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Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No.

November 22, 2011

On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition
filed by HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLIs Stock
Distribution Plan (SDP) and placing the subject lands in Hacienda Luisita under compulsory coverage of
the Comprehensive Agrarian Reform Program (CARP) of the government.
The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are
operative facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court
declared that the revocation of the SDP must, by application of the operative fact principle, give way to
the right of the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose whether they want
to remain as HLI stockholders or choose actual land distribution. It thus ordered the Department of
Agrarian Reform (DAR) to immediately schedule meetings with the said 6,296 FWBs and explain to
them the effects, consequences and legal or practical implications of their choice, after which the FWBs
will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing
their thumbmarks, as the case may be, over their printed names.
The parties thereafter filed their respective motions for reconsideration of the Court decision.

(1) Is the operative fact doctrine available in this case?
(2) Is Sec. 31 of RA 6657 unconstitutional?

The Court PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et al. with respect
to the option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda Luisita to remain
with petitioner HLI, which option the Court thereby RECALLED and SET ASIDE. It reconsidered its earlier
decision that the qualified FWBs should be given an option to remain as stockholders of HLI, and
UNANIMOUSLY directed immediate land distribution to the qualified FWBs.

1. YES, the operative fact doctrine is applicable in this case.
The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary
to the suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional laws but
also applies to decisions made by the President or the administrative agencies that have the force and
effect of laws. Prior to the nullification or recall of said decisions, they may have produced acts and
consequences that must be respected. It is on this score that the operative fact doctrine should be
applied to acts and consequences that resulted from the implementation of the PARC Resolution
approving the SDP of HLI. The majority stressed that the application of the operative fact doctrine by the
Court in its July 5, 2011 decision was in fact favourable to the FWBs because not only were they allowed
to retain the benefits and homelots they received under the stock distribution scheme, they were also
given the option to choose for themselves whether they want to remain as stockholders of HLI or not.

2. NO, Sec. 31 of RA 6657 NOT unconstitutional.
The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA
6657, reiterating that it was not raised at the earliest opportunity and that the resolution thereof is not
the lismota of the case. Moreover, the issue has been rendered moot and academic since SDO is no
longer one of the modes of acquisition under RA 9700. The majority clarified that in its July 5, 2011
decision, it made no ruling in favour of the constitutionality of Sec. 31 of RA 6657, but found
nonetheless that there was no apparent grave violation of the Constitution that may justify the
resolution of the issue of constitutionality.