Hacienda Luisita vs. PARC, GR 171101, May 17, 1993, Apr.
24,
2012, 670 SCRA 392
I. THE FACTS
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 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 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.”
The parties thereafter filed their respective motions for
reconsideration of the Court decision.
II. THE ISSUES
(1) Is the operative fact doctrine available in this case?
(2) Is Sec. 31 of RA 6657 unconstitutional?
(3) Can’t the Court 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 SDP?
(4) Is the date of the “taking” (for purposes of determining the just
compensation payable to HLI) November 21, 1989, when PARC
approved HLI’s SDP?
(5) Has the 10-year period prohibition on the transfer of awarded
lands under RA 6657 lapsed on May 10, 1999 (since Hacienda
Luisita were placed under CARP coverage through the SDOA
scheme on May 11, 1989), and thus the qualified FWBs should
now be allowed to sell their land interests in Hacienda Luisita to
third parties, whether they have fully paid for the lands or not?
(6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011
Decision that the qualified FWBs be given an option to remain as
stockholders of HLI be reconsidered?
III. THE RULING
[The Court PARTIALLY GRANTED the motions for
reconsideration of respondents PARC, et al. with respect to the
option granted to the original farmworkers-beneficiaries (FWBs)
of Hacienda Luisita to remain with petitioner HLI, which option the
Court thereby RECALLED and SET ASIDE. It reconsidered its
earlier decision that the qualified FWBs should be given an option
to remain as stockholders of HLI, and UNANIMOUSLY directed
immediate land distribution to the qualified FWBs.]
1. YES, the operative fact doctrine is applicable in this case.
[The Court maintained its stance that the operative fact doctrine
is applicable in this case since, contrary to the suggestion of the
minority, the doctrine is not limited only to invalid or
unconstitutional laws but also applies to decisions made by the
President or the administrative agencies that have the force and
effect of laws. Prior to the nullification or recall of said decisions,
they may have produced acts and consequences that must be
respected. It is on this score that the operative fact doctrine
should be applied to acts and consequences that resulted from
the implementation of the PARC Resolution approving the SDP of
HLI. The majority stressed that the application of the operative
fact doctrine by the Court in its July 5, 2011 decision was in fact
favorable to the FWBs because not only were they allowed to
retain the benefits and homelots they received under the stock
distribution scheme, they were also given the option to choose for
themselves whether they want to remain as stockholders of HLI
or not.]
2. 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, 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.]
3. 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 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
However since the area to be awarded to each FWB in the July 5,
2011 Decision appears too restrictive – considering that there are
roads, irrigation canals, and other portions of the land that are
considered commonly-owned by farmworkers, and these may
necessarily result in the decrease of the area size that may be
awarded per FWB – the Court reconsiders its Decision and
resolves to give the DAR leeway in adjusting the area that may
be awarded per FWB in case the number of actual qualified
FWBs decreases. In order to ensure the proper distribution of the
agricultural lands of Hacienda Luisita per qualified FWB, and
considering that matters involving strictly the administrative
implementation and enforcement of agrarian reform laws are
within the jurisdiction of the DAR, it is the latter which shall
determine the area with which each qualified FWB will be
awarded.
On the other hand, the majority likewise reiterated its holding that
the 500-hectare portion of Hacienda Luisita that have been validly
converted to industrial use and have been acquired by
intervenors Rizal Commercial Banking Corporation (RCBC) and
Luisita Industrial Park Corporation (LIPCO), as well as the
separate 80.51-hectare SCTEX lot acquired by the government,
should be excluded from the coverage of the assailed PARC
resolution. The Court however ordered that the unused balance
of the proceeds of the sale of the 500-hectare converted land and
of the 80.51-hectare land used for the SCTEX be distributed to
the FWBs.]
4. YES, the date of “taking” is November 21, 1989, when PARC
approved HLI’s SDP.
[For the purpose of determining just compensation, the date of
“taking” is November 21, 1989 (the date when PARC approved
HLI’s SDP) since this is the time that the FWBs were considered
to own and possess the agricultural lands in Hacienda Luisita. To
be precise, these lands became subject of the agrarian reform
coverage through the stock distribution scheme only upon the
approval of the SDP, that is, on November 21, 1989. Such
approval is akin to a notice of coverage ordinarily issued under
compulsory acquisition. On the contention of the minority (Justice
Sereno) that the date of the notice of coverage [after PARC’s
revocation of the SDP], that is, January 2, 2006, is determinative
of the just compensation that HLI is entitled to receive, the Court
majority noted that none of the cases cited to justify this position
involved the stock distribution scheme. Thus, said cases do not
squarely apply to the instant case. The foregoing
notwithstanding, it bears stressing that the DAR's land valuation
is only preliminary and is not, by any means, final and conclusive
upon the landowner. The landowner can file an original action
with the RTC acting as a special agrarian court to determine just
compensation. The court has the right to review with finality the
determination in the exercise of what is admittedly a judicial
function.]
5. 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 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.]
6. YES, the ruling in the July 5, 2011 Decision that the qualified
FWBs be given an option to remain as stockholders of HLI should
be reconsidered.
[The Court reconsidered its earlier decision that the 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. Control means the majority of [sic] 50% plus at
least one share of the common shares and other voting shares.
Applying the formula to the HLI stockholdings, the number of
shares that will constitute the majority is 295,112,101 shares
(590,554,220 total HLI capital shares divided by 2 plus one [1]
HLI share). The 118,391,976.85 shares subject to the SDP
approved by PARC substantially fall short of the 295,112,101
shares needed by the FWBs to acquire control over HLI.]
Landbank vs. Colarina, Sep. 1, 2010, GR 176410, 629 SCRA 614
FACTS:
Respondent is the registered owner of three (3) parcels of
agricultural land which he acquired from their former owner,
Damiana Arcega. The parcels of land have a total area of 972,047
square meters. Upon acquisition thereof, respondent manifested his
voluntary offer to sell the properties to the DAR for coverage under
R.A. No. 6657. Respondent‘s assessment value of the properties
was P45,000.00 per hectare.
The DAR, through petitioner LBP assessed the properties and
offered to purchase only 57.2047 hectares out of the 97.2047
hectares voluntarily offered for sale by respondent. The excluded
area (40 hectares) fell under the exemptions and exclusions
provided in Section 10 of the CARL, i.e., all lands with eighteen
percent (18%) slope and over.
As the LBP ‘s assessment and valuation of the properties was
unacceptable to, and rejected by, respondent, he elevated the
determination of just compensation of the properties to the Provincial
Agrarian Reform Adjudicator (PARAD). Unfortunately for
respondent, the PARAD affirmed the valuation set forth by the LBP.
Disappointed with the low valuation by petitioner and the DAR,
respondent filed a Complaint
before the RTC, for the judicial determination of just compensation.
During pre-trial, LBP manifested that the subject properties may be
reassessed and revaluated based on the new guidelines set forth in
DAR A.O. No. 11, Series of 1994. Intent on finding a common
ground between petitioner and respondent and to amicably settle the
case, the SAC ordered the revaluation.
However, the valuation was still rejected by respondent. Hence, trial
ensued.
ISSUE: How should the value of ―just compensation‖ be computed?
HELD:
Citing Land Bank of the Philippines v. Kelada, the Court declared:
While SAC is Required to consider the acquisition cost of the land,
the current value of like
properties, its nature, actual use and income, the sworn valuation by
the owner, the tax declaration and the assessments made by
the government assessors to determine just compensation, it
is equally true that these factors have been translated into a basic
formula by the DAR pursuant to its rule-making power under Section
49 of RA No. 6657. As the government agency principally tasked to
implement the agrarian reform program, it is the DAR ‘s duty to issue
rules and regulations to carry out the object of the law. DAR AO No.
5, s. of 1998 precisely ―filled in the details‖ of Section 17, RA No.
6657 by providing a basic formula by which the factors mentioned
therein may be taken into account. The SAC was at no liberty to
disregard the formula
which was devised to implement the said provision. It is elementary
that rules and regulations issued by administrative bodies to interpret
the law which they are entrusted to enforce, have the force of law,
and are entitled to great respect.
Administrative issuances partake of the nature of a statute and have
in their favor a presumption of legality. As such, courts cannot
ignore administrative issuances especially when, as in this case, its
validity was not put in issue. Unless an administrative order is
declared invalid, courts have no option but to apply the same.
While the Court commends respondent in readily participating in the
government ‘s agrarian reform program, our previous rulings
preclude us from validating the valuation of the subject properties
proffered to, and affirmed by, the SAC. The government cannot be
forced to purchase land which it finds no need for, regardless of
Oliva ‘s unschooled opinion. Considering respondent‘s belief that the
properties are worth more than the valuation made by the DAR, he
can proceed to develop the land excluded by the DAR from
expropriation into its potential use as assessed by Oliva.
Lubrica vs. Landbank, GR 170220, November 20, 2006, 507 SCRA
415
FACTS:
Petitioner Josefina S. Lubrica is the assignee2 of Federico C. Suntay
over certain parcels of agricultural land located at Sta. Lucia,
Sablayan, Occidental Mindoro, with an area of 3,682.0285 hectares
covered by Transfer Certificate of Title (TCT).
In 1972, a portion of the said property with an area of 311.7682
hectares, was placed under the land reform program pursuant to
Presidential Decree No. 27 (1972)4 and Executive Order No. 228
(1987).5 The land was thereafter subdivided and distributed to farmer
beneficiaries. The Department of Agrarian Reform (DAR) and the
LBP fixed the value of the land at P5,056,833.54 which amount was
deposited in cash and bonds in favor of Lubrica.
Nenita Suntay-Tañedo and Emilio A.M. Suntay III inherited from
Federico Suntay a parcel of agricultural land consisting of two lots,
namely, Lot 1 with an area of 45.0760 hectares and Lot 2 containing
an area of 165.1571 hectares or a total of 210.2331 hectares. Lot 2
was placed under the coverage of P.D. No. 27 but only 128.7161
hectares was considered by LBP and valued the same at
P1,512,575.05.
Petitioners rejected the valuation of their properties, hence the Office
of the Provincial Agrarian Reform Adjudicator (PARAD) conducted
summary administrative proceedings for determination of just
compensation.
ISSUE: WON the determination of just compensation should be
based on the value of the expropriated properties at the time of
payment.
HELD: Yes.
Petitioners were deprived of their properties without payment of just
compensation which, under the law, is a prerequisite before the
property can be taken away from its owners.27 The transfer of
possession and ownership of the land to the government are
conditioned upon the receipt by the landowner of the corresponding
payment or deposit by the DAR of the compensation with an
accessible bank. Until then, title remains with the landowner.
The CARP Law, for its part, conditions the transfer of possession
and ownership of the land to the government on receipt by the
landowner of the corresponding payment or the deposit by the DAR
of the compensation in cash or LBP bonds with an accessible bank.
Until then, title also remains with the landowner. No outright change
of ownership is contemplated either.
Petitioners were deprived of their properties way back in 1972, yet to
date, they have not yet received just compensation. Thus, it would
certainly be inequitable to determine just compensation based on the
guideline provided by P.D. No. 227 and E.O. No. 228 considering the
failure to determine just compensation for a considerable length of
time. That just compensation should be determined in accordance
with R.A. No. 6657 and not P.D. No. 227 or E.O. No. 228, is
important considering that just compensation should be the full and
fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.
Landbank vs. CA, GR 128557, Dec. 29, 1999, 321 SCRA 629
Facts:
An action for mandamus was filed by Jose Pascual after the refusal
of Landbank to pay private respondent pursuant to final decision
rendered by the Provincial Agrarian Reform Adjudicator (PARAD).
LDB was ordered to to pay P1.9M plus interest as just compensation
to Pascual. The computation was based on the increased value of
the Government Support Price which was 300 per caravan of palay
and 250 per caravan of corn. The petitioner refused to pay the
respondent alleging the lack of jurisdiction of CA and that it acted
beyond its authority. It also asserted that the writ of mandamus could
not be issued, as there are other remedies available in the ordinary
course of action.

Issue:
Is LB bound to pay the 1.9M plus 6% interest/annum as just
compensation to Pascual?

Held:
Yes. The SC affirmed CA’s ruling. LB is bound to pay 1.9M but
deleted the 6% interest per annum as it is no longer applicable. AO
No. 13 which provides just compensation to land owners for
unearned interests is no longer applicable since the PARAD already
increased the GSP from P35 to P300 per caravan of palay and P31
to P250 per caravan of corn
Mago vs. Barbin, GR 173923, Oct. 12, 2009, 603 SCRA 232
Padua vs. CA, GR 153456, Mar. 2, 2007, 517 SCRA 232
Estribillo vs. DAR, GR 159674, June 30, 2006, 494 SCRA 218
Gabriel vs.Pangilinan, 58 SCRA 590, 194