HACIENDA LUISITA, INCORPORATED v. PRESIDENTIAL AGRARIAN REFORM COUNCIL G.R. No.

171101, 05
July 2011, EN BANC (Velasco, Jr., J.)

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 Regional Trial Court (RTC) rendered judgment ordering TADECO to surrender
Hacienda Luisita to the MAR. In 1988, the Office of the Solicitor General (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 Stock Distribution Plan
(SDP) 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 are 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. 143 ISSUE:
May the Court exercise its power of judicial review over the constitutionality of Sec. 31 of RA 6657?
RULING: NO. First, the intervenor FARM failed to challenged the constitutionality of RA 6657, Sec 31 at
the earliest possible opportunity. It should have been raised as early as Nov 21, 1989, when PARC
approved the SDP of HLI or at least within a reasonable time thereafter. Second, the constitutionality of
RA 6657 is not the very lis mota of this case. Before the SC, 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. With regards
to the original positions of the groups representing the interests of the farmers, their very lis mota is the
non-compliance of the HLI with the SDP so that the the SDP may be revoked. Such issues can be
resolved without delving into the constitutionality of RA 6657. Hence, the essential requirements in
passing upon the constitutionality of acts of the executive or legislative departments have not been met
in this case.