Acuna v ArroyoG.R. No.79310July 14, 1989

Facts:

RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 was signed into law by then President Corazon Aquino. There were a number of legal questions challenging the constitutionality of the several measures enacted to implement the CARL.

In the instant case, the petitioners are landowners and sugar planters in the Victorias Mill District in Negros Occidental. Co-petitioner Planters’ Committee is an organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation of Proclamation No. 131 and EO No. 229.

The petitioners claim that the power to provide for a CARP as decreed by the constitution belongs to Congress and not the President. Even assuming that the interim legislative power of the President was properly exercised, Proc. No. 131 and EO No. 229 would still have to be annulled for violating the constitutional provisions on just compensation, due process and equal protection.Section 2 of Proc. No. 131 provides:

Agrarian Reform Fund.- There is hereby created a special fund, to be known as the Agriarian Reform Fund, an initial amount of FIFTY BILLION PEOS to cover the estimated cost of the CARP from 1987 -1992 which shall be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through the PCGG and such other sources as government may deem appropriate. The amounts collected and accruing to this special fund shall be appropriated automatically for the purpose authorized in this Proclamation. The money needed to cover the cost of the contemplated expropriated has yet to be raised and cannot be appropriated at this time.

Petitioners contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with money and in full, but no such payment is contemplated in Sec. 5 of EO No. 229.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of the sugar planters’ situation. To the extent that the sugar planters have been lumped in the same legislation with other farmers, although they are a separate group with problems exclusively their own, their right to equal protection has been violated.

Issue:

Whether or not Proc. No. 31 and EO No. 229 are valid.

Held:

The Court upheld the presumption of constitutionality in favour of Proc. No. 131 and EO No. 229. Contrary to the petitioners’ contention, a pilot project to determine the feasibility of CARP and a general survey on the people’s opinion thereon are not indispensable prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and should be treated differently.

Regarding the issue of just compensation, it cannot be denied that the issue involved in the case is a revolutionary kind of expropriation.

The expropriation in the instant case affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community but of the entire Filipino nation.

Such a program will involve not mere million of pesos. The cost will be tremendous. Considering the vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed that the amount of P50 billion initially appropriated, which is already staggering as it is by our present standards.

We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a top priority project of the government. It is a part of this assumption that when they envisioned the expropriation that would be needed, they also intended that the just compensation would have to be paid not in the orthodox way but a less conventional if more practical method. There can be doubt that they were aware of the financial limitations of the government and had no illusions that there would be enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers. we may therefore assume that their intention was to allow such manner of payment as is now provided for by the CARP Law, particularly the payment of the balance, or indeed of the entire amount of the just compensation, with other things of value.

Accepting the theory that payment of the just compensation is not always required to be made fully in money, we further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner.

Hence, the validity of Proc. No. 131 and EO No. 229 is SUSTAINED.

G.R. No. 127876. December 17, 1999

ROXAS & CO., INC.,

vs

THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, SECRETARY OFAGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV, MUNICIPAL AGRARIAN REFORMOFFICER OF NASUGBU,

BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATIONBOARD

FACTS:

Petitioner Roxas & Co. is a domestic corporation and is the registered owner of threehaciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu, Batangas. The events of

this case occurred during the incumbency of then President Corazon C. Aquino who issued Proclamation No. 3 promulgating a Provisional Constitution. Before the law’s effectivity, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the Republic Act No.6657, the Comprehensive Agrarian Reform Law of 1988(CARL).

In a letter, respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform.

Respondent Secretary also denied petitioner’s withdrawal of the Voluntary Offer to Sell (VOS) on the ground that withdrawal could only be based on specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over18 degrees and that the land is undeveloped. Despite the denial of the VOS withdrawal of Hacienda Caylaway, petitioner filed its application for conversion of both Haciendas Palico and Banilad. Petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway Petitioner instituted Case with respondent DAR Adjudication Board (DARAB) praying for the cancellation of the CLOA’s is

sued by respondent DAR in the name of several persons. Petitioneralleged that the haciendas had been declared a tourist zone, is not suitable for agriculturalproduction. DARAB held that the case involved the prejudicial question of whether the propertywas subject to agrarian reform, hence, this question should be submitted to the Office of theSecretary of Agrarian Reform for determination. Petitioner filed with the Court of Appeals. It questioned the expropriation of its properties under the CARL and the denial of due process in theacquisition of its landholdings.Meanwhile, the petition for conversion of the three haciendas was denied by the MARO.

Petitioner’s petition was dismissed by the Court of Appeals. Petitioner moved for reconsideration but the motion was denied by court of Appeals.

ISSUES:

Whether or not the DAR observes due process of the proceedings over the three haciendas

HELD:

The acquisition proceedings over the three haciendas are nullified for respondent DAR's failure to observe due process therein. In accordance with the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings and determination of petitioner's application for conversion. Failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the CLOA’s already issued to the farmer beneficiaries.

To assume the power is to short-circuit the administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in1993. Since then until the present, these farmers have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till.

The DAR must first resolve the issues raised in a protest/application before the distribution of covered lands to farmer-beneficiaries may be effected. (Roxas & Co., Inc. vs Court of Appeals, G.R. 127876, 17 December, 1999).

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No. 171101, November 22, 2011

R E S O L U T I O N

VELASCO, JR., J.:

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.]