Less than five months from the promulgation of its July 5, 2011 Decision, the Court en banc promulgated on November 22, 2011 its Resolution on the various motions for reconsideration filed in Hacienda Luisita Inc. (HLI) vs. Presidential Agrarian Reform Council (PARC), G.R. No. 171101.
[To read the FACTS of the case and the digest of the decision, please click here. To read a summary of the opinions in the July 5, 2011 decision, please click here.]
In its Resolution, 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, 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.
Thus, the Court – unanimously this time – directed immediate land distribution to the qualified FWBs. On the fine points, however, again the Court failed to have one voice.
The majority maintained its argument that the operative fact doctrine applies 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.
The majority also 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. On the other hand, the majority likewise reiterated its holding that those portions 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) should be excluded from the coverage of the assailed PARC resolution since the said intervenors are innocent purchasers for value.
Finally, the majority maintained that 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 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.
The separate opinions in the resolution
While the Court is unanimous on the matter of the distribution of Hacienda Luisita to the FWBs, the minority still disagreed with several aspects of the resolution of the majority.
Thus, Chief Justice Corona reiterated in his “Dissenting Opinion” that Section 31 of RA 6657 is invalid and unconstitutional. Agrarian reform’s underlying principle is the recognition of the rights of farmers who are landless to own, directly or collectively, the lands they till. Under the Constitution, actual land distribution to qualified agrarian reform beneficiaries is mandatory. Anything that promises something other than land, such the stock distribution option in Sec. 31, must be struck down for being unconstitutional.
Justice Bersamin, who fully concurred in the July 15, 2011 decision, wrote a “Concurring and Dissenting Opinion.” He opined that (1) the reckoning date for purposes of determining just compensation should be left to the DAR and Land Bank, and, ultimately, to the Special Agrarian Court (SAC) to determine; and (2) the landowner should be compensated for the value of the homelots granted to the farmworkers-beneficiaries (FWBs) pursuant to the discredited stock distribution plan (SDP). According to Justice Bersamin, the determination of when the taking occurred is an integral part of the determinationof just compensation. The nature and character of land at the time of its taking are the principal criteria to determine just compensation to the landowner; thus, the factual issue of when the taking had taken place should not be separated from the determination of just compensation by DAR, Land Bank and SAC. On the other hand, it appeared that the homelots granted to the FWBs under the SDP do not form part of the total area of the agricultural lands to be turned over to DAR for distribution to the qualified FWBs for which the landowner will be justly compensated. Should the landowner not be justly compensated for the value of the homelots, the taking will be confiscatory and unconstitutional.
Justice Sereno this time wrote a “Concurring and Dissenting Opinion.” She disagreed with the majority’s choice of November 21, 1989 as the reckoning date of the “taking” of the lands ordered to be distributed for the purpose of eventually determining just compensation. Her thesis: The taking of private lands under the agrarian reform program partakes of the nature of an expropriation proceeding. For purposes of taking under the agrarian reform program, the owners of the land should not receive less than the market value for their expropriated properties. There is taking of private property by the State in expropriation proceedings when the owner is ousted from his property and deprived of his beneficial enjoyment thereof. The “time of taking” is the moment when landowners are deprived of the use and benefit of the property. No taking of agricultural lands can thus be considered either at the time the SDOA was signed (May 11, 1989, as proposed by Justice Brion) or at the time PARC approved it (November 21, 1989, as held by the majority) since petitioner HLI retained full ownership and use of the lands thereafter. Despite the change in stockholders, petitioner was never ousted from or deprived of the beneficial enjoyment of the agricultural lands in Hacienda Luisita. Citing the rulings of the Court in agrarian reform cases, Justice Sereno noted that the notice of coverage commences the process of acquiring private agricultural lands covered by the CARP. The date of the notice of coverage – January 2, 2006 – is therefore determinative of the just compensation that petitioner HLI is entitled to.
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