Hda. Luisita vs. PARC, G.R. No.

171101, July 5, 2011

Facts:
Hacienda Luisita de Tarlac (Hacienda Luisita), then owned by Spanish owners, was
sold to Tarlac Development Corporation (Tadeco)owned and/or controlled by the Jose
Cojuangco, Sr. Group. The Philippine Government through Central bank assisted
Tadeco in obtaining a loan from a US Bank and the GSIS extended a loan to Tadeco
to pay the peso component of the sale, Subject to the condition that it shall be
subdivided by the applicant-corporation and sold at cost to the tenants.
The martial law administration filed a suit before the Manila Regional Trial Court
(RTC)for them to surrender Hacienda Luisita to the then Ministry of Agrarian Reform
(MAR, now the Department of Agrarian Reform [DAR]) so that the land can be
distributed to farmers at cost.CA dismissed the case the Marcos government initially
instituted. The dismissal action was, however, made subject to the obtention by
Tadeco of the PARCs approval of a stock distribution plan (SDP).
Tadeco organized a spin-off corporation, HLI, as a vehicle to facilitate stock
acquisition by the farmworkers.
From 1989 to 2005, HLI claimed to have extended numerous benefits to the
Farmworker-beneficiaries(FWBs),Two separate groups subsequently contested this
claim.
Issue: Is Sec. 31 of RA 6657, which permits stock transfer in lieu of
outright agricultural land transfer, inconsistent with the basic concept of
agrarian reform ingrained in Sec. 4, Art. XIII of the Constitution?
The wording of Section 4, Article XIII of the Constitution is unequivocalthe farmers
and regular farmworkers have a right TO OWN DIRECTLY OR COLLECTIVELY THE
LANDS THEY TILL. It allows two (2) modes of land distributiondirect and indirect
ownership. Direct transfer is the outright giving of the land to the farmer and
Indirect Transfer is made through corporations or cooperatives of farmers from
being the legal entity through which collective ownership can be exercised, No
language can be found in the 1987 Constitution that disqualifies and prohibits as
such. By using the word "collectively," the Constitution allows for indirect ownership
of land and not just outright agricultural land transfer.
While it is true that the farmer is issued stock certificates and does not directly own
the land, still, the Corporation Code is clear that the farmworker-beneficiary (FWBs)
becomes a stockholder who acquires an equitable interest in the assets of the
corporation, which include the agricultural lands. The expression shares of stock
when qualified by words indicating number and ownership expresses the extent of
the owners interest in the corporate property.