Hacienda Luisita vs PARC

Case Digest GR 171101 July 5 2011 Nov 22 2011
In 1988, RA 6657 or the CARP law was passed. It is a program aimed at
redistributing public and private agricultural lands to farmers and farmworkers who are
landless. One of the lands covered by this law is the Hacienda Luisita, a 6,443-hectare
mixed agricultural-industrial-residential expanse straddling several municipalities of
Tarlac. Hacienda Luisita was bought in 1958 from the Spanish owners by the Tarlac
Development Corporation (TADECO), which is owned and/or controlled by Jose
Cojuanco Sr., Group. Back in 1980, the Martial Law administration filed an expropriation
suit against TADECO to surrender the Hacienda to the then Ministry of Agrarian Reform
(now DAR) so that the land can be distributed to the farmers at cost. The RTC rendered
judgment ordering TADECO to surrender Hacienda Luisita to the MAR.
In 1988, the OSG moved to dismiss the government’s case against TADECO.
The CA dismissed it, but the dismissal was subject to the condition that TADECO shall
obtain the approval of FWB (farm worker beneficiaries) to the SDP (Stock Distribution
Plan) and to ensure its implementation.
Sec 31 of the CARP Law allows either land transfer or stock transfer as two alternative
modes in distributing land ownership to the FWBs. Since the stock distribution scheme
is the preferred option of TADECO, it organized a spin-off corporation, the Hacienda
Luisita Inc. (HLI), as vehicle to facilitate stock acquisition by the farmers.
After conducting a follow-up referendum and revision of terms of the Stock
Distribution Option Agreement (SDOA) proposed by TADECO, the Presidential Agrarian
Reform Council (PARC), led by then DAR Secretary Miriam Santiago, approved the
SDP of TADECO/HLI through Resolution 89-12-2 dated Nov 21, 1989.
From 1989 to 2005, the HLI claimed to have extended those benefits to the
farmworkers. Such claim was subsequently contested by two groups representing the
interests of the farmers – the HLI Supervisory Group and the AMBALA. In 2003, each of
them wrote letter petitions before the DAR asking for the renegotiation of terms and/or
revocation of the SDOA. They claimed that they haven’t actually received those benefits
in full, that HLI violated the terms, and that their lives haven’t really improved contrary to
the promise and rationale of the SDOA.
The DAR created a Special Task Force to attend to the issues and to review the
terms of the SDOA and the Resolution 89-12-2. Adopting the report and the
recommendations of the Task Force, the DAR Sec recommended to the PARC (1)
the revocation of Resolution 89-12-2 and (2) the acquisition of Hacienda Luisita
through compulsory acquisition scheme. Consequently, the PARC revoked the SDP
of TADECO/HLI and subjected those lands covered by the SDP to the mandated land
acquisition scheme under the CARP law. These acts of the PARC was assailed by HLI
via Rule 65.
On the other hand, FARM, an intervenor, asks for the invalidation of Sec. 31 of
RA 6657, insofar as it affords the corporation, as a mode of CARP compliance, to resort
to stock transfer in lieu of outright agricultural land transfer. For FARM, this modality of
distribution is an anomaly to be annulled for being inconsistent with the basic concept of
agrarian reform ingrained in Sec. 4, Art. XIII of the Constitution.

. a basic postulate that what is implied in a statute is as much a part of it as that which is expressed. 31 of RA 6657. the lis mota of the petitions filed by the HLI is whether or not the PARC acted with grave abuse of discretion in revoking the SDP of HLI. but such power or authority is deemed possessed by PARC under the principle of necessary implication. Sec 31 at the earliest possible opportunity. First. It may be that RA 6657 or other executive issuances on agrarian reform do not explicitly vest the PARC with the power to revoke/recall an approved SDP. the authority to approve the plan for stock distribution of the corporate landowner belongs to PARC. Second. Under Sec. Following this doctrine. their very lis mota is the non-compliance of the HLI with the SDP so that the the SDP may be revoked. the essential requirements in passing upon the constitutionality of acts of the executive or legislative departments have not been met in this case. the conferment of express power to approve a plan for stock distribution of the agricultural land of corporate owners necessarily includes the power to revoke or recall the approval of the plan. It should have been raised as early as Nov 21. 1989. as implemented by DAO 10. W/N the Court may exercise its power of judicial review over the constitutionality of Sec 31 of RA 6657 No. the constitutionality of RA 6657 is not the very lis mota of this case. Hence. when PARC approved the SDP of HLI or at least within a reasonable time thereafter. Such issues can be resolved without delving into the constitutionality of RA 6657.W/N PARC has the authority to revoke the Stock Distribution Plan or SDP W/N the Court may exercise its power of judicial review over the constitutionality of Sec 31 of RA 6657 W/N Sec 31 of RA 6657 is consistent with the Constitution’s concept of agrarian reform Ruling: W/N PARC has the authority to revoke the Stock Distribution Plan or SDP Yes. the intervenor FARM failed to challenged the constitutionality of RA 6657. Before the SC. With regards to the original positions of the groups representing the interests of the farmers.

Article XIII of the Constitution. If the intention were otherwise. or else the enactment suffers from the vice of unconstitutionality.W/N Sec 31 of RA 6657 is consistent with the Constitution’s concept of agrarian reform Yes. as instrument of social justice under Sec. No language can be found in the 1987 Constitution that disqualifies or prohibits corporations or cooperatives of farmers from being the legal entity through which collective ownership can be exercised. 31 of RA 6657 hews with the agrarian reform policy. This is in recognition of the fact that land reform may become successful even if it is done through the medium of juridical entities composed of farmers. the Constitution allows for indirect ownership of land and not just outright agricultural land transfer. the framers of the Constitution would have worded said section in a manner mandatory in character. The basic law allows two (2) modes of land distribution: direct and indirect ownership. The wording of the Art XIII. in a mass or body. 4 EXPRESSLY authorizes collective ownership by farmers. as couched. By using the word collectively. the Court emphasized that Sec. Direct transfer to individual farmers is the most commonly used method by DAR and widely accepted. 4 of Article XIII of the Constitution. does not constrict Congress to passing an agrarian reform law planted on direct land transfer to and ownership by farmers and no other. The word collective is defined as indicating a number of persons or things considered as constituting one group or aggregate. while collectively is defined as in a collective sense or manner. Albeit land ownership for the landless appears to be the dominant theme of that policy. 4. Indirect transfer through collective ownership of the agricultural land is the alternative to direct ownership of agricultural land by individual farmers. Sec. The stock distribution option devised under Sec. . Sec 4 of the Constitution is unequivocal: the farmers and regular farmworkers have a right to own directly or collectively the lands they till.