaloftheSDPbyPARC.
VII.ControloverAgriculturalLands
Afterhavingdiscussedandconsideredthedifferentcontentionsraisedbythepartiesintheirrespectivemotions,Wearenowleft
tocontendwithonecrucialissueinthecaseatbar,thatis,controlovertheagriculturallandsbythequalifiedFWBs.
Uponareviewofthefactsandcircumstances,WerealizethattheFWBswillneverhavecontrolovertheseagriculturallandsfor
aslongastheyremainasstockholdersofHLI.InOurJuly5,2011Decision,thisCourtmadethefollowingobservations:
Thereis,thus,nothingunconstitutionalintheformulaprescribedbyRA6657.Thepolicyonagrarianreformisthatcontrolover
theagriculturallandmustalwaysbeinthehandsofthefarmers.ThenitfallsontheshouldersofDARandPARCtoseetoitthefarmers
shouldalwaysownmajorityofthecommonsharesentitledtoelectthemembersoftheboardofdirectorstoensurethatthefarmerswillhavea
clear majority in the board.Before the SDP is approved, strict scrutiny of the proposed SDP must always be undertaken by the DAR and
PARC, such that the value of the agricultural land contributed to the corporation must always be more than 50% of the total assets of the
corporation to ensure that the majority of the members of the board of directors are composed of the farmers.The PARC composed of the
PresidentofthePhilippinesandcabinetsecretariesmustseetoitthatcontrolovertheboardofdirectorsrestswiththefarmersbyrejectingthe
inclusionofnonagriculturalassetswhichwillyieldthemajorityintheboardofdirectorstononfarmers.Anydeviation,however,byPARCor
DAR from the correct application of the formula prescribed by the second paragraph of Sec. 31 of RA 6675 does not make said provision
constitutionallyinfirm.Rather,itistheapplicationofsaidprovisionthatcanbechallenged.Ergo,Sec.31ofRA6657doesnottrenchonthe
constitutionalpolicyofensuringcontrolbythefarmers.(Emphasissupplied.)
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InlinewithOurfindingthatcontroloveragriculturallandsmustalwaysbeinthehandsofthefarmers,Wereconsiderourruling
thatthequalifiedFWBsshouldbegivenanoptiontoremainasstockholdersofHLI,inasmuchasthesequalifiedFWBswillnevergain
controlgiventhepresentproportionofshareholdingsinHLI.
A revisit of HLIs Proposal for Stock Distribution under CARP and the Stock Distribution Option Agreement (SDOA) upon
whichtheproposalwasbasedrevealsthatthetotalassetsofHLIisPhP590,554,220,whilethevalueofthe4,915.7466hectaresisPhP
196,630,000. Consequently, the share of the farmerbeneficiaries in the HLI capital stock is 33.296% (196,630,000 divided by
590,554.220) 118,391,976.85 HLI shares represent 33.296%. Thus, even if all the holders of the 118,391,976.85 HLI shares
unanimously vote to remain as HLI stockholders, which is unlikely, control will never be placed in the hands of the farmer
beneficiaries. Control, of course, means the majority of 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
(590,554,220dividedby2plusone[1]HLIshare).The118,391,976.85sharessubjecttotheSDPapprovedbyPARCsubstantiallyfall
shortofthe295,112,101sharesneededbytheFWBstoacquirecontroloverHLI.Hence,controlcanNEVERbeattainedbytheFWBs.
Thereisevennoassurancethat100%ofthe118,391,976.85sharesissuedtotheFWBswillallbevotedinfavorofstayinginHLI,
takingintoaccountthepreviousreferendumamongthefarmerswheresaidshareswerenotvotedunanimouslyinfavorofretainingthe
SDP.Inlightoftheforegoingconsideration,theoptiontoremaininHLIgrantedtotheindividualFWBswillhavetoberecalledand
revoked.
Moreover,bearinginmindthatwiththerevocationoftheapprovaloftheSDP,HLIwillnolongerbeoperatingunderSDPand
will only be treated as an ordinary private corporation the FWBs who remain as stockholders of HLI will be treated as ordinary
stockholdersandwillnolongerbeundertheprotectivemantleofRA6657.
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[80]
Inadditiontotheforegoing,inviewoftheoperativefactdoctrine,allthebenefitsandhomelots
receivedbyalltheFWBs
shallberespectedwithnoobligationtorefundorreturnthem,since,asWehavementionedinourJuly5,2011Decision,thebenefitsx
x x were received by the FWBs as farmhands in the agricultural enterprise of HLI and other fringe benefits were granted to them
pursuanttotheexistingcollectivebargainingagreementwithTadeco.
Onelastpoint,theHLIlandshallbedistributedonlytothe6,296originalFWBs.Theremaining4,206FWBsarenotentitledto
anyportionoftheHLIland,becausetherightstosaidlandwerevestedonlyinthe6,296originalFWBspursuanttoSec.22ofRA
6657.
In this regard, DAR shall verify the identities of the 6,296 original FWBs, consistent with its administrative prerogative to
[81]
identifyandselecttheagrarianreformbeneficiariesunderRA6657.
WHEREFORE,theMotionforPartialReconsiderationdatedJuly20,2011filedbypublicrespondentsPresidentialAgrarian
ReformCouncilandDepartmentofAgrarianReform,theMotionforReconsiderationdatedJuly19,2011filedbyprivaterespondent
AlyansangmgaManggagawangBukidsaHaciendaLuisita,theMotionforReconsiderationdatedJuly21,2011filedbyrespondent
intervenor Farmworkers Agrarian Reform Movement, Inc., and theMotion for Reconsideration dated July 22, 2011 filed by private
respondents Rene Galang and AMBALA are PARTIALLY GRANTED with respect to the option granted to the original
farmworkerbeneficiaries of Hacienda Luisita to remain with Hacienda Luisita, Inc., which is hereby RECALLED and SET
ASIDE. The Motion for Clarification and Partial Reconsideration dated July 21, 2011 filed by petitioner HLI and the Motion for
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ReconsiderationdatedJuly21,2011filedbyprivaterespondentsNoelMallari,JulioSuniga,SupervisoryGroupofHaciendaLuisita,
Inc.andWindsorAndayaareDENIED.
ThefallooftheCourtsJuly5,2011Decisionisherebyamendedandshallread:
PARC Resolution No. 20053201 dated December 22, 2005 and Resolution No. 20063401 dated May 3, 2006, placing the
landssubjectofHLIsSDPundercompulsorycoverageonmandatedlandacquisitionschemeoftheCARP,areherebyAFFIRMED
withthefollowingmodifications:
Allsalaries,benefits,the3%ofthegrosssalesoftheproductionoftheagriculturallands,the3%shareintheproceedsofthesaleof
the500hectareconvertedlandandthe80.51hectareSCTEXlotandthehomelotsalreadyreceivedbythe10,502FWBscomposedof
6,296 original FWBs and the 4,206 nonqualified FWBs shall be respected with no obligation to refund or return them. The 6,296
originalFWBsshallforfeitandrelinquishtheirrightsovertheHLIsharesofstockissuedtotheminfavorofHLI.TheHLICorporate
SecretaryshallcancelthesharesissuedtothesaidFWBsandtransferthemtoHLIinthestocksandtransferbook,whichtransfersshall
beexemptfromtaxes,feesandcharges.The4,206nonqualifiedFWBsshallremainasstockholdersofHLI.
DAR shall segregate from the HLI agricultural land with an area of 4,915.75 hectares subject of PARCs SDPapproving
Resolution No. 89122 the 500hectare lot subject of the August 14, l996 Conversion Order and the 80.51hectare lot sold to, or
acquiredby,thegovernmentaspartoftheSCTEXcomplex.Afterthesegregationprocess,asindicated,isdone,theremainingarea
shallbeturnedovertoDARforimmediatelanddistributiontotheoriginal6,296FWBsortheirsuccessorsininterestwhichwillbe
identifiedbytheDAR.The4,206nonqualifiedFWBsarenotentitledtoanyshareinthelandtobedistributedbyDAR.
HLIisdirectedtopaytheoriginal6,296FWBstheconsiderationofPhP500,000,000receivedbyitfromLuisitaRealty,Inc.for
thesaletothelatterof200hectaresoutofthe500hectarescoveredbytheAugust14,1996ConversionOrder,theconsiderationofPhP
750,000,000 received by its owned subsidiary, Centennary Holdings, Inc., for the sale of the remaining 300 hectares of the
aforementioned500hectarelottoLuisitaIndustrialParkCorporation,andthepriceofPhP80,511,500paidbythegovernmentthrough
the Bases Conversion Development Authority for the sale of the 80.51hectare lot used for the construction of the SCTEX road
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G.R.No.171101
network.FromthetotalamountofPhP1,330,511,500(PhP500,000,000+PhP750,000,000+PhP80,511,500=PhP1,330,511,500)
shallbedeductedthe3%oftheproceedsofsaidtransfersthatwerepaidtotheFWBs,thetaxesandexpensesrelatingtothetransferof
titlestothetransferees,andtheexpendituresincurredbyHLIandCentennaryHoldings,Inc.forlegitimatecorporatepurposes.Forthis
purpose,DARisorderedtoengagetheservicesofareputableaccountingfirmapprovedbythepartiestoauditthebooksofHLIand
CentennaryHoldings,Inc.todetermineifthePhP1,330,511,500proceedsofthesaleofthethree(3)aforementionedlotswereactually
usedorspentforlegitimatecorporatepurposes.Anyunspentorunusedbalanceandanydisallowedexpendituresasdeterminedbythe
auditshallbedistributedtothe6,296originalFWBs.
HLIisentitledtojustcompensationfortheagriculturallandthatwillbetransferredtoDARtobereckonedfromNovember21,1989
whichisthedateofissuanceofPARCResolutionNo.89122.DARandLBPareorderedtodeterminethecompensationduetoHLI.
DARshallsubmitacompliancereportaftersix(6)monthsfromfinalityofthisjudgment.Itshallalsosubmit,aftersubmissionofthe
compliancereport,quarterlyreportsontheexecutionofthisjudgmentwithinthefirst15daysaftertheendofeachquarter,untilfully
implemented.
Thetemporaryrestrainingorderislifted.
SOORDERED.
PRESBITEROJ.VELASCO,JR.
AssociateJustice
WECONCUR:
Pleaseseeconcurringanddissentingopinion:
RENATOC.CORONA
ChiefJustice
44/50
10/19/2016
G.R.No.171101
IconcurwithJusticeVelascoandmaintain
myvehementdisagreementwithJusticeSerenosopinion
whichwillputthelandbeyondthecapacityofthefarmers
topay,basedonherstrainedconstruction/interpretation
NoPart,priorinhibitionofthelawre:dateoftaking.
ANTONIOT.CARPIOTERESITAJ.LEONARDODECASTRO
AssociateJusticeAssociateJustice
IcertifytheMr.JusticeBrionsubmitteda
ConcurringandDissentingOpinion:
ARTUROD.BRIONDIOSDADOM.PERALTA
Withcouncurring&dissentingopinion
LUCASP.BERSAMINMARIANOC.DELCASTILLO
IjoinC.J.R.C.Coronasopinion
ROBERTOA.ABADMARTINS.VILLARAMA,JR.
Imaintainmypositionsinmyseparate
opinionexceptastothereckoningdate
justcompensation.ItshouldbefromNovember24,1989
JOSEPORTUGALPEREZJOSECATRALMENDOZA
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G.R.No.171101
SeeConcurringandDissentingOpinionSubjectofdissentingopinionofJusticeBersamin
MARIALOURDESP.A.SERENOBIENVENIDOL.REYES
Subj.toJ.Bersaminsdissentingopinion
ESTELAM.PERLASBERNABE
AssociateJustice
CERTIFICATION
PursuanttoSection13,ArticleVIIIoftheConstitution,itisherebycertifiedthattheconclusionsintheaboveResolutionhadbeen
reachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourt.
RENATOC.CORONA
ChiefJustice
[1]
JoseJulioZunigainsomepartsoftherecords.
[2]
TheMotionforReconsiderationdatedJuly22,2011wasfiledbyprivaterespondentsReneGalangandAMBALA,throughAtty.RomeoT.CapulongofthePublicInterest
LawCenter,asleadcounselforReneGalangandascollaboratingcounselofAtty.JobertPahilgaofSENTRAforAMBALA.
[3]
G.R.No.171101,July5,2011hereinafterreferredtoasJuly5,2011Decision.
[4]
PARC/DARMotionforReconsideration(MR),p.7.
46/50
10/19/2016
G.R.No.171101
[5]
PARC/DARMR,p.16.
[6]
AMBALAMR,p.51.
[7]
AMBALAMR,pp.5560.
[8]
ReneGalangandAMBALAMR,pp.1113.
[9]
FARMMR,p.47.
[10]
Under PARC Resolution No. 89122 dated November 21, 1989, then Secretary Miriam DefensorSantiago approved the SDP of HLI/Tarlac Development Corporation
(Tadeco).
[11]
G.R.No.L23127,April29,1971,38SCRA429.
[12]
G.R.No.L28113,March28,1969,27SCRA533.
[13]
G.R.No.138965,June30,2006,494SCRA53.
[14]
G.R.No.8548182,October18,1990,190SCRA686.
[15]
G.R.Nos.L54558andL69882,May22,1987,150SCRA144.
[16]
Id.at159.
[17]
LeagueofCitiesofthePhils.v.COMELEC,G.R.Nos.176951,177499and178056,August24,2010,628SCRA819,833.
[18]
LCKIndustries,Inc.v.PlantersDevelopmentBank,G.R.No.170606,November23,2007,538SCRA634,652citedinLandBankofthePhilippinesv.Ong,G.R.No.
190755,November24,2010,636SCRA266,280.
[19]
Brito,Sr.v.Dianala,G.R.No.171717,December15,2010.
[20]
Saludagav.Sandiganbayan,G.R.No.184537,April23,2010,619SCRA364,374citingAGPALO,STATUTORYCONSTRUCTION,2003p.204andTheHeirsof
GeorgePoev.MalayanInsuranceCompany,Inc.,G.R.No.156302,April7,2009.
[21]
G.R.No.142618,July12,2007,527SCRA405,422.
[22]
CitingPimentelv.COMELEC,G.R.No.126394,April24,1998,289SCRA586,597.
[23]
CitingCentenov.VillalonPornillos,G.R.No.113092,September1,1994,236SCRA197,206.
[24]
CitingCastilloCov.Barbers,G.R.No.129952,June16,1998,290SCRA717,723.
[25]
FARMMR,pp.611,3036.
[26]
Id.at52.
[27]
Id.
[28]
Id.
[29]
Apostolv.CA,G.R.No.141854,October15,2008,569SCRA80,92citingAlmuetev,Andres,421Phil522,531(2001).
[30]
Id.citingTolentinov.People,G.R.No.170396,August31,2006,500SCRA721,724andSuyat,Jr.v.Torres,G.R.No.133530,October25,2004,441SCRA265,274275.
[31]
SeeC.F.SharpCrewManagement,Inc.v.Espanol,Jr.,G.R.No.155903,September14,2007,533SCRA424,438439.
[32]
WestatedinOurJuly5,2011DecisionthatifaqualifiedFWBwillchooselanddistribution,heorshewillget6,886.5squaremetersofagriculturallandinHaciendaLuisita.
47/50
10/19/2016
G.R.No.171101
[33]
DARMR,p.37.
[34]
Id.
[35]
SeeSorianov.Bravo,G.R.No.152086,December15,2010,638SCRA403,420.
[36]
AMBALAMR,p.67.
[37]
Id.
[38]
HLIConsolidatedReplyandOpposition,p.65.
[39]
Id.at80,PetitionofHLIid.at944,ConsolidatedReplyofHLIid.at13271328.
[40]
AMBALAMR,p.76.
[41]
GalangMR,p.21.
[42]
Id.at22.
[43]
AMBALAMR,p.72.
[44]
FARMMR,p.94.
[45]
Rollo,Vol.3,pp.32803323.
[46]
Id.at34283468.
[47]
Nicolasv.DelNaciaCorp.,G.R.No.158026,April23,2008,552SCRA545,556.
[48]
Bascos,Jr.v.Taganahan,G.R.No.180666,February18,2009,579SCRA653,674675.
[49]
Velardev.Lopez,Inc.,G.R.No.153886,January14,2004,419SCRA422,431432citingTanBoonBee&Co.,Inc.v.Jarencio,163SCRA205(1988)andYutivoSons
HardwareCo.v.CTA,1SCRA160(1961).
[50]
Id.
[51]
G.R.Nos.14159394,July12,2006,494SCRA583,602.
[52]
HLIMR,pp.34.
[53]
TSN,August24,2010,p.13.
[54]
Korugav.Arcenas,G.R.Nos.168332and169053,June19,2009,590SCRA49,68citingInRe:PetitionforAssistanceintheLiquidationoftheRuralBankofBokod
(Benguet),Inc.,PDICv.BureauofInternalRevenue,G.R.No.158261,December18,2006,511SCRA123,141.
[55]
DARMR,p.33.
[56]
AsstatedintheSDP:
UnderSection31ofRepublicActNo.6657,acorporationowningagriculturallandmaydistributeamongthequalifiedbeneficiariessuchproportionorpercentageofitscapital
stockthatthevalueoftheagriculturallandactuallydevotedtoagriculturalactivities,bearsinrelationtothecorporationstotalassets.Conformablywiththislegalprovision,Tarlac
DevelopmentCorporationherebysubmitsforapprovalastockdistributionplanthatenvisionsthefollowing:xxx(Rollo,p.1322)
[57]
Rollo,p.1322AnnexAA.
[58]
Id.at37473748.
48/50
10/19/2016
G.R.No.171101
[59]
Id.at151.
[60]
HLIMR,pp.1821.
[61]
Mallari,etal.MR,pp.34.
[62]
AMBALAMR,p.70.
[63]
Id.at71.
[64]
G.R.No.140796,June30,2006,494SCRA66,9293.
[65]
HeirsofLorenzoandCarmenVidadv.LandBankofthePhilippines,G.R.No.1664691,April30,2010.
[66]
JointCongressionalConferenceCommitteeontheComprehensiveAgrarianReformProgramBills,May26,1988,pp.4546.
[67]
SEC.6.RetentionLimits.ExceptasotherwiseprovidedinthisAct,nopersonmayownorretain,directly,anypublicorprivateagriculturalland,thesizeofwhichshallvary
accordingtofactorsgoverningaviablefamilysizedfarm,suchascommodityproduced,terrain,infrastructure,andsoilfertilityasdeterminedbythePresidentialAgrarianReformCouncil
(PARC)createdhereunder,butinnocaseshalltheretentionbythelandownerexceedfive(5)hectares.Three(3)hectaresmaybeawardedtoeachchildofthelandowner,subjecttothe
followingqualifications:(1)thatheisatleastfifteen(15)yearsofageand(2)thatheisactuallytillingthelandordirectlymanagingthefarm:Provided,Thatlandownerswhoselands
havebeencoveredbyPresidentialDecreeNo.27shallbeallowedtokeeptheareaoriginallyretainedbythemthereunderProvided,further,Thatoriginalhomesteadgranteesordirect
compulsoryheirswhostillowntheoriginalhomesteadatthetimeoftheapprovalofthisActshallretainthesameareasaslongastheycontinuetocultivatesaidhomestead.
Therighttochoosetheareatoberetained,whichshallbecompactorcontiguous,shallpertaintothelandowner:Provided,however,Thatincasetheareaselectedforretentionby
thelandowneristenanted,thetenantshallhavetheoptiontochoosewhethertoremainthereinorbeabeneficiaryinthesameoranotheragriculturallandwithsimilarorcomparable
features.Incasethetenantchoosestoremainintheretainedarea,heshallbeconsideredaleaseholderandshalllosehisrighttobeabeneficiaryunderthisAct.Incasethetenantchooses
tobeabeneficiaryinanotheragriculturalland,heloseshisrightasaleaseholdertothelandretainedbythelandowner.Thetenantmustexercisethisoptionwithinaperiodofone(1)year
fromthetimethelandownermanifestshischoiceoftheareaforretention.
Inallcases,thesecurityoftenureofthefarmersorfarmworkersonthelandpriortotheapprovalofthisActshallberespected.
UpontheeffectivityofthisAct,anysale,disposition,lease,managementcontractortransferofpossessionofprivatelandsexecutedbytheoriginallandownerinviolationofthis
Actshallbenullandvoid:Provided,however,ThatthoseexecutedpriortothisActshallbevalidonlywhenregisteredwiththeRegisterofDeedswithinaperiodofthree(3)monthsafter
theeffectivityofthisAct.Thereafter,allRegistersofDeedsshallinformtheDARwithinthirty(30)daysofanytransactioninvolvingagriculturallandsinexcessoffive(5)hectares.
[68]
CommissionerofInternalRevenuev.CentralLuzonDrugCorp.,G.R.No.148512,June26,2006,492SCRA575,581.
[69]
PhilippineAmusement&GamingCorp.v.PhilippineGamingJurisdiction,Inc.,etal.,G.R.No.177333,April24,2009,586SCRA658,664665.
[70]
FortBonifacioDevelopmentCorporationv.CommissionerofInternalRevenue,G.R.Nos.158885&170680,October2,2009,602SCRA159,169.
[71]
R.E.Agpalo,STATUTORYCONSTRUCTION125(5th edition,2003)citationsomitted.
[72]
G.R.No.190582,April8,2010.
[73]
AMBALAMR,pp.6566FARMMR,p.60.
[74]
FARMMR,p.60.
[75]
TSN,August24,2010,p.125.
[76]
Mallari,etal.MR,p.3.
[77]
Id.
[78]
Id.
[79]
Id.
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10/19/2016
G.R.No.171101
[80]
Rollo,p.3738.Thesehomelotsdonotformpartofthe4,915.75hectaresofagriculturallandinHaciendaLuisita.Thesearepartoftheresidentiallandwithatotalareaof
120.9234hectares,asindicatedintheSDP.
[81]
SeeConchav.Rubio,G.R.No.162446,March29,2010,617SCRA22,31.
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