HACIENDA LUISITA, INC.

V.
PRESIDENTIAL AGRARIAN
REFORM COUNCIL, et. al.
A report by:

BOTIO, Marc Jeryl S.

SERRANO, Bethsheeba M.
 THE PROVERBIAL
HACIENDA LUISITA CASE:

AN OVERVIEW
 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
FACTS OF THE CASE the PARC revoking HLI’s Stock
Distribution Plan (SDP) and placing
the subject lands in Hacienda Luisita
under compulsory coverage of the
Comprehensive Agrarian Reform
Program (CARP) of the government.
 The Court however did not order outright land
distribution. Voting 6-5, the Court noted that there are
operative facts that occurred in the interim and which
the Court cannot validly ignore. Thus, the Court
declared that the revocation of the SDP must, by
application of the operative fact principle, give way to
the right of the original 6,296 qualified
farmworkers-beneficiaries (FWBs) to choose whether

FACTS OF THE CASE

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.”
 1. W/N Sec. 31 of R.A. 6657 is unconstitutional

RELEVANT ISSUES
2. W/N the Court can order that DAR’s compulsory
acquisition of Hacienda Lusita cover the full 6,443
hectares allegedly covered by RA 6657 and
previously held by Tarlac Development Corporation
(Tadeco), and not just the 4,915.75 hectares
covered by HLI’s SD
 3. W/N the 10-year period prohibition on the transfer of
awarded lands under RA 6657 has lapsed on May 10, 1999
(since Hacienda Luisita were placed under CARP coverage
through the SDOA scheme on May 11, 1989), and thus the

RELEVANT ISSUES
qualified FWBs should now be allowed to sell their land
interests in Hacienda Luisita to third parties

4. W/N the ruling in the July 5, 2011 Decision that the

qualified FWBs be given an option to remain as
stockholders of HLI be reconsidered
 NO, Sec. 31 of RA 6657 NOT unconstitutional.
_________________________________________

The Court maintained that the Court is NOT

compelled to rule on the constitutionality of Sec.
31 of RA 6657, reiterating that it was not raised at
the earliest opportunity and that the resolution
thereof is not the lis mota of the case. Moreover,
COURT RULING the issue has been rendered moot and academic
since SDO is no longer one of the modes of
acquisition under RA 9700. The majority clarified
that in its July 5, 2011 decision, it made no ruling in
favor of the constitutionality of Sec. 31 of RA 6657,
but found nonetheless that there was no apparent
grave violation of the Constitution that may justify
the resolution of the issue of constitutionality.
 NO, the Court CANNOT order that DAR’s compulsory
acquisition of Hacienda Lusita cover the full 6,443
hectares and not just the 4,915.75 hectares covered
by HLI’s SDP.
____________________________________________

Since what is put in issue before the Court is the

propriety of the revocation of the SDP, which only
COURT RULING involves 4,915.75 has. of agricultural land and not
6,443 has., then the Court is constrained to rule only
as regards the 4,915.75 has. of agricultural land.
Nonetheless, this should not prevent the DAR, under
its mandate under the agrarian reform law, from
subsequently subjecting to agrarian reform other
agricultural lands originally held by Tadeco that were
allegedly not transferred to HLI but were supposedly
covered by RA 6657.
 NO, the 10-year period prohibition on the transfer of
awarded lands under RA 6657 has NOT lapsed on May 10,
1999; thus, the qualified FWBs should NOT yet be allowed
to sell their land interests in Hacienda Luisita to third
parties.
_________________________________________________

Under RA 6657 and DAO 1, the awarded lands may only be

transferred or conveyed after 10 years from the issuance
COURT RULING and registration of the emancipation patent (EP) or
certificate of land ownership award (CLOA). Considering that
the EPs or CLOAs have not yet been issued to the qualified
FWBs in the instant case, the 10-year prohibitive period has
not even started. Significantly, the reckoning point is the
issuance of the EP or CLOA, and not the placing of the
agricultural lands under CARP coverage. Moreover, should
the FWBs be immediately allowed the option to sell or
convey their interest in the subject lands, then all efforts at
agrarian reform would be rendered nugatory, since, at the
end of the day, these lands will just be transferred to
persons not entitled to land distribution under CARP.
 NO, the 10-year period prohibition on the transfer of
awarded lands under RA 6657 has NOT lapsed on May 10,
1999; thus, the qualified FWBs should NOT yet be allowed
to sell their land interests in Hacienda Luisita to third
parties.
_________________________________________________

The Court reconsidered its earlier decision that the

COURT RULING
qualified FWBs should be given an option to remain as
stockholders of HLI, inasmuch as these qualified FWBs
will never gain control [over the subject lands] given
the present proportion of shareholdings in HLI.

The Court noted that the share of the FWBs in the HLI
capital stock is [just] 33.296%. Thus, even if all the
holders of this 33.296% unanimously vote to remain
as HLI stockholders, which is unlikely, control will
never be in the hands of the FWBs.
THANK YOU!