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Case Digest: Hacienda Luisita vs. PARC

G.R.No.17110:July5,2011
HACIENDALUISITA,INCORPORATED,Petitioner,LUISITAINDUSTRIALPARK
CORPORATIONandRIZALCOMMERCIALBANKINGCORPORATION,
PetitionersinIntervention,v.PRESIDENTIALAGRARIANREFORMCOUNCIL
(PARC)SECRETARYNASSERPANGANDAMANOFTHEDEPARTMENTOF
AGRARIANREFORMALYANSANGMGAMANGGAGAWANGBUKIDNG
HACIENDALUISITA,RENEGALANG,NOELMALLARI,andJULIOSUNIGAand
hisSUPERVISORYGROUPOFTHEHACIENDALUISITA,INC.andWINDSOR
ANDAYA,Respondents.
VELASCO,JR.,J.:
FACTS:
FollowingthepromulgationoftheCourtsDecisionintheabovecaptionedcaseon
July5,2011,thepetitionerspresentforresolutionseveralissuesconcerningthesaid
Decision.Torecall,inthe2011Decision,theCourtordered,amongothers,thatthe
landssubjectofHaciendaLuisitaIncorporateds(HLI)stockdistributionplan(SDP)be
placedundercompulsorycoverageonmandatedlandacquisitionschemeofthe
CARPanddeclaredthattheoriginal6,296qualifiedfarmworkerbeneficiaries(FWBs)
shallhavetheoptiontoremainasstockholdersofHLI.
ISSUES:
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I.Whetherornottheoperativefactdoctrineisapplicabletothepresentcase
II.WhetherornotSec.31ofRA6657ortheComprehensiveAgrarianReformLawof
1988isconstitutional
III.WhetherornottheCourtproperlydeterminedthecoverageofcompulsory
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IV.Whetherornotthematteronjustcompensationhasbeencorrectlypassedupon
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V.Whetherornotthesubjectagriculturallandsmaybesoldtothirdpartiesthough
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VI.WhetherHLIviolatedanyoftheprovisionsundertheSDP

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VII.WhetherornottherulingthatthequalifiedFWBsshouldbegivenanoptionto
remainasstockholdersofHLIisvalid
HELD:
(1)TheOperativeFactDoctrineisnotlimitedtoinvalidorunconstitutionallaws.
Contrarytothestanceofrespondents,theoperativefactdoctrinedoesnotonlyapply
tolawssubsequentlydeclaredunconstitutionalorunlawful,asitalsoappliesto
executiveactssubsequentlydeclaredasinvalid.The"operativefact"doctrineis
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executiveact,priortoitsbeingdeclaredasunconstitutionalbythecourts,isvalidand
mustbecompliedwith.Evidently,theoperativefactdoctrineisnotconfinedtostatutes
andrulesandregulationsissuedbytheexecutivedepartmentthatareaccordedthe
samestatusasthatofastatuteorthosewhicharequasilegislativeinnature.
(2)AsWehavesuccinctlydiscussedinOurJuly5,2011Decision,ittook
theFarmworkersAgrarianReformMovement(FARM)someeighteen(18)years
fromNovember21,1989beforeitchallengedtheconstitutionalityofSec.31of
RA6657.ThequestionofconstitutionalitywillnotbepasseduponbytheCourtunless
itisproperlyraisedandpresentedinanappropriatecaseatthefirstopportunity.
FARMis,therefore,remissinbelatedlyquestioningtheconstitutionalityofSec.31of
RA6657.Thesecondrequirementthattheconstitutionalquestionshouldberaisedat
theearliestpossibleopportunityisclearlywanting.Thelastbutthemostimportant
requisitethattheconstitutionalissuemustbetheverylismotaofthecasedoesnot
likewiseobtain.Thelismotaaspectisnotpresent,theconstitutionalissuetendered
notbeingcriticaltotheresolutionofthecase.Theunyieldingrulehasbeentoavoid,
wheneverplausible,anissueassailingtheconstitutionalityofastatuteor
governmentalact.Ifsomeothergroundsexistbywhichjudgmentcanbemade
withouttouchingtheconstitutionalityofalaw,suchrecourseisfavored.Basedonthe
foregoingdisquisitions,WemaintainthatthisCourtisNOTcompelledtoruleonthe
constitutionalityofSec.31ofRA6657.
(3)FARMarguesthatthisCourtignoredcertainmaterialfactswhenitlimited
themaximumareatobecoveredto4,915.75hectares,whereastheareathat
should,attheleast,becoveredis6,443hectares,whichistheagriculturalland
allegedlycoveredbyRA6657andpreviouslyheldbyTarlacDevelopment
Corporation(Tadeco).Wecannotsubscribetothisview.Sincewhatisputinissue
beforetheCourtistheproprietyoftherevocationoftheSDP,whichonlyinvolves
4,915.75has.ofagriculturallandandnot6,443has.,thenWeareconstrainedtorule
onlyasregardsthe4,915.75has.ofagriculturalland.
(4)InOurJuly5,2011Decision,Westatedthat"HLIshallbepaidjust
compensationfortheremainingagriculturallandthatwillbetransferredtoDAR
forlanddistributiontotheFWBs."Wealsoruledthatthedateofthe"taking"is
November21,1989,whenPARCapprovedHLIsSDPperPARCResolutionNo.89
122.
Wemaintainthatthedateof"taking"isNovember21,1989,thedatewhenPARC
approvedHLIsSDPperPARCResolutionNo.89122,inviewofthefactthatthisis
thetimethattheFWBswereconsideredtoownandpossesstheagriculturallandsin
HaciendaLuisita.Tobeprecise,theselandsbecamesubjectoftheagrarianreform
coveragethroughthestockdistributionschemeonlyupontheapprovaloftheSDP,
thatis,November21,1989.Thus,suchapprovalisakintoanoticeofcoverage
ordinarilyissuedundercompulsoryacquisition.
(5)ThereisaviewthatsincetheagriculturallandsinHaciendaLuisitawere
placedunderCARPcoveragethroughtheSDOAschemeonMay11,1989,then
the10yearperiodprohibitiononthetransferofawardedlandsunderRA6657
lapsedonMay10,1999,and,consequently,thequalifiedFWBsshouldalready
beallowedtoselltheselandswithrespecttotheirlandintereststothirdparties,
includingHLI,regardlessofwhethertheyhavefullypaidforthelandsornot.
Thepropositioniserroneous.UnderRA6657andDAO1,theawardedlandsmay
onlybetransferredorconveyedafterten(10)yearsfromtheissuanceandregistration
oftheemancipationpatent(EP)orcertificateoflandownershipaward(CLOA).
ConsideringthattheEPsorCLOAshavenotyetbeenissuedtothequalifiedFWBsin
theinstantcase,the10yearprohibitiveperiodhasnotevenstarted.Significantly,the
reckoningpointistheissuanceoftheEPorCLOA,andnottheplacingofthe
agriculturallandsunderCARPcoverage.
(6)AMBALAandFARMreiteratethatimprovingtheeconomicstatusofthe
FWBsisamongthelegalobligationsofHLIundertheSDPandisanimperative
impositionbyRA6657andDAO10.FARMfurtherassertsthat"[i]fthatminimum
thresholdisnotmet,whyallow[stockdistributionoption]atall,unlessthepurposeis

notsocialjusticebutapoliticalaccommodationtothepowerful."
ContrarytotheassertionsofAMBALAandFARM,nowhereintheSDP,RA6657and
DAO10canitbeinferredthatimprovingtheeconomicstatusoftheFWBsisamong
thelegalobligationsofHLIundertheSDPorisanimperativeimpositionbyRA6657
andDAO10,aviolationofwhichwouldjustifydiscardingthestockdistributionoption.
(7)Uponareviewofthefactsandcircumstances,WerealizethattheFWBswill
neverhavecontrolovertheseagriculturallandsforaslongastheyremainas
stockholdersofHLI.InlinewithOurfindingthatcontroloveragriculturallandsmust
alwaysbeinthehandsofthefarmers,Wereconsiderourrulingthatthequalified
FWBsshouldbegivenanoptiontoremainasstockholdersofHLI,inasmuchasthese
qualifiedFWBswillnevergaincontrolgiventhepresentproportionofshareholdingsin
HLI.
Moreover,bearinginmindthatwiththerevocationoftheapprovaloftheSDP,HLIwill
nolongerbeoperatingunderSDPandwillonlybetreatedasanordinaryprivate
corporationtheFWBswhoremainasstockholdersofHLIwillbetreatedasordinary
stockholdersandwillnolongerbeundertheprotectivemantleofRA6657.
Inadditiontotheforegoing,inviewoftheoperativefactdoctrine,allthebenefitsand
homelotsreceivedbyalltheFWBsshallberespectedwithnoobligationtorefundor
returnthem,since,asWehavementionedinourJuly5,2011Decision,"thebenefitsx
xxwerereceivedbytheFWBsasfarmhandsintheagriculturalenterpriseofHLIand
otherfringebenefitsweregrantedtothempursuanttotheexistingcollective
bargainingagreementwithTadeco."
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