WESTERN MINDANAO STATE UNIVERSITY

College of Law
Subject: Constitutional law 1 (Topic: Section 21-Promotion of Comprehensive Rural and
Agrarian Policy)

HACIENDA LUISITA, INCORPORATED VS. PRESIDENTIAL AGRARIAN REFORM

COUNCIL
G.R. No. 171101 July 5, 2011

Justice Presbitero Velasco, Jr.

FACTS:
In 1955, the Land Reform Act (Republic Act No. [RA] 1400) was passed, motioning the
expropriation of all tenanted estates. On August 8, 1963, the Agricultural Land Reform Code
(RA 3844) was enacted, abolishing and converting all instances of share tenancy into leasehold
tenancy. RA 3844 created the Land Bank of the Philippines (LBP) to provide support in all
phases of agrarian reform.
Subsequently, Congress passed the Code of Agrarian Reform (RA 6389) declaring the entire
country a land reform area, and providing for the automatic conversion of tenancy to leasehold
tenancy in all areas. In September 1972, then President Marcos issued Presidential Decree No.
27 (PD 27) allowing tenant-farmers, can either purchase the land they tilled or shift from share to
fixed-rent leasehold tenancy. 
Proclamation No. 131, Series of 1987, instituted the comprehensive agrarian reform program
(CARP) to cover all agricultural lands. In July 1987, Executive Order No. 229 created the
Presidential Agrarian Reform Council (PARC) as the highest policy-making body for the
implementation of CARP. This is just a short backstory of the CARP. The facts of the case are as
follows.
Hacienda Luisita, a 6,443-hectare land in Tarlac was previously owned by TABACALERA, then
was purchased by TADECO in 1958 through the assistance of the Central Bank of the
Philippines, the GSIS and a dollar loan from a US bank. In 1980, the martial law administration
filed a suit to TADECO for them to surrender the HLI to the MAR (now DAR) so that the land
can be distributed to the farmers at cost. TADECO alleged that their land does not have tenants
and is a sugar land (only tenured rice and corn lands are covered by the CARP). Due to political
disputes, the government commenced the case against TADECO. The Manila RTC rendered
judgement ordering TADECO to surrender the land. TADECO appealed to the CA. The CA
dismissed the case filed by the Marcos Government, however, the land is still subject for
PARC’s approval of the stock distribution plan (SDP).
On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement of
Hacienda Luisita signified in a referendum their acceptance of the proposed HLI’s Stock
Distribution Option Plan. On May 11, 1989, the Stock Distribution Option Agreement (SDOA),
styled as a Memorandum of Agreement (MOA),33 was entered into by Tadeco, HLI, and the
5,848 qualified FWBs34 and attested to by then DAR Secretary Philip Juico. The SDOA
embodied the basis and mechanics of the SDP, which would eventually be submitted to the
PARC for approval.

GEDUQUIO, MARY CLAIRE I. JD-IA, WMSU COL (AY 2022-2023)

ISSUES:
WHETHER OR NOT PUBLIC RESPONDENTS PARC AND SECRETARY
PANGANDAMAN HAVE JURISDICTION, POWER AND/OR AUTHORITY TO NULLIFY,
RECALL, REVOKE OR RESCIND THE SDOA.

HELD:
YES. HLI cannot maintain their stand that PARC has no authority to revoke a Stock Distribution
Plan.
RULLING:
Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the plan for
stock distribution of the corporate landowner belongs to PARC. However, contrary to petitioner
HLI’s posture, PARC also has the power to revoke the SDP which it previously approved. It may
be, as urged, 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. Such power or authority, however,
is deemed possessed by PARC under the principle of necessary implication, a basic postulate
that what is implied in a statute is as much a part of it as that which is expressed.

GEDUQUIO, MARY CLAIRE I. JD-IA, WMSU COL (AY 2022-2023)