Hacienda Luisita Inc. vs. Presidential Agrarian Reform Council
Cecille Carmela T. de los Reyes Philippine Christian University – University – College College of Law Professor – Professor – State State Solicitor Erika Buluran
Penned by: Justice Presbitero Velasco G.R. 171101 July 5, 2011
1963 1955 Land Reform Act (RA 1400) Set in motion the expropriation of all tenanted sales.
September 1972 (Martial Law Days)
Agricultural Land Reform Code (RA 3844)
PD 27 (Tenant Emancipation Decree)
Abolished share tenancy and converting all instances of share tenancy into a leasehold tenancy
Tenant-farmers, depending on the size of the landholding worked on, can either — purchase the land they tilled or shift from share to fixed-rent leasehold tenancy.
It also created the Land Bank of the Philippines (LBP) to provide support in all phases of agrarian reform. Created a system of owner-cultivatorship in rice and corn, supposedly to be accomplished by expropriating lands in excess of 75 hectares for the eventual resale to tenants.
In the same year, Congress passed the Agrarian Reform Code (RA 6389) x x x which declared the entire country a land reform area, and provided for automatic conversion of tenancy to leasehold tenancy in all areas.
Association of Small Landowners v. DAR Secretary —while touted as “revolutionary”, the scope of the agrarian reform program covered only tenanted, privately-owned rice and corn lands.
1987 (Pres. Corazon Aquino) 1987 Constitution Established the legal framework for the formulation of expansive approach to land reform, affecting all agricultural lands and covering both tenant-farmers and regular farmworkers. Proclamation 131 s. of 1987 (CARP) covers agricultural lands regardless of tenurial arrangement and commodity produced, as provided in the Constitution.
EO 229 (Mechanisms for CARP Implementation) which created the Presidential Agrarian Reform Council (PARC) as the highest policy-making body that formulates all policies, rules and regulations necessary for the implementation of CARP.
1988 RA 6657 (Comprehensive Agrarian Reform Law) CARL ushered in a new process of land classification, acquisition and distribution.
·
The Petition under Rule 65 by Hacienda Luisita seeks to:
6. One of the conditions contained in approving GSIS Resolution 3203 read:
· ·
Set aside PARC Resolution 2005-32-01 Resolution 2006-34-01 The Implementing Notice of Coverage dated January 2006
About Hacienda Luisita de Tarlac (Hacienda Luisita)
That the lots comprising Hacienda Luisita shall be subdivided by the applicantcorporation and sold at cost to the tenants and whenever conditions exist warranting such action.
1. Formerly owned by Compana de General de Tabacos de Filipina (Tabacalera)
2. In 1957, Spanish owners of Tabacalera offered to sell Hacienda Luisita as well as their controlling interest in the sugar mill within the hacienda, the Central Azucarera de Tarlac (CAT)
3. The Tarlac Development Corporation (TADECO) owned by Jose Cojuangco Sr. was willing to buy. 5. The Central Bank assisted Jose Cojuangco to obtain a dollar from the US bank. The GSIS also offered to pay the peso price component sale.
4. TADECO undertook to pay the purchase price in pesos, while that for the controlling interest in CAT—the US dollars.
TACEDO, owners of Hacienda Luisita
Martial Law Administration
1. Filed a suit before the RTC for them to surrender Hacienda Luisita to the then Ministry of Agrarian Reform (now DAR) so that the land can be distributed to farmers at cost.
2. Alleged that Hacienda does not have tenants— besides which sugar land—of which the Hacienda consisted, are not covered by existing agrarian reform legislations.
RTC rendered judgment ordering TADECO to surrender Hacienda Luisita to MAR. Therefrom, TADECO appealed to the Court of Appeals.
OSG moved to dismiss the case. The CA dismissed the case the Marcos government initially instituted and won against TADECO,
The dismissal was made subject to the obtaining by TADECO of PARC’s approval of stock distribution plan (SDP) that must be initially implemented after such approval shall have been secured.
The defendantappellants (Martial Law Administration)
3. Filed a motion joining governmental agencies concerned in moving for the dismissal of the case, subject, however to the following conditions: 1. Should TADECO fail to obtain approval of stock distribution plan 2. If such stock distribution plan is approved by PARC but TADECO fails to implement it. Marked ly, Sec. 10 of E.O. 229 allows (Mechanism of CARP)
corporate landowners as an alternative to actual land transfer scheme of CARP, to give qualified beneficiaries the right to purchase shares of stocks of the corporation under a stock ownership agreement and/or land-toshare ratio.
Also, RA 6657 provides two alternative modalities —l a n d o r s t o c k transfer, pursuant to either of which
the corporate landowner can comply with CARP, but subject to well-defined conditions and timeline requirements.
Hacienda Luisita/ TADECO
In 1988, TADECO organized a spin-off corporation, herein petitioner HLI as vehicle to facilitate stock acquisition by the farmworkers. For this reason, TADECO conveyed to HLI the agricultural land portion (4,915.75 hectares) and other farmrelated properties of Hacienda Luisita in exchange for HLI shares of stock.
93% of the f armworker-beneficiaries signified in a referendum their acceptance of the proposed HLI stock distribution option plan (SDOP) It embodied basis and mechanics of HLI’s SDP, which was eventually approved by the PARC after a follow-up referendum conducted by the DAR in which 5,117 out of 5, 315 who participated opted to receive shares from HLI.
Hacienda Luisita/ TADECO
HLI applied for the conversion of 500 hectares of land from agricultural to industrial use pursuant to Sec. 65 of RA 6657. The DAR approved, subject to payment of 3% of the gross selling price to the farmworker beneficiaries and to HLI’s continued compliance with the undertaking of the SDP, among other conditions.
Hacienda sold 200 hectares of that converted land to Luisita Realty Corporation (LRC) in two separate transactions both uniformly involving 100 hectares for P250 million each. The remaining 300 hectares was sold to Luisita Industrial Park Realty Corporation (LIPCO) which used it in developing an industrial complex.
LIPCO transferred two parcels to RCBC
Another 80.51 hectares were detached from Hacienda Luisita and acquired by the government as part of the Subic Clark Tarlac Expressway (SCTEX) complex. Remaining = 4,335.75 hectares
Two separate petitions were filed:
By Supervisory Group of Hacienda Luisita Incorporated
Alyansa ng mga Manggagawang Bukid ng Hacienda (AMBALA)
1. For the renegotiation of SDOA, or in the alternative—its revocation.
2. For the revocation and nullification of the SDOA and the distribution of the lands in the Hacienda.
DAR constituted a Special Task Force and later found out that Hacienda Luisita Incorporated has not complied with its obligations under RA 6657; despite the implementation of Stock Distribution Plan.
PARC issued Resolution 2005-32-01 recalling/revoking the Stock Distribution Option plan of TADECO. It further resolved that the subject lands be forthwith placed under the compulsory coverage or mandated land acquisition scheme of the CARP.
Hacienda Luisita—filed a petition before the Supreme Court alleging that DAR’s hastily placed Hacienda under CARP even before PARC could rule or read the motion for reconsideration. Eventually, PARC denied HLI’s motion for reconsideration—thereby upholding
Hence, this PETITION.
NO—(not unconstitutional).
Is Sec. 31 of RA 6657 which allows stock transfer in lieu of outright land transfer unconstitutional?
The Court refuses to pass upon the constitutional question because it was not raised on the earliest opportunity and the resolution is not the lis mota of the case. FARM members accepted the benefits from the SDP without even a complaint on the alleged unconstitutional legal provision.
Are the lands acquired by LIPCO and RCBC excluded from the coverage of the assailed PARC resolution?
NO— The revocation of the approval of the SDP is valid:
Did the PARC gravely abused its discretion in revoking the SDP and placing hacienda under CARP’s compulsory acquisition and distribution scheme?
1. The mechanics and timelines of HLI stock distribution was violated because the minimum allocation for farmworker benificiaries was diluted as a result of the use of “man days” and hiring of additional farmworkers. 2. The 30-year timeframe for HLI to FWB stock transfer is contrary to Sec. 10 of DAO 10. Based on HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he/she becomes entitled to HLI shares. HLI shares distributed depends on the number of days they are allowed to work in a year. Worse, HLI hired additional farmworkers hence, lessening the shares. The total farmworkers are 10, 502, and the minimum allocation of each FWB of 18,804.02 shares was diluted as a result of “man days” and hiring of additional farmworkers. PARC is correct in revoking SDP, as DAO 10 Sec. 11 provides for implementation of approved SDP within 3 months from receipt by the corporate landowner of the approval of the plan by PARC. Hence, beneficiaries are given 30 years within which to pay the cost of the land thus awarded them to make it less cumbersome for them to
YES—those portions of the converted land with Hacienda Luisita that RCBC and LIPCO acquired by purchase should be excluded from the coverage of the PARC resolution x x x since it can be rightfully said that RCBC and LIPCO are purchasers in good faith for value, so entitled to the benefits arising from such status. Though the subject lands are covered by CARP, they honestly believed that these lands were validly converted from commercial or industrial purposes for which the said lots were taken out of CARP coverage.
