G.R. No.

171101 July 5, 2011

HACIENDA LUISITA, INCORPORATED, Petitioner
,LUISITA INDUSTRIAL PARK CORPORATION and RIZAL
COMMERCIAL BANKING CORPORATION Petitioners-inIntervention,
- versus -
PRESIDENTIAL AGRARIAN REFORM COUNCIL; SECRETAR
NASSER PANGANDAMAN OF THE DEPARTMENT OF AGRARIAN
REFORM; ALANSA NG MGA MANGGAGA!ANG BUKID NG
HACIENDA LUISITA, RENE GALANG, NOEL MALLARI, and "ULIO
SUNIGA
[1]
and #$% SUPER&ISOR GROUP OF THE HACIENDA
LUISITA, INC. and !INDSOR ANDAA,
Respondents.
D E C I S I O N
&ELASCO, "R., J.'
Land for te landless,! a si""olet te landed #entry
dou"tless as re$eived %it &u$ &is#ivin#, if not resistan$e,
even if only te nu&"er of a#rarian suits filed serves to "e te
nor&. 'rou# te years, tis "attle $ry and root of dis$ord
$ontinues to refle$t te see&in#ly $easeless dis$ourse on, and
#reat disparity in, te distri"ution of land a&on# te people,
dra&ati(in# te in$reasin#ly ur#ent de&and of te
dispossessed ) ) ) for a plot of eart as teir pla$e in te
sun.!
[2]
*s ad&inistrations and politi$al ali#n&ents $an#e,
poli$ies advan$ed, and a#rarian refor& la%s ena$ted, te
latest "ein# %at is $onsidered a $o&preensive pie$e, te
fa$e of land refor& varies and is &as+ed in &yriads of
%ays. 'e stated #oal, o%ever, re&ains te sa&e, $lear te
%ay for te true freedo& of te far&er.
[-]
Land refor&, or te "roader ter& a#rarian refor&,! as "een a
#overn&ent poli$y even "efore te .o&&on%ealt era. In fa$t,
at te onset of te *&eri$an re#i&e, initial steps to%ard land
refor& %ere already ta+en to address so$ial unrest.
[/]
'en,
under te 10-5 .onstitution, spe$ifi$ provisions on so$ial
1usti$e and e)propriation of landed estates for distri"ution to
tenants as a solution to land o%nersip and tenan$y issues
%ere in$orporated.
In 1055, te Land Refor& *$t 2Repu"li$ *$t 3o. [R*] 1/004
%as passed, settin# in &otion te e)propriation of all tenanted
estates.
[5]
5n *u#ust 6, 107-, te *#ri$ultural Land Refor& .ode 2R*
-6//4 %as ena$ted,
[7]
a"olisin# sare tenan$y and $onvertin#
all instan$es of sare tenan$y into leaseold tenan$y.
[8]
R*
-6// $reated te Land 9an+ of te Pilippines 2L9P4 to provide
support in all pases of a#rarian refor&.
*s its &a1or trust, R* -6// ai&ed to $reate a syste& of
o%ner-$ultivatorsip in ri$e and $orn, supposedly to "e
a$$o&plised "y e)propriatin# lands in e)$ess of 85 e$tares
for teir eventual resale to tenants. 'e la%, o%ever, ad tis
restri$tin# feature, its operations %ere $onfined &ainly to areas
in .entral Lu(on, and its i&ple&entation at any level of
intensity li&ited to te pilot pro1e$t in 3ueva :$i1a.
[6]
;u"se<uently, .on#ress passed te .ode of *#rarian Refor&
2R* 7-604 de$larin# te entire $ountry a land refor& area, and
providin# for te auto&ati$ $onversion of tenan$y to leaseold
tenan$y in all areas. =ro& 85 e$tares, te retention li&it %as
$ut do%n to seven e$tares.
[0]
9arely a &ont after de$larin# &artial la% in ;epte&"er 1082,
ten President =erdinand >ar$os issued Presidential ?e$ree
3o. 28 2P? 284 for te e&an$ipation of te tiller fro& te
"onda#e of te soil.!
[10]
9ased on tis issuan$e, tenant-far&ers,
dependin# on te si(e of te landoldin# %or+ed on, $an eiter
pur$ase te land tey tilled or sift fro& sare to fi)ed-rent
leaseold tenan$y.
[11]
@ile touted as revolutionary,! te
s$ope of te a#rarian refor& pro#ra& P? 28 enun$iated
$overed only tenanted, privately-o%ned ri$e and $orn lands.
[12]
'en $a&e te revolutionary #overn&ent of ten President
.ora(on .. *<uino and te draftin# and eventual ratifi$ation of
te 1068 .onstitution. Its provisions foresado%ed te
esta"lis&ent of a le#al fra&e%or+ for te for&ulation of an
e)pansive approa$ to land refor&, affe$tin# all a#ri$ultural
lands and $overin# "ot tenant-far&ers and re#ular
far&%or+ers.
[1-]
;o it %as tat Pro$la&ation 3o. 1-1, ;eries of 1068, %as
issued institutin# a $o&preensive a#rarian refor& pro#ra&
2.*RP4 to $over all a#ri$ultural lands, re#ardless of tenurial
arran#e&ent and $o&&odity produ$ed, as provided in te
.onstitution.
5n July 22, 1068, :)e$utive 5rder 3o. 220 2:5 2204 %as
issued providin#, as its title
[1/]
indi$ates, te &e$anis&s for
.*RP i&ple&entation. It $reated te Presidential *#rarian
Refor& .oun$il 2P*R.4 as te i#est poli$y-&a+in# "ody tat
for&ulates all poli$ies, rules, and re#ulations ne$essary for te
i&ple&entation of .*RP.
5n June 15, 1066, R* 7758 or te Comprehensive Agrarian
Reform Law of 1988, also +no%n as .*RL or te .*RP La%,
too+ effe$t, userin# in a ne% pro$ess of land $lassifi$ation,
a$<uisition, and distri"ution. *s to "e e)pe$ted, R* 7758 &et
stiff opposition, its validity or so&e of its provisions $allen#ed
at every possi"le turn. Association of Small Landowners in the
Philippines, Inc. v. Secretar of Agrarian Reform
[15]
stated te
o"servation tat te assault %as inevita"le, te .*RP "ein# an
untried and untested pro1e$t, an e)peri&ent [even], as all life
is an e)peri&ent,! te .ourt said, "orro%in# fro& Justi$e
Aol&es.
T#( Ca%(
In tis Petition for .ertiorari and Proi"ition under Rule 75 %it
prayer for preli&inary in1un$tive relief, petitioner Aa$ienda
Luisita, In$. 2ALI4 assails and see+s to set aside P*R.
Resolution 3o. 2005--2-01
[17]
and Resolution 3o. 2007--/-
01
[18]
issued on ?e$e&"er 22, 2005 and >ay -, 2007,
respe$tively, as %ell as te i&ple&entin# 3oti$e of .overa#e
dated January 2, 2007 23oti$e of .overa#e4.
[16]
T#( Fa)*%
*t te $ore of te $ase is Aa$ienda Luisita de 'arla$ 2Aa$ienda
Luisita4, on$e a 7,//--e$tare &i)ed a#ri$ultural-industrial-
residential e)panse straddlin# several &uni$ipalities of 'arla$
and o%ned "y .o&paBia Ceneral de 'a"a$os de =ilipinas
2'a"a$alera4. In 1058, te ;panis o%ners of 'a"a$alera
offered to sell Aa$ienda Luisita as %ell as teir $ontrollin#
interest in te su#ar &ill %itin te a$ienda, te .entral
*(u$arera de 'arla$ 2.*'4, as an indivisi"le transa$tion. 'e
'arla$ ?evelop&ent .orporation 2'ade$o4, ten o%ned andDor
$ontrolled "y te Jose .o1uan#$o, ;r. Croup, %as %illin# to
"uy. *s a#reed upon, 'ade$o undertoo+ to pay te pur$ase
pri$e for Aa$ienda Luisita in pesos, %ile tat for te
$ontrollin# interest in .*', in E; dollars.
[10]
'o fa$ilitate te adverted sale-and-pur$ase pa$+a#e, te
Pilippine #overn&ent, trou# te ten .entral 9an+ of
te Pilippines, assisted te "uyer to o"tain a dollar loan fro&
a E; "an+.
[20]
*lso, te Covern&ent ;ervi$e Insuran$e ;yste&
2C;I;4 9oard of 'rustees e)tended on 3ove&"er 28, 1058 a
PP 5.011 &illion loan in favor of 'ade$o to pay te peso pri$e
$o&ponent of te sale. 5ne of te $onditions $ontained in te
approvin# C;I; Resolution 3o. -20-, as later a&ended "y
Resolution 3o. -57, ;eries of 1056, reads as follo%s,
'at te lots $o&prisin# te Aa$ienda Luisita sall "e
su"divided "y te appli$ant-$orporation and sold at $ost to te
tenants, sould tere "e any, and %enever $onditions sould
e)ist %arrantin# su$ a$tion under te provisions of te Land
'enure *$tF
[21]
*s of >ar$ -1, 1056, 'ade$o ad fully paid te pur$ase pri$e
for te a$<uisition of Aa$ienda Luisita and 'a"a$aleraGs interest
in .*'.
[22]

'e details of te events tat appened ne)t involvin# te
a$ienda and te politi$al $olor so&e of te parties e&"ossed
are of &ini&al si#nifi$an$e to tis narration and need no
"ela"orin#. ;uffi$e it to state tat on >ay 8, 1060, te &artial
la% ad&inistration filed a suit "efore te >anila Re#ional 'rial
.ourt 2R'.4 a#ainst 'ade$o, et al., for te& to surrender
Aa$ienda Luisita to te ten >inistry of *#rarian Refor& 2>*R,
no% te ?epart&ent of *#rarian Refor& [?*R]4 so tat te
land $an "e distri"uted to far&ers at $ost. Respondin#, 'ade$o
or its o%ners alle#ed tat Aa$ienda Luisita does not ave
tenants, "esides %i$ su#ar landsHHof %i$ te a$ienda
$onsistedHHare not $overed "y e)istin# a#rarian refor&
le#islations. *s per$eived ten, te #overn&ent $o&&en$ed
te $ase a#ainst 'ade$o as a politi$al &essa#e to te fa&ily of
te late 9eni#no *<uino, Jr.
[2-]
:ventually, te >anila R'. rendered 1ud#&ent orderin#
'ade$o to surrender Aa$ienda Luisita to te >*R. 'erefro&,
'ade$o appealed to te .ourt of *ppeals 2.*4.
5n >ar$ 18, 1066, te 5ffi$e of te ;oli$itor Ceneral 25;C4
&oved to %itdra% te #overn&entGs $ase a#ainst 'ade$o, et
al. 9y Resolution of >ay 16, 1066, te .* dis&issed te $ase
te >ar$os #overn&ent initially instituted and %on a#ainst
'ade$o, et al. 'e dis&issal a$tion %as, o%ever, &ade
su"1e$t to te o"tention "y 'ade$o of te P*R.Gs approval of a
sto$+ distri"ution plan 2;?P4 tat &ust initially "e i&ple&ented
after su$ approval sall ave "een se$ured.
[2/]
'e appellate
$ourt %rote,
'e defendants-appellants ) ) ) filed a &otion on *pril 1-,
1066 1oinin# te ) ) ) #overn&ental a#en$ies $on$erned in
&ovin# for te dis&issal of te $ase su"1e$t, o%ever, to te
follo%in# $onditions e&"odied in te letter dated *pril 6, 1066
2*nne) 24 of te ;e$retary of te [?*R] <uoted, as follo%s,
1. ;ould '*?:.5 fail to o"tain approval of te sto$+
distri"ution plan for failure to $o&ply %it all te re<uire&ents
for $orporate lando%ners set fort in te #uidelines issued "y
te [P*R.], or
2. If su$ sto$+ distri"ution plan is approved "y P*R.,
"ut '*?:.5 fails to initially i&ple&ent it.
) ) ) )
@A:R:=5R:, te present $ase on appeal is ere"y
dis&issed %itout pre1udi$e, and sould "e revived if any of
te $onditions as a"ove set fort is not duly $o&plied %it "y
te '*?:.5.
[25]
>ar+edly, ;e$tion 10 of :5 220
[27]
allo%s $orporate
lando%ners, as an alternative to te a$tual land transfer
s$e&e of .*RP, to #ive <ualified "enefi$iaries te ri#t to
pur$ase sares of sto$+s of te $orporation under a sto$+
o%nersip arran#e&ent andDor land-to-sare ratio.
Li+e :5 220, R* 7758, under te latterGs ;e$. -1, also
provides t%o 224 alternative &odalities, i.e., land or sto$+
transfer, pursuant to eiter of %i$ te $orporate lando%ner
$an $o&ply %it .*RP, "ut su"1e$t to %ell-defined $onditions
and ti&eline re<uire&ents. ;e$. -1 of R* 7758 provides,
;:.. -1. Corporate Landowners.!.orporate lando%ners &ay
voluntarily transfer o%nersip over teir a#ri$ultural
landoldin#s to te Repu"li$ of te Pilippines pursuant to
;e$tion 20 ereof or to <ualified "enefi$iaries ) ) ).
Epon $ertifi$ation "y te ?*R, $orporations o%nin# a#ri$ultural
lands +a, -$.( *#($/ 01a2$3$(d 4(n(3$)$a/$(% *#( /$-#* *o
51/)#a%( %1)# 5/o5o/*$on o3 *#( )a5$*a2 %*o)6 o3 *#(
)o/5o/a*$on *#a* *#( a-/$)12*1/a2 2and, a)*1a22, d(.o*(d *o
a-/$)12*1/a2 a)*$.$*$(%, 4(a/% $n /(2a*$on *o *#( )o+5an,7%
*o*a2 a%%(*%, under su$ ter&s and $onditions as &ay "e
a#reed upon "y te&. In no $ase sall te $o&pensation
re$eived "y te %or+ers at te ti&e te sares of sto$+s are
distri"uted "e redu$ed. ) ) )
.orporations or asso$iations %i$ voluntarily divest a
proportion of teir $apital sto$+, e<uity or parti$ipation in favor
of teir %or+ers or oter <ualified "enefi$iaries under tis
se$tion sall "e dee&ed to ave $o&plied %it te provisions
of tis *$t, Provided, 'at te follo%in# $onditions are
$o&plied %it,
2a4 In order to safe#uard te ri#t of "enefi$iaries %o o%n
sares of sto$+s to dividends and oter finan$ial "enefits, te
"oo+s of te $orporation or asso$iation sall "e su"1e$t to
periodi$ audit "y $ertified pu"li$ a$$ountants $osen "y te
"enefi$iariesF
2"4 Irrespe$tive of te value of teir e<uity in te $orporation
or asso$iation, te "enefi$iaries sall "e assured of at least
one 214 representative in te "oard of dire$tors, or in a
&ana#e&ent or e)e$utive $o&&ittee, if one e)ists, of te
$orporation or asso$iationF

2$4 *ny sares a$<uired "y su$ %or+ers and "enefi$iaries
sall ave te sa&e ri#ts and features as all oter saresF
and
2d4 *ny transfer of sares of sto$+s "y te ori#inal
"enefi$iaries sall "e void a" initio unless said transa$tion is in
favor of a <ualified and re#istered "enefi$iary %itin te sa&e
$orporation.
If %itin t%o 224 years fro& te approval of tis *$t, te
[voluntary] land or sto$+ transfer envisioned a"ove is not &ade
or reali(ed or te plan for su$ sto$+ distri"ution approved "y
te P*R. %itin te sa&e period, te a#ri$ultural land of te
$orporate o%ners or $orporation sall "e su"1e$t to te
$o&pulsory $overa#e of tis *$t. 2:&pasis added.4
Iis-J-vis te sto$+ distri"ution aspe$t of te afore<uoted ;e$.
-1, ?*R issued *d&inistrative 5rder 3o. 10, ;eries of 1066
2?*5 104,
[28]
entitled #$idelines and Proced$res for Corporate
Landowners %esiring to Avail &hemselves of the Stoc'
%istri"$tion Plan $nder Section (1 of RA ))*+.
=ro& te start, te sto$+ distri"ution s$e&e appeared to "e
'ade$oGs preferred option, for, on *u#ust 2-, 1066,
[26]
it
or#ani(ed a spin-off $orporation, ALI, as vei$le to fa$ilitate
sto$+ a$<uisition "y te far&%or+ers. =or tis purpose, 'ade$o
assi#ned and $onveyed to ALI te a#ri$ultural land portion
2/,015.85 e$tares4 and oter far&-related properties of
Aa$ienda Luisita in e)$an#e for ALI sares of sto$+.
[20]
Pedro .o1uan#$o, Josepine .. Reyes, 'eresita .. Lopa, Jose
.o1uan#$o, Jr., and Pa( .. 'eopa$o %ere te in$orporators of
ALI.
[-0]
'o a$$o&&odate te assets transfer fro& 'ade$o to ALI, te
latter, %it te ;e$urities and :)$an#e .o&&issionGs 2;:.Gs4
approval, in$reased its $apital sto$+ on >ay 10, 1060 fro&
PP 1,500,000 divided into 1,500,000 sares %it a par value
of PP 1Dsare to PP /00,000,000 divided into /00,000,000
sares also %it par value of PP 1Dsare, 150,000,000 of
%i$ %ere to "e issued only to <ualified and re#istered
"enefi$iaries of te .*RP, and te re&ainin# 250,000,000 to
any sto$+older of te $orporation.
[-1]
*s appearin# in its proposed ;?P, te properties and assets of
'ade$o $ontri"uted to te $apital sto$+ of ALI, as appraised
and approved "y te ;:., ave an a##re#ate value of PP
500,55/,220, or after dedu$tin# te total lia"ilities of te far&
a&ountin# to PP 2-5,/22,856, a net value of PP
-55,5-1,/72. 'is translated to -55,5-1,/72 sares %it a par
value of PP 1Dsare.
[-2]
5n >ay 0, 1060, so&e 0-K of te ten far&%or+er-
"enefi$iaries 2=@9s4 $o&ple&ent of Aa$ienda Luisita si#nified
in a referendu& teir a$$eptan$e of te proposed ALIGs ;to$+
?istri"ution 5ption Plan. 5n >ay 11, 1060, te ;to$+
?istri"ution 5ption *#ree&ent 2;?5*4, styled as
a >e&orandu& of *#ree&ent 2>5*4,
[--]
%as entered into "y
'ade$o, ALI, and te 5,6/6 <ualified =@9s
[-/]
and attested to
"y ten ?*R ;e$retary Pilip Jui$o. 'e ;?5* e&"odied te
"asis and &e$ani$s of te ;?P, %i$ %ould eventually "e
su"&itted to te P*R. for approval. In te ;?5*, te parties
a#reed to te follo%in#,
1. 'e per$enta#e of te value of te a#ri$ultural land of
Aa$ienda Luisita 2P107,7-0,000.004 in relation to te total
assets 2P500,55/,220.004 transferred and $onveyed to te
;:.53? P*R'L [ALI] is --.207K tat, under te la%, is te
proportion of te outstandin# $apital sto$+ of te ;:.53?
P*R'L, %i$ is P-55,5-1,/72.00 or -55,5-1,/72 sares %it
a par value of P1.00 per sare, tat as to "e distri"uted to te
'AIR? P*R'L [=@9s] under te sto$+ distri"ution plan, te
said --.207K tereof "ein# P116,-01,087.65
or118,9:1,:7;.8< %#a/(%.
2. 'e <ualified "enefi$iaries of te sto$+ distri"ution plan
sall "e te far&%or+ers %o appear in te annual payroll,
in$lusive of te per&anent and seasonal e&ployees, %o are
re#ularly or periodi$ally e&ployed "y te ;:.53? P*R'L.
-. *t te end of ea$ fis$al year, for a 5(/$od o3 90 ,(a/%, te
;:.53? P*R'L sall arran#e %it te =IR;' P*R'L
['ade$o] te a)01$%$*$on and d$%*/$41*$on to te 'AIR?
P*R'L on te "asis of nu&"er of days %or+ed and at no $ost
to te& of one-tirtiet 21D-04 of 116,-01,087.65 sares of te
$apital sto$+ of te ;:.53? P*R'L tat are presently o%ned
and eld "y te =IR;' P*R'L, until su$ ti&e as te entire
"lo$+ of 116,-01,087.65 sares sall ave "een $o&pletely
a$<uired and distri"uted to te 'AIR? P*R'L.
/.'e ;:.53? P*R'L sall #uarantee to te <ualified
"enefi$iaries of te [;?P] tat every year tey %ill re$eive on
top of teir re#ular $o&pensation, an a&ount tat
appro)i&ates te e<uivalent of tree 2-K4 of te total #ross
sales fro& te produ$tion of te a#ri$ultural land, %eter it "e
in te for& of $as dividends or in$entive "onuses or "ot.
5. :ven if only a part or fra$tion of te sares ear&ar+ed for
distri"ution %ill ave "een a$<uired fro& te =IR;' P*R'L
and distri"uted to te 'AIR? P*R'L, =IR;' P*R'L sall
e)e$ute at te "e#innin# of ea$ fis$al year an irrevo$a"le
pro)y, valid and effe$tive for one 214 year, in favor of te
far&%or+ers appearin# as sareolders of te ;:.53?
P*R'L at te start of said year %i$ %ill e&po%er te 'AIR?
P*R'L or teir representative to vote in sto$+oldersG and
"oard of dire$torsG &eetin#s of te ;:.53? P*R'L $onvened
durin# te year te entire --.207K of te outstandin# $apital
sto$+ of te ;:.53? P*R'L ear&ar+ed for distri"ution and
tus "e a"le to #ain su$ nu&"er of seats in te "oard of
dire$tors of te ;:.53? P*R'L tat te %ole --.207K of
te sares su"1e$t to distri"ution %ill "e entitled to.
7. In addition, te ;:.53? P*R'L sall %itin a reasona"le
ti&e su"divide and allo$ate for free and %itout $ar#e a&on#
te <ualified fa&ily-"enefi$iaries residin# in te pla$e %ere
te a#ri$ultural land is situated, residential or o&elots of not
&ore tan 2/0 s<.&. ea$, %it ea$ fa&ily-"enefi$iary "ein#
assured of re$eivin# and o%nin# a o&elot in te "aran#ay
%ere it a$tually resides on te date of te e)e$ution of tis
*#ree&ent.
8. 'is *#ree&ent is entered into "y te parties in te spirit of
te 2..*.R.P.4 of te #overn&ent and %it te supervision of
te [?*R], %it te end in vie% of i&provin# te lot of te
<ualified "enefi$iaries of te [;?P] and o"tainin# for te&
#reater "enefits. 2:&pasis added.4
*s &ay "e #leaned fro& te ;?5*, in$luded as part of te
distri"ution plan are, 2a4 produ$tion-sarin# e<uivalent to tree
per$ent 2-K4 of #ross sales fro& te produ$tion of te
a#ri$ultural land paya"le to te =@9s in $as dividends or
in$entive "onusF and 2"4 distri"ution of free o&elots of not
&ore tan 2/0 s<uare &eters ea$ to fa&ily-"enefi$iaries. 'e
produ$tion-sarin#, as te ;?P indi$ated, is paya"le
$//(%5()*$.( o3 =#(*#(/ >HLI? +a6(% +on(, o/ no*,!
i&plyin# tat te "enefits do not parta+e te nature of
dividends, as te ter& is ordinarily understood under
$orporation la%.
@ile a little "it ard to follo%, #iven tat, durin# te period
&aterial, te assi#ned value of te a#ri$ultural land in te
a$ienda %as PP 107.7- &illion, %ilete total assets of ALI
%as PP 500.55 &illion %it net assets of PP -55.5- &illion,
'ade$oDALI %ould ad&it tat te ratio of te land-to-sares of
sto$+ $orresponds to99.9@ of te outstandin# $apital sto$+ of
te ALI e<uivalent to 118,9:1,:7;.8< %#a/(% of sto$+ %it a
par value of PP 1Dsare.
;u"se<uently, ALI su"&itted to ?*R its ;?P, desi#nated as
Proposal for ;to$+ ?istri"ution under ..*.R.P.,!
[-5]
%i$ %as
su"stantially "ased on te ;?5*.
3ota"ly, in a follo%-up referendu& te ?*R $ondu$ted on
5$to"er 1/, 1060, 5,118 =@9s, out of 5,-15 %o parti$ipated,
opted to re$eive sares in ALI.
[-7]
5ne undred tirty-t%o 21-24
$ose a$tual land distri"ution.
[-8]
*fter a revie% of te ;?P, ten ?*R ;e$retary >iria&
?efensor-;antia#o 2;e$. ?efensor-;antia#o4 addressed a
letter dated 3ove&"er 7, 1060
[-6]
to Pedro ;. .o1uan#$o
2.o1uan#$o4, ten 'ade$o president, proposin# tat te ;?P
"e revised, alon# te follo%in# lines,
1. 'at over te i&ple&entation period of te [;?P],
['ade$o]DALI sall ensure tat tere %ill "e no dilution in te
sares of sto$+s of individual [=@9s]F
2. 'at a safe#uard sall "e provided "y ['ade$o]DALI
a#ainst te dilution of te per$enta#e sareoldin#s of te
[=@9s], i.e., tat te --K sareoldin#s of te [=@9s] %ill "e
&aintained at any #iven ti&eF
-. 'at te &e$ani$s for distri"utin# te sto$+s "e
e)pli$itly stated in te [>5*] si#ned "et%een te ['ade$o], ALI
and its [=@9s] prior to te i&ple&entation of te sto$+ planF
/. 'at te sto$+ distri"ution plan provide for $lear and
definite ter&s for deter&inin# te a$tual nu&"er of seats to "e
allo$ated for te [=@9s] in te ALI 9oardF
5. 'at ALI provide #uidelines and a ti&eta"le for te
distri"ution of o&elots to <ualified [=@9s]F and
7. 'at te -K $as dividends &entioned in te [;?P] "e
e)pressly provided for [in] te >5*.
In a letter-reply of 3ove&"er 1/, 1060 to ;e$. ?efensor-
;antia#o, 'ade$oDALI e)plained tat te proposed revisions of
te ;?P are already e&"odied in "ot te ;?P and >5*.
[-0]
=ollo%in# tat e)$an#e, te P*R., under ten ;e$.
?efensor-;antia#o, "y R(%o21*$on No. 8:A1BAB
[/0]
dated
3ove&"er 21, 1060, approved te ;?P of 'ade$oDALI.
[/1]
*t te ti&e of te ;?P approval, ALI ad a pool of
far&%or+ers, nu&"erin# 7,207, &ore or less, $o&posed of
per&anent, seasonal and $asual &aster listDpayroll and non-
&aster list &e&"ers.
=ro& 1060 to 2005, ALI $lai&ed to ave e)tended te
follo%in# "enefits to te =@9s,
2a4 - "illion pesos 2P-,000,000,0004 %ort of salaries,
%a#es and frin#e "enefits

2"4 50 &illion sares of sto$+ distri"uted for free to te
=@9sF
2$4 150 &illion pesos 2P150,000,0004 representin# -K
of te #ross produ$eF
2d4 -8.5 &illion pesos 2P-8,500,0004 representin# -K
fro& te sale of 500 e$tares of $onverted
a#ri$ultural land of Aa$ienda LuisitaF
2e4 2/0-s<uare &eter o&elots distri"uted for freeF
2f4 2./ &illion pesos 2P2,/00,0004 representin# -K fro&
te sale of 60 e$tares at 60 &illion pesos 2P60,000,0004 for
te ;.':MF
2#4 ;o$ial servi$e "enefits, su$ as "ut not li&ited to free
ospitali(ationD&edi$alD&aternity servi$es, old a#eDdeat
"enefits and no interest "earin# salaryDedu$ational loans and
ri$e su#ar a$$ounts.
[/2]
'%o separate #roups su"se<uently $ontested tis $lai& of ALI.
5n *u#ust 15, 1005, ALI applied for te $onversion of 500
e$tares of land of te a$ienda fro& a#ri$ultural to industrial
use,
[/-]
pursuant to ;e$. 75 of R* 7758, providin#,
;:.. 75. Conversion of Lands.N*fter te lapse of five 254
years fro& its a%ard, %en te land $eases to "e e$ono&i$ally
feasi"le and sound for a#ri$ultural purposes, or te lo$ality as
"e$o&e ur"ani(ed and te land %ill ave a #reater e$ono&i$
value for residential, $o&&er$ial or industrial purposes, te
?*R, upon appli$ation of te "enefi$iary or te lando%ner, %it
due noti$e to te affe$ted parties, and su"1e$t to e)istin# la%s,
&ay autori(e te re$lassifi$ation, or $onversion of te land
and its disposition, Provided, 'at te "enefi$iary sall ave
fully paid its o"li#ation.
'e appli$ation, a$$ordin# to ALI, ad te "a$+in# of 5,000 or
so =@9s, in$ludin# respondent Rene Calan#, and Jose Julio
;uni#a, as eviden$ed "y te >anifesto of ;upport tey si#ned
and %i$ %as su"&itted to te ?*R.
[//]
*fter te usual
pro$essin#, te ?*R, tru ten ;e$. :rnesto Carilao, approved
te appli$ation on *u#ust 1/, 1007, per ?*R .onversion 5rder
3o. 0-070108/-87/-2054, ;eries of 1007,
[/5]
su"1e$t to
pay&ent of tree per$ent 2-K4 of te #ross sellin# pri$e to te
=@9s and to ALIGs $ontinued $o&plian$e %it its underta+in#s
under te ;?P, a&on# oter $onditions.
5n ?e$e&"er 1-, 1007, ALI, in e)$an#e for su"s$ription of
12,000,000 sares of sto$+s of .entennary Aoldin#s, In$.
2.entennary4, $eded -00 e$tares of te $onverted area to te
latter.
[/7]
.onse<uently, ALIGs 'ransfer .ertifi$ate of 'itle 2'.'4
3o. 268010
[/8]
%as $an$eled and '.' 3o. 202001
[/6]
%as
issued in te na&e of .entennary. ALI transferred te
re&ainin# 200 e$tares $overed "y '.' 3o. 268000 to Luisita
Realty .orporation 2LR.4
[/0]
in t%o separate transa$tions in
1008 and 1006, "ot unifor&ly involvin# 100 e$tares for PP
250 &illion ea$.
[50]
.entennary, a $orporation %it an autori(ed $apital sto$+ of
PP 12,100,000 divided into 12,100,000 sares and %olly-
o%ned "y ALI, ad te follo%in# in$orporators, Pedro
.o1uan#$o, Josepine .. Reyes, 'eresita .. Lopa, :rnesto C.
'eopa$o, and 9ernardo R. Lao(.
;u"se<uently, .entennary sold
[51]
te entire -00 e$tares
to Luisita Industrial Par+ .orporation 2LIP.54 for PP 850
&illion. 'e latter a$<uired it for te purpose of developin# an
industrial $o&ple).
[52]
*s a result, .entennaryGs '.' 3o.
202001 %as $an$eled to "e repla$ed "y '.' 3o. -10067
[5-]
in
te na&e of LIP.5.
=ro& te area $overed "y '.' 3o. -10067 %as $arved out t%o
224 par$els, for %i$ t%o 224 separate titles %ere issued in te
na&e of LIP.5, spe$ifi$ally, 2a4 '.' 3o. -75600
[5/]
and 2"4
'.' 3o. -75601,
[55]
$overin# 160 and four e$tares,
respe$tively. '.' 3o. -10067 %as, a$$ordin#ly, partially
$an$eled.
Later on, in a ?eed of *"solute *ssi#n&ent dated 3ove&"er
25, 200/, LIP.5 transferred te par$els $overed "y its '.'
3os. -75600 and -75601 to te Ri(al .o&&er$ial 9an+in#
.orporation 2R.9.4 "y %ay of dacion en pago in pay&ent of
LIP.5Gs PP /-1,705,8-2.10 loan o"li#ations. LIP.5Gs titles
%ere $an$eled and ne% ones, '.' 3os. -01051 and -01052,
%ere issued to R.9..
*part fro& te 500 e$tares alluded to, anoter 60.51 e$tares
%ere later deta$ed fro& te area $overa#e of Aa$ienda
Luisita %i$ ad "een a$<uired "y te #overn&ent as part of
te ;u"i$-.lar+-'arla$ :)press%ay 2;.':M4 $o&ple). In
a"solute ter&s, /,--5.85 e$tares re&ained of te ori#inal
/,015 e$tares 'ade$o $eded to ALI.
[57]
;u$, in sort, %as te state of tin#s %en t%o separate
petitions, "ot undated, rea$ed te ?*R in te latter part of
200-. In te first, deno&inated asPetitionDProtest,
[58]
respondents Jose Julio ;uni#a and @indsor *ndaya,
identifyin# te&selves as ead of te ;upervisory Croup of
ALI 2;upervisory Croup4, and 70 oter supervisors sou#t to
revo+e te ;?5*, alle#in# tat ALI ad failed to #ive te&
teir dividends and te one per$ent 21K4 sare in #ross sales,
as %ell as te tirty-tree per$ent 2--K4 sare in te pro$eeds
of te sale of te $onverted 500 e$tares of land. 'ey furter
$lai&ed tat teir lives ave not i&proved $ontrary to te
pro&ise and rationale for te adoption of te ;?5*. 'ey also
$ited violations "y ALI of te ;?5*Gs ter&s.
[56]
'ey prayed for
a rene#otiation of te ;?5*, or, in te alternative, its
revo$ation.
Revo$ation and nullifi$ation of te ;?5* and te distri"ution of
te lands in te a$ienda %ere te $all in te se$ond petition,
styled as Petison 2Petition4.
[50]
'e Petison %as ostensi"ly
filed on ?e$e&"er /, 200- "y Alansa ng mga
,anggagawang -$'id ng .acienda L$isita 2*>9*L*4, %ere
te and%ritten na&e of respondents Rene Calan# as
Pan#ulo *>9*L*! and 3oel >allari as ;e$-Cen.
*>9*L*!
[70]
appeared. *s alle#ed, te petition %as filed on
"ealf of *>9*L*Gs &e&"ers purportedly $o&posin# a"out
60K of te 5,--0 =@9s of Aa$ienda Luisita.
ALI %ould eventually ans%er
[71]
te petitionDprotest of te
;upervisory Croup. 5n te oter and, ALIGs ans%er
[72]
to te
*>9*L* petition %as $ontained in its letter dated January 21,
2005 also filed %it ?*R.
>ean%ile, te ?*R $onstituted a ;pe$ial 'as+ =or$e to attend
to issues relatin# to te ;?P of ALI. *&on# oter duties, te
;pe$ial 'as+ =or$e %as &andated to revie% te ter&s and
$onditions of te ;?5* and P*R. Resolution 3o. 60-12-2
relative to ALIGs ;?PF evaluate ALIGs $o&plian$e reportsF
evaluate te &erits of te petitions for te revo$ation of te
;?PF $ondu$t o$ular inspe$tions or field investi#ationsF and
re$o&&end appropriate re&edial &easures for approval of te
;e$retary.
[7-]
*fter investi#ation and evaluation, te ;pe$ial 'as+ =or$e
su"&itted its 'er&inal Report, Aa$ienda Luisita, In$orporated
2ALI4 ;to$+ ?istri"ution Plan 2;?P4 .onfli$t!
[7/]
dated
;epte&"er 22, 2005 2'er&inal Report4, findin# tat ALI as not
$o&plied %it its o"li#ations under R* 7758 despite te
i&ple&entation of te ;?P.
[75]
'e 'er&inal Report and te
;pe$ial 'as+ =or$eGs re$o&&endations %ere adopted "y ten
?*R ;e$. 3asser Pan#anda&an 2;e$. Pan#anda&an4.
[77]
;u"se<uently, ;e$. Pan#anda&an re$o&&ended to te P*R.
:)e$utive .o&&ittee 2:)$o&4 2a4 te re$allDrevo$ation of
P*R. Resolution 3o. 60-12-2 dated 3ove&"er 21, 1060
approvin# ALIGs ;?PF and 2"4 te a$<uisition of Aa$ienda
Luisita trou# te $o&pulsory a$<uisition s$e&e. =ollo%in#
revie%, te P*R. Ialidation .o&&ittee favora"ly endorsed te
?*R ;e$retaryGs re$o&&endation afore-stated.
[78]
5n ?e$e&"er 22, 2005, te P*R. issued te assailed
Resolution 3o. 2005--2-01, disposin# as follo%s,
35@, 'A:R:=5R:, on &otion duly se$onded, R:;5LI:?,
as it is A:R:9L R:;5LI:?, to approve and $onfir& te
re$o&&endation of te P*R. :)e$utive .o&&ittee
adoptin# in toto te report of te P*R. :).o& Ialidation
.o&&ittee affir&in# te re$o&&endation of te ?*R to
re$allDrevo+e te ;?5 plan of 'arla$ ?evelop&ent
.orporationDAa$ienda Luisita In$orporated.
R:;5LI:?, furter, tat te lands su"1e$t of te
re$alledDrevo+ed '?.DALI ;?5 plan "e fort%it pla$ed under
te $o&pulsory $overa#e or &andated land a$<uisition
s$e&e of te [.*RP].
*PPR5I:?.
[76]
* $opy of Resolution 3o. 2005--2-01 %as served on ALI te
follo%in# day, ?e$e&"er 2-, %itout any $opy of te
do$u&ents adverted to in te resolution atta$ed. * letter-
re<uest dated ?e$e&"er 26, 2005
[70]
for $ertified $opies of said
do$u&ents %as sent to, "ut %as not a$ted upon "y, te P*R.
se$retariat.
'erefro&, ALI, on January 2, 2007, sou#t re$onsideration.
[80]
5n te sa&e day, te ?*R 'arla$ provin$ial offi$e issued
te 3oti$e of .overa#e
[81]
%i$ ALI re$eived on January /,
2007.
Its &otion not%itstandin#, ALI as filed te instant re$ourse in
li#t of %at it $onsiders as te ?*RGs asty pla$in# of
Aa$ienda Luisita under .*RP even "efore P*R. $ould rule or
even read te &otion for re$onsideration.
[82]
*s ALI later rued,
it $an not +no% fro& te a"ove-<uoted resolution te fa$ts and
te la% upon %i$ it is "ased.!
[8-]
P*R. %ould eventually deny ALIGs &otion for
re$onsideration via Resolution 3o. 2007--/-01 dated >ay -,
2007.
9y Resolution of June 1/, 2007,
[8/]
te .ourt, a$tin# on ALIGs
&otion, issued a te&porary restrainin# order,
[85]
en1oinin# te
i&ple&entation of Resolution 3o. 2005--2-01 and te noti$e of
$overa#e.
5n July 1-, 2007, te 5;C, for pu"li$ respondents P*R. and
te ?*R, filed its .o&&ent
[87]
on te petition.
5n ?e$e&"er 2, 2007, 3oel >allari, i&pleaded "y ALI as
respondent in is $apa$ity as ;e$-Cen. *>9*L*,! filed
is >anifestation and >otion %it .o&&ent *tta$ed dated
?e$e&"er /, 2007 2>anifestation and >otion4.
[88]
In it, >allari
stated tat e as "ro+en a%ay fro& *>9*L* %it oter
*>9*L* e)-&e&"ers and for&ed =ar&%or+ers *#rarian
Refor& >ove&ent, In$. 2=*R>4.
[86]
;ould tis sift in allian$e
deny i& standin#, >allari also prayed tat =*R> "e allo%ed
to intervene.
*s events %ould later develop, >allari ad a partin# of %ays
%it oter =*R> &e&"ers, parti$ularly %ould-"e intervenors
Renato Lali$, et al. *s tin#s stand, >allari returned to te
*>9*L* fold, $reatin# te *>9*L*-3oel >allari fa$tion and
leavin# Renato Lali$, et al. as te re&ainin# &e&"ers of
=*R> %o sou#t to intervene.
5n January 10, 2008, te ;upervisory Croup
[80]
and te
*>9*L*-Rene Calan# fa$tion su"&itted
teir .o&&entD5pposition dated ?e$e&"er 18, 2007.
[60]
5n 5$to"er -0, 2008, R.9. filed a >otion for Leave to
Intervene and to =ile and *d&it *tta$ed Petition-In-
Intervention dated 5$to"er 16, 2008.
[61]
LIP.5 later follo%ed
%it a si&ilar &otion.
[62]
In "ot &otions, R.9. and LIP.5
$ontended tat te assailed resolution effe$tively nullified te
'.'s under teir respe$tive na&es as te properties $overed
in te '.'s %ere verita"ly in$luded in te January 2, 2007
noti$e of $overa#e. In te &ain, tey $lai&ed tat te
revo$ation of te ;?P $annot le#ally affe$t teir ri#ts as
inno$ent pur$asers for value. 9ot &otions for leave to
intervene %ere #ranted and te $orrespondin# petitions-in-
intervention ad&itted.
5n *u#ust 16, 2010, te .ourt eard te &ain and intervenin#
petitioners on oral ar#u&ents. 5n te oter and, te .ourt,
on *u#ust 2/, 2010, eard pu"li$ respondents as %ell as te
respe$tive $ounsels of te *>9*L*->allari-;upervisory
Croup, te *>9*L*-Calan# fa$tion, and te =*R> and its 28
&e&"ers
[6-]
ar#ue teir $ase.
Prior to te oral ar#u&ents, o%ever, ALIF *>9*L*,
represented "y >allariF te ;upervisory Croup, represented "y
;uni#a and *ndayaF and te Enited Luisita @or+ers Enion,
represented "y :ldifonso Pin#ol, filed %it te .ourt a 1oint
su"&ission and &otion for approval of a .o&pro&ise
*#ree&ent 2:n#lis and 'a#alo# versions4 dated *u#ust 7,
2010.
5n *u#ust -1, 2010, te .ourt, in a "id to resolve te dispute
trou# an a&i$a"le settle&ent, issued a
Resolution
[6/]
$reatin# a >ediation Panel $o&posed of ten
*sso$iate Justi$e >a. *li$ia *ustria->artine(, as $airperson,
and for&er .* Justi$es Ae$tor AofileBa and 'eresita ?y-Lia$$o
=lores, as &e&"ers. >eetin#s on five 254 separate dates, i.e.,
;epte&"er 6, 0, 1/, 20, and 28, 2010, %ere
$ondu$ted. ?espite perseverin# and painsta+in# efforts on te
part of te panel, &ediation ad to "e dis$ontinued %en no
a$$epta"le a#ree&ent $ould "e rea$ed.
T#( I%%1(%
ALI raises te follo%in# issues for our $onsideration,
I.
@A:'A:R 5R 35' PE9LI. R:;P53?:3'; P*R. *3?
;:.R:'*RL P*3C*3?*>*3 A*I: JERI;?I.'I53,
P5@:R *3?D5R *E'A5RI'L '5 3ELLI=L, R:.*LL,
R:I5O: 5R R:;.I3? 'A: ;?5*.

II.
[I= ;5], ) ) ) .*3 'A:L ;'ILL :M:R.I;: ;E.A
JERI;?I.'I53, P5@:R *3?D5R *E'A5RI'L *' 'AI;
'I>:, I./., *=':R ;IM'::3 2174 L:*R; =R5> 'A:
:M:.E'I53 5= 'A: ;?5* *3? I'; I>PL:>:3'*'I53
@I'A5E' II5L*'I3C ;:.'I53; 1 *3? 10 5= *R'I.L: III
29ILL 5= RICA';4 5= 'A: .53;'I'E'I53 *C*I3;'
?:PRII*'I53 5= PR5P:R'L @I'A5E' ?E: PR5.:;;
5= L*@ *3? 'A: I>P*IR>:3' 5= .53'R*.'E*L
RICA'; *3? 59LIC*'I53;P >5R:5I:R, *R: 'A:R:
L:C*L CR5E3?; E3?:R 'A: .IIIL .5?:, vi0, *R'I.L:
1101 ) ) ), *R'I.L:; 1-60, 1-61 *3? 1-62 ) ) ) *R'I.L:
1-00 ) ) ) *3? *R'I.L: 1/00 ) ) ) 'A*' .*3 9: I3I5O:?
'5 3ELLI=L, R:.*LL, R:I5O:, 5R R:;.I3? 'A: ;?5*P
III.
@A:'A:R 'A: P:'I'I53; '5 3ELLI=L, R:.*LL,
R:I5O: 5R R:;.I3? 'A: ;?5* A*I: *3L L:C*L 9*;I;
5R CR5E3?; *3? @A:'A:R 'A: P:'I'I53:R;
'A:R:I3 *R: 'A: R:*L P*R'I:;-I3-I3':R:;' '5 =IL:
;*I? P:'I'I53;.
II.
@A:'A:R 'A: RICA';, 59LIC*'I53; *3? R:>:?I:;
5= 'A: P*R'I:; '5 'A: ;?5* *R: 35@ C5I:R3:? 9L
'A: .5RP5R*'I53 .5?: 29*'*; P*>9*3;* 9LC. 764
*3? 35' 9L 'A: ) ) ) [.*RL] ) ) ).
5n te oter and, R.9. su"&its te follo%in# issues,
I.
R:;P53?:3' P*R. .5>>I'':? CR*I: *9E;: 5=
?I;.R:'I53 *>5E3'I3C '5 L*.O 5R :M.:;; 5=
JERI;?I.'I53 @A:3 I' ?I? 35' :M.LE?: 'A: ;E9J:.'
PR5P:R'L =R5> 'A: .5I:R*C: 5= 'A: .*RP
?:;PI': 'A: =*.' 'A*' P:'I'I53:R-I3':RI:35R
R.9. A*; *.QEIR:? I:;':? RICA'; *3?
I3?:=:*;I9L: 'I'L: 5I:R 'A: ;E9J:.' PR5P:R'L *;
*3 I335.:3' PER.A*;:R =5R I*LE:.
*. 'A: *;;*IL:? R:;5LE'I53 35. 2005--2-01 *3?
'A: 35'I.: 5= .5I:R*C: ?*':? 02 J*3E*RL 2007
A*I: 'A: :==:.' 5= 3ELLI=LI3C '.' 35;. -01051 *3?
-01052 I3 'A: 3*>: 5= P:'I'I53:R-I3':RI:35R
R.9..
9. *; *3 I335.:3' PER.A*;:R =5R I*LE:,
P:'I'I53:R-I3':RI:35R R.9. .*335' 9:
PR:JE?I.:? 9L * ;E9;:QE:3' R:I5.*'I53 5R
R:;.I;;I53 5= 'A: ;?5*.
II.
'A: *;;*IL:? R:;5LE'I53 35. 2005--2-01 *3? 'A:
35'I.: 5= .5I:R*C: ?*':? 02 J*3E*RL 2007 @:R:
I;;E:? @I'A5E' *==5R?I3C P:'I'I53:R-I3':RI:35R
R.9. I'; RICA' '5 ?E: PR5.:;; *; *3 I335.:3'
PER.A*;:R =5R I*LE:.
LIP.5, li+e R.9., asserts avin# a$<uired vested and
indefeasi"le ri#ts over $ertain portions of te $onverted
property, and, en$e, %ould as$ri"e on P*R. te $o&&ission
of #rave a"use of dis$retion %en it in$luded tose portions in
te noti$e of $overa#e. *nd apart fro& raisin# issues identi$al
%it tose of ALI, su$ as "ut not li&ited to te a"sen$e of
valid #rounds to %arrant te res$ission andDor revo$ation of te
;?P, LIP.5 %ould alle#e tat te assailed resolution and te
noti$e of $overa#e %ere issued %itout affordin# it te ri#t to
due pro$ess as an inno$ent pur$aser for value. 'e
#overn&ent, LIP.5 also ar#ues, is estopped fro& re$overin#
properties %i$ ave sin$e passed to inno$ent parties.
;i&ply for&ulated, te prin$ipal deter&inative issues tendered
in te &ain petition and to %i$ all oter related <uestions
&ust yield "oil do%n to te follo%in#, 214 &atters of standin#F
224 te $onstitutionality of ;e$. -1 of R* 7758F 2-4 te
1urisdi$tion of P*R. to re$all or revo+e ALIGs ;?PF 2/4 te
validity or propriety of su$ re$all or revo$atory a$tionF and 254
$orollary to 2/4, te validity of te ter&s and $onditions of te
;?P, as e&"odied in te ;?5*.
O1/ R12$n-
I.
@e first pro$eed to te e)a&ination of te preli&inary issues
"efore delvin# on te &ore serious $allen#es "earin# on te
validity of P*R.Gs assailed issuan$e and te #rounds for it.

S15(/.$%o/, G/o15, AMBALA and *#($/
/(%5()*$.( 2(ad(/% a/( /(a2 5a/*$(%A$nA$n*(/(%*
ALI %ould deny real party-in-interest status to te purported
leaders of te ;upervisory Croup and *>9*L*, i.e., Julio
;uni#a, @indsor *ndaya, and Rene Calan#, %o filed te
revo$atory petitions "efore te ?*R. *s ALI %ould ave it,
Calan#, te self-styled ead of *>9*L*, #ained ALI
e&ploy&ent in June 1000 and, tus, $ould not ave "een a
party to te ;?5* e)e$uted a year earlier.
[65]
*s re#ards te
;upervisory Croup, ALI alle#es tat supervisors are not
re#ular far&%or+ers, "ut te $o&pany noneteless $onsidered
te& =@9s under te ;?5* as a &ere $on$ession to ena"le
te& to en1oy te sa&e "enefits #iven <ualified re#ular
far&%or+ers. Ao%ever, if te ;?5* %ould "e $an$eled and
land distri"ution effe$ted, so ALI $lai&s, $itin# 1ortich v.
Corona,
[67]
te supervisors %ould "e e)$luded fro& re$eivin#
lands as far&%or+ers oter tan te re#ular far&%or+ers %o
are &erely entitled to te fruits of te land.!
[68]
'e ;?5* no less identifies te ;?P <ualified "enefi$iaries!
as *#( 3a/+=o/6(/% =#o a55(a/ $n *#( ann1a2 5a,/o22,
$n)21%$.( o3 *#( 5(/+an(n* and %(a%ona2 (+52o,((%, =#o
a/( /(-12a/2, o/ 5(/$od$)a22, (+52o,(d 4, >HLI?.!
[66]
Calan#,
per ALIGs o%n ad&ission, is e&ployed "y ALI, and is, tus, a
<ualified "enefi$iary of te ;?PF e $o&es %itin te definition
of a real party-in-interest under ;e$. 2, Rule - of te Rules of
.ourt, &eanin#, one %o stands to "e "enefited or in1ured "y
te 1ud#&ent in te suit or is te party entitled to te avails of
te suit.
'e sa&e olds true %it respe$t to te ;upervisory Croup
%ose &e&"ers %ere ad&ittedly e&ployed "y ALI and %ose
na&es and si#natures even appeared in te anne) of te
;?5*. 9ein# <ualified "enefi$iaries of te ;?P, ;uni#a and
te oter 71 supervisors are $ertainly parties %o %ould
"enefit or "e pre1udi$ed "y te 1ud#&ent re$allin# te ;?P or
repla$in# it %it so&e oter &odality to $o&ply %it R* 7758.
:ven assu&in# tat &e&"ers of te ;upervisory Croup are
not re#ular far&%or+ers, "ut are in te $ate#ory of oter
far&%or+ers! &entioned in ;e$. /, *rti$le MIII of te
.onstitution,
[60]
tus only entitled to a sare of te fruits of te
land, as indeed 1ortich tea$es, tis does not detra$t fro& te
fa$t tat tey are still identified as "ein# a&on# te ;?P
<ualified "enefi$iaries.! *s su$, tey are, tus, entitled to
"rin# an a$tion upon te ;?P.
[00]
*t any rate, te follo%in#
ad&ission &ade "y *tty. Cener *sun$ion, $ounsel of ALI,
durin# te oral ar#u&ents sould put to rest any lin#erin#
dou"t as to te status of protesters Calan#, ;uni#a, and
*ndaya,
Justi$e 9ersa&in, ) ) ) I eard you a %ile a#o tat you %ere
$on$edin# te <ualified far&er "enefi$iaries of Aa$ienda
Luisita %ere real parties in interestP
*tty. *sun$ion, Les, Lour Aonor please, real party in interest
%i$ tat <uestion refers to te $o&plaints of protest initiated
"efore te ?*R and te real party in interest tere "e
$onsidered as possessed "y te far&er "enefi$iaries %o
initiated te protest.
[01]
=urter, under ;e$. 50, para#rap / of R* 7758, far&er-
leaders are e)pressly allo%ed to represent te&selves, teir
fello% far&ers or teir or#ani(ations in any pro$eedin#s "efore
te ?*R. ;pe$ifi$ally,
;:.. 50. Quasi-Judi$ial Po%ers of te ?*R.N) ) )
) ) ) )
R(%5on%$42( 3a/+(/ 2(ad(/% %#a22 4( a22o=(d *o /(5/(%(n*
*#(+%(2.(%, *#($/ 3(22o= 3a/+(/% o/ *#($/ o/-an$Ca*$on% $n
an, 5/o)((d$n-% 4(3o/( *#( DAR, Provided, o%ever, tat
%en tere are t%o or &ore representatives for any individual
or #roup, te representatives sould $oose only one a&on#
te&selves to represent su$ party or #roup "efore any ?*R
pro$eedin#s. 2:&pasis supplied.4
.learly, te respe$tive leaders of te ;upervisory Croup and
*>9*L* are $onte)tually real parties-in-interest allo%ed "y
la% to file a petition "efore te ?*R or P*R..
'is is not ne$essarily to say, o%ever, tat Calan# represents
*>9*L*, for as re$ords so% and as ALI aptly noted,
[02]
is
petison! filed %it ?*R did not $arry te usual autori(ation
of te individuals in %ose "ealf it %as supposed to ave
"een instituted. 'o date, su$ autori(ation do$u&ent, %i$
%ould lo#i$ally in$lude a
list of te na&es of te autori(in# =@9s, as yet to "e
su"&itted to "e part of te re$ords.
PARC7% A1*#o/$*, *o R(.o6( a S*o)6 D$%*/$41*$on P2an
5n te postulate tat te su"1e$t 1urisdi$tion is $onferred "y
la%, ALI &aintains tat P*R. is %itout autority to revo+e an
;?P, for neiter R* 7758 nor :5 220 e)pressly vests P*R.
%it su$ autority. @ile, as ALI ar#ued, :5 220 e&po%ers
P*R. to approve te plan for sto$+ distri"ution in appropriate
$ases, te e&po%er&ent only in$ludes te po%er to
disapprove, "ut not to re$all its previous approval of te ;?P
after it as "een i&ple&ented "y te parties.
[0-]
'o ALI, it is te
$ourt %i$ as 1urisdi$tion and autority to order te
revo$ation or res$ission of te P*R.-approved ;?P.
@e disa#ree.
Ender ;e$. -1 of R* 7758, as i&ple&ented "y ?*5 10, te
autority to approve te plan for sto$+ distri"ution of te
$orporate lando%ner "elon#s to P*R.. Ao%ever, $ontrary to
petitioner ALIGs posture, P*R. also as te po%er to revo+e
te ;?P %i$ it previously approved. It &ay "e, as ur#ed, tat
R* 7758 or oter e)e$utive issuan$es on a#rarian refor& do
not e)pli$itly vest te P*R. %it te po%er to revo+eDre$all
an approved ;?P. ;u$ po%er or autority, o%ever, is
dee&ed possessed "y P*R. under te 5/$n)$52( o3
n()(%%a/, $+52$)a*$on, a 4a%$) 5o%*12a*( *#a* =#a* $%
$+52$(d $n a %*a*1*( $% a% +1)# a 5a/* o3 $* a% *#a* =#$)# $%
(D5/(%%(d.
[0/]
@e ave e)plained tat every statute is understood, "y
i&pli$ation, to $ontain all su$ provisions as &ay "e ne$essary
to effe$tuate its o"1e$t and purpose, or to &a+e effe$tive ri#ts,
po%ers, privile#es or 1urisdi$tion %i$ it #rants, in$ludin# all
su$ $ollateral and su"sidiary $onse<uen$es as &ay "e fairly
and lo#i$ally inferred fro& its ter&s.!
[05]
=urter, every statutory
#rant of po%er, ri#t or privile#e is dee&ed to in$lude all
in$idental po%er, ri#t or privile#e.
[07]
#ordon v. 2eridiano II is instru$tive,
T#( 5o=(/ *o a55/o.( a 2$)(n%( $n)21d(% 4, $+52$)a*$on,
(.(n $3 no* (D5/(%%2, -/an*(d, *#( 5o=(/ *o /(.o6( $*. 9y
e)tension, te po%er to revo+e is li&ited "y te autority to
#rant te li$ense, fro& %i$ it is derived in te first pla$e.
'us, if te =?* #rants a li$ense upon its findin# tat te
appli$ant dru# store as $o&plied %it te re<uire&ents of te
#eneral la%s and te i&ple&entin# ad&inistrative rules and
re#ulations, it is only for teir violation tat te =?* &ay revo+e
te said li$ense. 9y te sa&e to+en, avin# #ranted te per&it
upon is as$ertain&ent tat te $onditions tereof as applied )
) ) ave "een $o&plied %it, it is only for te violation of su$
$onditions tat te &ayor &ay revo+e te said per&it.
[08]
2:&pasis supplied.4
=ollo%in# te do$trine of ne$essary i&pli$ation, it &ay "e
stated tat te $onfer&ent of e)press po%er to approve a plan
for sto$+ distri"ution of te a#ri$ultural land of $orporate
o%ners ne$essarily in$ludes te po%er to revo+e or re$all te
approval of te plan.
*s pu"li$ respondents aptly o"serve, to deny P*R. su$
revo$atory po%er %ould redu$e it into a tootless a#en$y of
.*RP, "e$ause te very sa&e a#en$y tas+ed to ensure
$o&plian$e "y te $orporate lando%ner %it te approved ;?P
%ould "e %itout autority to i&pose san$tions for non-
$o&plian$e %it it.
[06]
@it te vie% @e ta+e of te $ase, only
P*R. $an effe$t su$ revo$ation. 'e ?*R ;e$retary, "y is
o%n autority as su$, $annot plausi"ly do so, as te
a$$eptan$e andDor approval of te ;?P sou#t to "e ta+en
"a$+ or undone is te a$t of P*R. %ose offi$ial $o&position
in$ludes, no less, te President as $air, te ?*R ;e$retary as
vi$e-$air, and at least eleven 2114 oter depart&ent eads.
[00]

5n anoter "ut related issue, te ALI foists on te .ourt te
ar#u&ent tat su"1e$tin# its landoldin#s to $o&pulsory
distri"ution after its approved ;?P as "een i&ple&ented
%ould i&pair te $ontra$tual o"li#ations $reated under te
;?5*.
'e "road s%eep of ALIGs ar#u&ent i#nores $ertain
esta"lised le#al pre$epts and &ust, terefore, "e re1e$ted.
* la% autori(in# interferen$e, %en appropriate, in te
$ontra$tual relations "et%een or a&on# parties is dee&ed read
into te $ontra$t and its i&ple&entation $annot su$$essfully "e
resisted "y for$e of te non-i&pair&ent #uarantee. 'ere is, in
tat instan$e, no i&pin#e&ent of te i&pair&ent $lause, te
non-i&pair&ent prote$tion "ein# appli$a"le only to la%s tat
dero#ate 5/$o/ a$ts or $ontra$ts "y enlar#in#, a"rid#in# or in
any &anner $an#in# te intention of te parties. I&pair&ent,
in fine, o"tains if a %14%(01(n* la% $an#es te ter&s of a
$ontra$t "et%een te parties, i&poses ne% $onditions,
dispenses %it tose a#reed upon or %itdra%s e)istin#
re&edies for te enfor$e&ent of te ri#ts of te parties.
[100]
3e$essarily, te $onstitutional pros$ription %ould not apply
to la%s already in effe$t at te ti&e of $ontra$t e)e$ution, as in
te $ase of R* 7758, in relation to ?*5 10, vis-J-vis ALIGs
;?5*. *s eld in Serrano v. #allant ,aritime Services, Inc.,
'e proi"ition [a#ainst i&pair&ent of te o"li#ation of
$ontra$ts] is ali#ned %it te #eneral prin$iple tat la%s ne%ly
ena$ted ave only a prospective operation, and $annot affe$t
a$ts or $ontra$ts already perfe$tedF o%ever, as to la%s
already in e)isten$e, teir provisions are read into $ontra$ts
and dee&ed a part tereof. T#1%, *#( nonA$+5a$/+(n*
)2a1%( 1nd(/ S()*$on 10, A/*$)2( II >o3 *#( Con%*$*1*$on? $%
2$+$*(d $n a552$)a*$on *o 2a=% a4o1* *o 4( (na)*(d *#a*
=o12d $n an, =a, d(/o-a*( 3/o+ (D$%*$n- a)*% o/ )on*/a)*%
4, (n2a/-$n-, a4/$d-$n- o/ $n an, +ann(/ )#an-$n- *#(
$n*(n*$on o3 *#( 5a/*$(% *#(/(*o.
[101]
2:&pasis supplied.4
3eedless to stress, te assailed Resolution 3o. 2005--2-01 is
not te +ind of issuan$e %itin te a&"it of ;e$. 10, *rt. III of
te .onstitution providin# tat 3n4o law impairing the o"ligation
of contracts shall "e passed.!
Parenteti$ally, ALI ta#s te ;?5* as an ordinary $ivil la%
$ontra$t and, as su$, a "rea$ of its ter&s and $onditions is
not a P*R. ad&inistrative &atter, "ut one tat #ives rise to a
$ause of a$tion $o#ni(a"le "y re#ular $ourts.
[102]
'is
$ontention as little to $o&&end itself. 'e ;?5* is a %5()$a2
)on*/a)* $+41(d =$*# 5142$) $n*(/(%*, entered into and
$rafted pursuant to te provisions of R* 7758. It e&"odies te
;?P, %i$ re<uires for its validity, or at least its enfor$ea"ility,
P*R.Gs approval. *nd te fa$t tat te $ertifi$ate of
$o&plian$e
[10-]
HHto "e issued "y a#rarian autorities upon
$o&pletion of te distri"ution of sto$+sHHis revo$a"le "y te
sa&e issuin# autority supports te idea tat everytin# a"out
te i&ple&entation of te ;?P is, at te first instan$e, su"1e$t
to ad&inistrative ad1udi$ation.
ALI also parlays te notion tat te parties to te ;?5* sould
no% loo+ to te .orporation .ode, instead of to R* 7758, in
deter&inin# teir ri#ts, o"li#ations and re&edies. 'e .ode,
it adds, sould "e te appli$a"le la% on te disposition of te
a#ri$ultural land of ALI.
.ontrary to te vie% of ALI, te ri#ts, o"li#ations and
re&edies of te parties to te ;?5* e&"odyin# te ;?P are
pri&arily #overned "y R* 7758. It sould a"undantly "e &ade
$lear tat ALI %as pre$isely $reated in order to $o&ply %it R*
7758, %i$ te 5;C aptly des$ri"ed as te &oter la%! of
te ;?5* and te ;?P.
[10/]
It is, tus, parado)i$al for ALI to
sield itself fro& te $overa#e of .*RP "y invo+in# e)$lusive
appli$a"ility of te .orporation .ode under te #uise of "ein# a
$orporate entity.
@itout in any %ay &ini&i(in# te relevan$e of te
.orporation .ode sin$e te =@9s of ALI are also
sto$+olders, its appli$a"ility is li&ited as te ri#ts of te
parties arisin# fro& te ;?P sould not "e &ade to supplant or
$ir$u&vent te a#rarian refor& pro#ra&.
@itout dou"t, te .orporation .ode is te #eneral la%
providin# for te for&ation, or#ani(ation and re#ulation of
private $orporations. 5n te oter and, R* 7758 is te spe$ial
la% on a#rarian refor&. *s "et%een a #eneral and spe$ial la%,
te latter sall prevailRgeneralia speciali"$s non derogant.
[105]
9esides, te present i&passe "et%een ALI and te private
respondents is not an intra-$orporate dispute %i$
ne$essitates te appli$ation of te .orporation .ode. @at
private respondents <uestioned "efore te ?*R is te proper
i&ple&entation of te ;?P and ALIGs $o&plian$e %it R*
7758. :vidently, R* 7758 sould "e te appli$a"le la% to te
instant $ase.
ALI furter $ontends tat te in$lusion of te
a#ri$ultural land of Aa$ienda Luisita under te $overa#e of
.*RP and te eventual distri"ution of te land to te =@9s
%ould a&ount to a disposition of all or pra$ti$ally all of te
$orporate assets of ALI. ALI %ould add tat tis $ontin#en$y, if
ever it $o&es to pass, re<uires te appli$a"ility of te
.orporation .ode provisions on $orporate dissolution.
@e are not persuaded.
Indeed, te provisions of te .orporation .ode on $orporate
dissolution %ould apply insofar as te %indin# up of ALIGs
affairs or li<uidation of te assets is $on$erned. Ao%ever, te
&ere in$lusion of te a#ri$ultural land of Aa$ienda
Luisita under te $overa#e of .*RP and te landGs eventual
distri"ution to te =@9s %ill not, %itout &ore, auto&ati$ally
tri##er te dissolution of ALI. *s stated in te ;?5* itself, te
per$enta#e of te value of te a#ri$ultural land of Aa$ienda
Luisita in relation to te total assets transferred and $onveyed
"y 'ade$o to ALI $o&prises only --.207K, follo%in# tis
e<uation, value of te a#ri$ultural lands divided "y total
$orporate assets. 9y no stret$ of i&a#ination %ould said
per$enta#e a&ount to a disposition of all or pra$ti$ally all of
ALIGs $orporate assets sould $o&pulsory land a$<uisition and
distri"ution ensue.
'is "rin#s us to te validity of te revo$ation of te approval
of te ;?P si)teen 2174 years after its e)e$ution pursuant to
;e$. -1 of R* 7758 for te reasons set fort in te 'er&inal
Report of te ;pe$ial 'as+ =or$e, as endorsed "y P*R.
:)$o&. 9ut first, te &atter of te $onstitutionality of said
se$tion.
Con%*$*1*$ona2 I%%1(
=*R> as+s for te invalidation of ;e$. -1 of R* 7758, insofar
as it affords te $orporation, as a &ode of .*RP $o&plian$e,
to resort to sto$+ distri"ution, an arran#e&ent %i$, to =*R>,
i&pairs te funda&ental ri#t of far&ers and far&%or+ers
under ;e$. /, *rt. MIII of te .onstitution.
[107]
'o a &ore spe$ifi$, "ut dire$t point, =*R> ar#ues tat ;e$. -1
of R* 7758 per&its sto$+ transfer in lieu of outri#t a#ri$ultural
land transferF in fine, tere is sto$+ $ertifi$ate o%nersip of te
far&ers or far&%or+ers instead of te& o%nin# te land, as
envisa#ed in te .onstitution. =or =*R>, tis &odality of
distri"ution is an ano&aly to "e annulled for "ein# in$onsistent
%it te "asi$ $on$ept of a#rarian refor& in#rained in ;e$. /,
*rt. MIII of te .onstitution.
[108]
Rea$tin#, ALI insists tat a#rarian refor& is not only a"out
transfer of land o%nersip to far&ers and oter <ualified
"enefi$iaries. It dra%s attention in tis re#ard to ;e$. -2a4 of
R* 7758 on te $on$ept and s$ope of te ter& a-/a/$an
/(3o/+.! 'e $onstitutionality of a la%, ALI added, $annot, as
ere, "e atta$+ed $ollaterally.
'e instant $allen#e on te $onstitutionality of ;e$. -1 of R*
7758 and ne$essarily its $ounterpart provision in :5 220 &ust
fail as e)plained "elo%.
@en te .ourt is $alled upon to e)er$ise its po%er of 1udi$ial
revie% over, and pass upon te $onstitutionality of, a$ts of te
e)e$utive or le#islative depart&ents, it does so only %en te
follo%in# essential re<uire&ents are first &et, to %it,
214 tere is an a$tual $ase or $ontroversyF
224 tat te $onstitutional <uestion is raised at te earliest
possi"le opportunity "y a proper party or one %it loc$s standiF
and
2-4 te issue of $onstitutionality &ust "e te very lis
mota of te $ase.
[106]
3ot all te fore#oin# re<uire&ents are satisfied in te $ase at
"ar.
@ile tere is indeed an a$tual $ase or $ontroversy, intervenor
=*R>, $o&posed of a s&all &inority of 28 far&ers, as yet to
e)plain its failure to $allen#e te $onstitutionality of ;e$. -l of
R* 7758, sin$e as early as 3ove&"er 21, l060 %en P*R.
approved te ;?P of Aa$ienda Luisita or at least %itin a
reasona"le ti&e tereafter and %y its &e&"ers re$eived
"enefits fro& te ;?P %itout so &u$ of a protest. It %as only
on ?e$e&"er /, 200- or 1/ years after approval of te ;?P via
P*R. Resolution 3o. 60-12-2 dated 3ove&"er 21, 1060 tat
said plan and approvin# resolution %ere sou#t to "e revo+ed,
"ut not, to stress, "y =*R> or any of its &e&"ers, "ut "y
petitioner *>9*L*. =urter&ore, te *>9*L* petition did
35' <uestion te $onstitutionality of ;e$. -1 of R* 7758, "ut
$on$entrated on te purported fla%s and #aps in te
su"se<uent i&ple&entation of te ;?P. :ven te pu"li$
respondents, as represented "y te ;oli$itor Ceneral, did not
<uestion te $onstitutionality of te provision. 5n te oter
and, =*R>, %ose 28 &e&"ers for&erly "elon#ed to
*>9*L*, raised te $onstitutionality of ;e$. -1 only on >ay -,
2008 %en it filed its ;upple&ental .o&&ent %it te .ourt.
'us, it too+ =*R> so&e ei#teen 2164 years fro& 3ove&"er
21, 1060 "efore it $allen#ed te $onstitutionality of ;e$. -1 of
R* 7758 %i$ is <uite too late in te day. 'e =*R>
&e&"ers slept on teir ri#ts and even a$$epted "enefits fro&
te ;?P %it nary a $o&plaint on te alle#ed
un$onstitutionality of ;e$. -1 upon %i$ te "enefits %ere
derived. 'e .ourt $annot no% "e #oaded into resolvin# a
$onstitutional issue tat =*R> failed to assail after te lapse of
a lon# period of ti&e and te o$$urren$e of nu&erous events
and a$tivities %i$ resulted fro& te appli$ation of an alle#ed
un$onstitutional le#al provision.
It as "een e&pasi(ed in a nu&"er of $ases tat te <uestion
of $onstitutionality %ill not "e passed upon "y te .ourt unless
it is properly raised and presented in an appropriate $ase at
te first opportunity.
[100]
=*R> is, terefore, re&iss in "elatedly
<uestionin# te $onstitutionality of ;e$. -1 of R* 7758. 'e
se$ond re<uire&ent tat te $onstitutional <uestion sould "e
raised at te earliest possi"le opportunity is $learly %antin#.
'e last "ut te &ost i&portant re<uisite tat te $onstitutional
issue &ust "e te very lis mota of te $ase does not li+e%ise
o"tain. 'e lis mota aspe$t is not present, te $onstitutional
issue tendered not "ein# $riti$al to te resolution of te $ase.
'e unyieldin# rule as "een to avoid, %enever plausi"le, an
issue assailin# te $onstitutionality of a statute or
#overn&ental a$t.
[110]
If so&e oter #rounds e)ist "y %i$
1ud#&ent $an "e &ade %itout tou$in# te $onstitutionality of
a la%, su$ re$ourse is favored.
[111]
#arcia v. /5ec$tive
Secretar e)plains %y,
Lis ,ota R te fourt re<uire&ent to satisfy "efore tis .ourt
%ill underta+e 1udi$ial revie% R &eans tat te .ourt %ill not
pass upon a <uestion of un$onstitutionality, altou# properly
presented, if the case can "e disposed of on some other
gro$nd, s$ch as the application of the stat$te or the general
law. 'e petitioner &ust "e a"le to so% tat te $ase $annot
"e le#ally resolved unless te $onstitutional <uestion raised is
deter&ined. 'is re<uire&ent is "ased on te rule tat every
la% as in its favor te presu&ption of $onstitutionalityF to
1ustify its nullifi$ation, tere &ust "e a $lear and une<uivo$al
"rea$ of te .onstitution, and not one tat is dou"tful,
spe$ulative, or ar#u&entative.
[112]
2Itali$s in te ori#inal.4
'e lis mota in tis $ase, pro$eedin# fro& te "asi$ positions
ori#inally ta+en "y *>9*L* 2to %i$ te =*R> &e&"ers
previously "elon#ed4 and te ;upervisory Croup, is te alle#ed
non-$o&plian$e "y ALI %it te $onditions of te ;?P to
support a plea for its revo$ation. *nd "efore te .ourt, te lis
mota is %eter or not P*R. a$ted in #rave a"use of
dis$retion %en it ordered te re$all of te ;?P for su$ non-
$o&plian$e and te fa$t tat te ;?P, as $ou$ed and
i&ple&ented, offends $ertain $onstitutional and statutory
provisions. 'o "e sure, any of tese +ey issues &ay "e
resolved %itout plun#in# into te $onstitutionality of ;e$. -1 of
R* 7758. >oreover, loo+in# deeply into te underlyin# petitions
of *>9*L*, et al., it is not te said se$tion per se tat is
invalid, "ut rater it is te alle#ed appli$ation of te said
provision in te ;?P tat is fla%ed.
It &ay "e %ell to note at tis 1un$ture tat ;e$. 5 of R* 0800,
[11-]
a&endin# ;e$. 8 of R* 7758, as all "ut superseded ;e$.
-1 of R* 7758 vis-J-vis te sto$+ distri"ution $o&ponent of
said ;e$. -1. In its pertinent part, ;e$. 5 of R* 0800
provides, >T?#a* a3*(/ "1n( 90, B00:, *#( +od(% o3
a)01$%$*$on %#a22 4( 2$+$*(d *o .o21n*a/, o33(/ *o %(22 and
)o+512%o/, a)01$%$*$on.! 'us, for all intents and purposes,
te sto$+ distri"ution s$e&e under ;e$. -1 of R* 7758 is no
lon#er an availa"le option under e)istin# la%. 'e <uestion of
%eter or not it is un$onstitutional sould "e a &oot issue.
It is true tat te .ourt, in so&e $ases, as pro$eeded to
resolve $onstitutional issues oter%ise already &oot and
a$ade&i$
[11/]
provided te follo%in# re<uisites are present,
) ) ) first, tere is a #rave violation of te
.onstitutionF second, te e)$eptional $ara$ter of te situation
and te para&ount pu"li$ interest is involvedF third, %en te
$onstitutional issue raised re<uires for&ulation of $ontrollin#
prin$iples to #uide te "en$, te "ar, and te pu"li$F fo$rth,
te $ase is $apa"le of repetition yet evadin# revie%.
'ese re<uisites do not o"tain in te $ase at "ar.
=or one, tere appears to "e no "rea$ of te funda&ental
la%. ;e$. /, *rti$le MIII of te .onstitution reads,
'e ;tate sall, "y la%, underta+e an a#rarian refor& pro#ra&
founded on te ri#t of te far&ers and re#ular far&%or+ers,
%o are landless, to 5@3 dire$tly or .5LL:.'II:LL 'A:
L*3?; 'A:L 'ILL or, in te $ase of oter far&%or+ers, to
re$eive a 1ust sare of te fruits tereof. 'o tis end, te ;tate
sall en$oura#e and underta+e te 1ust distri"ution of all
a#ri$ultural lands, su"1e$t to su$ priorities and reasona"le
retention li&its as te .on#ress &ay pres$ri"e, ta+in# into
a$$ount e$olo#i$al, develop&ental, or e<uity $onsiderations,
and su"1e$t to te pay&ent of 1ust $o&pensation. In
deter&inin# retention li&its, te ;tate sall respe$t te ri#t of
s&all lando%ners. 'e ;tate sall furter provide in$entives
for voluntary land-sarin#. 2:&pasis supplied.4
'e %ordin# of te provision is une<uivo$alHHte far&ers and
re#ular far&%or+ers ave a ri#t '5 5@3 ?IR:.'LL 5R
.5LL:.'II:LL 'A: L*3?; 'A:L 'ILL. 'e "asi$ la%
allo%s t%o 224 &odes of land distri"utionRdire$t and indire$t
o%nersip. ?ire$t transfer to individual far&ers is te &ost
$o&&only used &etod "y ?*R and %idely a$$epted. Indire$t
transfer trou# $olle$tive o%nersip of te a#ri$ultural land is
te alternative to dire$t o%nersip of a#ri$ultural land "y
individual far&ers. 'e afore<uoted ;e$. / :MPR:;;LL
autori(es $olle$tive o%nersip "y far&ers. 3o lan#ua#e $an
"e found in te 1068 .onstitution tat dis<ualifies or proi"its
$orporations or $ooperatives of far&ers fro& "ein# te le#al
entity trou# %i$ $olle$tive o%nersip $an "e
e)er$ised. 'e %ord $olle$tive! is defined as indi$atin# a
nu&"er of persons or tin#s $onsidered as $onstitutin# one
#roup or a##re#ate,!
[115]
%ile $olle$tively! is defined as in a
$olle$tive sense or &annerF in a &ass or "ody.!
[117]
9y usin#
te %ord $olle$tively,! te .onstitution allo%s for indire$t
o%nersip of land and not 1ust outri#t a#ri$ultural land
transfer. 'is is in re$o#nition of te fa$t tat land refor& &ay
"e$o&e su$$essful even if it is done trou# te &ediu& of
1uridi$al entities $o&posed of far&ers.
.olle$tive o%nersip is per&itted in t%o 224 provisions of R*
7758. Its ;e$. 20 allo%s %or+ersG $ooperatives or asso$iations
to $olle$tively o%n te land, %ile te se$ond para#rap of
;e$. -1 allo%s $orporations or asso$iations to o%n a#ri$ultural
land %it te far&ers "e$o&in# sto$+olders or
&e&"ers. ;aid provisions read,
;:.. 20. 1arms owned or operated " corporations or other
"$siness associations.RIn te $ase of far&s o%ned or
operated "y $orporations or oter "usiness asso$iations, te
follo%in# rules sall "e o"served "y te P*R..
In #eneral, lands sall "e distri"uted dire$tly to te individual
%or+er-"enefi$iaries.
In $ase it is not e$ono&i$ally feasi"le and sound to divide te
land, ten $* %#a22 4( o=n(d )o22()*$.(2, 4, *#( =o/6(/
4(n(3$)$a/$(% =#o %#a22 3o/+ a =o/6(/%7 )oo5(/a*$.( o/
a%%o)$a*$on %i$ %ill deal %it te $orporation or "usiness
asso$iation. ) ) ) 2:&pasis supplied.4
;:.. -1. Corporate Landowners.R ) ) )
) ) ) )
Epon $ertifi$ation "y te ?*R, )o/5o/a*$on% o%nin#
a#ri$ultural lands &ay #ive teir <ualified "enefi$iaries te ri#t
to pur$ase su$ proportion of te $apital sto$+ of
te)o/5o/a*$on tat te a#ri$ultural land, a$tually devoted to
a#ri$ultural a$tivities, "ears in relation to te $o&panyGs total
assets, under su$ ter&s and $onditions as &ay "e a#reed
upon "y te&. In no $ase sall te $o&pensation re$eived "y
te %or+ers at te ti&e te sares of sto$+s are distri"uted "e
redu$ed. 'e sa&e prin$iple sall "e applied toa%%o)$a*$on%,
%it respe$t to teir e<uity or parti$ipation. ) ) ) 2:&pasis
supplied.4
.learly, %or+ersG $ooperatives or asso$iations under ;e$. 20 of
R* 7758 and $orporations or asso$iations under te
su$$eedin# ;e$. -1, as differentiated fro& individual far&ers,
are autori(ed vei$les for te $olle$tive o%nersip of
a#ri$ultural land. .ooperatives $an "e re#istered %it te
.ooperative ?evelop&ent *utority and a$<uire le#al
personality of teir o%n, %ile $orporations are 1uridi$al
persons under te .orporation .ode. 'us, ;e$. -1 is
$onstitutional as it si&ply i&ple&ents ;e$. / of *rt. MIII of te
.onstitution tat land $an "e o%ned .5LL:.'II:LL "y
far&ers. :ven te fra&ers of te l068 .onstitution are in
unison %it respe$t to te t%o 224 &odes of o%nersip of
a#ri$ultural lands tilled "y far&ersHH?IR:.' and
.5LL:.'II:, tus,
>R. 35LL:?5. *nd %en %e tal+ of te prase to
o%n d$/()*2,,! %e &ean te prin$iple of d$/()* o=n(/%#$5 4,
*#( *$22(/P
>R. >53;5?. Les.
>R. 35LL:?5. *nd %en %e tal+ of )o22()*$.(2,,! %e &ean
$o&&unal o%nersip, ste%ardsip or ;tate o%nersipP
>;. 3I:I*. In tis se$tion, %e $on$eive of $ooperativesF *#a*
$% 3a/+(/%7 )oo5(/a*$.(% o=n$n- *#( 2and, not te ;tate.
>R. 35LL:?5. *nd %en %e tal+ of )o22()*$.(2,,! referrin#
to far&ersG $ooperatives, do te far&ers o%n spe$ifi$ areas of
land %ere tey only unite in teir effortsP
>;. 3I:I*. 'at is one %ay.
>R. 35LL:?5. 9e$ause I understand tat tere are t%o
"asi$ syste&s involved, te &osave! type of a#ri$ulture and
te +i""ut(.! ;o are "ot $onte&plated in te reportP
>R. '*?:5. An- da2a=a 6a%$n- 5a+a+a/aan n-
5a-5a5a*15ad n- *1na, na /(5o/+a %a 215a a, an-
5a-+a+a,Aa/$ n- 215a na #a#a*$$n %a $nd$.$d1a2 na
5a-+a+a,Aa/$ E d$/()*2, E a* an- *$na*a=a- na %a+aA
%a+an- -a-a=$n n- +-a +a-41416$d. 'ulad sa 3e#ros,
an# #usto n# &#a &a#"u"u+id ay #a%in nila iton#
$ooperative or $olle$tive far&.! *n# i"i# sa"iin ay %a+aA
%a+a nilan# sasa+ain.
) ) ) )
>R. 'I3C;53. ) ) ) @en %e spea+ ere of to o%n dire$tly
or $olle$tively te lands tey till,! is tis land for te tillers rater
tan land for te landlessP 9efore, %e used to ear land for
te landless,! "ut no% te slo#an is land for te tillers.! Is tat
ri#tP
>R. '*?:5. *n# prinsipyon# u&iiral dito ay iyon# land for te
tillers. An- $4$- %a4$#$n n- Fd$/()*2,G a, *12ad %a
$+52(+(n*a%,on %a /$)( and )o/n 2and% 61n- %aan $naa/$
na n- +-a +a-%a%a6a an- 215an- 4$n141n-6a2 n$2a. An-
$4$- %a4$#$n na+an n- F)o22()*$.(2,G a, %a+aA%a+an-
5a--a=a %a $%an- 215a$n o $%an- 416$d, +atulad n#
sit%asyon sa3e#ros.
[118]
2:&pasis supplied.4
*s .o&&issioner 'adeo e)plained, te far&ers %ill %or+ on
te a#ri$ultural land sa&a-sa&a! or $olle$tively. 'us, te
&ain re<uisite for $olle$tive o%nersip of land is $olle$tive or
#roup %or+ "y far&ers of te a#ri$ultural land. Irrespe$tive of
%eter te lando%ner is a $ooperative, asso$iation or
$orporation $o&posed of far&ers, as lon# as $on$erted #roup
%or+ "y te far&ers on te land is present, ten it falls %itin
te a&"it of $olle$tive o%nersip s$e&e.
Li+e%ise, ;e$. /, *rt. MIII of te .onstitution &a+es &ention of
a $o&&it&ent on te part of te ;tate to pursue, 4, 2a=, an
a#rarian refor& pro#ra& founded on te poli$y of land for te
landless, "ut su"1e$t to su$ priorities as .on#ress &ay
pres$ri"e, ta+in# into a$$ount su$ a"stra$t varia"le as e<uity
$onsiderations.! 'e te)tual referen$e to a la% and .on#ress
ne$essarily i&plies tat te a"ove $onstitutional provision
is no* %(23A(D()1*o/, and tat le#islation is needed to
i&ple&ent te ur#ently needed pro#ra& of a#rarian
refor&. *nd R* 7758 as "een ena$ted pre$isely pursuant to
and as a &e$anis& to $arry out te $onstitutional dire$tives.
'is pie$e of le#islation, in fa$t, restates
[116]
te a#rarian refor&
poli$y esta"lised in te afore&entioned provision of te
.onstitution of pro&otin# te %elfare of landless far&ers and
far&%or+ers. R* 7758 tus defines a#rarian refor&! as te
redistri"ution of lands S to far&ers and re#ular far&%or+ers
%o are landless S to lift te e$ono&i$ status of te
"enefi$iaries and a22 o*#(/ a//an-(+(n*% a2*(/na*$.( *o *#(
5#,%$)a2 /(d$%*/$41*$on o3 2and%, su$ as produ$tion or profit
sarin#, la"or ad&inistration and te d$%*/$41*$on o3 %#a/(% o3
%*o)6 %i$ %ill allo% "enefi$iaries to re$eive a 1ust sare of
te fruits of te lands tey %or+.!
@it te vie% @e ta+e of tis $ase, te sto$+ distri"ution option
devised under ;e$. -1 of R* 7758 e%s %it te a#rarian
refor& poli$y, as instru&ent of so$ial 1usti$e under ;e$. / of
*rti$le MIII of te .onstitution. *l"eit land o%nersip for te
landless appears to "e te do&inant te&e of tat poli$y, @e
e&pasi(e tat ;e$. /, *rti$le MIII of te .onstitution, as
$ou$ed, does not $onstri$t .on#ress to passin# an a#rarian
refor& la% planted on dire$t land transfer to and o%nersip "y
far&ers and no oter, or else te ena$t&ent suffers fro& te
vi$e of un$onstitutionality. If te intention %ere oter%ise, te
fra&ers of te .onstitution %ould ave %orded said se$tion in
a &anner &andatory in $ara$ter.
=or tis .ourt, ;e$. -1 of R* 7758, %it its dire$t and indire$t
transfer features, is not in$onsistent %it te ;tateGs
$o&&it&ent to far&ers and far&%or+ers to advan$e teir
interests under te poli$y of so$ial 1usti$e. 'e le#islature, tru
;e$. -1 of R* 7758, as $osen a &odality for $olle$tive
o%nersip "y %i$ te i&peratives of so$ial 1usti$e &ay, in its
esti&ation, "e appro)i&ated, if not a$ieved. 'e .ourt
sould "e "ound "y su$ poli$y $oi$e.
=*R> $ontends tat te far&ers in te sto$+ distri"ution
s$e&e under ;e$. -1 do not o%n te a#ri$ultural land "ut are
&erely #iven sto$+ $ertifi$ates. 'us, te far&ers lose $ontrol
over te land to te "oard of dire$tors and e)e$utive offi$ials of
te $orporation %o a$tually &ana#e te land. 'ey $on$lude
tat su$ arran#e&ent runs $ounter to te &andate of te
.onstitution tat any a#rarian refor& &ust preserve te $ontrol
over te land in te ands of te tiller.
'is $ontention as no &erit.
@ile it is true tat te far&er is issued sto$+ $ertifi$ates and
does not dire$tly o%n te land, still, te .orporation .ode is
$lear tat te =@9 "e$o&es a sto$+older %o a$<uires an
e<uita"le interest in te assets of te $orporation, %i$
in$lude te a#ri$ultural lands. It %as e)plained tat te
e<uita"le interest of te sareolder in te property of te
$orporation is represented "y te ter& sto$+, and te e)tent of
is interest is des$ri"ed "y te ter& sares. 'e e)pression
sares of sto$+ %en <ualified "y %ords indi$atin# nu&"er and
o%nersip e)presses te e)tent of te o%nerGs interest in te
$orporate property.!
[110]
* sare of sto$+ typifies an ali<uot
part of te $orporationGs property, or te ri#t to sare in its
pro$eeds to tat e)tent %en distri"uted a$$ordin# to la% and
e<uity and tat its older is not te o%ner of any part of te
$apital of te $orporation.
[120]
Ao%ever, te =@9s %ill ulti&ately
o%n te a#ri$ultural lands o%ned "y te $orporation %en te
$orporation is eventually dissolved and li<uidated.
*nent te alle#ed loss of $ontrol of te far&ers over te
a#ri$ultural land operated and &ana#ed "y te $orporation, a
readin# of te se$ond para#rap of ;e$. -1 so%s oter%ise.
;aid provision provides tat <ualified "enefi$iaries ave te
ri#t to pur$ase su$ proportion of te $apital sto$+ of te
$orporation tat te a#ri$ultural land, a$tually devoted to
a#ri$ultural a$tivities, "ears in relation to te $o&panyGs total
assets.! 'e %ordin# of te for&ula in te $o&putation of te
nu&"er of sares tat $an "e "ou#t "y te far&ers does not
&ean loss of $ontrol on te part of te far&ers. It &ust "e
re&e&"ered tat te deter&ination of te per$enta#e of te
$apital sto$+ tat $an "e "ou#t "y te far&ers depends on te
value of te a#ri$ultural land and te value of te total assets
of te $orporation.
'ere is, tus, notin# un$onstitutional in te for&ula
pres$ri"ed "y R* 7758. 'e poli$y on a#rarian refor& is tat
$ontrol over te a#ri$ultural land &ust al%ays "e in te ands
of te far&ers. 'en it falls on te soulders of ?*R and
P*R. to see to it te far&ers sould al%ays o%n &a1ority of
te $o&&on sares entitled to ele$t te &e&"ers of te "oard
of dire$tors to ensure tat te far&ers %ill ave a $lear &a1ority
in te "oard. 9efore te ;?P is approved, stri$t s$rutiny of te
proposed ;?P &ust al%ays "e underta+en "y te ?*R and
P*R., su$ tat te value of te a#ri$ultural land $ontri"uted
to te $orporation &ust al%ays "e &ore tan 50K of te total
assets of te $orporation to ensure tat te &a1ority of te
&e&"ers of te "oard of dire$tors are $o&posed of te
far&ers. 'e P*R. $o&posed of te President of
te Pilippines and $a"inet se$retaries &ust see to it tat
$ontrol over te "oard of dire$tors rests %it te far&ers "y
re1e$tin# te in$lusion of non-a#ri$ultural assets %i$ %ill yield
te &a1ority in te "oard of dire$tors to non-far&ers. *ny
deviation, o%ever, "y P*R. or ?*R fro& te $orre$t
appli$ation of te for&ula pres$ri"ed "y te se$ond para#rap
of ;e$. -1 of R* 7785 does not &a+e said provision
$onstitutionally infir&. Rater, it is te appli$ation of said
provision tat $an "e $allen#ed. :r#o, ;e$. -1 of R* 7758
does not tren$ on te $onstitutional poli$y of ensurin# $ontrol
"y te far&ers.
* vie% as "een advan$ed tat tere $an "e no a#rarian
refor& unless tere is land distri"ution and tat a$tual land
distri"ution is te essential $ara$teristi$ of a $onstitutional
a#rarian refor& pro#ra&. 5n te $ontrary, tere ave "een so
&any instan$es %ere, despite a$tual land distri"ution, te
i&ple&entation of a#rarian refor& %as still unsu$$essful. *s a
&atter of fa$t, tis .ourt &ay ta+e 1udi$ial noti$e of $ases
%ere =@9s sold te a%arded land even to non-<ualified
persons and in violation of te proi"ition period provided
under te la%. 'is only proves to so% tat te &ere fa$t tat
tere is land distri"ution does not #uarantee a su$$essful
i&ple&entation of a#rarian refor&.
*s it %ere, te prin$iple of land to te tiller! and te old
pastoral &odel of land o%nersip %ere non-u&an 1uridi$al
persons, su$ as $orporations, %ere proi"ited fro& o%nin#
a#ri$ultural lands are no lon#er realisti$ under e)istin#
$onditions. Pra$ti$ally, an individual far&er %ill often fa$e
#reater disadvanta#es and diffi$ulties tan tose %o e)er$ise
o%nersip in a $olle$tive &anner trou# a $ooperative or
$orporation. 'e for&er is too often left to is o%n devi$es
%en fa$ed %it failin# $rops and "ad %eater, or $o&pelled to
o"tain usurious loans in order to pur$ase $ostly fertili(ers or
far&in# e<uip&ent. 'e e)perien$es learned fro& failed land
refor& a$tivities in various parts of te $ountry are la$+ of
finan$in#, la$+ of far& e<uip&ent, la$+ of fertili(ers, la$+ of
#uaranteed "uyers of produ$e, la$+ of far&-to-&ar+et roads,
a&on# oters. 'us, at te end of te day, tere is still no
su$$essful i&ple&entation of a#rarian refor& to spea+ of in
su$ a $ase.
*ltou# su$$ess is not #uaranteed, a $ooperative or a
$orporation stands in a "etter position to se$ure fundin# and
$o&petently &aintain te a#ri-"usiness tan te individual
far&er. @ile dire$t sin#ular o%nersip over far&land does
offer advanta#es, su$ as te a"ility to &a+e <ui$+ de$isions
una&pered "y interferen$e fro& oters, yet at "est, tese
advanta#es only "ut offset te disadvanta#es tat are often
asso$iated %it su$ o%nersip arran#e&ent. 'us,
#overn&ent &ust "e fle)i"le and $reative in its &ode of
i&ple&entation to "etter its $an$es of su$$ess. 5ne su$
option is $olle$tive o%nersip trou# 1uridi$al persons
$o&posed of far&ers.
*side fro& te fa$t tat tere appears to "e no violation of te
.onstitution, te re<uire&ent tat te instant $ase "e $apa"le
of repetition yet evadin# revie% is also %antin#. It %ould "e
spe$ulative for tis .ourt to assu&e tat te le#islature %ill
ena$t anoter la% providin# for a si&ilar sto$+ option.
*s a &atter of sound pra$ti$e, te .ourt %ill not interfere
inordinately %it te e)er$ise "y .on#ress of its offi$ial
fun$tions, te eavy presu&ption "ein# tat a la% is te
produ$t of earnest studies "y .on#ress to ensure tat no
$onstitutional pres$ription or $on$ept is infrin#ed.
[121]
.orollarily,
$ourts %ill not pass upon <uestions of %isdo&, e)pedien$y and
1usti$e of le#islation or its provisions. 'o%ards tis end, all
reasona"le dou"ts sould "e resolved in favor of te
$onstitutionality of a la% and te validity of te a$ts and
pro$esses ta+en pursuant tereof.
[122]
.onse<uently, "efore a statute or its provisions duly
$allen#ed are voided, an une<uivo$al "rea$ of, or a $lear
$onfli$t %it te .onstitution, not &erely a dou"tful or
ar#u&entative one, &ust "e de&onstrated in su$ a &anner
as to leave no dou"t in te &ind of te .ourt. In oter %ords,
te #rounds for nullity &ust "e "eyond reasona"le dou"t.
[12-]
=*R> as not presented $o&pellin# ar#u&ents to
over$o&e te presu&ption of $onstitutionality of ;e$. -1 of R*
7758.
'e %isdo& of .on#ress in allo%in# an ;?P trou# a
$orporation as an alternative &ode of i&ple&entin# a#rarian
refor& is not for 1udi$ial deter&ination. :sta"lised
1urispruden$e tells us tat it is not %itin te provin$e of te
.ourt to in<uire into te %isdo& of te la%, for, indeed, @e are
"ound "y %ords of te statute.
[12/]
II.
'e sta#e is no% set for te deter&ination of te propriety
under te pre&ises of te revo$ation or re$all of ALIGs ;?P. 5r
to "e &ore pre$ise, te in<uiry sould "e, %eter or not
P*R. #ravely a"used its dis$retion in revo+in# or re$allin# te
su"1e$t ;?P and pla$in# te a$ienda under .*RPGs
$o&pulsory a$<uisition and distri"ution s$e&e.
'e findin#s, analysis and re$o&&endation of te ?*RGs
;pe$ial 'as+ =or$e $ontained and su&&ari(ed in its 'er&inal
Report provided te "ases for te assailed P*R.
revo$atoryDre$allin# Resolution. 'e findin#s &ay "e #rouped
into t%o, 214 te ;?P is $ontrary to eiter te poli$y on a#rarian
refor&, ;e$. -1 of R* 7758, or ?*5 10F and 224 te alle#ed
violation "y ALI of te $onditionsDter&s of te ;?P. In &ore
parti$ular ter&s, te follo%in# are essentially te reasons
underpinnin# P*R.Gs revo$atory or re$all a$tion,
214 ?espite te lapse of 17 years fro& te approval of ALIGs
;?P, te lives of te =@9s ave ardly i&proved and te
pro&ised in$reased in$o&e as not &ateriali(edF
224 ALI as failed to +eep Aa$ienda Luisita inta$t and
unfra#&entedF
2-4 'e issuan$e of ALI sares of sto$+ on te "asis of
nu&"er of ours %or+edHHor te so-$alled &an days!HHis
#rossly onerous to te =@9s, as ALI, in te #uise of rotation,
$an unilaterally deny %or+ to anyone. In ela"oration of tis
#round, P*R.Gs Resolution 3o. 2007--/-01, denyin# ALIGs
&otion for re$onsideration of Resolution 3o. 2005--2-01,
stated tat te &an days $riterion %or+ed to dilute te
entitle&ent of te ori#inal sare "enefi$iariesF
[125]
2/4 'e distri"utionDtransfer of sares %as not in a$$ordan$e
%it te ti&elines fi)ed "y la%F
254 ALI as failed to $o&ply %it its o"li#ations to #rant -K of
te #ross sales every year as produ$tion-sarin# "enefit on top
of te %or+ersG salaryF and
274 ;everal o&elot a%ardees ave yet to re$eive teir
individual titles.
Petitioner ALI $lai&s avin# $o&plied %it, at least
su"stantially, all its o"li#ations under te ;?P, as approved "y
P*R. itself, and ta#s te reasons #iven for te revo$ation of
te ;?P as unfounded.
Pu"li$ respondents, on te oter and, aver tat te assailed
resolution rests on solid #rounds set fort in te 'er&inal
Report, a position sared "y *>9*L*, %i$, in so&e
pleadin#s, is represented "y te sa&e $ounsel as tat
appearin# for te ;upervisory Croup.
=*R>, for its part, posits te vie% tat le#al "ases o"tain for
te revo$ation of te ;?P, "e$ause it does not $onfor& to ;e$.
-1 of R* 7758 and ?*5 10. *nd trainin# its si#t on te
resultin# dilution of te e<uity of te =@9s appearin# in ALIGs
&asterlist, =*R> %ould state tat te ;?P, as $ou$ed and
i&ple&ented, spa%ned disparity %en tere sould "e noneF
parity %en tere sould ave "een differentiation.
[127]
'e petition is not i&pressed %it &erit.
In te 'er&inal Report adopted "y P*R., it is stated
tat te ;?P violates te a#rarian refor& poli$y under ;e$. 2
of R* 7758, as te said plan failed to enan$e te di#nity and
i&prove te <uality of lives of te =@9s trou# #reater
produ$tivity of a#ri$ultural lands. @e disa#ree.
;e$. 2 of R* 7758 states,
;:.'I53 2. %eclaration of Principles and Policies.NIt is te
poli$y of te ;tate to pursue a .o&preensive *#rarian
Refor& Pro#ra& 2.*RP4. 'e %elfare of te landless far&ers
and far& %or+ers %ill re$eive te i#est $onsideration to
pro&ote so$ial 1usti$e and to &ove te nation to%ards sound
rural develop&ent and industriali(ation, and te esta"lis&ent
of o%ner $ultivatorsip of e$ono&i$-si(ed far&s as te "asis of
Pilippine a#ri$ulture.
'o tis end, a &ore e<uita"le distri"ution and o%nersip of
land, %it due re#ard to te ri#ts of lando%ners to 1ust
$o&pensation and to te e$olo#i$al needs of te nation, sall
"e underta+en to provide far&ers and far& %or+ers =$*# *#(
o55o/*1n$*, *o (n#an)( *#($/ d$-n$*, and $+5/o.( *#(
01a2$*, o3 *#($/ 2$.(% *#/o1-# -/(a*(/ 5/od1)*$.$*, o3
a-/$)12*1/a2 2and%.
'e a#rarian refor& pro#ra& is founded on te ri#t of far&ers
and re#ular far& %or+ers, %o are landless, to o%n dire$tly or
$olle$tively te lands tey till or, in te $ase of oter far&
%or+ers, to re$eive a sare of te fruits tereof. 'o tis end, te
;tate sall en$oura#e te 1ust distri"ution of all a#ri$ultural
lands, su"1e$t to te priorities and retention li&its set fort in
tis *$t, avin# ta+en into a$$ount e$olo#i$al, develop&ental,
and e<uity $onsiderations, and su"1e$t to te pay&ent of 1ust
$o&pensation. 'e ;tate sall respe$t te ri#t of s&all
lando%ners and sall provide in$entives for voluntary land-
sarin#. 2:&pasis supplied.4
Para#rap 2 of te a"ove-<uoted provision spe$ifi$ally
&entions tat a &ore e<uita"le distri"ution and o%nersip of
land ) ) ) sall "e underta+en to provide far&ers and far&
%or+ers %it te o55o/*1n$*, to enan$e teir di#nity and
i&prove te <uality of teir lives trou# #reater produ$tivity of
a#ri$ultural lands.! 5f note is te ter& opportunity! %i$ is
defined as a favora"le $an$e or openin# offered "y
$ir$u&stan$es.
[128]
.onsiderin# tis, "y no stret$ of
i&a#ination $an said provision "e $onstrued as a #uarantee in
i&provin# te lives of te =@9s. *t "est, it &erely provides for
a possi"ility or favora"le $an$e of upliftin# te e$ono&i$
status of te =@9s, %i$ &ay or &ay not "e attained.
Pertinently, i&provin# te e$ono&i$ status of te =@9s is
neiter a&on# te le#al o"li#ations of ALI under te ;?P nor
an i&perative i&position "y R* 7758 and ?*5 10, a violation
of %i$ %ould 1ustify dis$ardin# te sto$+ distri"ution
option. 3otin# in tat option a#ree&ent, la% or depart&ent
order indi$ates oter%ise.
;i#nifi$antly, ALI dra%s parti$ular attention to its avin# paid its
=@9s, durin# te re#i&e of te ;?P 21060-20054, so&e PP -
"illion "y %ay of salariesD%a#es and i#er "enefits e)$lusive
of free ospital and &edi$al "enefits to teir i&&ediate fa&ily.
*nd atta$ed as *nne) C! to ALIGs >e&orandu& is te
$ertified true report of te finan$e &ana#er of Jose .o1uan#$o
T ;ons 5r#ani(ations-'arla$ 5perations, $aptioned as
.ACI/6%A L7ISI&A, I6C. Salaries, -enefits and Credit
Privileges 8in &ho$sand Pesos9 Since the Stoc' :ption was
Approved " PARC;CARP,! detailin# %at ALI #ave teir
%or+ers fro& 1060 to 2005. 'e su& total, as added up "y te
.ourt, yields te follo%in# nu&"ers, 'otal ?ire$t .as 5ut
2;alariesD@a#es T .as 9enefits4 U PP 2,028,6/6F 'otal 3on-
?ire$t .as 5ut 2AospitalD>edi$al 9enefits4 U PP
-0-,0/0. 'e $as out fi#ures, as stated in te report, in$lude
te $ost of o&elotsF te PP 150 &illion or so representin#
-K of te #ross produ$e of te a$iendaF and te PP -8.5
&illion representin# -K fro& te pro$eeds of te sale of te
500-e$tare $onverted lands. @ile not in$luded in te report,
ALI &anifests avin# #iven te =@9s -K of te PP 60 &illion
paid for te 60 e$tares of land traversed "y te ;.':M.
[126]
5n top of tese, it is %ort re&e&"erin# tat te sares of
sto$+s %ere #iven "y ALI to te =@9s for free. Ierily, te
=@9s ave "enefited fro& te ;?P.
'o address ur#in#s tat te =@9s "e allo%ed to disen#a#e
fro& te ;?P as ALI as not any%ay earned profits trou#
te years, it $annot "e over-e&pasi(ed tat, as a &atter of
$o&&on "usiness sense, no $orporation $ould #uarantee a
profita"le run all te ti&e. *s as "een su##ested, one of te
+ey features of an ;?P of a $orporate lando%ner is te
li+eliood of te $orporate vei$le not earnin#, or, %orse still,
losin# &oney.
[120]
'e .ourt is fully a%are tat one of te $riteria under ?*5 10
for te P*R. to $onsider te advisa"ility of approvin# a sto$+
distri"ution plan is te li+eliood tat te plan =o12d /(%12* $n
$n)/(a%(d $n)o+( and -/(a*(/ 4(n(3$*% *o >01a2$3$(d
4(n(3$)$a/$(%? *#an $3 *#( 2and% =(/( d$.$d(d and
d$%*/$41*(d *o *#(+ $nd$.$d1a22,.!
[1-0]
9ut as aptly noted
durin# te oral ar#u&ents, ?*5 10 ou#t to ave not, as it
$annot, a$tually e)a$t assuran$e of su$$ess on so&etin# tat
is su"1e$t to te %ill of &an, te for$es of nature or te inerent
ris+y nature of "usiness.
[1-1]
Just li+e in a$tual land distri"ution,
an ;?P $annot #uarantee, as indeed te ;?5* does not
#uarantee, a $o&forta"le life for te =@9s. 'e .ourt $an ta+e
1udi$ial noti$e of te fa$t tat tere %ere &any instan$es
%erein after a far&%or+er "enefi$iary as "een a%arded %it
an a#ri$ultural land, e 1ust su"se<uently sells it and is
eventually left %it notin# in te end.
In all ten, te onerous $ondition of te =@9sG e$ono&i$
status, teir life of ardsip, if tat really "e te $ase, $an
ardly "e attri"uted to ALI and its ;?P and provide a valid
#round for te planGs revo$ation.3eiter does ALIGs ;?P,
%en$e te ?*R-attested ;?5*D>5* is "ased, infrin#e ;e$.
-1 of R* 7758, al"eit pu"li$ respondents erroneously su"&it
oter%ise.
'e provisions of te first para#rap of te adverted
;e$. -1 are %itout relevan$e to te issue on te propriety of
te assailed order revo+in# ALIGs ;?P, for te para#rap deals
%it te transfer of a#ri$ultural lands to te #overn&ent, as a
&ode of .*RP $o&plian$e, tus,
;:.. -1. Corporate Landowners.!.orporate lando%ners &ay
voluntarily transfer o%nersip over teir a#ri$ultural
landoldin#s to te Repu"li$ of te Pilippines pursuant to
;e$tion 20 ereof or to <ualified "enefi$iaries under su$
ter&s and $onditions, $onsistent %it tis *$t, as tey &ay
a#ree, su"1e$t to $onfir&ation "y te ?*R.
'e se$ond and tird para#raps, %it teir su"-
para#raps, of ;e$. -1 provide as follo%s,
Epon $ertifi$ation "y te ?*R, $orporations o%nin# a#ri$ultural
lands +a, -$.( *#($/ 01a2$3$(d 4(n(3$)$a/$(% *#( /$-#* *o
51/)#a%( %1)# 5/o5o/*$on o3 *#( )a5$*a2 %*o)6 o3 *#(
)o/5o/a*$on *#a* *#( a-/$)12*1/a2 2and, a)*1a22, d(.o*(d *o
a-/$)12*1/a2 a)*$.$*$(%, 4(a/% $n /(2a*$on *o *#( )o+5an,7%
*o*a2 a%%(*%, under su$ ter&s and $onditions as &ay "e
a#reed upon "y te&. In no $ase sall te $o&pensation
re$eived "y te %or+ers at te ti&e te sares of sto$+s are
distri"uted "e redu$ed. ) ) )
.orporations or asso$iations %i$ voluntarily divest a
proportion of teir $apital sto$+, e<uity or parti$ipation in favor
of teir %or+ers or oter <ualified "enefi$iaries under tis
se$tion sall "e dee&ed to ave $o&plied %it te provisions
of tis *$t, Provided, 'at te follo%in# $onditions are
$o&plied %it,
2a4 In order to safe#uard te ri#t of "enefi$iaries %o o%n
sares of sto$+s to dividends and oter finan$ial "enefits, te
"oo+s of te $orporation or asso$iation sall "e su"1e$t to
periodi$ audit "y $ertified pu"li$ a$$ountants $osen "y te
"enefi$iariesF
2"4 Irrespe$tive of te value of teir e<uity in te $orporation
or asso$iation, te "enefi$iaries sall "e assured of at least
one 214 representative in te "oard of dire$tors, or in a
&ana#e&ent or e)e$utive $o&&ittee, if one e)ists, of te
$orporation or asso$iationF
2$4 *ny sares a$<uired "y su$ %or+ers and "enefi$iaries
sall ave te sa&e ri#ts and features as all oter saresF
and
2d4 *ny transfer of sares of sto$+s "y te ori#inal
"enefi$iaries sall "e void a" initio unless said transa$tion is in
favor of a <ualified and re#istered "enefi$iary %itin te sa&e
$orporation.
'e &andatory &ini&u& ratio of land-to-sares of sto$+
supposed to "e distri"uted or allo$ated to <ualified
"enefi$iaries, advertin# to %at ;e$. -1 of R* 7758 refers to as
tat 5/o5o/*$on o3 *#( )a5$*a2 %*o)6 o3 *#( )o/5o/a*$on *#a*
*#( a-/$)12*1/a2 2and, a)*1a22, d(.o*(d *o a-/$)12*1/a2
a)*$.$*$(%, 4(a/% $n /(2a*$on *o *#( )o+5an,7% *o*a2 a%%(*%!
ad "een o"served.
Para#rap one 214 of te ;?5*, %i$ %as "ased on te ;?P,
$onfor&s to ;e$. -1 of R* 7758. 'e stipulation reads,
1. 'e per$enta#e of te value of te a#ri$ultural land of
Aa$ienda Luisita 2P107,7-0,000.004 in relation to te total
assets 2P500,55/,220.004 transferred and $onveyed to te
;:.53? P*R'L is --.207K tat, under te la%, is te
proportion of te outstandin# $apital sto$+ of te ;:.53?
P*R'L, %i$ is P-55,5-1,/72.00 or -55,5-1,/72 sares %it
a par value of P1.00 per sare, tat as to "e distri"uted to te
'AIR? P*R'L under te sto$+ distri"ution plan, te said
--.207K tereof "ein# P116,-01,087.65 or 116,-01,087.65
sares.
'e appraised value of te a#ri$ultural land is PP
107,7-0,000 and of ALIGs oter assets is PP
-0-,02/,220. 'e total value of ALIGs assets is, terefore, PP
500,55/,220.
[1-2]
'e per$enta#e of te value of te
a#ri$ultural lands 2PP 107,7-0,0004 in relation to te total
assets 2PP 500,55/,2204 is --.207K, %i$ represents te
sto$+oldin#s of te 7,207 ori#inal <ualified far&%or+er-
"enefi$iaries 2=@9s4 in ALI. 'e total nu&"er of sares to "e
distri"uted to said <ualified =@9s is 116,-01,087.65 ALI
sares. 'is %as arrived at "y #ettin# --.207K of te
-55,5-1,/72 sares %i$ is te outstandin# $apital sto$+ of
ALI %it a value of PP -55,5-1,/72. 'us, if %e divide te
116,-01,087.65 ALI sares "y 7,207 =@9s, ten ea$ =@9 is
entitled to 16,60/.-2 ALI sares. 'ese sares under te ;?P
are to "e #iven to =@9s for free.
'e .ourt finds tat te deter&ination of te sares to "e
distri"uted to te 7,207 =@9s stri$tly aderes to te for&ula
pres$ri"ed "y ;e$. -12"4 of R* 7758.
*nent te re<uire&ent under ;e$. -12"4 of te tird para#rap,
tat te =@9s sall "e assured of at least one 214
representative in te "oard of dire$tors or in a &ana#e&ent or
e)e$utive $o&&ittee irrespe$tive of te value of te e<uity of
te =@9s in ALI, te .ourt finds tat te ;?5* $ontained
provisions &a+in# $ertain te =@9sG representation in ALIGs
#overnin# "oard, tus,
5. :ven if only a part or fra$tion of te sares ear&ar+ed for
distri"ution %ill ave "een a$<uired fro& te =IR;' P*R'L
and distri"uted to te 'AIR? P*R'L, =IR;' P*R'L sall
e)e$ute at te "e#innin# of ea$ fis$al year an irrevo$a"le
pro)y, valid and effe$tive for one 214 year, in favor of te
far&%or+ers appearin# as sareolders of te ;:.53?
P*R'L at te start of said year %i$ %ill e&po%er te 'AIR?
P*R'L or teir representative to vote in sto$+oldersG and
"oard of dire$torsG &eetin#s of te ;:.53? P*R'L $onvened
durin# te year te entire --.207K of te outstandin# $apital
sto$+ of te ;:.53? P*R'L ear&ar+ed for distri"ution and
tus "e a"le to #ain su$ nu&"er of seats in te "oard of
dire$tors of te ;:.53? P*R'L tat te %ole --.207K of
te sares su"1e$t to distri"ution %ill "e entitled to.
*lso, no alle#ations ave "een &ade a#ainst ALI restri$tin#
te inspe$tion of its "oo+s "y a$$ountants $osen "y te
=@9sF en$e, te assu&ption &ay "e &ade tat tere as
"een no violation of te statutory pres$ription under su"-
para#rap 2a4 on te auditin# of ALIGs a$$ounts.
Pu"li$ respondents, o%ever, su"&it tat te distri"ution of te
&andatory &ini&u& ratio of land-to-sares of sto$+, referrin#
to te 116,-01,087.65 sares %it par value of PP 1 ea$,
sould ave "een &ade in full %itin t%o 224 years fro& te
approval of R* 7758, in line %it te last para#rap of ;e$. -1
of said la%.
[1--]
Pu"li$ respondentsG su"&ission is palpa"ly erroneous. @e
ave $losely e)a&ined te last para#rap alluded to, %it
parti$ular fo$us on te t%o-year period &entioned, and notin#
in it re&otely supports te pu"li$ respondentsG posture. In its
pertinent part, said ;e$. -1 provides,
;:.. -1. .orporate Lando%ners ) ) )
If %itin *=o HBI ,(a/% fro& te approval of tis *$t, te
[voluntary] land or sto$+ transfer envisioned a"ove is not &ade
or reali(ed o/ *#( 52an 3o/ %1)# %*o)6 d$%*/$41*$on a55/o.(d
4, *#( PARC =$*#$n *#( %a+( 5(/$od, *#( a-/$)12*1/a2 2and
o3 *#( )o/5o/a*( o=n(/% o/ )o/5o/a*$on %#a22 4( %14J()* *o
*#( )o+512%o/, )o.(/a-( o3 *#$% A)*. 2@ord in "ra$+et and
e&pasis added.4
Properly vie%ed, te %ords *=o HBI ,(a/%! $learly refer to te
period %itin %i$ te $orporate lando%ner, to avoid land
transfer as a &ode of .*RP $overa#e under R* 7758, is to
avail of te sto$+ distri"ution option or to ave te ;?P
approved. 'e ALI se$ured approval of its ;?P in 3ove&"er
1060, %ell %itin te t%o-year period re$+oned fro& June 1066
%en R* 7758 too+ effe$t.
Aavin# urdled te alle#ed "rea$ of te a#rarian refor& poli$y
under ;e$. 2 of R* 7758 as %ell as te statutory issues, @e
sall no% delve into %at P*R. and respondents dee& to "e
oter instan$es of violation of ?*5 10 and te ;?P.
On *#( Con.(/%$on o3 Land%
.ontrary to te al&ost parallel stan$e of te respondents,
+eepin# Aa$ienda Luisita unfra#&ented is also not a&on# te
i&perative i&positions "y te ;?P, R* 7758, and ?*5 10.
'e 'er&inal Report states tat te proposed distri"ution plan
su"&itted in 1060 to te P*R. effe$tively assured te intended
sto$+ "enefi$iaries tat te pysi$al inte#rity of te far& sall
re&ain inviolate. *$$ordin#ly, te 'er&inal Report and te
P*R.-assailed resolution %ould ta+e ALI to tas+ for se$urin#
approval of te $onversion to non-a#ri$ultural uses of 500
e$tares of te a$ienda. In not too &any %ords, te Report
and te resolution vie% te $onversion as an infrin#e&ent of
;e$. 52a4 of ?*5 10 %i$ reads, a. tat te $ontinued
operation of te $orporation %it its a#ri$ultural land inta$t and
unfra#&ented is via"le %it potential for #ro%t and in$reased
profita"ility.!
'e P*R. is %ron#.
In te first pla$e, ;e$. 52a4HH1ust li+e te su$$eedin# ;e$. 52"4
of ?*5 10 on in$reased in$o&e and #reater "enefits to
<ualified "enefi$iariesHHis "ut one of te stated $riteria to #uide
P*R. in de$idin# on %eter or not to a$$ept an ;?P. ;aid
;e$. 52a4 does not e)a$t fro& te $orporate lando%ner-
appli$ant te underta+in# to +eep te far& inta$t and
unfra#&ented ad infinit$m. *nd tere is lo#i$ to ALIGs stated
o"servation tat te +ey prase in te provision of ;e$. 52a4 is
via"ility of $orporate operations!, [%]at is tus re<uired is not
te a#ri$ultural land re&ainin# inta$t ) ) ) "ut te via"ility of
te $orporate operations %it its a#ri$ultural land "ein# inta$t
and unfra#&ented. .orporate operation &ay "e via"le even if
te $orporate a#ri$ultural land does not re&ain inta$t or
[un]fra#&ented.!
[1-/]
It is, of $ourse, anti-$li&a$ti$ to &ention tat ?*R vie%ed te
$onversion as not violative of any issuan$e, let alone
under&inin# te via"ility of Aa$ienda LuisitaGs operation, as te
?*R ;e$retary approved te land $onversion applied for and
its disposition via is .onversion 5rder dated *u#ust 1/, 1007
pursuant to ;e$. 75 of R* 7758 %i$ reads,
;e$. 75. Conversion of Lands.N*fter te lapse of five years
fro& its a%ard %en te land $eases to "e e$ono&i$ally
feasi"le and sound for a#ri$ultural purposes, or te lo$ality as
"e$o&e ur"ani(ed and te land %ill ave a #reater e$ono&i$
value for residential, $o&&er$ial or industrial purposes, te
?*R upon appli$ation of te "enefi$iary or lando%ner %it due
noti$e to te affe$ted parties, and su"1e$t to e)istin# la%s, &ay
autori(e te ) ) ) $onversion of te land and its
dispositions. ) ) )
On *#( 9@ P/od1)*$on S#a/(
5n te &atter of te alle#ed failure of ALI to $o&ply %it
sarin# te -K of te #ross produ$tion sales of te a$ienda
and pay dividends fro& profit, te entries in its finan$ial "oo+s
tend to indi$ate $o&plian$e "y ALI of te profit-sarin#
e<uivalent to -K of te #ross sales fro& te produ$tion of te
a#ri$ultural land on top of 2a4 te salaries and %a#es due
=@9s as e&ployees of te $o&pany and 2"4 te -K of te
#ross sellin# pri$e of te $onverted land and tat portion used
for te ;.':M. * plausi"le eviden$e of $o&plian$e or non-
$o&plian$e, as te $ase &ay "e, $ould "e te "oo+s of
a$$ount of ALI. :vidently, te $ry of so&e #roups of not avin#
re$eived teir sare fro& te #ross produ$tion sales as not
ade<uately "een validated on te #round "y te ;pe$ial 'as+
=or$e.
Indeed, fa$tual findin#s of ad&inistrative a#en$ies are
$on$lusive %en supported "y su"stantial eviden$e and are
a$$orded due respe$t and %ei#t, espe$ially %en tey are
affir&ed "y te .*.
[1-5]
Ao%ever, su$ rule is not a"solute. 5ne
su$ e)$eption is %en te findin#s of an ad&inistrative
a#en$y are $on$lusions %itout $itation of spe$ifi$ eviden$e on
%i$ tey are "ased,
[1-7]
su$ as in tis parti$ular
instan$e. *s $ulled fro& its 'er&inal Report, it %ould appear
tat te ;pe$ial 'as+ =or$e re1e$ted ALIGs $lai& of $o&plian$e
on te "asis of tis ratio$ination,
V 'e 'as+ =or$e position' 'ou#, alle#edly, te
;upervisory Croup re$eives te -K #ross produ$tion sare
and tat oters alle#ed tat tey re$eived -0 &illion pesos still
oters &aintain tat tey ave not re$eived anytin# yet. Ite&
3o. / of te >5* is $lear and &ust "e follo%ed. 'ere is a
distin$tion "et%een te *o*a2 -/o%% %a2(% fro& te5/od1)*$on
o3 *#( 2and and te 5/o)((d% fro& te %a2( o3 *#( 2and. 'e
for&er refers to te fruitsDyield of te a#ri$ultural land %ile te
latter is te land itself. 'e prase te "enefi$iaries are
entitled every year to an a&ount appro)i&ately e<uivalent to
-K %ould only "e feasi"le if te su"1e$t is te produ$e sin$e
tere is at least one arvest per year, %ile su$ is not te
$ase in te sale of te a#ri$ultural land. 'is ne#ates ten te
$lai& of ALI tat, all tat te =@9s $an "e entitled to, if any, is
only -K of te pur$ase pri$e of te $onverted land.
V 9esides, te Conversion Order dated 1/ *u#ust 1007
provides tat the "enefits, wages and the li'e, presentl
received " the 1<-s shall not in an wa "e red$ced or
adversel affected. Three percent of the gross selling price
of the sale of the converted land shall be awarded to the
beneficiaries of the SDO.= 'e -K #ross produ$tion sare
ten is different fro& te -K pro$eeds of te sale of te
$onverted land and, %it &ore reason, te --K sare "ein#
$lai&ed "y te =@9s as part o%ners of te Aa$ienda, sould
ave "een #iven te =@9s, as sto$+olders, and to %i$ tey
$ould ave "een entitled if only te land %ere a$<uired and
redistri"uted to te& under te .*RP.
) ) ) )
V 'e =@9s do not re$eive any oter "enefits under te
>5* e)$ept te afore&entioned [2vi0, sares of sto$+s
2partial4, -K #ross produ$tion sale 2not all4 and o&elots 2not
all4].
Jud#in# fro& te a"ove state&ents, te ;pe$ial 'as+ =or$e is
at "est silent on %eter ALI as failed to $o&ply %it te -K
produ$tion-sarin# o"li#ation or te -K of te #ross sellin#
pri$e of te $onverted land and te ;.':M lot. In fa$t, it
ad&its tat te =@9s, tou# not all, ave re$eived teir sare
of te #ross produ$tion sales and in te sale of te lot to
;.':M. *t &ost, ten, ALI ad $o&plied su"stantially %it tis
;?P underta+in# and te $onversion order. 'o "e sure, tis
sli#t "rea$ %ould not 1ustify te settin# to nau#t "y P*R. of
te approval a$tion of te earlier P*R.. :ven in $ontra$t
la%, res$ission, predi$ated on violation of re$ipro$ity, %ill not "e
per&itted for a sli#t or $asual "rea$ of $ontra$tF res$ission
&ay "e ad only for su$ "rea$es tat are su"stantial and
funda&ental as to defeat te o"1e$t of te parties in &a+in# te
a#ree&ent.
[1-8]
?espite te fore#oin# findin#s, te revo$ation of te approval
of te ;?P is not %itout "asis as so%n "elo%.
On T$*2(% *o Ho+(2o*%
Ender R* 7758, te distri"ution of o&elots is re<uired only for
$orporations or "usiness asso$iations o%nin# or operatin#
far&s %i$ opted for land distri"ution. ;e$. -0 of R* 7758
states,
;:.. -0. .omelots and 1armlots for ,em"ers of
Cooperatives.N'e individual &e&"ers of te $ooperatives or
$orporations &entioned in te pre$edin# se$tion sall "e
provided %it o&elots and s&all far&lots for teir fa&ily use,
to "e ta+en fro& te land o%ned "y te $ooperative or
$orporation.
'e pre$edin# se$tion! referred to in te a"ove-<uoted
provision is as follo%s,
;:.. 20. 1arms :wned or :perated " Corporations or :ther
-$siness Associations.!In te $ase of far&s o%ned or
operated "y $orporations or oter "usiness asso$iations, te
follo%in# rules sall "e o"served "y te P*R..
In #eneral, lands sall "e distri"uted dire$tly to te individual
%or+er-"enefi$iaries.
In $ase it is not e$ono&i$ally feasi"le and sound to divide te
land, ten it sall "e o%ned $olle$tively "y te %or+er-
"enefi$iaries %o sall for& a %or+ersG $ooperative or
asso$iation %i$ %ill deal %it te $orporation or "usiness
asso$iation. Entil a ne% a#ree&ent is entered into "y and
"et%een te %or+ersG $ooperative or asso$iation and te
$orporation or "usiness asso$iation, any a#ree&ent e)istin# at
te ti&e tis *$t ta+es effe$t "et%een te for&er and te
previous lando%ner sall "e respe$ted "y "ot te %or+ersG
$ooperative or asso$iation and te $orporation or "usiness
asso$iation.
3oti$ea"ly, te fore#oin# provisions do not &a+e referen$e to
$orporations %i$ opted for sto$+ distri"ution under ;e$. -1 of
R* 7758. .on$o&itantly, said $orporations are not o"li#ed to
provide for it e)$ept "y stipulation, as in tis $ase.
Ender te ;?P, ALI undertoo+ to su"divide and allo$ate for
free and %itout $ar#e a&on# te <ualified fa&ily-
"enefi$iaries ) ) ) residential or o&elots of not &ore tan 2/0
s<. &. ea$, %it ea$ fa&ily "enefi$iary "ein# assured of
re$eivin# and o%nin# a o&elot in te "arrio or "aran#ay
%ere it a$tually resides,! %itin a reasona"le ti&e.!
>ore tan si)teen 2174 years ave elapsed fro& te ti&e te
;?P %as approved "y P*R., and yet, it is still te $ontention
of te =@9s tat not all %as #iven te 2/0-s<uare &eter
o&elots and, of tose %o %ere already #iven, so&e still do
not ave te $orrespondin# titles.
?urin# te oral ar#u&ents, ALI %as afforded te $an$e to
refute te fore#oin# alle#ation "y su"&ittin# proof tat te
=@9s %ere already #iven te said o&elots,
Justi$e Ielas$o, ) ) ) 'ere is also an alle#ation tat te
far&er "enefi$iaries, te <ualified fa&ily "enefi$iaries %ere not
#iven te 2/0 s<uare &eters ea$. ;o, $an you also [prove]
tat te <ualified fa&ily "enefi$iaries %ere already provided te
2/0 s<uare &eter o&elots.
*tty. *sun$ion, @e %ill, your Aonor please.
[1-6]

5ter tan te finan$ial report, o%ever, no oter su"stantial
proof so%in# tat all te <ualified "enefi$iaries ave re$eived
o&elots %as su"&itted "y ALI. Aen$e, tis .ourt is
$onstrained to rule tat ALI as not yet fully $o&plied %it its
underta+in# to distri"ute o&elots to te =@9s under te ;?P.
On FMan Da,%G and *#( M()#an$)% o3 S*o)6 D$%*/$41*$on
In our revie% and analysis of par. - of te ;?5* on te
&e$ani$s and ti&elines of sto$+ distri"ution, @e find tat
it .$o2a*(% t%o 224 provisions of ?*5 10. Par. - of te ;?5*
states,
-. *t te end of ea$ fis$al year, for a period of -0 years,
te ;:.53? P*R'L [ALI] sall arran#e %it te =IR;'
P*R'L ['?.] te a$<uisition and distri"ution to te 'AIR?
P*R'L [=@9s] on te "asis of nu&"er of days %or+ed and at
no $ost to te& of one-tirtiet 21D-04 of 116,-01,087.65 sares
of te $apital sto$+ of te ;:.53? P*R'L tat are presently
o%ned and eld "y te =IR;' P*R'L, until su$ ti&e as te
entire "lo$+ of 116,-01,087.65 sares sall ave "een
$o&pletely a$<uired and distri"uted to te 'AIR? P*R'L.
9ased on te a"ove-<uoted provision, te distri"ution of te
sares of sto$+ to te =@9s, al"eit not entailin# a $as out
fro& te&, is $ontin#ent on te nu&"er of &an days,! tat is,
te nu&"er of days tat te =@9s ave %or+ed durin# te
year. 'is for&ula deviates fro& ;e$. 1 of ?*5 10, %i$
de$rees te distri"ution of e<ual nu&"er of sares to te
=@9s as te &ini&u& ratio of sares of sto$+ for purposes of
$o&plian$e %it ;e$. -1 of R* 7758. *s stated in ;e$. / of
?*5 10,
;e$tion /. Stoc' %istri"$tion Plan.!'e [;?P] su"&itted "y
te $orporate lando%ner-appli$ant sall provide for *#(
d$%*/$41*$on o3 an (01a2 n1+4(/ o3 %#a/(% o3 *#( %a+(
)2a%% and .a21(, =$*# *#( %a+( /$-#*% and 3(a*1/(% a% a22
o*#(/ %#a/(%, *o (a)# o3 *#( 01a2$3$(d 4(n(3$)$a/$(%. 'is
distri"ution plan in all $ases, sall "e at least te+$n$+1+
/a*$o for purposes of $o&plian$e %it ;e$tion -1 of R.*. 3o.
7758.
On *o5 o3 *#( +$n$+1+ /a*$o provided under ;e$tion - of tis
I&ple&entin# Cuideline, te $orporate lando%ner-appli$ant
&ay adopt add$*$ona2 %*o)6 d$%*/$41*$on %)#(+(% *a6$n-
$n*o a))o1n* 3a)*o/% %1)# a% /an6, %(n$o/$*,, %a2a/,,
5o%$*$on and o*#(/ )$/)1+%*an)(% =#$)# +a, 4( d((+(d
d(%$/a42( a% a +a**(/ o3 %o1nd )o+5an, 5o2$),. 2:&pasis
supplied.4
'e a"ove proviso #ives t%o 224 sets or $ate#ories of sares of
sto$+ %i$ a <ualified "enefi$iary $an a$<uire fro& te
$orporation under te ;?P. 'e first pertains, as earlier
e)plained, to te &andatory &ini&u& ratio of sares of sto$+
to "e distri"uted to te =@9s in $o&plian$e %it ;e$. -1 of R*
7758. 'is &ini&u& ratio $onte&plates of tat 5/o5o/*$on o3
*#( )a5$*a2 %*o)6 o3 *#( )o/5o/a*$on *#a* *#( a-/$)12*1/a2
2and, a)*1a22, d(.o*(d *o a-/$)12*1/a2 a)*$.$*$(%, 4(a/% $n
/(2a*$on *o *#( )o+5an,7% *o*a2 a%%(*%.!
[1-0]
It is tis set of
sares of sto$+ %i$, in line %it ;e$. / of ?*5 10, is
supposed to "e allo$ated for te distri"ution of an e<ual
nu&"er of sares of sto$+ of te sa&e $lass and value, %it
te sa&e ri#ts and features as all oter sares, to ea$ of te
<ualified "enefi$iaries.!
5n te oter and, te se$ond set or $ate#ory of sares
parta+es of a #ratuitous e)tra #rant, &eanin# tat tis set or
$ate#ory $onstitutes an au#&entation sareDs tat te
$orporate lando%ner &ay #ive under an additional sto$+
distri"ution s$e&e, ta+in# into a$$ount su$ varia"les as
ran+, seniority, salary, position and li+e fa$tors %i$ te
&ana#e&ent, in te e)er$ise of its sound dis$retion, &ay
dee& desira"le.
[1/0]
9efore anytin# else, it sould "e stressed tat, at te ti&e
P*R. approved ALIGs ;?P, ALI re$o#ni(ed ;,B:; individuals
as <ualified =@9s. *nd under te -0-year sto$+ distri"ution
pro#ra& envisa#ed under te plan, =@9s %o $a&e in after
1060, ne% =@9s in fine, &ay "e a$$o&&odated, as tey
appear to ave in fa$t "een a$$o&&odated as eviden$ed "y
teir re$eipt of ALI sares.
3o% ten, "y providin# tat te nu&"er of sares of te
ori#inal 1060 =@9s sall depend on te nu&"er of &an
days,! ALI violated te afore-<uoted rule on sto$+ distri"ution
and effe$tively deprived te =@9s of e<ual sares of sto$+ in
te $orporation, for, in net effe$t, tese 7,207 <ualified =@9s,
%o teoreti$ally ad #iven up teir ri#ts to te land tat $ould
ave "een distri"uted to te&, suffered a dilution of teir due
sare entitle&ent. *s as "een o"served durin# te oral
ar#u&ents, ALI as $osen to use te sares ear&ar+ed for
far&%or+ers as re%ard syste& $ips to %ater do%n te sares
of te ori#inal 7,207 =@9s.
[1/1]
Parti$ularly,
Justi$e *"ad, If te ;?5* did not ta+e pla$e, te oter tin#
tat %ould ave appened is tat tere %ould "e .*RPP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, 'atGs te only point I %ant to +no% ) ) ). 3o%,
"ut tey $ose to enter ;?5* instead of pla$in# te land under
.*RP. *nd for tat reason tose %o %ould ave #otten teir
sares of te land a$tually #ave up teir ri#ts to tis land in
pla$e of te sares of te sto$+, is tat $orre$tP
*tty. ?ela >er$ed, It %ould "e tat %ay, Lour Aonor.
Justi$e *"ad, Ri#t no%, also te #overn&ent, in a %ay, #ave
up its ri#t to o%n te land "e$ause tat %ay te #overn&ent
ta+es o%n [si$] te land and distri"ute it to te far&ers and pay
for te land, is tat $orre$tP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, *nd ten you #ave tirty-tree per$ent 2--K4 of
te sares of ALI to te far&ers at tat ti&e tat nu&"ered ) )
) tose %o si#ned five tousand four undred ninety ei#t
25,/064 "enefi$iaries, is tat $orre$tP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, 9ut later on, after assi#nin# te& teir sares,
so&e %or+ers $a&e in fro& 1060, 1000, 1001, 1002 and te
rest of te years tat you #ave additional sares %o %ere not
in te ori#inal list of o%nersP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, ?id tose ne% %or+ers #ive up any ri#t tat
%ould ave "elon# to te& in 1060 %en te land %as
supposed to ave "een pla$ed under .*RPP
*tty. ?ela >er$ed, If you are tal+in# or referrin#S 2interrupted4
Justi$e *"ad, 3oneW Lou tell &e. 3one. 'ey #ave up no
ri#ts to landP
*tty. ?ela >er$ed, 'ey did not do te sa&e tin# as %e did in
1060, Lour Aonor.
Justi$e *"ad, 3o, if tey %ere not %or+ers in 1060 %at land
did tey #ive upP 3one, if tey "e$o&e %or+ers later on.
*tty. ?ela >er$ed, 3one, Lour Aonor, I %as referrin#, Lour
Aonor, to te ori#inalS 2interrupted4
Justi$e *"ad, ;o %y is it tat te ri#ts of tose %o #ave up
teir lands %ould "e diluted, "e$ause te $o&pany as $osen
to use te sares as re%ard syste& for ne% %or+ers %o $o&e
inP It is not tat te ne% %or+ers, in effe$t, "e$o&e 1ust
%or+ers of te $orporation %ose sto$+olders %ere already
fi)ed. 'e '*?:.5 %o as sares tere a"out si)ty si)
per$ent 277K4 and te five tousand four undred ninety ei#t
25,/064 far&ers at te ti&e of te ;?5*P :)plain to &e. @y,
%y %ill you ) ) ) %at ri#t or %ere did you #et tat ri#t to
use tis sares, to %ater do%n te sares of tose %o sould
ave "een "enefited, and to use it as a re%ard syste& de$ided
"y te $o&panyP
[1/2]

=ro& te a"ove dis$ourse, it is $lear as day tat te ori#inal
7,207 =@9s, %o %ere <ualified "enefi$iaries at te ti&e of te
approval of te ;?P, suffered fro& %aterin# do%n of
sares. *s deter&ined earlier, ea$ ori#inal =@9 is entitled to
16,60/.-2 ALI sares. 'e ori#inal =@9s #ot less tan te
#uaranteed 16,60/.-2 ALI sares per "enefi$iary, "e$ause te
a$<uisition and distri"ution of te ALI sares %ere "ased on
&an days! or nu&"er of days %or+ed! "y te =@9 in a yearGs
ti&e. *s e)plained "y ALI, a "enefi$iary needs to %or+ for at
least -8 days in a fis$al year "efore e or se "e$o&es entitled
to ALI sares. If it falls "elo% -8 days, te =@9, unfortunately,
does not #et any sare at year end. 'e nu&"er of ALI sares
distri"uted varies dependin# on te nu&"er of days te =@9s
%ere allo%ed to %or+ in one year. @orse, ALI ired
far&%or+ers in addition to te ori#inal 7,207 =@9s, su$ tat,
as indi$ated in te .o&plian$e dated *u#ust 2, 2010 su"&itted
"y ALI to te .ourt, te total nu&"er of far&%or+ers of ALI as
of said date stood at 10,502. *ll tese far&%or+ers, %i$
in$lude te ori#inal 7,207 =@9s, %ere #iven sares out of te
116,0-1,087.65 ALI sares representin# te --.207K of te
total outstandin# $apital sto$+ of ALI. .learly, te &ini&u&
individual allo$ation of ea$ ori#inal =@9 of 16,60/.-2 sares
%as diluted as a result of te use of &an days! and te irin#
of additional far&%or+ers.
Coin# into anoter "ut related &atter, par. - of te ;?5*
e)pressly providin# for a -0-year ti&efra&e for ALI-to-=@9s
sto$+ transfer is an arran#e&ent $ontrary to %at ;e$. 11 of
?*5 10 pres$ri"es. ;aid ;e$. 11 provides for te
i&ple&entation of te approved sto$+ distri"ution plan %itin
tree 2-4 &onts fro& re$eipt "y te $orporate lando%ner of
te approval of te plan "y P*R.. In fa$t, "ased on te said
provision, te transfer of te sares of sto$+ in te na&es of
te <ualified =@9s sould "e re$orded in te sto$+ and
transfer "oo+s and &ust "e su"&itted to te ;:. %itin si)ty
2704 days fro& i&ple&entation. *s stated,
;e$tion 11. Implementation;,onitoring of Plan.!'e approved
sto$+ distri"ution plan sall "e $+52(+(n*(d =$*#$n *#/(( H9I
+on*#% 3/o+ /()($5* 4, *#( )o/5o/a*( 2ando=n(/Aa552$)an*
o3 *#( a55/o.a2 *#(/(o3 4, *#( PARC, and te transfer of te
sares of sto$+s in te na&es of te <ualified "enefi$iaries
sall "e re$orded in sto$+ and transfer "oo+s and %14+$**(d
*o *#( S()1/$*$(% and ED)#an-( Co++$%%$on HSECI =$*#$n
%$D*, H;0I da,% 3/o+ *#( %a$d $+52(+(n*a*$on o3 *#( %*o)6
d$%*/$41*$on 52an.2:&pasis supplied.4
It is evident fro& te fore#oin# provision tat te
i&ple&entation, tat is, te distri"ution of te sares of sto$+ to
te =@9s, &ust "e &ade %itin tree 2-4 &onts fro& re$eipt
"y ALI of te approval of te sto$+ distri"ution plan "y P*R..
@ile neiter of te $lasin# parties as &ade a $o&pellin#
$ase of te trust of tis provision, te .ourt is of te vie% and
so olds tat te intent is to $o&pel te $orporate lando%ner to
$o&plete, not &erely initiate, te transfer pro$ess of sares
%itin tat tree-&ont ti&efra&e. Reinfor$in# tis $on$lusion
is te 70-day sto$+ transfer re$ordin# 2%it te ;:.4
re<uire&ent re$+oned fro& te i&ple&entation of te ;?P.
'o te .ourt, tere is a purpose, %i$ is at on$e dis$erni"le
as it is pra$ti$al, for te tree-&ont tresold. Re&ove tis
ti&eline and te $orporate lando%ner $an verita"ly evade
$o&plian$e %it a#rarian refor& "y si&ply deferrin# to a"surd
li&its te i&ple&entation of te sto$+ distri"ution s$e&e.
'e ar#u&ent is ur#ed tat te tirty 2-04-year distri"ution
pro#ra& is 1ustified "y te fa$t tat, under ;e$. 27 of R*
7758, pay&ent "y "enefi$iaries of land distri"ution under
.*RP sall "e &ade in tirty 2-04 annual a&orti(ations. 'o
ALI, said se$tion provides a 1ustifyin# di&ension to its -0-year
sto$+ distri"ution pro#ra&.
ALIGs relian$e on ;e$. 27 of R* 7758, <uoted in part "elo%, is
o"viously &ispla$ed as te said provision $learly deals %it
land distri"ution.
;:.. 27. Pament " -eneficiaries.NLands a%arded pursuant
to tis *$t sall "e paid for "y te "enefi$iaries to te L9P in
tirty 2-04 annual a&orti(ations ) ) ).
'en, too, te ones o"li#ed to pay te L9P under te said
provision are te "enefi$iaries. 5n te oter and, in te
instant $ase, aside fro& te fa$t tat %at is involved is sto$+
distri"ution, it is te $orporate lando%ner %o as te
o"li#ation to distri"ute te sares of sto$+ a&on# te =@9s.
:vidently, te land transfer "enefi$iaries are #iven tirty 2-04
years %itin %i$ to pay te $ost of te land tus a%arded
te& to &a+e it less $u&"erso&e for te& to pay te
#overn&ent. 'o "e sure, te reason underpinnin# te -0-year
a$$o&&odation does not apply to $orporate lando%ners in
distri"utin# sares of sto$+ to te <ualified "enefi$iaries, as te
sares &ay "e issued in a &u$ sorter period of ti&e.
'a+in# into a$$ount te a"ove dis$ussion, te revo$ation of te
;?P "y P*R. sould "e upeld for violatin# ?*5 10. It "ears
stressin# tat under ;e$. /0 of R* 7758, te P*R. and te
?*R ave te po%er to issue rules and re#ulations,
su"stantive or pro$edural. 9ein# a produ$t of su$ rule-&a+in#
po%er, ?*5 10 as te for$e and effe$t of la% and &ust "e
duly $o&plied %it.
[1/-]
'e P*R. is, terefore, $orre$t in
revo+in# te ;?P. .onse<uently, te P*R. Resolution 3o. 60-
12-2 dated 3ove&"er 21, l060 approvin# te ALIGs ;?P is
nullified and voided.
III.
@e no% resolve te petitions-in-intervention %i$, at "otto&,
unifor&ly pray for te e)$lusion fro& te $overa#e of te
assailed P*R. resolution tose portions of te $onverted land
%itin Aa$ienda Luisita %i$ R.9. and LIP.5 a$<uired "y
pur$ase.
9ot $ontend tat tey are inno$ent pur$asers for value of
portions of te $onverted far& land. 'us, teir plea for te
e)$lusion of tat portion fro& P*R. Resolution 2005--2-01, as
i&ple&ented "y a ?*R-issued 3oti$e of .overa#e dated
January 2, 2007, %i$ $alled for &andatory .*RP a$<uisition
$overa#e of lands su"1e$t of te ;?P.
'o restate te ante$edents, after te $onversion of te 500
e$tares of land in Aa$ienda Luisita, ALI transferred te -00
e$tares to .entennary, %ile $edin# te re&ainin# 200-
e$tare portion to LR.. ;u"se<uently, LIP.5 pur$ased te
entire tree undred 2-004 e$tares of land fro& .entennary
for te purpose of developin# te land into an industrial
$o&ple).
[1//]
*$$ordin#ly, te '.' in .entennaryGs na&e %as
$an$eled and a ne% one issued in LIP.5Gs na&e. 'ereafter,
said land %as su"divided into t%o 224 &ore par$els of land.
Later on, LIP.5 transferred a"out 16/ e$tares to R.9. "y
%ay of dacion en pago, "y virtue of %i$ '.'s in te na&e of
R.9. %ere su"se<uently issued.
Ender ;e$. // of P? 1520 or te Propert Registration %ecree,
every re#istered o%ner re$eivin# a $ertifi$ate of title in
pursuan$e of a de$ree of re#istration and every su"se<uent
pur$aser of re#istered land ta+in# a $ertifi$ate of title for value
and in good faith sall old te sa&e free fro& all
en$u&"ran$es e)$ept tose noted on te $ertifi$ate and
enu&erated terein.!
[1/5]
It is settled do$trine tat one %o deals %it property
re#istered under te 'orrens syste& need not #o "eyond te
four $orners of, "ut $an rely on %at appears on, te title. Ae is
$ar#ed %it noti$e only of su$ "urdens and $lai&s as are
annotated on te title. 'is prin$iple ad&its of $ertain
e)$eptions, su$ as %en te party as a$tual +no%led#e of
fa$ts and $ir$u&stan$es tat %ould i&pel a reasona"ly
$autious &an to &a+e su$ in<uiry, or %en te pur$aser as
+no%led#e of a defe$t or te la$+ of title in is vendor or of
suffi$ient fa$ts to indu$e a reasona"ly prudent &an to in<uire
into te status of te title of te property in liti#ation.
[1/7]
*
i#er level of $are and dili#en$e is of $ourse e)pe$ted fro&
"an+s, teir "usiness "ein# i&pressed %it pu"li$ interest.
[1/8]

,illena v. Co$rt of Appeals des$ri"es a pur$aser in #ood fait
in tis %ise,
) ) ) A 51/)#a%(/ $n -ood 3a$*# $% on( =#o 41,% 5/o5(/*,
o3 ano*#(/, =$*#o1* no*$)( *#a* %o+( o*#(/ 5(/%on #a% a
/$-#* *o, o/ $n*(/(%* $n, %1)# 5/o5(/*, a* *#( *$+( o3 %1)#
51/)#a%(, o/ 4(3o/( #( #a% no*$)( o3 *#( )2a$+ o/ $n*(/(%*
o3 %o+( o*#(/ 5(/%on% $n *#( 5/o5(/*,. Cood fait, or te
la$+ of it, is in te final analysis a <uestion of intentionF "ut in
as$ertainin# te intention "y %i$ one is a$tuated on a #iven
o$$asion, %e are ne$essarily $ontrolled "y te eviden$e as to
te $ondu$t and out%ard a$ts "y %i$ alone te in%ard
&otive &ay, %it safety, "e deter&ined. 'ruly, #ood fait is not
a visi"le, tan#i"le fa$t tat $an "e seen or tou$ed, "ut rater a
state or $ondition of &ind %i$ $an only "e 1ud#ed "y a$tual
or fan$ied to+ens or si#ns. 5ter%ise stated, #ood fait ) ) )
refers to te state of &ind %i$ is &anifested "y te a$ts of
te individual $on$erned.
[1/6]
2:&pasis supplied.4
In fine, tere are t%o 224 re<uire&ents "efore one &ay "e
$onsidered a pur$aser in #ood fait, na&ely, 214 tat te
pur$aser "uys te property of anoter %itout noti$e tat
so&e oter person as a ri#t to or interest in su$ propertyF
and 224 tat te pur$aser pays a full and fair pri$e for te
property at te ti&e of su$ pur$ase or "efore e or se as
noti$e of te $lai& of anoter.
It $an ri#tfully "e said tat "ot LIP.5 and R.9. areHH
"ased on te a"ove re<uire&ents and %it respe$t to te
adverted transa$tions of te $onverted land in <uestionHH
pur$asers in #ood fait for value entitled to te "enefits
arisin# fro& su$ status.
1irst, at te ti&e LIP.5 pur$ased te entire tree undred
2-004 e$tares of industrial land, tere %as no noti$e of any
supposed defe$t in te title of its transferor, .entennary, or tat
any oter person as a ri#t to or interest in su$ property. In
fa$t, at te ti&e LIP.5 a$<uired said par$els of land, only te
follo%in# annotations appeared on te '.' in te na&e of
.entennary, te ;e$retaryGs .ertifi$ate in favor of 'eresita
Lopa, te ;e$retaryGs .ertifi$ate in favor of ;intaro >urai, and
te $onversion of te property fro& a#ri$ultural to industrial
and residential use.
[1/0]
'e sa&e is true %it respe$t to R.9.. *t te ti&e it a$<uired
portions of Aa$ienda Luisita, only te follo%in# #eneral
annotations appeared on te '.'s of LIP.5, te ?eed of
Restri$tions, li&itin# its use solely as an industrial estateF te
;e$retaryGs .ertifi$ate in favor of Oo1i Oo&ai and Oyosu+e AoriF
and te Real :state >ort#a#e in favor of R.9. to #uarantee
te pay&ent of PP -00 &illion.
It $annot "e $lai&ed tat R.9. and LIP.5 a$ted in "ad fait
in a$<uirin# te lots tat %ere previously $overed "y te
;?P. Cood fait $onsists in te possessorGs "elief tat te
person fro& %o& e re$eived it %as te o%ner of te sa&e
and $ould $onvey is title. Cood fait re<uires a %ell-founded
"elief tat te person fro& %o& title %as re$eived %as
i&self te o%ner of te land, %it te ri#t to $onvey it. 'ere
is #ood fait %ere tere is an onest intention to a"stain fro&
ta+in# any un$ons$ientious advanta#e fro& anoter.!
[150]
It is
te opposite of fraud.
'o "e sure, intervenor R.9. and LIP.5 +ne% tat te lots
tey "ou#t %ere su"1e$ted to .*RP $overa#e "y &eans of a
sto$+ distri"ution plan, as te ?*R $onversion order %as
annotated at te "a$+ of te titles of te lots tey
a$<uired. Ao%ever, tey are of te onest "elief tat te
su"1e$t lots %ere validly $onverted to $o&&er$ial or industrial
purposes and for %i$ said lots %ere ta+en out of te .*RP
$overa#e su"1e$t of P*R. Resolution 3o. 60-12-2 and, en$e,
$an "e le#ally and validly a$<uired "y te&. *fter all, ;e$. 75
of R* 7758 e)pli$itly allo%s $onversion and disposition of
a#ri$ultural lands previously $overed "y .*RP land a$<uisition
after te lapse of five 254 years fro& its a%ard %en te land
$eases to "e e$ono&i$ally feasi"le and sound for a#ri$ultural
purposes or te lo$ality as "e$o&e ur"ani(ed and te land
%ill ave a #reater e$ono&i$ value for residential, $o&&er$ial
or industrial purposes.! >oreover, ?*R notified all te affe$ted
parties, &ore parti$ularly te =@9s, and #ave te& te
opportunity to $o&&ent or oppose te proposed
$onversion. ?*R, after #oin# trou# te ne$essary
pro$esses, #ranted te $onversion of 500 e$tares of
Aa$ienda Luisita pursuant to its pri&ary 1urisdi$tion under ;e$.
50 of R* 7758 to deter&ine and ad1udi$ate a#rarian refor&
&atters and its ori#inal e)$lusive 1urisdi$tion over all &atters
involvin# te i&ple&entation of a#rarian refor&. 'e ?*R
$onversion order "e$a&e final and e)e$utory after none of te
=@9s interposed an appeal to te .*. In tis fa$tual settin#,
R.9. and LIP.5 pur$ased te lots in <uestion on teir
onest and %ell-founded "elief tat te previous re#istered
o%ners $ould le#ally sell and $onvey te lots tou# tese
%ere previously su"1e$t of .*RP $overa#e. :r#o, R.9. and
LIP.5 a$ted in #ood fait in a$<uirin# te su"1e$t lots.
*nd second, "ot LIP.5 and R.9. pur$ased portions of
Aa$ienda Luisita for value. Endenia"ly, LIP.5 a$<uired -00
e$tares of land fro& .entennary for te a&ount of PP 850
&illion pursuant to a ?eed of ;ale dated July -0, 1006.
[151]
5n
te oter and, in a ?eed of *"solute *ssi#n&ent dated
3ove&"er 25, 200/, LIP.5 $onveyed portions of Aa$ienda
Luisita in favor of R.9. "y %ay of dacion en pago to pay for a
loan of PP /-1,705,8-2.10.
*s "ona fide pur$asers for value, "ot LIP.5 and R.9.
ave a$<uired ri#ts %i$ $annot 1ust "e disre#arded "y ?*R,
P*R. or even "y tis .ourt. *s eld in Spo$ses Ch$a v.
Soriano,
@it te property in <uestion avin# already passed to te
ands of pur$asers in #ood fait, it is no% of no &o&ent tat
so&e irre#ularity attended te issuan$e of te ;P*, $onsistent
%it our pronoun$e&ent in .eirs of Spo$ses -enito #avino
and >$ana /$ste v. Co$rt of Appeals, to %it,
) ) ) te #eneral rule tat te dire$t result of a previous void
$ontra$t $annot "e valid, is inappli$a"le in tis $ase as it %ill
dire$tly $ontravene te 'orrens syste& of re#istration. !#(/(
$nno)(n* *#$/d 5(/%on%, /(2,$n- on *#( )o//()*n(%% o3 *#(
)(/*$3$)a*( o3 *$*2( *#1% $%%1(d, a)01$/( /$-#*% o.(/ *#(
5/o5(/*,, *#( )o1/* )anno* d$%/(-a/d %1)# /$-#*% and o/d(/
*#( )an)(22a*$on o3 *#( )(/*$3$)a*(. 'e effe$t of su$ outri#t
$an$ellation %ill "e to i&pair pu"li$ $onfiden$e in te $ertifi$ate
of title. 'e san$tity of te 'orrens syste& &ust "e preservedF
oter%ise, everyone dealin# %it te property re#istered under
te syste& %ill ave to in<uire in every instan$e as to %eter
te title ad "een re#ularly or irre#ularly issued, $ontrary to te
evident purpose of te la%.
B($n- 51/)#a%(/% $n -ood 3a$*#, *#( C#1a% a2/(ad,
a)01$/(d .a2$d *$*2( *o *#( 5/o5(/*,. A 51/)#a%(/ $n -ood
3a$*# #o2d% an $nd(3(a%$42( *$*2( *o *#( 5/o5(/*, and #( $%
(n*$*2(d *o *#( 5/o*()*$on o3 *#( 2a=.
[152]
) ) ) 2:&pasis
supplied.4
'o "e sure, te pra$ti$alities of te situation ave to a point
influen$ed 5ur disposition on te fate of R.9. and LIP.5.
*fter all, te .ourt, to "orro% fro&Association of Small
Landowners in the Philippines, Inc.,
[15-]
is not a $loistered
institution re&oved! fro& te realities on te #round. 'o note,
te approval and issuan$es of "ot te national and lo$al
#overn&ents so%in# tat $ertain portions of Aa$ienda Luisita
ave effe$tively $eased, le#ally and pysi$ally, to "e
a#ri$ultural and, terefore, no lon#er .*RPa"le are a &atter of
fa$t %i$ $annot 1ust "e i#nored "y te .ourt and te ?*R.
*&on# te approvin#Dendorsin# issuan$es,
[15/]
2a4 Resolution 3o. -02 dated 11 ?e$e&"er 1007 of te
;an##unian# 9ayan of 'arla$ favora"ly endorsin# te -00-
e$tare industrial estate pro1e$t of LIP.5F
2"4 95I .ertifi$ate of Re#istration 3o. 07-020 dated 20
?e$e&"er 1007 issued in a$$ordan$e %it te 5&ni"us
Invest&ents .ode of 1068F
2$4 P:X* .ertifi$ate of 9oard Resolution 3o. 08-202 dated
28 June 1008, approvin# LIP.5Gs appli$ation for a &i)ed
e$o(one and pro$lai&in# te tree undred 2-004 e$tares of
te industrial land as a ;pe$ial :$ono&i$ XoneF
2d4 Resolution 3o. 2-/ dated 06 *u#ust 1008 of te
;an##unian# 9ayan of 'arla$, approvin# te =inal
?evelop&ent Per&it for te Luisita Industrial Par+ II Pro1e$tF
2e4 ?evelop&ent Per&it dated 1- *u#ust 1008 for te
proposed Luisita Industrial Par+ II Pro1e$t issued "y te 5ffi$e
of te ;an##unian# 9ayan of 'arla$F
[155]
2f4 ?:3R :nviron&ental .o&plian$e .ertifi$ate dated 01
5$to"er 1008 issued for te proposed pro1e$t of "uildin# an
industrial $o&ple) on tree undred 2-004 e$tares of
industrial landF
[157]
2#4 .ertifi$ate of Re#istration 3o. 0080/ dated 27 ?e$e&"er
1008 issued "y te ALER9 on te pro1e$t of Luisita Industrial
Par+ II %it an area of tree &illion 2-,000,0004 s<uare &etersF
[158]
24 Li$ense to ;ell 3o. 0087 dated 27 ?e$e&"er 1008 issued
"y te ALER9 autori(in# te sale of lots in te Luisita
Industrial Par+ IIF
2i4 Pro$la&ation 3o. 1208 dated 22 *pril 1006 entitled
?e$larin# .ertain Par$els of Private Land in 9aran#ay ;an
>i#uel, >uni$ipality of 'arla$, Provin$e of 'arla$, as a ;pe$ial
:$ono&i$ Xone pursuant to Repu"li$ *$t 3o. 8017,!
desi#natin# te Luisita Industrial Par+ II $onsistin# of tree
undred e$tares 2-00 as.4 of industrial land as a ;pe$ial
:$ono&i$ XoneF and
214 .ertifi$ate of Re#istration 3o. :X-06-05 dated 08
>ay 1006 issued "y te P:X*, statin# tat pursuant to
Presidential Pro$la&ation 3o. 1208 dated 22 *pril 1006 and
Repu"li$ *$t 3o. 8017, LIP.5 as "een re#istered as an
:$o(one ?eveloperD5perator of Luisita Industrial Par+ II
lo$ated in ;an >i#uel, 'arla$, 'arla$.
@ile a &ere re$lassifi$ation of a $overed a#ri$ultural land or
its in$lusion in an e$ono&i$ (one does not auto&ati$ally allo%
te $orporate or individual lando%ner to $an#e its use,
[156]
te
re$lassifi$ation pro$ess is a prima facie indi$iu& tat te land
as $eased to "e e$ono&i$ally feasi"le and sound for
a#ri$ultural uses. *nd if only to stress, ?*R .onversion 5rder
3o. 0-070108/-87/-2054 issued in 1007 "y ten ?*R
;e$retary Carilao ad effe$tively $onverted 500 e$tares of
a$ienda land fro& a#ri$ultural to industrialD$o&&er$ial use
and autori(ed teir disposition.
In relyin# upon te a"ove-&entioned approvals, pro$la&ation
and $onversion order, "ot R.9. and LIP.5 $annot "e
$onsidered at fault for "elievin# tat $ertain portions of
Aa$ienda Luisita are industrialD$o&&er$ial lands and are, tus,
outside te a&"it of .*RP. 'e P*R., and $onse<uently ?*R,
#ravely a"used its dis$retion %en it pla$ed LIP.5Gs and
R.9.Gs property %i$ on$e for&ed part of Aa$ienda Luisita
under te .*RP $o&pulsory a$<uisition s$e&e via te
assailed 3oti$e of .overa#e.
*s re#ards te 60.51-e$tare land transferred to te
#overn&ent for use as part of te ;.':M, tis sould also "e
e)$luded fro& te $o&pulsory a#rarian refor& $overa#e
$onsiderin# tat te transfer %as $onsistent %it te
#overn&entGs e)er$ise of te po%er of e&inent do&ain
[150]
and
none of te parties a$tually <uestioned te transfer.
@ile @e affir& te revo$ation of te ;?P on Aa$ienda Luisita
su"1e$t of P*R. Resolution 3os. 2005--2-01 and 2007--/-01,
te .ourt $annot $lose its eyes to $ertain operative fa$ts! tat
ad o$$urred in te interi&. Pertinently, te operative fa$t!
do$trine reali(es tat, in de$larin# a 2a= or (D()1*$.(
a)*$on null and void, or, "y e)tension, no lon#er %itout for$e
and effe$t, undue arsness and resultin# unfairness &ust "e
avoided. 'is is as it sould realisti$ally "e, sin$e ri#ts &i#t
ave a$$rued in favor of natural or 1uridi$al persons and
o"li#ations 1ustly in$urred in te &eanti&e.
[170]
'e a$tual
e)isten$e of a statute or e)e$utive a$t is, prior to su$ a
deter&ination, an operative fa$t and &ay ave $onse<uen$es
%i$ $annot 1ustly "e i#noredF te past $annot al%ays "e
erased "y a ne% 1udi$ial de$laration.
[171]
'e oft-$ited %e Ag"aani v. Philippine 6ational
-an'
[172]
dis$ussed te effe$t to "e #iven to a le#islative or
e)e$utive a$t su"se<uently de$lared invalid,
) ) ) It does not ad&it of dou"t tat prior to te de$laration of
nullity su$ $allen#ed le#islative or e)e$utive a$t &ust ave
"een in for$e and ad to "e $o&plied %it. 'is is so as until
after te 1udi$iary, in an appropriate $ase, de$lares its invalidity,
it is entitled to o"edien$e and respe$t. Parties &ay ave a$ted
under it and &ay ave $an#ed teir positions. @at $ould "e
&ore fittin# tan tat in a su"se<uent liti#ation re#ard "e ad
to %at as "een done %ile su$ le#islative or e)e$utive a$t
%as in operation and presu&ed to "e valid in all respe$ts. It is
no% a$$epted as a do$trine tat prior to its "ein# nullified, its
e)isten$e as a fa$t &ust "e re$+oned %it. 'is is &erely to
refle$t a%areness tat pre$isely "e$ause te 1udi$iary is te
#overn&ent or#an %i$ as te final say on %eter or not a
le#islative or e)e$utive &easure is valid, a period of ti&e &ay
ave elapsed "efore it $an e)er$ise te po%er of 1udi$ial
revie% tat &ay lead to a de$laration of nullity. It %ould "e to
deprive te la% of its <uality of fairness and 1usti$e ten, if
tere "e no re$o#nition of %at ad transpired prior to su$
ad1udi$ation.
In te lan#ua#e of an *&eri$an ;upre&e .ourt de$ision, 'e
a$tual e)isten$e of a statute, prior to su$ a deter&ination of
[un$onstitutionality], is an operative fa$t and &ay ave
$onse<uen$es %i$ $annot 1ustly "e i#nored. 'e past $annot
al%ays "e erased "y a ne% 1udi$ial de$laration. 'e effe$t of
te su"se<uent rulin# as to invalidity &ay ave to "e
$onsidered in various aspe$ts,HH%it respe$t to parti$ular
relations, individual and $orporate, and parti$ular $ondu$t,
private and offi$ial.! ) ) )
Civen te a"ove perspe$tive and $onsiderin# tat &ore tan
t%o de$ades ad passed sin$e te P*R.Gs approval of te
ALIGs ;?P, in $on1un$tion %it nu&erous a$tivities perfor&ed in
#ood fait "y ALI, and te relian$e "y te =@9s on te le#ality
and validity of te P*R.-approved ;?P, perfor$e, $ertain ri#ts
of te parties, &ore parti$ularly te =@9s, ave to "e
respe$ted pursuant to te appli$ation in a #eneral %ay of te
operative fa$t do$trine.
* vie%, o%ever, as "een advan$ed tat te operative fa$t
do$trine is of &ini&al or alto#eter %itout relevan$e to te
instant $ase as it applies only in $onsiderin# te effe$ts of a
de$laration of un$onstitutionality of a statute, and not of a
de$laration of nullity of a $ontra$t. 'is is in$orre$t, for tis vie%
failed to $onsider is tat it is 35' te ;?5* dated >ay 11,
1060 %i$ %as revo+ed in te instant $ase. Rater, it is
P*R.Gs approval of te ALIGs Proposal for ;to$+ ?istri"ution
under .*RP %i$ e&"odied te ;?P tat %as nullified.
* re$all of te ante$edent events %ould so% tat on >ay 11,
1060, 'ade$o, ALI, and te <ualified =@9s e)e$uted te
;?5*. 'is a#ree&ent provided te "asis and &e$ani$s of
te ;?P tat %as su"se<uently proposed and su"&itted to
?*R for approval. It %as only after its revie% tat te P*R.,
trou# ten ;e$. ?efensor-;antia#o, issued te assailed
Resolution 3o. 60-12-2 approvin# te ;?P. .onsidera"ly, it is
not te ;?5* %i$ #ave le#al for$e and effe$t to te sto$+
distri"ution s$e&e "ut instead, it is te approval of te ;?P
under te P*R. Resolution 3o. 60-12-2 tat #ave it its validity.
'e a"ove $on$lusion is "olstered "y te fa$t tat in ;e$.
Pan#anda&anGs re$o&&endation to te P*R. :)$o&, %at
e proposed is te re$allDrevo$ation of P*R. Resolution 3o.
60-12-2 approvin# ALIGs ;?P, and not te revo$ation of te
;?5*. ;e$. Pan#anda&anGs re$o&&endation %as favora"ly
endorsed "y te P*R. Ialidation .o&&ittee to te P*R.
:)$o&, and tese re$o&&endations %ere referred to in te
assailed Resolution 3o. 2005--2-01. .learly, it is not te ;?5*
%i$ %as &ade te "asis for te i&ple&entation of te sto$+
distri"ution s$e&e.
'at te operative fa$t do$trine s<uarely applies to e)e$utive
a$tsHHin tis $ase, te approval "y P*R. of te ALI proposal
for sto$+ distri"utionHHis %ell-settled in our
1urispruden$e. In Chave0 v. 6ational .o$sing A$thorit,
[17-]
@e
eld,
Petitioner postulates tat te operative fa$t! do$trine is
inappli$a"le to te present $ase "e$ause it is an e<uita"le
do$trine %i$ $ould not "e used to $ountenan$e an
ine<uita"le result tat is $ontrary to its proper offi$e.
5n te oter and, te petitioner ;oli$itor Ceneral ar#ues tat
te e)isten$e of te various a#ree&ents i&ple&entin# te
;>?RP is an operative fa$t tat $an no lon#er "e distur"ed or
si&ply i#nored, $itin# Rieta v. People of the Philippines.
'e ar#u&ent of te ;oli$itor Ceneral is &eritorious.
'e operative fa$t! do$trine is e&"odied in %e Ag"aani v.
Co$rt of Appeals, %erein it is stated tat a le#islative
or (D()1*$.( a)*, prior to its "ein# de$lared as un$onstitutional
"y te $ourts, is valid and &ust "e $o&plied %it, tus,
))) ))) )))
'is do$trine %as reiterated in te &ore re$ent $ase of Cit of
,a'ati v. Civil Service Commission, %erein %e ruled tat,
>oreover, %e $ertainly $annot nullify te .ity Covern&entYs
order of suspension, as %e ave no reason to do so, &u$
less retroa$tively apply su$ nullifi$ation to deprive private
respondent of a $o&pellin# and valid reason for not filin# te
leave appli$ation. Fo/ a% =( #a.( #(2d, a .o$d a)* *#o1-# $n
2a= a +(/( %)/a5 o3 5a5(/ non(*#(2(%% )on3(/% 2(-$*$+a),
15on 5a%* a)*% o/ o+$%%$on% don( $n /(2$an)(
*#(/(o3. .onse<uently, te e)isten$e of a statute or (D()1*$.(
o/d(/prior to its "ein# ad1ud#ed void is an operative fa$t to
%i$ le#al $onse<uen$es are atta$ed. It %ould indeed "e
#astly unfair to prevent private respondent fro& relyin# upon
te order of suspension in lieu of a for&al leave appli$ation.
2.itations o&ittedF :&pasis supplied.4
'e appli$a"ility of te operative fa$t do$trine to e)e$utive a$ts
%as furter e)pli$ated "y tis .ourt in Rieta v. People,
[17/]
tus,
Petitioner $ontends tat is arrest "y virtue of *rrest ;ear$
and ;ei(ure 5rder 2*;;54 3o. /85/ %as invalid, as te la%
upon %i$ it %as predi$ated R Ceneral 5rder 3o. 70, issued
"y ten President =erdinand :. >ar$os R %as su"se<uently
de$lared "y te .ourt, in &a?ada v. &$vera, -- to ave no for$e
and effe$t. 'us, e asserts, any eviden$e o"tained pursuant
tereto is inad&issi"le in eviden$e.
@e do not a#ree. In &a?ada, te .ourt addressed te possi"le
effe$ts of its de$laration of te invalidity of various presidential
issuan$es. ?is$ussin# terein o% su$ a de$laration &i#t
affe$t a$ts done on a presu&ption of teir validity, te .ourt
said,
. . .. In si&ilar situations in te past tis .ourt ad ta+en te
pra#&ati$ and realisti$ $ourse set fort in Chicot Co$nt
%rainage %istrict vs. -a5ter -an' to %it,
Z'e $ourts "elo% ave pro$eeded on te teory tat te *$t
of .on#ress, avin# "een found to "e un$onstitutional, %as not
a la%F tat it %as inoperative, $onferrin# no ri#ts and i&posin#
no duties, and en$e affordin# no "asis for te $allen#ed
de$ree. . . . It is <uite $lear, o%ever, tat su$ "road
state&ents as to te effe$t of a deter&ination of
un$onstitutionality &ust "e ta+en %it <ualifi$ations. 'e a$tual
e)isten$e of a statute, prior to [te deter&ination of its
invalidity], is an operative fa$t and &ay ave $onse<uen$es
%i$ $annot 1ustly "e i#nored. 'e past $annot al%ays "e
erased "y a ne% 1udi$ial de$laration. 'e effe$t of te
su"se<uent rulin# as to invalidity &ay ave to "e $onsidered in
various aspe$ts R %it respe$t to parti$ular $ondu$t, private
and offi$ial. Questions of ri#ts $lai&ed to ave "e$o&e
vested, of status, of prior deter&inations dee&ed to ave
finality and a$ted upon a$$ordin#ly, of pu"li$ poli$y in te li#t
of te nature "ot of te statute and of its previous appli$ation,
de&and e)a&ination. 'ese <uestions are a&on# te &ost
diffi$ult of tose %i$ ave en#a#ed te attention of $ourts,
state and federal, and it is &anifest fro& nu&erous de$isions
tat an all-in$lusive state&ent of a prin$iple of a"solute
retroa$tive invalidity $annot "e 1ustified.G
))) ))) )))
;i&ilarly, te i&ple&entationDenfor$e&ent of presidential
de$rees prior to teir pu"li$ation in te 5ffi$ial Ca(ette is Zan
operative fa$t %i$ &ay ave $onse<uen$es %i$ $annot "e
1ustly i#nored. 'e past $annot al%ays "e erased "y a ne%
1udi$ial de$laration . . . tat an all-in$lusive state&ent of a
prin$iple of a"solute retroa$tive invalidity $annot "e 1ustified.G!
'e .i$ot do$trine $ited in &a?ada advo$ates tat, prior to
te nullifi$ation of a statute, tere is an i&perative ne$essity of
ta+in# into a$$ount its a$tual e)isten$e as an operative fa$t
ne#atin# te a$$eptan$e of a prin$iple of a"solute retroa$tive
invalidity.! @atever %as done %ile te le#islative or
te (D()1*$.( a)* %as in operation sould "e duly re$o#ni(ed
and presu&ed to "e valid in all respe$ts. T#( ASSO *#a* =a%
$%%1(d $n 1:7: 1nd(/ G(n(/a2 O/d(/ No. ;0 K 2on- 4(3o/(
o1/ D()$%$on $n Taada and *#( a//(%* o3 5(*$*$on(/ K $% an
o5(/a*$.( 3a)* *#a* )an no 2on-(/ 4( d$%*1/4(d o/ %$+52,
$-no/(d. 2.itations o&ittedF :&pasis supplied.4
'o reiterate, altou# te assailed Resolution 3o. 2005--2-01
states tat it revo+es or re$alls te ;?P, %at it a$tually
revo+ed or re$alled %as te P*R.Gs approval of te ;?P
e&"odied in Resolution 3o. 60-12-2. .onse<uently, %at %as
a$tually de$lared null and void %as an e)e$utive a$t,
P*R. Resolution 3o. 60-12-2,
[175]
and not a $ontra$t
2;?5*4. It is, terefore, %ron# to say tat it %as te ;?5*
%i$ %as annulled in te instant $ase. :vidently, te operative
fa$t do$trine is appli$a"le.
I&.
@ile te assailed P*R. resolutions effe$tively nullifyin# te
Aa$ienda Luisita ;?P are upeld, te revo$ation &ust, "y
appli$ation of te operative fa$t prin$iple, #ive %ay to te ri#t
of te ori#inal 7,207 <ualified =@9s to $oose %eter tey
%ant to re&ain as ALI sto$+olders or not. 'e .ourt $annot
turn a "lind eye to te fa$t tat in 1060, 0-K of te =@9s
a#reed to te ;?5* 2or te >5*4, %i$ "e$a&e te "asis of
te ;?P approved "y P*R. per its Resolution 3o. 60-12-2
dated 3ove&"er 21, 1060. =ro& 1060 to 2005, te =@9s %ere
said to ave re$eived fro& ALI salaries and $as "enefits,
ospital and &edi$al "enefits, 2/0-s<uare &eter o&elots, -K
of te #ross produ$e fro& a#ri$ultural lands, and -K of te
pro$eeds of te sale of te 500-e$tare $onverted land and te
60.51-e$tare lot sold to ;.':M. ALI sares totalin#
116,-01,087.65 %ere distri"uted as of *pril 22, 2005.
[177]
5n
*u#ust 7, 20l0, ALI and private respondents su"&itted a
.o&pro&ise *#ree&ent, in %i$ ALI #ave te =@9s te
option of a$<uirin# a pie$e of a#ri$ultural land or re&ain as ALI
sto$+olders, and as a &atter of fa$t, &ost =@9s indi$ated
teir $oi$e of re&ainin# as sto$+olders. 'ese fa$ts and
$ir$u&stan$es tend to indi$ate tat so&e, if not all, of te
=@9s &ay a$tually desire to $ontinue as ALI sareolders. *
&atter "est left to teir o%n dis$retion.
@it respe$t to te oter =@9s %o %ere not listed as
<ualified "enefi$iaries as of 3ove&"er 21, 1060 %en te ;?P
%as approved, tey are not a$$orded te ri#t to a$<uire land
"ut sall, o%ever, $ontinue as ALI sto$+olders. *ll te
"enefits and o&elots
[178]
re$eived "y te 10,502 =@9s 27,207
ori#inal =@9s and /,207 non-<ualified =@9s4 listed as ALI
sto$+olders as of *u#ust 2, 2010 sall "e respe$ted %it no
o"li#ation to refund or return te& sin$e te "enefits 2e)$ept
te o&elots4 %ere re$eived "y te =@9s as far&ands in te
a#ri$ultural enterprise of ALI and oter frin#e "enefits %ere
#ranted to te& pursuant to te e)istin# $olle$tive "ar#ainin#
a#ree&ent %it 'ade$o. If te nu&"er of ALI sares in te
na&es of te ori#inal =@9s %o opt to re&ain as ALI
sto$+olders falls "elo% te #uaranteed allo$ation of 16,60/.-2
ALI sares per =@9, te ALI sall assi#n additional sares to
said =@9s to $o&plete said &ini&u& nu&"er of sares at no
$ost to said =@9s.
@it re#ard to te o&elots already a%arded or
ear&ar+ed, te =@9s are not o"li#ed to return te sa&e to ALI
or pay for its value sin$e tis is a "enefit #ranted under te
;?P. 'e o&elots do not for& part of te /,015.85 e$tares
$overed "y te ;?P "ut %ere ta+en fro& te 120.02-/ e$tare
residential lot o%ned "y 'ade$o. 'ose %o did not re$eive te
o&elots as of te revo$ation of te ;?P on ?e$e&"er 22,
2005 %en P*R. Resolution 3o. 2005--2-01 %as issued, %ill
no lon#er "e entitled to o&elots. 'us, in te deter&ination
of te ulti&ate a#ri$ultural land tat %ill "e su"1e$ted to land
distri"ution, te a##re#ate area of te o&elots %ill no lon#er
"e dedu$ted.
'ere is a $lai& tat, sin$e te sale and transfer of te 500
e$tares of land su"1e$t of te *u#ust 1/, 1007 .onversion
5rder and te 60.51-e$tare ;.':M lot $a&e after $o&pulsory
$overa#e as ta+en pla$e, te =@9s sould ave teir
$orrespondin# sare of te landGs value. 'ere is &erit in te
$lai&. ;in$e te ;?P approved "y P*R. Resolution 3o. 60-
12-2 as "een nullified, ten all te lands su"1e$t of te ;?P
%ill auto&ati$ally "e su"1e$t of $o&pulsory $overa#e under
;e$. -1 of R* 7758. ;in$e te .ourt e)$luded te 500-e$tare
lot su"1e$t of te *u#ust 1/, 1007 .onversion 5rder and te
60.51-e$tare ;.':M lot a$<uired "y te #overn&ent fro& te
area $overed "y ;?P, ten ALI and its su"sidiary, .entennary,
sall "e lia"le to te =@9s for te pri$e re$eived for said
lots. ALI sall "e lia"le for te value re$eived for te sale of
te 200-e$tare land to LR. in te a&ount of PP
500,000,000 and te e<uivalent value of te 12,000,000
sares of its su"sidiary, .entennary, for te -00-e$tare lot
sold to LIP.5 for te $onsideration of PP
850,000,000. Li+e%ise, ALI sall "e lia"le for PP 60,511,500
as $onsideration for te sale of te 60.51-e$tare ;.':M lot.
@e, o%ever, note tat ALI as alle#edly paid -K of te
pro$eeds of te sale of te 500-e$tare land and 60.51-e$tare
;.':M lot to te =@9s. @e also ta+e into a$$ount te
pay&ent of ta)es and e)penses relatin# to te transfer of te
land and ALIGs state&ent tat &ost, if not all, of te pro$eeds
%ere used for le#iti&ate $orporate purposes. In order to
deter&ine on$e and for all %eter or not all te pro$eeds
%ere properly utili(ed "y ALI and its su"sidiary, .entennary,
?*R %ill en#a#e te servi$es of a reputa"le a$$ountin# fir& to
"e approved "y te parties to audit te "oo+s of ALI to
deter&ine if te pro$eeds of te sale of te 500-e$tare land
and te 60.51-e$tare ;.':M lot %ere a$tually used for
le#iti&ate $orporate purposes, titlin# e)penses and in
$o&plian$e %it te *u#ust 1/, 1007 .onversion 5rder. 'e
$ost of te audit %ill "e souldered "y ALI. If after su$ audit,
it is deter&ined tat tere re&ains a "alan$e fro& te
pro$eeds of te sale, ten te "alan$e sall "e distri"uted to
te <ualified =@9s.
* vie% as "een advan$ed tat ALI &ust pay te =@9s yearly
rent for use of te land fro& 1060. @e disa#ree. It sould not
"e for#otten tat te =@9s are also sto$+olders of ALI, and
te "enefits a$<uired "y te $orporation fro& its possession
and use of te land ulti&ately redounded to te =@9sG "enefit
"ased on its "usiness operations in te for& of salaries, and
oter frin#e "enefits under te .9*. 'o still re<uire ALI to pay
rent to te =@9s %ill result in dou"le $o&pensation.
=or sure, ALI %ill still e)ist as a $orporation even after
te revo$ation of te ;?P altou# it %ill no lon#er "e
operatin# under te ;?P, "ut pursuant to te .orporation .ode
as a private sto$+ $orporation. 'e non-a#ri$ultural assets
a&ountin# to PP -0-,02/,220 sall re&ain %it ALI, %ile te
a#ri$ultural lands valued at PP 107,7-0,000 %it an ori#inal
area of /,015.85 e$tares sall "e turned over to ?*R for
distri"ution to te =@9s. 'o "e dedu$ted fro& said area are
te 500-e$tare lot su"1e$t of te *u#ust 1/, 1007 .onversion
5rder, te 60.51-e$tare ;.':M lot, and te total area of
7,667.5 s<uare &eters of individual lots tat sould ave "een
distri"uted to =@9s "y ?*R ad tey not opted to stay in ALI.
ALI sall "e paid 1ust $o&pensation for te re&ainin#
a#ri$ultural land tat %ill "e transferred to ?*R for land
distri"ution to te =@9s. @e find tat te date of te ta+in#!
is 3ove&"er 21, 1060, %en P*R. approved ALIGs ;?P per
P*R. Resolution 3o. 60-12-2. ?*R sall $oordinate %it L9P
for te deter&ination of 1ust $o&pensation. @e $annot use
>ay 11, 1060 %en te ;?5* %as e)e$uted, sin$e it %as te
;?P, not te ;?5*, tat %as approved "y P*R..
'e instant petition is treated pro hac vice in vie% of te
pe$uliar fa$ts and $ir$u&stan$es of te $ase.
!HEREFORE, te instant petition is DENIED. P*R.
Resolution 3o. 2005--2-01 dated ?e$e&"er 22, 2005 and
Resolution 3o. 2007--/-01 dated >ay -, 2007, pla$in# te
lands su"1e$t of ALIGs ;?P under $o&pulsory $overa#e on
&andated land a$<uisition s$e&e of te .*RP, are
ere"y AFFIRMED %it teMODIFICATION tat te ori#inal
7,207 <ualified =@9s sall ave te option to re&ain as
sto$+olders of ALI. ?*R sall i&&ediately s$edule
&eetin#s %it te said 7,207 =@9s and e)plain to te& te
effe$ts, $onse<uen$es and le#al or pra$ti$al i&pli$ations of
teir $oi$e, after %i$ te =@9s %ill "e as+ed to &anifest, in
se$ret votin#, teir $oi$es in te "allot, si#nin# teir
si#natures or pla$in# teir tu&"&ar+s, as te $ase &ay "e,
over teir printed na&es.
5f te 7,207 =@9s, e or se %o %ises to $ontinue
as an ALI sto$+older is entitled to 16,60/.-2 ALI sares, and,
in $ase te ALI sares already #iven to i& or er is less tan
16,60/.-2 sares, te ALI is ordered to issue or distri"ute
additional sares to $o&plete said pres$ri"ed nu&"er of
sares at no $ost to te =@9 %itin tirty 2-04 days fro&
finality of tis ?e$ision. 5ter =@9s %o do not "elon# to te
ori#inal 7,207 <ualified "enefi$iaries are not entitled to land
distri"ution and sall re&ain as ALI sareolders. *ll salaries,
"enefits, -K produ$tion sare and -K sare in te pro$eeds of
te sale of te 500-e$tare $onverted land and te 60.51-
e$tare ;.':M lot and o&elots already re$eived "y te
10,502 =@9s, $o&posed of 7,207 ori#inal =@9s and /,207
non-<ualified =@9s, sall "e respe$ted %it no o"li#ation to
refund or return te&.
@itin tirty 2-04 days after deter&inin# %o fro& a&on#
te ori#inal =@9s %ill stay as sto$+olders, ?*R sall
se#re#ate fro& te ALI a#ri$ultural land %it an area of
/,015.85 e$tares su"1e$t of P*R.Gs ;?P-approvin#
Resolution 3o. 60-12-2 te follo%in#, 2a4 te 500-e$tare lot
su"1e$t of te *u#ust 1/, l007 .onversion 5rderF 2"4 te 60.51-
e$tare lot sold to, or a$<uired "y, te #overn&ent as part of
te ;.':M $o&ple)F and 2$4 te a##re#ate area of 7,667.5
s<uare &eters of individual lots tat ea$ =@9 is entitled to
under te .*RP ad e or se not opted to stay in ALI as a
sto$+older. *fter te se#re#ation pro$ess, as indi$ated, is
done, te re&ainin# area sall "e turned over to ?*R for
i&&ediate land distri"ution to te ori#inal <ualified =@9s %o
opted not to re&ain as ALI sto$+olders.
'e afore&entioned area $o&posed of 7,667.5-s<uare &eter
lots allotted to te =@9s %o stayed %it te $orporation sall
for& part of te ALI assets.
ALI is dire$ted to pay te 7,207 =@9s te $onsideration of
PP 500,000,000 re$eived "y it fro& Luisita Realty, In$. for te
sale to te latter of 200 e$tares out of te 500 e$tares
$overed "y te *u#ust 1/, 1007 .onversion 5rder, te
$onsideration of PP 850,000,000 re$eived "y its o%ned
su"sidiary, .entennary Aoldin#s, In$. for te sale of te
re&ainin# -00 e$tares of te afore&entioned 500-e$tare lot
to Luisita Industrial Par+ .orporation, and te pri$e of PP
60,511,500 paid "y te #overn&ent trou# te 9ases
.onversion ?evelop&ent *utority for te sale of te 60.51-
e$tare lot used for te $onstru$tion of te ;.':M road
net%or+. =ro& te total a&ount of PP 1,--0,511,500 2PP
500,000,000 [ PP 850,000,000 [ PP 60,511,500 U PP
1,--0,511,5004 sall "e dedu$ted te -K of te total #ross
sales fro& te produ$tion of te a#ri$ultural land and te -K of
te pro$eeds of said transfers tat %ere paid to te =@9s, te
ta)es and e)penses relatin# to te transfer of titles to te
transferees, and te e)penditures in$urred "y ALI and
.entennary Aoldin#s, In$. for le#iti&ate $orporate
purposes. =or tis purpose, ?*R is ordered to en#a#e te
servi$es of a reputa"le a$$ountin# fir& approved "y te parties
to audit te "oo+s of ALI and .entennary Aoldin#s, In$. to
deter&ine if te PP 1,--0,511,500 pro$eeds of te sale of te
tree 2-4 afore&entioned lots %ere used or spent for le#iti&ate
$orporate purposes. *ny unspent or unused "alan$e as
deter&ined "y te audit sall "e distri"uted to te 7,207
ori#inal =@9s.
ALI is entitled to 1ust $o&pensation for te a#ri$ultural
land tat %ill "e transferred to ?*R to "e re$+oned fro&
3ove&"er 21, 1060 per P*R. Resolution 3o. 60-12-2. ?*R
and L9P are ordered to deter&ine te $o&pensation due to
ALI.
?*R sall su"&it a $o&plian$e report after si) 274
&onts fro& finality of tis 1ud#&ent. It sall also su"&it, after
su"&ission of te $o&plian$e report, <uarterly reports on te
e)e$ution of tis 1ud#&ent to "e su"&itted %itin te first 15
days at te end of ea$ <uarter, until fully i&ple&ented.
'e te&porary restrainin# order is lifted.

[27]
;:.'I53 10. .orporate Lando%ners. .orporate
lando%ners &ay #ive teir %or+ers and oter <ualified
"enefi$iaries te ri#t to pur$ase su$ proportion of te
$apital sto$+ of te $orporation tat te land assets "ear in
relation to te $orporationGs total assets, and #rant additional
$o&pensation %i$ &ay "e used for tis purposes. 'e
approval "y te P*R. of a plan for su$ sto$+ distri"ution, and
its initial i&ple&entation, sall "e dee&ed $o&plian$e %it te
land distri"ution re<uire&ents of te .*RP.
[28]
S()*$on 1.
1a.4 Qualified Corporate Landowner-
ApplicantN*ll "ona fide sto$+ $orporations o%nin# a#ri$ultural
land utili(ed for a#ri$ultural produ$tion and e)istin# as su$ as
of June 15, 1066, te date of effe$tivity of R.*. 3o. 7758, &ay
apply for and avail of te voluntary sto$+ distri"ution plan
[;?P] provided in ;e$tion -1 tereof. 3e% $orporations
in$orporated after te effe$tivity of R.*. 3o. 7758 &ay also
apply, provided tat tey are su"sidiaries of or spin-offs fro&
teir &oter $orporation ) ) ).
1".4 Qualified eneficiariesN'e <ualified "enefi$iaries
in te [;?P] are all tose identified "enefi$iaries of land
transfer enu&erated under ;e$tion 22 of R* 7758.
'e [;?P] sall "e a#reed upon "y "ot te
$orporate lando%ner-appli$ant and te <ualified "enefi$iaries
and su"1e$t to approval "y P*R.. ) ) )
S()*$on B. Applicant and Ti!e of "ilingN'e
$orporate lando%ner-appli$ant sall file te [;?P] in a for& to
"e pres$ri"ed "y ?*R and o"tain approval %itin t%o 224 years
fro& te effe$tivity of R* 7758 "ut prior to ?*RGs noti$e of
$o&pulsory a$<uisition of said property under te sa&e la%.
S()*$on 9. #roportion of DistributionN'e [;?P] of
$orporate lando%ner-appli$ant &ust #ive te <ualified
"enefi$iaries te ri#t to pur$ase at least su$ proportion of
te $apital sto$+ of te $orporation tat te a#ri$ultural land,
a$tually devoted to a#ri$ultural a$tivities, "ears in relation to
te $orporationGs total assets under su$ ter&s and $onditions
as &ay "e a#reed upon "y te&.
S()*$on L. Stoc$ Distribution #lanN'e [;?P]
su"&itted "y te $orporate lando%ner-appli$ant sall provide
for te distri"ution of an e<ual nu&"er of sares of sto$+ of te
sa&e $lass and value, %it te sa&e ri#ts and features as all
oter sares, to ea$ of te <ualified "enefi$iaries. 'is
distri"ution plan in all $ases, sall "e at least te &ini&u& ratio
for purposes of $o&plian$e %it ;e$tion -1 of R* 7758.
5n top of te &ini&u& ratio provided under ;e$tion
- of tis I&ple&entin# Cuideline, $orporate lando%ner-
appli$ant &ay adopt additional sto$+ distri"ution s$e&es
ta+in# into a$$ount fa$tors su$ as ran+, seniority, salary,
position and oter $ir$u&stan$es %i$ &ay "e dee&ed
desira"le as a &atter of sound $o&pany poli$y.
S()*$on <. Criteria for %valuation of #roposalN'e
[;?P] su"&itted "y te $orporate lando%ner-appli$ant sall
&eet te follo%in# &ini&u& $riteria,
a. tat te $ontinued operation of te $orporation
%it its a#ri$ultural land inta$t and unfra#&ented is via"le %it potential
for #ro%t and in$reased profita"ilityF
". tat te plan for sto$+ distri"ution to <ualified
"enefi$iaries %ould result in in$reased in$o&e and #reater "enefits to
te&, tan if te lands %ere divided and distri"uted to te&
individuallyF
$. tat te sto$+ distri"ution plan is a$$epta"le to a
&a1ority, defined as 50K plus 1, of all te <ualified "enefi$iariesF
d. tat te plan sall in$lude a provision tat te
"oo+s of te $orporation sall "e su"1e$t to periodi$ audit "y $ertified
pu"li$ a$$ountants $osen "y te "enefi$iariesF
e. tat irrespe$tive of te value of te "enefi$iaries
e<uity in te $orporation, tey sall "e assured of at least one 214
representative in te 9oard of ?ire$tors or in a &ana#e&ent or
e)e$utive $o&&ittee, if one e)ists ) ) )F
f. tat a "enefi$iary %o avails of a sto$+ option &ust
first e)e$ute te ne$essary %aiver fro& "ein# a "enefi$iary in anoter
sto$+ distri"ution plan ) ) )F
#. oter $riteria tat te ?*R &ay pres$ri"e ) ) ).
S()*$on ;. &aluation and Co!pensationN'e
valuation of $orporate assets su"&itted "y te $orporate
lando%ner-appli$ant in tis proposal sall "e su"1e$t to
verifi$ation and audit e)a&ination "y ?*R. 'e deter&ination
of te value of te a#ri$ultural land sall "e "ased on te land
valuation #uidelines pro&ul#ated "y ?*R.
S()*$on 7. 'odes of Stoc$ DistributionN'e [;?P]
) ) ) &ay "e effe$ted trou# divest&ent of te e)istin# e<uity
oldin#s "y sto$+olders or oter &odes of sto$+ distri"ution
a$$epta"le to "ot parties and duly approved "y ?*R.
S()*$on 8. Li&ited 'ransfera"ility of 9enefi$iaries ;to$+s ) )
).
S()*$on :. Pay&ent of ;ares H 'e pay&ent of te pur$ase
pri$e of te sares sall "e under su$ ter&s and $onditions
a#reed upon "y te $orporate lando%ner-appli$ant and te
"enefi$iaries, provided tat in no $ase sall te $o&pensation
re$eived "y te %or+ers, at te ti&e te sares of sto$+ are
distri"uted, "e redu$ed.
S()*$on 10. Disposition of #roposalN*fter te
evaluation of te [;?P] su"&itted "y te $orporate lando%ner-
appli$ant to te [?*R] ;e$retary, e sall for%ard te sa&e
%it all te supportin# do$u&ents to te Presidential *#rarian
Refor& .oun$il 2P*R.4, trou# its :)e$utive .o&&ittee, %it
is re$o&&endation for final a$tion.
S()*$on 11. (!ple!entation ) 'onitoring of
#lanN'e approved [;?P] sall "e i&ple&ented %itin tree
2-4 &onts fro& re$eipt "y te $orporate lando%ner-appli$ant
of te approval tereof "y te P*R. and te transfer of te
sares of sto$+s in te na&es of te <ualified "enefi$iaries
sall "e re$orded in te sto$+ and transfer "oo+s and
su"&itted to te ;e$urities and :)$an#e .o&&ission 2;:.4
%itin si)ty 2704 days fro& te said i&ple&entation of te
[;?P].
Epon $o&pletion, te $orporate lando%ner-appli$ant
sall "e issued a .ertifi$ate of .o&plian$e. 'e [?*R]
;e$retary ) ) ) sall stri$tly &onitor te i&ple&entation to
deter&ine %eter or not tere as "een $o&plian$e %it te
approved [;?P] as %ell as te re<uire&ents of te .*RP. =or
tis purpose, te $orporate lando%ner-appli$ant sall &a+e
availa"le its pre&ises for o$ular inspe$tion, its personnel for
intervie%, and its re$ords for e)a&ination at nor&al "usiness
ours.
S()*$on 1B. 3on-$o&plian$e %it any of te re<uire&ents of
;e$tion -1 of R* 7785, as i&ple&ented "y tis I&ple&entin#
Cuidelines sall "e #rounds for te revo$ation of te .ertifi$ate
of .o&plian$e issued to te $orporate lando%ner-appli$ant.
S()*$on 19. 3otin# erein sall "e $onstrued as pre$ludin#
te P*R. fro& &a+in# its o%n independent evaluation and
assess&ent of te sto$+ distri"ution plan ) ) ) and in
pres$ri"in# oter re<uire&ents.
[-/]
Id. at -8/7. 'e fi#ure is lifted fro& * Proposal for ;to$+
?istri"ution under .*RP!F >e&orandu& of ALI,
* PR5P5;*L =5R ;'5.O ?I;'RI9E'I53 E3?:R ..*.R.P.
'arla$ ?evelop&ent .orporation, ['ade$o] en#a#ed prin$ipally
in a#ri$ultural pursuits, proposes to $o&ply %it te
.o&preensive *#rarian Refor& Pro#ra& 2..*.R.P.4 ) ) ) %it
[re#ard] to its far& ) ) ) Aa$ienda Luisita! "y availin# of
;e$tion -1 of [R*] 7758 %i$ allo%s a $orporate lando%ner to
$oose "et%een pysi$ally dividin# its a#ri$ultural land su"1e$t
to a#rarian refor& a&on# its far&%or+ers and adoptin# a plan
of distri"ution to te sa&e "enefi$iaries of te sares of te
$apital sto$+ of te $orporation o%nin# te a#ri$ultural land.
In vie% of te fa$t tat te portions of Aa$ienda
Luisita devoted to a#ri$ulture, $onsistin# of appro)i&ately
/,015.85 e$tares, if divided and distri"uted a&on# &ore or
less 8,000 far&%or+ers as potential "enefi$iaries, %ould not "e
ade<uate to #ive te said far&ands a de$ent &eans of
liveliood, ['ade$o] as de$ided to resort to te distri"ution of
sares to te <ualified "enefi$iaries as te "etter and &ore
e<uita"le &ode of $o&plian$e %it te ..*.R.P.
5ne of te i&portant "usinesses of ['ade$o] %as to
operate Aa$ienda Luisita %i$ is a su#ar$ane far&, te
a#ri$ultural parts of %i$ ) ) ) ave an a##re#ate area of
a"out /,015.85 e$tares.
Prior to 1061, ['ade$o] operated te said far& ) ) )
&anually. 'e only &e$ani(ed portion of te operation ten
%as te preparation of te land. Ender tis syste& of
$ultivation, produ$tion %as so e)i#uous tat te yield per
e$tare %as even "elo% te "rea+-even point. 'o survive te
$ripplin# e$ono&i$ $risis "e#otten "y te depressed pri$e of
su#ar ['ade$o] "e#an introdu$in# in Aa$ienda Luisita in 1061
ne% te$nolo#y in su#ar$ane far&in# "y %ay of
&e$ani(ation. 'e si(e and $onti#uous nature of te land
&ade te &e$ani(ed approa$ ideal. Its intention %as not to
$ut $ost tru la"or displa$e&ent "ut to ta+e advanta#e of te
"etter produ$tivity level a$$ruin# to tis type of operation.
In no ti&e at all, ) ) ) te yield per e$tare al&ost
dou"led and %ent up to 60 tons. *nd %at %as "efore a
&ar#inal operation "e$a&e a via"le one.
=*R>@5RO:R-9:3:=I.I*RI:;
Aa$ienda Luisita, as an a#ri$ultural enterprise,
e&ploys at te &o&ent 7,207 far&%or+ers, e)$ludin# tose
%ose na&es ave "een dropped fro& te list for not avin#
%or+ed in te far& for te past t%o years. Its la"or
$o&ple&ent $onsists of --8 per&anent far&%or+ers, 285
seasonal, -,608 $asuals %o are &aster list &e&"ers and
1,688 $asuals %o are non-&aster list &e&"ers, altou# it
a$tually needs only /,0/8 of te& to run te far&.
;in$e its a$<uisition of Aa$ienda Luisita in 1056,
['ade$o] as never resorted to retren$&ent in personnel even
durin# e)tre&ely diffi$ult ti&es ) ) ), %i$ sa% te su#ar
industry on te "rin+ of $ollapse. It as pro&ptly $o&plied %it
in$reases in te &ini&u& %a#e la%. 'ere as "een no
$olle$tive "ar#ainin# ne#otiation tat did not produ$e an
a$ross-te-"oard in$rease in %a#es for la"or, so tat a
Aa$ienda Luisita %or+er re$eived $o&pensation &u$ i#er
tan te floor %a#e pres$ri"ed for te su#ar industry.
=or .rop Lear 1068-66, ['ade$o] paid a total of
P/6,0/0,000.00 in ter&s of salaries and %a#es and frin#e
"enefits of its e&ployees and far&%or+ers in Aa$ienda
Luisita. *&on# te frin#e "enefits presently en1oyed "y its
personnel, under teir e)istin# $olle$tive "ar#ainin# a#ree&ent
[.9*] %it &ana#e&ent, are te follo%in#,
1.4 100K free ospitali(ation and &edi$al plan for all
e&ployees and %or+ers, and teir spouses, $ildren and parentsF
2.4 ;ervi$e and a&elioration "onusesF
-.4 Interest-free loans on edu$ation, ri$e and su#ar,
and salary and spe$ial loansF
/.4 9us fare su"sidy for students %o are $ildren of
e&ployees and %or+ers in te far&, and
5.4 Retire&ent plan tat is fully funded and non-
$ontri"utory.
'o "e entitled to te a"ove-&entioned "enefits, a <ualified
%or+er as only to %or+ for -8 days in one $rop year.
;PI3-5== .5RP5R*'I53
'o e)pedite $o&plian$e %it te re<uire&ents of te
[.*RP] on sto$+ distri"ution and at te sa&e ti&e assure te
far&%or+er-"enefi$iaries of te far& of re$eivin# #reater
"enefits tan if te a#ri$ultural land %ere to "e divided a&on#
te& instead, ['ade$o] $on$eived of separatin# te a#ri$ultural
portions of Aa$ienda Luisita fro& te rest of its "usiness and
transferrin# and $onveyin# te said a#ri$ultural land and su$
properties, assets, e<uip&ent, ri#ts, interests and a$$ounts
related to its operation, in$ludin# lia"ilities, o"li#ations and
en$u&"ran$es in$urred tere"y, to anoter $orporation
separate and distin$t, and for tat purpose $aused, tru its
$ontrollin# sto$+olders, te re#istration and in$orporation of
[ALI] on *u#ust 2-, 1066, as te entity to serve as te spin-off
vei$le in %ose favor te said properties and assets %ere
later on to "e transferred and $onveyed.
.apital ;tru$ture. H 'o a$$o&&odate su$ transfer
of assets, [ALI], %it te approval of te [;:.], in$reased its
autori(ed $apital sto$+ on >ay 10, 1060, fro& P1,500,000.00,
divided into 1,500,000 sares %it a par value of P1.00 per
sare, to P/00,000,000.00, divided into /00,000,000 sares
also %it a par value of P1.00 per sare, 150,000,000 of %i$
issua"le only to <ualified and re#istered "enefi$iaries of te
2..*.R.P.4 and 250,000,000, to any sto$+older or sto$+olders
of te $orporation.
Ialuation of *ssets 'ransferred. H 9y virtue of a
?eed of *ssi#n&ent and .onveyan$e e)e$uted on >ar$ 22,
1060, ['ade$o] su"s$ri"ed to P-55,1-1,/72.00 %ort of sares
in te in$rease in autori(ed $apital sto$+ of te spin-off
$orporation, [ALI], and in pay&ent of its su"s$ription
transferred and $onveyed to te latter te a#ri$ultural portions
of Aa$ienda Luisita ) ) ) avin# a total area of /,015.8/77
e$tares, %i$ are $overed ) ) ) to#eter %it su$ oter
properties, assets, e<uip&ent, ri#ts, interests and a$$ounts
as are ne$essary in te operation of te a#ri$ultural land.
;u$ properties and assets $ontri"uted "y ['ade$o]
to te $apital sto$+ of [ALI], as appraised and approved "y te
[;:.], ave an a##re#ate value of P500,55/,220.00, "ut
inas&u$ as te $onveyan$e of assets also involved te
transfer of lia"ilities to te spin-off $orporation, te net value
left, after dedu$tin# te total lia"ilities of te far& a&ountin# to
P2-5,/22,856.00, is P-55,1-1,/72.00 %i$ is pre$isely te
a&ount of ['ade$oGs] su"s$ription to te in$rease in $apital
sto$+ of [ALI].
'e total value of te properties and assets
transferred and $onveyed "y ['ade$o] to [ALI] a&ountin# to
P500,55/,220.00 &ay "e "ro+en do%n as follo%s,
'e "rea+ do%n of te lia"ilities and o"li#ations
$ontra$ted in operatin# te far& land of Aa$ienda
Luisita [totalin# P2-5,/22,856.00] and tat ave to "e
dedu$ted fro& te total value of te properties and assets
transferred to arrive at teir net value, is erein"elo% indi$ated,
) ) ) )
'e a"ove valuations of "ot assets and lia"ilities ave "een
#iven te i&pri&atur of te [;:.] "y reason of its approval of
te in$rease in te autori(ed $apital sto$+ of [ALI], te
su"s$ription to su$ in$rease of ['ade$o], and te pay&ent "y
['ade$o] of its su"s$ription tru transfer of assets and
lia"ilities. .onse<uently, te net value of te assets and
properties transferred to [ALI] of P-55,1-1,/72.00, if added to
te su"s$ription of te in$orporators [ALI] to te ori#inal
autori(ed $apital sto$+ of te said $orporation a&ountin# to
P/00,000.00, %ould #ive us te total $apital sto$+ su"s$ri"ed
and outstandin# of [ALI] of P-55,5-1,/72.00 %i$, as %ill "e
seen later on, plays an i&portant role in deter&inin# %at
a&ount of sares of te $apital sto$+ of [ALI] &ay "e
distri"uted a&on# its far&%or+er-"enefi$iaries pursuant to
;e$tion -1 of Repu"li$ *$t 3o. 7758.
>:.A*3I.; 5= ;'5.O ?I;'RI9E'I53 PL*3
Ender ;e$tion -1 of [R*] 7758, a $orporation
o%nin# a#ri$ultural land &ay distri"ute a&on# te <ualified
"enefi$iaries su$ proportion or per$enta#e of its $apital sto$+
tat te value of te a#ri$ultural land a$tually devoted to
a#ri$ultural a$tivities, "ears in relation to te $orporationGs total
assets. .onfor&a"ly %it tis le#al provision, ['ade$o] ere"y
su"&its for approval a sto$+ distri"ution plan tat envisions te
follo%in#,
1.4 'e per$enta#e of te value of te
a#ri$ultural portions of Aa$ienda Luisita 2P107,7-0,000.004 in
relation to te total assets 2P500,55/,220.004 transferred and
$onveyed to te spin-off $orporation, ) ) ) is --.-K, or to "e
e)a$t, --.207K, tat in a$$ordan$e %it la%, is te proportion
of te outstandin# $apital sto$+ of te $orporation o%nin# te
a#ri$ultural land, %i$ is P-55,5-1,/72.00 or -55,5-1,/72
sares %it a par value of P1.00 per sare, tat is proposed to
"e distri"uted to te <ualified "enefi$iaries of te plan.
2.4 'e said --.-K of te outstandin# $apital
sto$+ of [ALI] is P116,-01,087.65 or 116,-01,087.65 sares
%it a par value of P1.00 per sare.
-.4 'e <ualified "enefi$iaries of te [;?P]
sall "e te far&%or+ers %o appear in te annual payroll,
in$lusive of te per&anent and seasonal e&ployees, %o are
re#ularly or periodi$ally e&ployed "y [ALI] ) ) ).
/.4 [ALI] sall arran#e %it ['ade$o] at te end
of ea$ fis$al year, for a period of -0 years, te a$<uisition and
distri"ution to te far&%or+er-"enefi$iaries, on te "asis of
nu&"er of days %or+ed durin# te year and at no $ost to te&,
of one-tirtiet 21D-04 of 116,-01,087.65 sares of te $apital
sto$+ of [ALI], e<uivalent to P116,-01,087.65, tat are
presently o%ned and eld "y ['ade$o], until su$ ti&e as te
entire "lo$+ of P116,-01,087.65 sares sall ave "een
$o&pletely a$<uired and distri"uted a&on# te far&%or+er-
"enefi$iaries.
5.4 [ALI] #uarantees to te <ualified
"enefi$iaries of te sto$+ distri"ution plan tat every year tey
%ill re$eive, on top of teir re#ular $o&pensation, an a&ount
tat appro)i&ates tree 2-K4 per$ent of te total #ross sales
fro& te produ$tion of te a#ri$ultural land, %eter it "e in te
for& of $as dividends or in$entive "onuses or "ot.
7.4 :ven if only a part or fra$tion of te sares
ear&ar+ed for distri"ution %ill ave "een a$<uired fro&
['ade$o] and distri"uted a&on# te far&%or+er-"enefi$iaries,
['ade$o] sall e)e$ute at te "e#innin# of ea$ fis$al year an
irrevo$a"le pro)y, valid and effe$tive for one 214 year, in favor
of te far&%or+ers appearin# as sareolders of [ALI] at te
start of te said year %i$ %ill e&po%er te said far&%or+ers
or teir representative to vote in sto$+oldersG &eetin#s of [ALI]
$onvened durin# te year te entire --.-K of te outstandin#
$apital sto$+ of [ALI] ear&ar+ed for distri"ution and tus "e
a"le fro& te very "e#innin# to #ain su$ nu&"er of seats in
te "oard of dire$tors of [ALI] tat te %ole --.-K of te
sares su"1e$t to distri"ution %ill "e entitled to.
8.4 In addition, [ALI] sall %itin a reasona"le
ti&e su"divide and allo$ate for free and %itout $ar#e a&on#
te <ualified fa&ily-"enefi$iaries residin# in te pla$e %ere
te a#ri$ultural land is situated, residential or o&elots of not
&ore tan 2/0 s<. &. ea$, %it ea$ fa&ily-"enefi$iary "ein#
assured of re$eivin# and o%nin# a o&elot in te "arrio or
"aran#ay %ere it a$tually resides.
;'5.O RICA'; *3? R:;'RI.'I53;
*s previously e)plained, te a&end&ent of te
arti$les of in$orporation of [ALI] in$reasin# its $apital sto$+
provided for te $lassifi$ation of its sares of sto$+ into t%o
types, .lass *! and .lass 9! sares. ;ares of sto$+
representin# te proportion of te outstandin# $apital sto$+ of
te said $orporation to "e distri"uted a&on# its far&%or+er-
"enefi$iaries sall $onstitute te .lass *! sares, %ile te
rest of te $apital sto$+ sall "e$o&e .lass 9! sares or
sares sans any restri$tions and $an "e issued to any
sto$+older.
.lass *! sares ave te sa&e ri#ts as te ) ) )
.lass 9! sares. 9ut teir issuan$e "ein# li&ited to
far&%or+er-"enefi$iaries only, .lass *! sares are su"1e$t to
te restri$tion tat for a period of 10 years fro& and after teir
distri"ution, no sale, transfer or $onveyan$e of su$ sares ) )
) sall "e valid unless it "e "y ereditary su$$ession or in favor
of <ualified and re#istered "enefi$iaries %itin te sa&e
$orporation. 'is li&itation on te transfera"ility appears ) ) )
in te a&ended arti$les of in$orporation of [ALI] and in due
ti&e %ill "e printed on te $orrespondin# $ertifi$ates of sto$+ of
tat type of sares.
Li&itin# te effe$tivity of te restri$tion to 10 years
finds support in ;e$tion 28 of te Repu"li$ *$t 3o. 7758 %i$
&a+es land distri"uted a&on# "enefi$iaries under te [.*RP]
non-transfera"le for only 10 years, and sin$e sto$+ distri"ution
is a la%ful alternative to te fra#&entation of land, te said
le#al provision sould e<ually apply to a $ase %ere sto$+
option is te $oi$e.
*?I*3'*C:; 5= ;'5.O PL*3 5I:R L*3?
?I;'RI9E'I53
'ere are puissant reasons "eind ['ade$oGs]
preferen$e for sto$+ distri"ution to land apportion&ent, and
tey are te follo%in#,
1.4 'e pysi$al fra#&entation and distri"ution
of te a#ri$ultural se#&ents of Aa$ienda Luisita, a&on#
potential far&%or+er-"enefi$iaries %o nu&"er appro)i&ately
8,000 %ould result in ea$ individual far&and re$eivin# less
tan a e$tare of land tat in no %ay $ould produ$e enou# to
ena"le i& to lead a $o&forta"le lifeF
2.4 *s te re$ipient of a par$el of a#ri$ultural
land, te far&%or+er as to ta+e $are of in1e$tin# te
ne$essary inputs needed "y te land and soulder te $ost of
produ$tion, and
-.4 'e far&%or+er in$urs te o"li#ation of
payin# to te #overn&ent for is sare of te a#ri$ultural land,
altou# te la% allo%s i& -0 years %itin %i$ to do it.
5n te oter and, te sto$+ distri"ution plan
envisa#ed "y ['ade$o] $onte&plates of,
*. ?istri"utin# te sares of sto$+ over a nu&"er of
years a&on# te <ualified "enefi$iaries at no $ost to te&F
9. *llo%in# te far&%or+er to $ontinue to %or+ on
te land as su$ and re$eive te %a#es and oter "enefits
provided for "y is [.9*] %it te $orporate lando%nerF
.. :ntitlin# i& to re$eive dividends, %eter in
$as or in sto$+, on te sares already distri"uted to i& and
"enefit fro& %atever appre$iation in value tat te said
sares &ay #ain as te $orporation "e$o&es profita"leF
?. Qualifyin# i& to "e$o&e te re$ipient of
%atever in$o&e-au#&entin# and "enefit-i&provin# s$e&es
tat te spin-off $orporation &ay esta"lis, su$ as te
pay&ent of te #uaranteed tree 2-K4 per$ent of #ross sales
every year and te free residential or o&elots to "e allotted to
fa&ily "enefi$iaries of te plan, and
:. Oeepin# te a#ri$ultural land inta$t and
unfra#&ented, to &aintain te via"ility of te su#ar operation
involvin# te far& as a sin#le unit and tus %arrant to te
a$+no%led#ed far&%or+er-"enefi$iaries, and-in-and %it
teir a$<uisition of te sares of te $apital sto$+ of te
$orporation o%nin# te land, a $ontinuin# and sta"le sour$e of
in$o&e.
Indeed, te sto$+ distri"ution plan of ['ade$o] ) ) ) as &any
stron# points and aderen$e to te la% is one of te&.
=or instan$e, in arran#in# for te a$<uisition "y te
far&%or+er-"enefi$iaries of sares of te $apital sto$+ of te
$orporation o%nin# te land #ratis, te $orporate lando%ner
upolds ;e$tion 0 of te Cuidelines and Pro$edures
pro&ul#ated to i&ple&ent ;e$tion -1 of [R*] 7758, %i$
proi"its te use of #overn&ent funds in payin# for te
sares. >oreover, te plan for te free dispersal of sares %ill
not in any %ay di&inis te re#ular $o&pensation "ein#
re$eived "y te far&%or+er-"enefi$iaries at te ti&e of sare
distri"ution, %i$ is pros$ri"ed "y ;e$tion -1 of [R*] 7758.
I>P5R'*3.: '5 :.535>I. ?:I:L5P>:3'
Aa$ienda Luisita at present is te prin$ipal sour$e of
su#ar$ane needed "y a su#ar &ill o%ned and operated "y
[.*'] in te area. It supplies 50K of te su#ar$ane
re<uire&ent of te &ill tat as 1,650 e&ployees and %or+ers
in its e&ploy. *ny disruption in te present operation of
Aa$ienda Luisita %i$ %ould affe$t its present produ$tivity
level %ould terefore auto&ati$ally influen$e te operational
via"ility of te su#ar fa$tory ) ) ) and %i$, in turn, %ould
ave reper$ussions on te liveliood of te present e&ployees
and %or+ers of te &ill as %ell as te liveliood of te
tousands of su#ar$ane planters and teir fa&ilies %itin te
'arla$ su#ar distri$t "ein# servi$ed "y te su#ar &ill.
5n te oter and, te %ell-"ein# of te su#ar &ill
as to "e te pri&e $on$ern also of te $orporate o%ner of
Aa$ienda Luisita, si&ply "e$ause it is te entity tat &ills and
$onverts te su#ar$ane produ$e of te latter to a finised
produ$t. 3ot only tat. 9y &illin# %it [.*'] %i$ as te
&ost effi$ient su#ar &ill in te re#ion, te $orporate o%ner of
Aa$ienda Luisita in effe$t #uarantees to itself &a)i&u&
re$overy fro& its far&Gs su#ar$ane H so&etin# tat is
essential to its finan$ial $apa"ility. In oter %ords, te
relationsip "et%een far& and &ill is one of a"solute
re$ipro$ity and interdependen$e. 5ne $annot e)ist %itout te
oter.
'e i&portan$e of te a#ri$ultural land of Aa$ienda
Luisita stayin# undivided $annot "e #ainsaid. =or it to re&ain
lu$rative, it as to "e operated as a unit ) ) ). *nd on its
su$$essful operation rests te %ell-"ein# of so &any
"usinesses and underta+in#s in te provin$e, or in a %ider
perspe$tive, in te re#ion, tat are lar#ely dependent upon it
for e)isten$e.
.53=5R>I'L 5= =*R>@5RO:R-9:3:=I.I*RI:;
5n >ay 11, 1060, a istori$ event too+ pla$e in
Aa$ienda Luisita %en te representatives of ['ade$o] and
[ALI] and 5,6/6 far&%or+er-"enefi$iaries in+ed teir a$$ord, in
te presen$e of offi$ials of te [?*R], to a [>5*] tat
e&"odies te sto$+ distri"ution plan su"1e$t of tis
proposal. 'e said 5,6/6 far&%or+er-"enefi$iaries %o #ave
teir $onfor&ity to te a#ree&ent represent 02.0K of teir
entire $o&ple&ent %i$ is &u$ &ore tan te &a1ority 250K
plus one4 tat te la% re<uires.
.53.LE;I53 Aere is a sto$+ distri"ution plan tat
$alls for te a$<uisition and distri"ution every year, for te ne)t
-0 years, of -,0/7,-00.2- sares, %ort P-,0/7,-00.2-, of te
$apital sto$+ of te $orporation o%nin# te a#ri$ultural land
a&on# its <ualified far&%or+er-"enefi$iaries at no $ost to
te&. It also #uarantees to pay to te& ea$ year te
e<uivalent of tree 2-K4 per$ent of te #ross sales of te
produ$tion of te land, %i$ is a"out P8,-20,000.00 yearly,
irrespe$tive of %eter te said $orporation &a+es &oney or
not. It $onte&plates of allo%in# te far&%or+er-"enefi$iaries
fro& te very start to o$$upy su$ nu&"er of seats in te
"oard of dire$tors of te $orporate lando%ner as te %ole
nu&"er of sares of sto$+ set aside for distri"ution &ay entitle
te&, so tat tey $ould ave a say in for#in# teir o%n
destiny. *nd last "ut not least, it intends to elp #ive te sa&e
far&%or+er-"enefi$iaries, %o are <ualified, ade<uate selter
"y providin# residential or o&elots not e)$eedin# 2/0 s<.&.
ea$ for free %i$ tey $an $all teir o%n.
'e a"ove sto$+ distri"ution plan is ere"y
su"&itted on te "asis of all tese "enefits tat te
far&%or+er-"enefi$iaries of Aa$ienda Luisita %ill re$eive under
its provisions in addition to teir re#ular $o&pensation as
far&ands in te a#ri$ultural enterprise and te frin#e "enefits
#ranted to te& "y teir [.9*] %it &ana#e&ent. ) ) )
[-7]
Ender ?*5 10, ;e$. 1".4, par. 2, te a$$eptan$e of te
[;?P] "y te &a1ority of all te <ualified "enefi$iaries sall "e
"indin# upon all te said <ualified "enefi$iaries %itin te
appli$ant $orporation.!
I&. IDENTIFICATION OF THE
PROBLEMSMISSUESMCONCERNS'
>atri) on te .o&parative Iie%s of te =ar&er
Croups vis-J-vis tose of ALI >ana#e&ent, *lon# @it te
.orrespondin# =C?D5.I. Results %as prepared and te
$o&plian$e reports su"&itted, te petitions of te =@9s,
parti$ularly te *>9*L* and te ;upervisory Croup, to#eter
%it te respe$tive responses to said petitions "y ALI
&ana#e&ent and te =C?D5.I results %ere utili(ed to &a+e a
$o&parative su&&ary, e)e&plified ereunder.
1. INDI&IDUAL ISSUES RAISED B
THE S*#%+&(SO+, -+O*# OF HACIENDA LUISITA
INCORPORATED &(S-.-&(S RE"OINDER OF HLI AND
OBSER&ATION OF TF.
1.1. Issue, 3on-en1oy&ent of te ri#ts and privile#es
tat %ere supposed to "e #iven to te =@9s as stated in te
[>5*] pro&pted te supervisory #roup to $lai& for te one
per$ent 21K4! sare fro& te ALI representin# teir sare as
supervisors durin# te transition period.
V HLI +ana-(+(n*' ;u$ $lai& is a total
&isappreension of Section (@ of R.A. 6o. ))*+, te last
para#rap of %i$ re<uires te pay&ent of 1K of te #ross
sale to &ana#erial, supervisory and te$ni$al %or+ers at te
ti&e of te effe$tivity of R.A. 6o. ))*+. 'ere %ere no su$
&ana#erial e&ployees and supervisors en#a#ed in te&porarily
&ana#in# and supervisin# te operation of te land until its
final turnover to te far&%or+ers sin$e tere %as no land to
transfer in te first pla$e.
V T#( Ta%6 Fo/)( 5o%$*$on' 'at ;e$tion
-2 of R.*. 3o. 7758 &ay not dire$tly apply to te instant $ase
"ut te non-reali(ation of te said 1K sare of e)pe$tation in
te #ross sale is a $ause of disen$ant&ent. 'e $lai& for te
1K sare is not in$luded in te >5*. ) ) )
1.2. Issue, NonA/()($5* o3 *#( 10@ d$.$d(nd
V ALI $ontends tat te distri"ution of said
dividend does not apply to $orporate far&s li+e ALI %i$
opted for te ;? Plan.
V Ta%6 3o/)( 3$nd$n-' 'e =@9s do not
re$eive su$ finan$ial return despite te stipulation on te
&atter.
1.-. Issue, On *#( *#/(( 5(/)(n* H9@I o1* o3 *#( *#$/*,
*#/(( 5(/)(n* H99@I /(5/(%(n*$n- *#( (01$*, %#a/(% -$.(n
3/o+ *#( 5/o)((d% o3 *#( %a2( o3 *#( <00 #()*a/(%
H)on.(/*(d *o nonAa-/$)12*1/a2 1%(I.

V 'e HLI +ana-(+(n* ar#ues tat te $orporation,
"an+in# on te le#al fi$tion of separate $orporate e)isten$e, is
not o"li#ed to #ive --K of te -/o%% %(22$n- 5/$)( of te land
sin$e te le#al o%ner is te $orporation itself and not te
sto$+olders. *nd te -K %as #iven "y te ALI &erely as a
"onus for te =@9s.
V T#( Ta%6 Fo/)( 5o%$*$on' 'ou#, alle#edly, te
supervisory #roup re$eives te -K #ross produ$tion sare and
tat oters alle#ed tat tey re$eived -0 &illion pesos still
oters &aintain tat tey ave not re$eived anytin# yet. Ite&
3o. / of te >5* is $lear and &ust "e follo%ed. 'ere is a
distin$tion "et%een te *o*a2 -/o%% %a2(% fro& te 5/od1)*$on
o3 *#( 2and and te 5/o)((d% fro& te %a2( o3 *#( 2and. 'e
for&er refers to te fruitsDyield of te a#ri$ultural land %ile te
latter is te land itself. 'e prase te "enefi$iaries are
entitled every year to an a&ount appro)i&ately e<uivalent to
-K %ould only "e feasi"le if te su"1e$t is te produ$e sin$e
tere is at least one arvest per year, %ile su$ is not te
$ase in te sale of te a#ri$ultural land. 'is ne#ates ten te
$lai& of ALI tat, all tat te =@9s $an "e entitled to, if any, is
only -K of te pur$ase pri$e of te $onverted land.
V 9esides, te Conversion Order dated 1/ *u#ust 1007
provides tat the "enefits, wages and the li'e, presentl
received " the 1<-s shall not in an wa "e red$ced or
adversel affected. Three percent of the gross selling price
of the sale of the converted land shall be awarded to the
beneficiaries of the SDO.= 'e -K #ross produ$tion sare
ten is different fro& te -K pro$eeds of te sale of te
$onverted land and, %it &ore reason, te --K sare "ein#
$lai&ed "y te =@9s as part o%ners of te Aa$ienda, sould
ave "een #iven te =@9s, as sto$+olders, and to %i$ tey
$ould ave "een entitled if only te land %ere a$<uired and
redistri"uted to te& under te .*RP.
1./. Issue, I22(-a2 )on.(/%$on and 3$nan)$a2
$n)a5a4$2$*, o3 HLI *o 5/o)((d =$*# *#( 5/o5o%(d
d(.(2o5+(n*, *#(/(4, 2(a.$n- *#( a/(a% 1n5/od1)*$.(.
V 'e HLI +ana-(+(n* $ontends tat te P(*$*$on 3o/
Con.(/%$on %as duly approved "y te ?*R on 1/ *u#ust
1007 and it ad te $onfor&ity of &ore tan 5,000 =@9s %o
si#ned a &anifesto of support.

V In te #etitions andDdurin# te OC()"-D [5$ular
Inspe$tionD=o$used Croup ?is$ussion] te 500 e$tares
su"1e$t of $onversion appear to still re&ain undeveloped. *
$lear e)a&ple is te .entral 'e$no Par+ %i$ as a
lands$aped entran$e and $on$rete roads "ut te only tin#s
%i$ $an "e seen inside te pre&ises are $o#on
#rasslands. 'e =@9s furter &aintained tat tey %ere
eiter not #iven any &onetary "enefit fro& te $onversion of
te 500 e$tares or tat tey %ere only partially #iven.
B. CONCERNS MANIFESTED IN THE PETITION
FILED B THE AL,A/SA /- '-A 'A/--A-A0A/-
*1(D /- 2AC(%/DA L*(S(TA 3A'ALA4 LED B MR.
RENE GALANG
2.1. Issue, T#a* DAR Ad+$n$%*/a*$.( O/d(/ No. 10,
%(/$(% o3 1:88, -1$d(2$n(% $n *#( )o/5o/a*( a.a$2+(n* o3
SDO, %#o12d o4%(/.( S()*$on 91 o3 R.A. No. ;;<7 01a2$3$(d
4(n(3$)$a/$(% and 5/o.$d( *#a* *#(, HF!B%I 4( a22o=(d *o
41, *#( 2and 3/o+ *#( )o+5an,.
'e HLI +ana-(+(n* posits te proposition
tat Section 56 is very $lear and una&"i#uous. It #rants to
te =@9s te ri#t to pur$ase sares of sto$+s in te
$orporation tat o%ns te a#ri$ultural land itself and not te
land. ALI is $orre$t in tis unless te ;?P is disre#arded.
2.2. Issue, Can)(22a*$on o3 *#( SDO and $++(d$a*(
)o.(/a-( o3 *#( a/(a a/( /(01(%*(d a% *#( a-/((+(n*% $n
*#( $+52(+(n*a*$on o3 *#( SDO =(/( a22(-(d2, no*
3o22o=(dM)o+52$(d =$*#.
V 'e ALI &ana#e&ent %arranted tat su"1e$t ;? Plan is
te &ost feasi"le s$e&eDalternative vis-J-vis pysi$al
distri"ution of te landoldin# under $o&pulsory a$<uisition.
V ?urin# te "-D)OC(, it %as represented tat te ter&s,
$onditions and "enefits provided for in te >5*D$o&&it&ent
appear not to ave "een su"stantially follo%ed. H(/(1nd(/, $%
a +o/( d(*a$2(d d$%)1%%$on o3 *#( $%%1(%'
2.2.1. On *#( $%%1( o3 non )o+52$an)( =$*# *#( MOA
\ =@9s are supposed to re$eive P800-600 dividends
annually.
\ P600-1000 produ$tion sarin# per year. 'e .acienda is
operatin# $ontinuously %i$ only proves tat te .acienda is
earnin#.
V ALI, o%ever, $lai&s tat it is not in$urrin#
profits, tus, tere are no dividends to "e distri"uted. 9ut te
sares of sto$+s and -K produ$tion sare ave "een #iven.
"-D)OC( 3$nd$n- so%s tat te nu&"er of sares of sto$+s
to "e re$eived "y te =@9s, depends on teir desi#nation 2i.e.,
per&anent, $asual or seasonal4 and on te nu&"er of +an
da,%. R(*$/(d and /(*/(n)#(d=o/6(/% are not #iven sares
of sto$+s and $ease as sare olders. Endisputedly, te setup
under te >5* is one-sided in favor te ALI. 'e %or+
s$edule, upon %i$ te e)tent of entitle&ent to "e #ranted
sares of sto$+ is %olly%itin te prero#ative and dis$retion of
ALI &ana#e&ent tat a =@9 $an still "e denied tereof "y te
si&ple e)pedien$y of not #ivin# i& any %or+in#
oursDdays. *nd tis is &ade possi"le "y te fa$t tat [tere]
are &ore far&ersDfar&%or+ers in its e&ploy tan %at is,
a$$ordin# to ALI, ne$essary to &a+e it operational.
2.2.2. On *#( $%%1( o3 /(5/(%(n*a*$on
V It %as verified tat te 9oard of ?ire$tors ele$tion is
annually $ondu$ted. Ao%ever, &a1ority of te =@9s are no
lon#er interested and, in fa$t, ave "oy$otted te ele$tions
"e$ause of te &inority representation of te =@9s 2/ as
a#ainst 84. 'ey $lai& tat tey are al%ays outnu&"ered and
so&e $lai& tat te representatives ele$ted are pro
&ana#e&ent. ) ) ) [3]o fruitful and ar&onious $orporate
a$tivities $an "e e)pe$ted as any resistan$e %ill "e $ounter-
produ$tive, tat to $ontinue te operation under te ;?P tat is
$allen#ed erein %ill only "e an e&pty e)er$ise. 'e far&ers
and far&%or+ers %ill not, under te $ir$u&stan$es, "e a"le to
reali(e te $onte&plated re$eipt of "enefits under te Pro#ra&.
2.2.-. On *#( $%%1( o3 *#( BL0A%01a/( +(*(/ #o+(2o*
V *s to te 2/0 s<uare &eter o&elots, not all of te
=@9s %ere #iven o&elots. 5f tose #iven, tey $o&plain
tat tey still do not ave te $orrespondin# titles. *nd, tose
already #iven titles &aintain tat said do$u&ents are useless
as su$, for tey $annot even "e used as "an+ $ollaterals,
despite even te lapse of te 5-year pres$riptive period,
"e$ause "an+s and oter finan$ial institutions refuse to onor
te sa&e %itout $learan$e fro& te ALI &ana#e&ent. ) ) )
2.2./. On *#( $%%1( o3 )o.(/a-( o3 *#( Ha)$(nda
V 'e HLI $ontends tat dividin# te /,015.85 e$tares
a&on# 7,207 "enefi$iaries %ould result to a far& lot of 0.86
e$tare per individual =@9, %i$ is not an e$ono&i$ si(e
far&. ?ifferen$es in te pysi$al $onditions of te landoldin#
&ust "e $onsidered su$ as soil fertility and a$$essi"ility. 'e
<uestion of %o %ould #et te fertile or a$$essi"le part of te
land and %o %ould re$eive less %ould resultD$ul&inate in a
"attle royale! a&on# te =@9s.
?*R as esta"lised #uidelines on te &atter of su$
allo$ations and no pro"le& as "een en$ountered in its
i&ple&entation of te .*RP. 9y and lar#e for a %ole s$ale
$ultivation and produ$tion, for&ation of $ooperatives as
proven to "e an effe$tive &e$anis& to address te
pro"le&. 'e la% even en$oura#es te use of su$
$o&"ination [cf. ;e$tion 20, 2-
rd
par.4, Rep. *$t 3o. 7758].
2.2.5. On *#( a-/((+(n* *#a* o*#(/ 4(n(3$*% =$22 4(
-$.(n o*#(/ *#an *#o%( 5/o.$d(d 3o/ $n *#( MOA
V It %as stipulated tat te ;?5 %ould provide te
=@9s oter "enefits ) ) ) a less tan a e$tare-far& %ould not
"e a"le to provide, li+e te -K of te #ross produ$tion sales, to
"e sared %it te =@9s, on top of teir re#ular
$o&pensation.
V 'e =@9s do not re$eive any oter "enefits under
te >5* e)$ept te afore&entioned [2vi0, sares of sto$+s
2partial4, -K #ross produ$tion sale 2not all4 and o&elots 2not
all4].
&. PRELIMINAR CONSIDERATIONS
1. 'e $o&&on issues raised "y te
petitioners are fo$used on te revo$ation of te e)istin# ;?5
tat %as proposed "y ALI and approved "y te P*R. on
#round, a&on# oters tat te provisions of S()*$on 91 of R.A.
No. ;;<7, upon %i$ te ;?5D;?P %as "ased is $ontrary to
te "asi$ poli$y of te a#rarian refor& pro#ra& on Land
Ac7uisition and +edistribution, as &ay "e #leaned fro& te
se$ond para#rap of Section 8 of +9A9 /o9 ::;<, %i$ reads,
&o this end, a more eA$ita"le distri"$tion and ownership of
land, with d$e regard to the rights of landowners to B$st
compensation and to the ecological needs of the nation, shall
"e $nderta'en to provide farmers and farmwor'ers with the
opport$nit to enhance their dignit and to improve the A$alit
of their lives thro$gh greater prod$ctivit of agric$lt$ral
lands.! 8$nderscoring s$pplied9.
:nvisioned in te fore#oin# provision is te pysi$al land
transfer to prospe$tive "enefi$iaries as reiterated in S()*$on
< tereof, as follo%s,
Schedule of (!ple!entation. &he distri"$tion of all lands
covered " this Act shall "e implemented immediatel and
completed within ten 81C9 ears from the effectivit thereof!.
2. @ile ;?5D;?P is an alternative
arran#e&ent to te pysi$al distri"ution of lands pursuant
to S()*$on 91 of R.A. No. ;;<7, lo#i$ and reason di$tate tat
su$ a#ree&ent &ust &ateriali(e %itin a spe$ifi$ period
durin# te lifeti&e of .*RP, statin# $learly terein %en su$
arran#e&ent &ust end. 'e afore&entioned provision &ay "e
$onsidered as te provision of te la% on s$spended
coverage!, parallel to te provisions of Section
11 onCommercial 1arming %ere $overa#e of .*RP is
deferred for *(n H10I ,(a/% after te effe$tivity of Repu"li$ *$t
3o. 7758. ;tated si&ply, o%ners of $o&&er$ial far&s are
#iven a $an$e to re$oup teir invest&ent for ten 2104 years
"efore sa&e is finally su"1e$ted to $overa#e under te .*RP.
&I. FINDINGS, ANALSIS AND RECOMMENDATION'
1. Providin# for te <uintessen$e and spirit
of te a#rarian refor& pro#ra&, Repu"li$ *$t 3o. 7758
e)pli$itly provides,
;:.'I53 2. ?e$laration of Prin$iples and
Poli$ies.NIt is te poli$y of te ;tate to pursue a
.o&preensive *#rarian Refor& Pro#ra& 2.*RP4. 'e
%elfare of te landless far&ers and far&%or+ers %ill re$eive
te i#est $onsideration to pro&ote so$ial 1usti$e and to &ove
te nation to%ard sound rural develop&ent and
industriali(ation, and te esta"lis&ent of o%ner $ultivatorsip
of e$ono&i$-si(e far&s as te "asis of Pilippine a#ri$ulture.
'o tis end, a &ore e<uita"le distri"ution and
o%nersip of land, %it due re#ard to te ri#ts of lando%ners
to 1ust $o&pensation and to te e$olo#i$al needs of te nation,
sall "e underta+en to provide far&ers and far&%or+ers %it
te opportunity to enan$e teir di#nity and i&prove te <uality
of teir lives trou# #reater produ$tivity of a#ri$ultural lands!
2unders$orin# added4.
@itin te $onte)t of te fore#oin# poli$yDo"1e$tive, te
far&erDfar&%or+er "enefi$iaries 2=@9s4 in a#ri$ultural land
o%ned and operated "y $orporations &ay "e #ranted option "y
te latter, %it te intervention and prior $ertifi$ation of ?*R, )
) ) te ri#t to pur$ase su$ proportion of te $apital sto$+ of
te $orporation tat te a#ri$ultural land, a$tually devoted to
a#ri$ultural a$tivities, "ears in relation to te $o&panyGs total
asset ) ) )! 2;e$tion -1, Rep. *$t 35. 77584. 'o%ard tis end,
?*R issued *d&inistrative 5rder 3o. 10, series of 1066, $opy
of %i$ is atta$ed as Anne= >1? and &ade an inte#ral part
ereof, %i$ re<uires tat te sto$+ distri"ution option 2;?54
sall &eet te follo%in# $riteria, readin#, inter alia,
a. tat te $ontinued operation of te $orporation %it its
a#ri$ultural land inta$t and unfra#&ented is via"le, %it
potential for #ro%t and in$reased profita"ilityF
". tat te plan for sto$+ distri"ution to <ualified "enefi$iaries
%ould result in in$reased in$o&e and #reater "enefits to te&,
tan if te lands %ere divided and distri"uted to te&
individuallyF
) ) ) )
*nd to ensure, effe$tive and fair i&ple&entation of te
$onte&plated ;to$+ ?istri"ution Plan 2;?P4, te said *5 also
provides,
;:.'I53 12. Revocation of Certificate of
ComplianceN3on-$o&plian$e %it any of te re<uire&ents of
;e$tion -1 of R* 7758, as i&ple&ented "y tese I&ple&entin#
Cuidelines sall "e #rounds for te revo$ation of te .ertifi$ate
of .o&plian$e issued to te $orporate lando%ner-appli$ant.
;:.'I53 1-. Reservation Cla$se!3otin# erein sall "e
$onstrued as pre$ludin# te P*R. fro& &a+in# its o%n
independent evaluation and assess&ent of te sto$+
distri"ution plan of te $orporate lando%ner-appli$ant and fro&
pres$ri"in# oter re<uire&ents.!
2erein@ however@ there is Aet no Certificate of Co!pliance
issued9
'e reason is si&ple. ?espite te lapse of si)teen
2174 years, fro& te ti&e te ;?P %as approved in 3ove&"er
1060, "y resolution of te ) ) ) 2P*R.4, te o"1e$tive and
poli$y of .*RP, i.e., a$<uisition and distri"ution 2erein under
te [;?P], only sares of sto$+s4 is yet to "e fully $o&pletedF
te =@9s, instead of te pro&isedDenvisioned "etter life under
te .*RP 2terein, as $orporate o%ner4, do still live in %ant, in
a"1e$t poverty, i#li#ted "y te resultin# loss of lives in teir
vainDfutile atte&pt to "e finan$ially restored at least to %ere
tey %ere "efore te .*RP 2;?P4 %as i&ple&ented. @ile
tey %ere ten a"le to &a+e "ot ends &eet, %it te ;?P,
teir lives "e$a&e &isera"le.
2. =or te fore#oin# $onsiderations, as
furter dra&ati(ed "y te follo%in# violationsDnon$o&plian$e
%it te #uidelines pres$ri"ed, %i$ are le#ally presu&ed as
inte#rated in te a#ree&entsDa$$ordsDstipulations arrived at
tereunder li+e te ALI ;?P, na&ely,
2.1. 3on$o&plian$e %it ;e$tion 11 of
*d&inistrative 5rder 3o. 10, ;eries of 1066, %i$ provides,
'e approved sto$+ distri"ution plan sall "e
i&ple&ented %itin tree 2-4 &onts fro& re$eipt "y te
$orporate lando%ner-appli$ant of te approval tereof "y te
P*R. and te transfer of te sares of sto$+s in te na&es of
te <ualified "enefi$iaries sall "e re$orded in te sto$+ and
transfer "oo+s and su"&itted to te ;e$urities and :)$an#e
.o&&ission 2;:.4 %itin si)ty 2704 days fro& te said
i&ple&entation plan.!
'e [;?P], o%ever, su"&itted a -0-year i&ple&entation
period in ter&s of te transfer of sares of sto$+s to te
far&%or+ers "enefi$iaries 2=@9s4. 'e >5* provides,
*t te end of ea$ fis$al year, for a period of -0 years,
;:.53? P*R'L sall arran#e %it te =IR;' P*R'L te
a$<uisition and distri"ution to te 'AIR? P*R'L on te "asis
of te nu&"er of days %or+ed and at no $ost to te& of one-
tirtiet 21D-04 of S!
Plainly, pendin# te issuan$e of te $orrespondin# sares of
sto$+s, te =@9s re&ain ordinary far&ers andDor far&%or+er
and te land re&ain under te full o%nersip and $ontrol of te
ori#inal o%ner, te ALID'*?:.5.
'o date te issuan$e and transfer of te sares of sto$+s,
to#eter %it te re$ordin# of te transfer, are yet to "e
$o&plied %it.
2.2. 3on$o&plian$e %it te
representationsD%arranties &ade under ;e$tion 5 2a4 and 2"4 of
said *d&inistrative 5rder 3o. 10.
*s $lai&ed "y ALI itself, te $orporate a$tivity as
already stopped tat te $onte&plated profita"ility, in$reased
in$o&e and #reater "enefits enu&erated in te ;?P ave
re&ained &ere illusions.
2.-. 'e a#ri$ultural land involved
%as not &aintained unfra#&ented!. *t least, 500 e$tares
ereof ave "een $arved out after its land use as "een
$onverted to non-a#ri$ultural uses.
'e /()a22 of said ;?PD;?5 of ALI is re$o&&ended. >ore
so, sin$e,
1. I* $% )on*/a/, *o P142$) Po2$),
;e$tion 2 of [R*] 7758 provides tat te %elfare of
landless far&%or+ers %ill re$eive te i#est $onsideration to
pro&ote so$ial 1usti$e. *s su$, te ;tate underta+e a &ore
e<uita"le distri"ution and o%nersip of land tat sall provide
far&%or+ers %it te opportunity to enan$e teir di#nity and
i&prove te <uality of teir lives trou# #reater produ$tivity of
a#ri$ultural lands.
In te $ase of Aa$ienda Luisita, te far&%or+ers
alle#ed tat te <uality of teir lives as not i&proved. In fa$t it
even deteriorated espe$ially %it te ALI >ana#e&ent
de$laration tat te $o&pany as not #ained profits, in te last
15 years, tat tere $ould "e no de$laration and distri"ution of
dividends.
2. 'e &atter of issuan$eDdistri"ution sares of sto$+s in
lieu of a$tual distri"ution of te a#ri$ultural land involved, %as
&ade totally dependent on te dis$retionD$apri$e of
ALI. Ender te setup, te a#ree&ent is #rossly onerous to te
=@9s as teir &an days of %or+ $annot depart fro& %atever
&ana#e&ent of ALI unilaterally dire$ts.
'ey $an "e denied te opportunity to "e #ranted a
sare of sto$+ "y 1ust not allo%in# te& to %or+ alto#eter
under te #uise of rotation. >ean%ile, %itin te -0-year
period of "onda#e, tey &ay already rea$ retire&ent or,
%orse, #et retren$ed for any reason, ten, tey forever lose
%atever "enefit e $ould ave re$eived as re#ular a#rarian
"enefi$iary under te .*RP if only te ;?P of ALI %ere not
autori(ed and approved.
In$identally, te =@9s did not ave parti$ipation in
te valuation of te a#ri$ultural land for te purpose of
deter&inin# its proportionate e<uity in relation to te total
assets of te $orporation. *pparently, te su#arlands %ere
undervalued.
-. 'e =@9s %ere &isled into "elievin# "y te ALI, trou#
its $arefully %orded Proposal tat ) ) ) te sto$+ distri"ution
plan envisa#ed "y ['ade$o], in effe$t, assured of,
*. ?istri"utin# te sares of sto$+ over a nu&"ers of years
a&on# te <ualified "enefi$iaries at no $ost to te&F
9. *llo%in# te far&%or+er to $ontinue to %or+ on te
land as su$ and re$eive te %a#es and oter "enefits
provided for "y is $olle$tive "ar#ainin# a#ree&ent %it te
$orporate lando%nerF
.. :ntitlin# i& to re$eive dividends, %eter in $as or
in sto$+, on te sares already distri"uted to i& and "enefit
fro& %atever appre$iation in value tat te said sares &ay
#ain as te $orporation "e$o&es profita"leF
?. Qualifyin# i& to "e$o&e te re$ipient of %atever
in$o&e-au#&entin# and "enefit-i&provin# s$e&es tat te
spin-off $orporation &ay esta"lis, su$ as te pay&ent of te
#uaranteed tree 2-K4 per$ent of #ross sales every year and
te free residential or o&elots to "e allotted to fa&ily
"enefi$iaries of te planF and
:. Oeepin# te a#ri$ultural land inta$t and
unfra#&ented, to &aintain te via"ility of te su#ar operation
involvin# te far& as a sin#le unit and tus %arrant to te
a$+no%led#ed far&%or+er-"enefi$iaries, and-in-[and] %it
teir a$<uisition of te sares of te $apital sto$+ of te
$orporation o%in# te land, a $ontinuin# and sta"le sour$e of
in$o&e.! 2Anne= >A?, s$pra4.
*t te e)pense of "ein# repetitive, te "e su#ar-$oated
assuran$es %ere, &ore tan enou# to &ade te& fall for te
;?5 as tey &ade te& feel ri$ as sto$+ older! of a ri$
and fa&ous $orporation despite te dirt in teir ands and te
tatters, tey useF #iven te feelin# of se$urity of tenure in teir
%or+ %en tere is noneF e)pe$tation to re$eive dividends
%en te $orporation as already suspended operations
alle#edly due to losesF and a sta"le su#ar produ$tion "y
&aintainin# te a#ri$ultural lands %en a su"stantial portion
tereof of, al&ost 1D6 of te total area, as already "een
$onverted to non-a#ri$ultural uses.
[86]
*ttys. :d#ar 9ernal and =lorisa *l&odiel si#ned te
&otionD&anifestation as $ounsel of >allari andDor =*R>.
[80]
'e ;upervisory Croup later tea&ed up %it te *>9*L*-
>allari fa$tion. =or "revity, tey are referred to erein as te
*>9*L*->allari-;upervisory Croup.!.
[60]
;e$. /. 'e ;tate sall, "y la%, underta+e an a#rarian
refor& pro#ra& founded on te ri#t of far&ers and re#ular
far& %or+ers, %o are landless, to o%n dire$tly or $olle$tively
te lands tey till or, in te $ase of oter far& %or+ers, to
re$eive a 1ust sare of te fruits tereof. 'o tis end, te ;tate
sall en$oura#e and underta+e te 1ust distri"ution of all
a#ri$ultural lands, su"1e$t to su$ priorities and reasona"le
retention li&its as te .on#ress &ay pres$ri"e, ta+in# into
a$$ount e$olo#i$al, develop&ental, or e<uity $onsiderations,
and su"1e$t to te pay&ent of 1ust $o&pensation. In
deter&inin# retention li&its te ;tate sall respe$t te ri#t of
s&all lando%ners. 'e ;tate sall furter provide in$entives for
voluntary land-sarin#..
[10-]
DAO 10, S()*$on 11. (!ple!entation ) 'onitoring of
#lanN'e approved [;?P] sall "e i&ple&ented %itin tree
2-4 &onts ) ) ).
Epon $o&pletion [of te sto$+ distri"ution], te
$orporate lando%ner-appli$ant sall "e issued a .ertifi$ate of
.o&plian$e. ) ) )
S()*$on 1B. 3on-$o&plian$e %it any of te re<uire&ents of
;e$tion -1 of R* 7785, as i&ple&ented "y tis I&ple&entin#
Cuidelines sall "e #rounds for te revo$ation of te .ertifi$ate
of .o&plian$e issued to te $orporate lando%ner-appli$ant. ) )
)
[10/]
';3, *u#ust 2/, 2010, p. 1-.
[105]
Dor$ga v. Arcenas, C.R. 3os. 176--2 and 17005-, June
10, 2000, 500 ;.R* /0, 76F $itin# In ReE Petition for
Assistance in the LiA$idation of the R$ral -an' of -o'od
8-eng$et9, Inc., P%IC v. -$rea$ of Internal Reven$e, C.R. 3o.
156271, ?e$e&"er 16, 2007, 511 ;.R* 12-, 1/1.
[107]
';3, *u#ust 2/, 2010, p. 205.
[108]
Id.
[106]
#arcia v. /5ec$tive Secretar, C.R. 3o. 15856/, *pril 2,
2000, 56- ;.R* 110, 120F $itin# 1ranciso, >r. v. .o$se of
Representatives, C.R. 3o. 170271, 3ove&"er 10, 200-, /15
;.R* //.
[100]
A-SFC-6 -roadcasting Corporation v. Philippine ,$ltiF
,edia Sstem, Inc., C.R. 3os. 185870-80, January 10, 2000,
587 ;.R* 272, 260 $itin# Philippine 2eterans -an' v. Co$rt of
Appeals, C.R. 3o. 1-2571, June -0, 2005, /72 ;.R*
--7F Ape5 ,ining Co., Inc. v. So$theast ,indanao #old ,ining
Corp., C.R. 3os. 15271-, 152726, 172710-20 and 152680-81.
[110]
1ranciso, >r. v. .o$se of Representatives, supra note 106.
[111]
Alvare0 v. PIC:P Reso$rces, Inc., C.R. 3os. 1722/-, et$.,
3ove&"er 20, 2007, 506 ;.R* /06, 552.
[112]
;upra note 106, at 1-6-1-0.
[11-]
*n *$t ;tren#tenin# te .*RP, :)tendin# te *$<uisition
and ?istri"ution of all *#ri$ultural Lands, Institutin# 3e$essary
Refor&s, *&endin# for te Purpose .ertain Provisions of R*
7758, as *&ended and *ppropriatin# =unds terefor.
[11/]
G$i0on v. Comelec, 5/5 ;.R* 7-5F ,attel, Inc. v.
1rancisco, 570 ;.R* 507.
[115]
@:9;':RG; 'AIR? 3:@ I3':R3*'I53*L ?I.'I53*RL
E3*9RI?C:? ///-//5 2100-4.
[117]
Id. at //5.
[118]
Re$ords of te .onstitutional .o&&ission, Iol. II, p. 786.
[116]
;e$. 2, -
rd
para#rap , of R* 7758 states, 'e a#rarian
refor& pro#ra& is founded on te ri#t of far&ers and re#ular
far&ers %o are landless, to o%n land dire$tly or $olle$tively
te lands tey till or, in te $ase of oter far&%or+ers to
re$eive a sare of te fruits tereof. 'o tis end, te ;tate sall
en$oura#e and underta+e te 1ust distri"ution of all a#ri$ultural
lands, su"1e$t to priorities and retention li&its set fort in tis
*$t ) ) ).
[110]
11 =let$er, .y$. .orps. 21081 Rev. Iol.4 ;e$. 506-.
[120]
,o"ilia Prod$cts, Inc. v. 7me0awa, C.R. 3os. 1/0-58 and
1/0/0-, >ar$ /, 2005.
[121]
Cawaling v. C:,/L/C, C.R. 3o. 1/7-10, 5$to"er 27,
2001, -76 ;.R* /5-.
[122]
-asco v. PA#C:R, C.R. 3o. 1-6206, 3ove&"er 20, 2000,
-/7 ;.R* /65
[12-]
Angara v. /lectoral Commission, 7- Pil. 1-0
210-74F Cawaling v. C:,/L/C, supra, $itin# Alvare0 v.
#$ingona, 252 ;.R* 705 210074.
[12/]
6ational 1ood A$thorit v. ,asda Sec$rit Agenc, Inc.,
C.R. 3o. 17-//6, >ar$ 6, 2005.
[125]
Rollo, p. 80/. 'e P*R. resolution also states,
ALIGs i&ple&entation of te distri"ution of te &andatory
&ini&u& ratio of land-to-sares of sto$+ to te *R9s [*#rarian
Refor& 9enefi$iaries] %as "ased on &an days, %itin its poli$y
of no-%or+ no-sares of sto$+, and not to e<ual nu&"er of
sares dependin# upon teir ri#tful sare, as re<uired in te
rules, and terefore pra$ti$ally divested te *R9s, as to teir
<ualifi$ationDentitle&ent, as *R9s at ALIGs %i&s, to teir
disadvanta#e and pre1udi$e in te for& of di&inution in te
&ini&u& ration of sares. Aavin# in$reased ) ) ) te nu&"er
of %or+ers 2$ontra$tual4, te (01$*, %#a/( o3 (a)# 5(/+an(n*
(+52o,((, a% o3 1:8:, na*1/a22, #ad *o 4(, a% $n 3a)*,
/(d1)(d.
=urter ) ) ), ALI too+ it upon itself, or usurped, te duty or
&andate of ?*R to <ualify te re$ipient *R9s and i&posed its
o%n $riteria and dis$retion in te allo$ation of te &andatory
&ini&u& ratio of land-to sare "y "asin# te distri"ution on te
nu&"er of days %or+ed. ;till %orse, ALI &ade allo$ation to
re$ipients %o are not in te *R9s ori#inal &asterlist as
ad&ittedly, $* d$%*/$41*(d *o a4o1* 11,:<< %*o)6#o2d(/% o3
/()o/d <:,9;B,;11 %#a/(% /(5/(%(n*$n- *#( %()ond #a23 o3
*#( *o*a2 n1+4(/ o3 %#a/(% (a/+a/6(d 3o/ d$%*/$41*$on
=#(n $n 3a)* *#(/( =(/( on2, ;,B:; 3a/+ =o/6(/% or less, at
te ti&e %en te land %as pla$ed under .*RP under te
;?PD;?5 s$e&e. 2:&pasis added.4
[127]
>e&orandu& of Renato Lali$, et al., p. 1/.
[128]
LI''L: 5M=5R? ?I.'I53*RL //2 28
t
ed.4.
[126]
Rollo, p. -787.
[120]
'e ;CI T .o.Gs Independent *uditors Report on ALI for
years ended 2000, 2006 and 2008 $ontains te follo%in#
entries, [']e .o&pany as suffered re$urrin# losses fro&
operations and as su"stantial ne#ative %or+in# $apital
defi$ien$y. 'e .o&pany as $ontinued to ave no operations
and e)perien$ed finan$ial diffi$ulties as a result of a stri+e
sta#ed "y te la"or union on 3ove&"er 7, 200/.! Rollo, p.
-880, *nne) I! of ALIGs >e&orandu&.
[178]
Id. at -8-6. 'ese o&elots do not for& part of te
/,015.85 e$tares of a#ri$ultural land in Aa$ienda Luisita.
'ese are part of te residential land %it a total area of
120.02-/ e$tares, as indi$ated in te ;?P.

No.(+4(/ BB, B011 G.R. No. 171101
HACIENDA LUISITA, INCORPORATED, P(*$*$on(/,
LUISITA INDUSTRIAL PARK CORPORATION and RIZAL
COMMERCIAL BANKING CORPORATION
P(*$*$on(/%A$nAIn*(/.(n*$onA .(/%1% A
PRESIDENTIAL AGRARIAN REFORM COUNCIL;
SECRETAR NASSER PANGANDAMAN OF THE DEPARTMENT
OF AGRARIAN REFORM; ALANSA NG MGA MANGGAGA!ANG
BUKID NG HACIENDA LUISITA, RENE GALANG, NOEL MALLARI,
and "ULIO SUNIGA>1? and #$% SUPER&ISOR GROUP OF THE
HACIENDA LUISITA, INC. and !INDSOR ANDAA R(%5ond(n*%.
=or resolution are te 214 ,otion for Clarification and
Partial Reconsideration dated July 21, 2011 filed "y
petitioner Aa$ienda Luisita, In$. 2ALI4F 224 ,otion for
Partial Reconsideration dated July 20, 2011 filed "y
pu"li$ respondents Presidential *#rarian Refor& .oun$il
2P*R.4 and ?epart&ent of *#rarian Refor& 2?*R4F
2-4,otion for Reconsideration dated July 10, 2011 filed
"y private respondent *lyansa n# &#a >an##a#a%an#
9u+id sa Aa$ienda Luisita 2*>9*L*4F 2/4 ,otion for
Reconsideration dated July 21, 2011 filed "y
respondent-intervenor =ar&%or+ers *#rarian Refor&
>ove&ent, In$. 2=*R>4F 254 ,otion for
Reconsideration dated July 21, 2011 filed "y private
respondents 3oel >allari, Julio ;uni#a, ;upervisory
Croup of Aa$ienda Luisita, In$. 2;upervisory Croup4 and
@indsor *ndaya 2$olle$tively referred to as >allari, et
al.!4F and 274 ,otion for Reconsideration dated July 22,
2011 filed "y private respondents Rene Calan# and
*>9*L*.
[2]

5n July 5, 2011, tis .ourt pro&ul#ated a ?e$ision
[-]
in
te a"ove-$aptioned $ase, denyin# te petition filed "y
ALI and affir&in# Presidential *#rarian Refor& .oun$il
2P*R.4 Resolution 3o. 2005--2-01 dated ?e$e&"er 22,
2005 and P*R. Resolution 3o. 2007--/-01 dated >ay
-, 2007 %it te &odifi$ation tat te ori#inal 7,207
<ualified far&%or+er-"enefi$iaries of Aa$ienda Luisita
2=@9s4 sall ave te option to re&ain as sto$+olders
of ALI.
In its ,otion for Clarification and Partial
Reconsideration dated July 21, 2011, ALI raises te
follo%in# issues for 5ur $onsideration,
*
I' I; 35' PR5P:R, :I'A:R I3 L*@ 5R I3 :QEI'L,
'5 ?I;'RI9E': '5 'A: 5RICI3*L =@9s 5= 7,207
'A: E3;P:3' 5R E3E;:? 9*L*3.: 5= 'A:
PR5.::?; 5= 'A: ;*L: 5= 'A: 500 A:.'*R:;
*3? 60.51 A:.'*R:; 5= 'A: ALI L*3?, 9:.*E;:,
214 'A: PR5.::?; 5= 'A: ;*L: 9:L53C '5 'A:
.5RP5R*'I53, ALI, *; .5RP5R*': .*PI'*L *3?
*;;:'; I3 ;E9;'I'E'I53 =5R 'A: P5R'I53; 5=
I'; L*3? *;;:' @AI.A @:R: ;5L? '5 'AIR?
P*R'LF
224 '5 ?I;'RI9E': 'A: .*;A ;*L:; PR5.::?;
5= 'A: P5R'I53; 5= 'A: L*3? *;;:' '5 'A:
=@9s, @A5 *R: ;'5.OA5L?:R; 5= ALI, I; '5
?I;;5LI: 'A: .5RP5R*'I53 *3? ?I;'RI9E':
'A: PR5.::?; *; LIQEI?*'I3C ?III?:3?;
@I'A5E' :I:3 P*LI3C 'A: .R:?I'5R; 5= 'A:
.5RP5R*'I53F
2-4 'A: ?5I3C 5= ;*I? *.'; @5EL? II5L*': 'A:
;'RI3C:3' PR5II;I53; 5= 'A: .5RP5R*'I53
.5?: *3? .5RP5R*': PR*.'I.:.
9
I' I; 35' PR5P:R, :I'A:R I3 L*@ 5R I3 :QEI'L,
'5 R:.O53 'A: P*L>:3' 5= JE;'
.5>P:3;*'I53 =R5> 35I:>9:R 21, 1060 @A:3
'A: P*R., 'A:3 E3?:R 'A: .A*IR>*3;AIP 5=
?*R ;:.R:'*RL >IRI*> ?:=:3;5R-;*3'I*C5,
*PPR5I:? 'A: ;'5.O ?I;'RI9E'I53 PL*3 2;?P4
PR5P5;:? 9L '*?:.5DALI, 9:.*E;:,
214 'A*' P*R. R:;5LE'I53 35. 60-12-2 ?*':?
35I:>9:R 21, 1060 @*; 35' 'A: *.'E*L
'*OI3C! 5= 'A: '*?:.5GsDALIGs *CRI.EL'ER*L
L*3?F
224 'A: R:.*LL 5R R:I5.*'I53 E3?:R
R:;5LE'I53 35. 2005--2-01 5= 'A*' ;?P 9L 'A:
3:@ P*R. E3?:R 'A: .A*IR>*3;AIP 5= ?*R
;:.R:'*RL 3*;;:R P*3C*3?*>*3 53
?:.:>9:R 22, 2005 5R 17 L:*R; :*RLI:R @A:3
'A: ;?P @*; *PPR5I:? ?I? 35' R:;EL' I3
*.'E*L '*OI3C! 53 35I:>9:R 21, 1060F
2-4 '5 P*L 'A: JE;' .5>P:3;*'I53 *; 5=
35I:>9:R 21, 1060 5R 22 L:*R; 9*.O @5EL?
9: *R9I'R*RL, E3JE;', *3? 5PPR:;;II:,
.53;I?:RI3C 'A: I>PR5I:>:3';, :MP:3;:; I3
'A: >*I3':3*3.: *3? PR:;:RI*'I53 5= 'A:
L*3?, *3? RI;: I3 L*3? PRI.:; 5R I*LE: 5=
'A: PR5P:R'L.
5n te oter and, P*R. and ?*R, trou# te 5ffi$e
of te ;oli$itor Ceneral 25;C4, raise te follo%in# issues
in teir ,otion for Partial Reconsiderationdated July 20,
2011,
'A: ?5.'RI3: 5= 5P:R*'II: =*.' ?5:; 35'
*PPLL '5 'AI; .*;: =5R 'A: =5LL5@I3C
R:*;53;,
I
'A:R: I; 35 L*@ 5R REL: @AI.A A*; 9::3
I3I*LI?*':? 53 'A: CR5E3? 5=
E3.53;'I'E'I53*LI'LF *3?
II
'AI; ?5.'RI3: I; * REL: 5= :QEI'L @AI.A >*L
9: *PPLI:? 53LL I3 'A: *9;:3.: 5= * L*@. I3
'AI; .*;:, 'A:R: I; * P5;I'II: L*@ @AI.A
>*3?*':; 'A: ?I;'RI9E'I53 5= 'A: L*3? *; *
R:;EL' 5= 'A: R:I5.*'I53 5= 'A: ;'5.O
?I;'RI9E'I53 PL*3 2;?P4.
=or its part, *>9*L* poses te follo%in# issues in
its ,otion for Reconsideration dated July 10, 2011,
I
'A: >*J5RI'L 5= 'A: >:>9:R; 5= 'A:
A535R*9L: .5ER', @I'A ?E: R:;P:.', :RR:?
I3 A5L?I3C 'A*' ;:.'I53 -1 5= R:PE9LI. *.'
7758 2R* 77584 I; .53;'I'E'I53*L.
II
'A: >*J5RI'L 5= 'A: >:>9:R; 5= 'A:
A535R*9L: .5ER', @I'A ?E: R:;P:.', :RR:?
I3 A5L?I3C 'A*' 53LL 'A: [P*R.G;] *PPR5I*L
5= ALIGs PR5P5;*L =5R ;'5.O ?I;'RI9E'I53
E3?:R .*RP *3? 'A: [;?P] @:R: R:I5O:? *3?
35' 'A: ;'5.O ?I;'RI9E'I53 5P'I53
*CR::>:3' 2;?5*4.
III
'A: >*J5RI'L 5= 'A: >:>9:R; 5= 'A:
A535R*9L: .5ER', @I'A ?E: R:;P:.', :RR:?
I3 *PPLLI3C 'A: ?5.'RI3: 5= 5P:R*'II: =*.';
*3? I3 >*OI3C 'A: [=@9s] .A55;: '5 5P' =5R
*.'E*L L*3? ?I;'RI9E'I53 5R '5 R:>*I3 *;
;'5.OA5L?:R; 5= [ALI].
II
'A: >*J5RI'L 5= 'A: >:>9:R; 5= 'A:
A535R*9L: .5ER', @I'A ?E: R:;P:.', :RR:?
I3 A5L?I3C 'A*' I>PR5II3C 'A: :.535>I.
;'*'E; 5= =@9s I; 35' *>53C 'A: L:C*L
59LIC*'I53; 5= ALI E3?:R 'A: ;?P *3? *3
I>P:R*'II: I>P5;I'I53 9L [R* 7758] *3?
?:P*R'>:3' 5= *CR*RI*3 R:=5R>
*?>I3I;'R*'II: 5R?:R 35. 10 2?*5 104.
I
'A: A535R*9L: .5ER', @I'A ?E: R:;P:.',
:RR:? I3 A5L?I3C 'A*' 'A: .53I:R;I53 5=
'A: *CRI.EL'ER*L L*3?; ?I? 35' II5L*': 'A:
.53?I'I53; 5= R* 7758 *3? ?*5 10.
II
'A: A535R*9L: .5ER', @I'A ?E: R:;P:.',
:RR:? I3 A5L?I3C 'A*' P:'I'I53:R I; :3'I'L:?
'5 P*L>:3' 5= JE;' .5>P:3;*'I53. ;A5EL?
'A: A535R*9L: .5ER' *==IR> 'A:
:3'I'L:>:3' 5= 'A: P:'I'I53:R '5 JE;'
.5>P:3;*'I53, 'A: ;*>: ;A5EL? 9: P:CC:?
'5 =5R'L 'A5E;*3? P:;5; 2PP /0,000.004 P:R
A:.'*R:.
III
'A: A535R*9L: .5ER', @I'A ?E: R:;P:.',
:RR:? I3 A5L?I3C 'A*' LEI;I'* I3?E;'RI*L
P*RO .5RP. 2LIP.54 *3? RIX*L .5>>:R.I*L
9*3OI3C .5RP5R*'I53 2R.9.4 *R: I335.:3'
PER.A*;:R; =5R I*LE:.
In its ,otion for Reconsideration dated July 21, 2011,
=*R> si&ilarly puts fort te follo%in# issues,
I
'A: A535R*9L: ;EPR:>: .5ER' ;A5EL? A*I:
;'RE.O ?5@3 ;:.'I53 -1 5= [R* 7758] =5R
9:I3C E3.53;'I'E'I53*L. 'A:
.53;'I'E'I53*LI'L I;;E: 'A*' @*; R*I;:? 9L
'A: R:;P53?:3';-I3':RI:35R; I; 'A: LIS
,:&A 5= 'A: .*;:.
II
'A: A535R*9L: ;EPR:>: .5ER' ;A5EL? 35'
A*I: *PPLI:? 'A: ?5.'RI3: 5= 5P:R*'II:
=*.'! '5 'A: .*;:. 'A: 5P'I53 CII:3 '5 'A:
=*R>:R; '5 R:>*I3 *; ;'5.OA5L?:R; 5=
A*.I:3?* LEI;I'* I; :QEII*L:3' '5 *3 5P'I53
=5R A*.I:3?* LEI;I'* '5 R:'*I3 L*3? I3 ?IR:.'
II5L*'I53 5= 'A: .5>PR:A:3;II: *CR*RI*3
R:=5R> L*@. 'A: ?:.:P'II: ;'5.O
?I;'RI9E'I53 5P'I53 D ;'5.O ?I;'RI9E'I53
PL*3 .*335' JE;'I=L ;E.A R:;EL', :;P:.I*LLL
*=':R 'A: ;EPR:>: .5ER' A*; *==IR>:? I';
R:I5.*'I53.
III
'A: A535R*9L: ;EPR:>: .5ER' ;A5EL? 35'
A*I: .53;I?:R:? [LIP.5] *3? [R.9.] *;
I335.:3' PER.A*;:R; =5R I*LE: I3 'A:
I3;'*3' .*;:.
>allari, et al., on te oter and, advan$e te follo%in#
#rounds in support of teir ,otion for
Reconsideration dated July 21, 2011,
214 'A: A5>:L5'; R:QEIR:? '5 9: ?I;'RI9E':?
A*I: *LL 9::3 ?I;'RI9E':? PER;E*3' '5 'A:
>:>5R*3?E> 5= *CR::>:3'. @A*' R:>*I3;
>:R:LL I; 'A: R:L:*;: 5= 'I'L: =R5> 'A:
R:CI;':R 5= ?::?;.
224 'A:R: A*; 9::3 35 ?ILE'I53 5= ;A*R:;.
.5RP5R*': R:.5R?; @5EL? ;A5@ 'A*' I=
:I:R 35' *LL 5= 'A: 16,60/.-2 ;A*R:; @:R:
CII:3 '5 'A: *.'E*L 5RICI3*L =*R>@5RO:R
9:3:=I.I*RL, 'A: R:.IPI:3' 5= 'A:
?I==:R:3.: I; 'A: 3:M' 5= OI3 5R .AIL?R:3
5= ;*I? 5RICI3*L [=@9s]. A:3.:, @:
R:;P:.'=ELLL ;E9>I' 'A*' ;I3.: 'A: ;A*R:;
@:R: CII:3 '5 'A: ;*>: =*>ILL 9:3:=I.I*RL!,
'AI; ;A5EL? 9: ?::>:? *; ;E9;'*3'I*L
.5>PLI*3.: @I'A 'A: PR5II;I53; 5= ;:.'I53
/ 5= ?*5 10.
2-4 'A:R: A*; 9::3 35 II5L*'I53 5= 'A: --
>53'A P:RI5? '5 I>PL:>:3' 'A: [;?P] *;
PR5II?:? =5R 9L ;:.'I53 11 5= ?*5 10 *; 'AI;
PR5II;I53 >E;' 9: R:*? I3 LICA' 5= ;:.'I53
10 5= :M:.E'II: 5R?:R 35. 220, 'A: P:R'I3:3'
P5R'I53 5= @AI.A R:*?;, 'A: *PPR5I*L 9L
'A: P*R. 5= * PL*3 =5R ;E.A ;'5.O
?I;'RI9E'I53, *3? I'; I3I'I*L I>PL:>:3'*'I53,
;A*LL 9: ?::>:? .5>PLI*3.: @I'A 'A: L*3?
?I;'RI9E'I53 R:QEIR:>:3' 5= 'A: .*RP.!
2/4 'A: I*LE*'I53 5= 'A: L*3? .*335' 9:
9*;:? *; 5= 35I:>9:R 21, 1060, 'A: ?*': 5=
*PPR5I*L 5= 'A: ;'5.O ?I;'RI9E'I53 5P'I53.
I3;':*?, @: R:;P:.'=ELLL ;E9>I' 'A*' 'A:
'I>: 5= '*OI3C! =5R I*LE*'I53 PERP5;:; I; *
=*.'E*L I;;E: 9:;' L:=' =5R 'A: 'RI*L
.5ER'; '5 ?:.I?:.
254 '5 'A5;: @A5 @ILL .A55;: L*3?, 'A:L
>E;' R:'ER3 @A*' @*; CII:3 '5 'A:> E3?:R
'A: ;?P. I' @5EL? 9: E3=*IR I= 'A:L *R:
*LL5@:? '5 C:' 'A: L*3? *3? *' 'A: ;*>:
'I>: A5L? 53 '5 'A: 9:3:=I'; 'A:L R:.:II:?
PER;E*3' '5 'A: ;?P I3 'A: ;*>: @*L *;
'A5;: @A5 @ILL .A55;: '5 ;'*L @I'A 'A:
;?5.
Lastly, Rene Calan# and *>9*L*, trou# te Pu"li$
Interest La% .enter 2PIL.4, su"&it te follo%in# #rounds
in support of teir ,otion for Reconsiderationdated July
22, 2011,
I
'A: A535R*9L: .5ER', @I'A ?E: R:;P:.',
CR*I:LL :RR:? I3 5R?:RI3C 'A: A5L?I3C 5= *
I5'I3C 5P'I53 I3;':*? 5= '5'*LLL
R:?I;'RI9E'I3C 'A: ;E9J:.' L*3?; '5 [=@9s]
in [ALI].
*. 'A: A5L?I3C 5= * I5'I3C 5P'I53 A*; 35
L:C*L 9*;I;. 'A: R:I5.*'I53 5= 'A: [;?P]
.*RRI:; @I'A I' 'A: R:I5.*'I53 5= 'A:
[;?5*].
9. CIII3C 'A: [=@9s] 'A: 5P'I53 '5 R:>*I3 *;
;'5.OA5L?:R; 5= ALI @I'A5E' >*OI3C 'A:
3:.:;;*RL .A*3C:; I3 'A: .5RP5R*':
;'RE.'ER: @5EL? 53LL ;E9J:.' 'A:> '5
=ER'A:R >*3IPEL*'I53 *3? A*R?;AIP.
.. 5'A:R II5L*'I53; .5>>I'':? 9L ALI E3?:R
'A: [;?5*] *3? P:R'I3:3' L*@; JE;'I=L '5'*L
L*3? R:?I;'RI9E'I53 5= A*.I:3?* LEI;I'*.
II
'A: A535R*9L: .5ER', @I'A ?E: R:;P:.',
CR*I:LL :RR:? I3 A5L?I3C 'A*' 'A: [R.9.]
*3? [LIP.5] *R: I335.:3' PER.A*;:R; =5R
I*LE: 5= 'A: -00-A:.'*R: PR5P:R'L I3
A*.I:3?* LEI;I'* 'A*' @*; ;5L? '5 'A:>
PRI5R '5 'A: I3.:P'I53 5= 'A: PR:;:3'
.53'R5I:R;L.
Elti&ately, te issues for 5ur $onsideration are te
follo%in#, 214 appli$a"ility of te operative fa$t do$trineF
224 $onstitutionality of ;e$. -1 of R* 7758 or
teComprehensive Agrarian Reform Law of 1988F 2-4
$overa#e of $o&pulsory a$<uisitionF 2/4 1ust
$o&pensationF 254 sale to tird partiesF 274 te violations
of ALIF and 284 $ontrol over a#ri$ultural lands.
@e sall dis$uss tese issues a$$ordin#ly.
I. A552$)a4$2$*, o3 *#( O5(/a*$.( Fa)* Do)*/$n(
In teir &otion for partial re$onsideration, ?*R and
P*R. ar#ue tat te do$trine of operative fa$t does not
apply to te instant $ase sin$e, 214 tere is no la% or rule
%i$ as "een invalidated on te #round of
un$onstitutionalityF
[/]
224 te do$trine of operative fa$t is a
rule of e<uity %i$ &ay "e applied only in te a"sen$e
of a la%, and in tis $ase, tey &aintain tat tere is a
positive la% %i$ &andates te distri"ution of te land
as a result of te revo$ation of te sto$+ distri"ution plan
2;?P4.
[5]
:$oin# te stan$e of ?*R and P*R., *>9*L* su"&its
tat te operative fa$t do$trine sould only "e &ade to
apply in te e)tre&e $ase in %i$ e<uity de&ands it,
%i$ alle#edly is not in te instant $ase.
[7]
It furter
ar#ues tat tere %ould "e no undue arsness or in1ury
to ALI in $ase lands are a$tually distri"uted to te
far&%or+ers, and tat te de$ision %i$ orders te
far&%or+ers to $oose %eter to re&ain as
sto$+olders of ALI or to opt for land distri"ution %ould
result in ine<uity and pre1udi$e to te far&%or+ers.
[8]
'e fore#oin# vie%s are also si&ilarly sared "y
Rene Calan# and *>9*L*, trou# te PIL..
[6]
In
addition, =*R> posits tat te option #iven to te =@9s
is e<uivalent to an option for ALI to retain land in dire$t
violation of R* 7758.
[0]
HaI O5(/a*$.( Fa)* Do)*/$n( No* L$+$*(d *o
In.a2$d o/ Un)on%*$*1*$ona2 La=%
.ontrary to te stan$e of respondents, te operative fa$t
do$trine does not only apply to la%s su"se<uently
de$lared un$onstitutional or unla%ful, as it also applies
to e)e$utive a$ts su"se<uently de$lared as invalid. *s
@e ave dis$ussed in 5ur July 5, 2011 ?e$ision,
'at te operative fa$t do$trine s<uarely applies to
e)e$utive a$tsHHin tis $ase, te approval "y P*R. of
te ALI proposal for sto$+ distri"utionHHis %ell-settled in
our 1urispruden$e. In Chave0 v. 6ational .o$sing
A$thorit, @e eld,
Petitioner postulates tat te operative fa$t! do$trine is
inappli$a"le to te present $ase "e$ause it is an
e<uita"le do$trine %i$ $ould not "e used to
$ountenan$e an ine<uita"le result tat is $ontrary to its
proper offi$e.
5n te oter and, te petitioner ;oli$itor Ceneral
ar#ues tat te e)isten$e of te various a#ree&ents
i&ple&entin# te ;>?RP is an operative fa$t tat $an
no lon#er "e distur"ed or si&ply i#nored, $itin# Rieta v.
People of the Philippines.
'e ar#u&ent of te ;oli$itor Ceneral is &eritorious.
'e operative fa$t! do$trine is e&"odied in %e
Ag"aani v. Co$rt of Appeals, %erein it is stated tat a
le#islative or (D()1*$.( a)*, prior to its "ein# de$lared
as un$onstitutional "y te $ourts, is valid and &ust "e
$o&plied %it, tus,
))) ))) )))
'is do$trine %as reiterated in te &ore re$ent $ase
of Cit of ,a'ati v. Civil Service Commission, %erein
%e ruled tat,
>oreover, %e $ertainly $annot nullify te .ity
Covern&entYs order of suspension, as %e ave no
reason to do so, &u$ less retroa$tively apply su$
nullifi$ation to deprive private respondent of a $o&pellin#
and valid reason for not filin# te leave appli$ation. Fo/
a% =( #a.( #(2d, a .o$d a)* *#o1-# $n 2a= a +(/(
%)/a5 o3 5a5(/ non(*#(2(%% )on3(/% 2(-$*$+a), 15on
5a%* a)*% o/ o+$%%$on% don( $n /(2$an)(
*#(/(o3. .onse<uently, te e)isten$e of a statute
or (D()1*$.( o/d(/prior to its "ein# ad1ud#ed void is an
operative fa$t to %i$ le#al $onse<uen$es are atta$ed.
It %ould indeed "e #astly unfair to prevent private
respondent fro& relyin# upon te order of suspension in
lieu of a for&al leave appli$ation.
'e appli$a"ility of te operative fa$t do$trine to
e)e$utive a$ts %as furter e)pli$ated "y tis .ourt
in Rieta v. People, tus,
Petitioner $ontends tat is arrest "y virtue of *rrest
;ear$ and ;ei(ure 5rder 2*;;54 3o. /85/ %as invalid,
as te la% upon %i$ it %as predi$ated R Ceneral
5rder 3o. 70, issued "y ten President =erdinand :.
>ar$os R %as su"se<uently de$lared "y te .ourt,
in &a?ada v. &$vera, -- to ave no for$e and effe$t.
'us, e asserts, any eviden$e o"tained pursuant
tereto is inad&issi"le in eviden$e.

@e do not a#ree. In &a?ada, te .ourt addressed te
possi"le effe$ts of its de$laration of te invalidity of
various presidential issuan$es. ?is$ussin# terein o%
su$ a de$laration &i#t affe$t a$ts done on a
presu&ption of teir validity, te .ourt said,
. . .. In si&ilar situations in te past tis .ourt ad
ta+en te pra#&ati$ and realisti$ $ourse set fort
in Chicot Co$nt %rainage %istrict vs. -a5ter -an' to %it,
Z'e $ourts "elo% ave pro$eeded on te teory tat
te *$t of .on#ress, avin# "een found to "e
un$onstitutional, %as not a la%F tat it %as inoperative,
$onferrin# no ri#ts and i&posin# no duties, and en$e
affordin# no "asis for te $allen#ed de$ree. . . . It is
<uite $lear, o%ever, tat su$ "road state&ents as to
te effe$t of a deter&ination of un$onstitutionality &ust
"e ta+en %it <ualifi$ations. 'e a$tual e)isten$e of a
statute, prior to [te deter&ination of its invalidity], is an
operative fa$t and &ay ave $onse<uen$es %i$
$annot 1ustly "e i#nored. 'e past $annot al%ays "e
erased "y a ne% 1udi$ial de$laration. 'e effe$t of te
su"se<uent rulin# as to invalidity &ay ave to "e
$onsidered in various aspe$ts R %it respe$t to
parti$ular $ondu$t, private and offi$ial. Questions of
ri#ts $lai&ed to ave "e$o&e vested, of status, of prior
deter&inations dee&ed to ave finality and a$ted upon
a$$ordin#ly, of pu"li$ poli$y in te li#t of te nature "ot
of te statute and of its previous appli$ation, de&and
e)a&ination. 'ese <uestions are a&on# te &ost
diffi$ult of tose %i$ ave en#a#ed te attention of
$ourts, state and federal, and it is &anifest fro&
nu&erous de$isions tat an all-in$lusive state&ent of a
prin$iple of a"solute retroa$tive invalidity $annot "e
1ustified.G
))) ))) )))
;i&ilarly, te i&ple&entationD enfor$e&ent of
presidential de$rees prior to teir pu"li$ation in te
5ffi$ial Ca(ette is Zan operative fa$t %i$ &ay ave
$onse<uen$es %i$ $annot "e 1ustly i#nored. 'e past
$annot al%ays "e erased "y a ne% 1udi$ial de$laration . .
. tat an all-in$lusive state&ent of a prin$iple of a"solute
retroa$tive invalidity $annot "e 1ustified.G!
'e .i$ot do$trine $ited in &a?ada advo$ates tat,
prior to te nullifi$ation of a statute, tere is an
i&perative ne$essity of ta+in# into a$$ount its a$tual
e)isten$e as an operative fa$t ne#atin# te a$$eptan$e
of a prin$iple of a"solute retroa$tive invalidity.!
@atever %as done %ile te le#islative or
te (D()1*$.( a)*%as in operation sould "e duly
re$o#ni(ed and presu&ed to "e valid in all respe$ts. T#(
ASSO *#a* =a% $%%1(d $n 1:7: 1nd(/ G(n(/a2 O/d(/
No. ;0 K 2on- 4(3o/( o1/ D()$%$on $n Taada and *#(
a//(%* o3 5(*$*$on(/ K $% an o5(/a*$.( 3a)* *#a* )an no
2on-(/ 4( d$%*1/4(d o/ %$+52, $-no/(d. 2.itations
o&ittedF e&pasis in te ori#inal.4
9earin# in &ind tat P*R. Resolution 3o. 60-12-2
[10]
HH
an e)e$utive a$tHH%as de$lared invalid in te instant
$ase, te operative fa$t do$trine is $learly appli$a"le.
3oneteless, te &inority is of te persistent vie% tat
te appli$a"ility of te operative fa$t do$trine sould "e
li&ited to statutes and rules and re#ulations issued "y
te e)e$utive depart&ent tat are a$$orded te sa&e
status as tat of a statute or tose %i$ are <uasi-
le#islative in nature. 'us, te &inority $on$ludes tat
te prase e)e$utive a$t! used in te $ase of %e
Ag"aani v. Philippine 6ational -an'
[11]
refers only to
a$ts, orders, and rules and re#ulations tat ave te
for$e and effe$t of la%. 'e &inority also &ade &ention
of te .on$urrin# 5pinion of Justi$e :nri<ue =ernando
in ,$nicipalit of ,ala"ang v. -enito,
[12]
%ere it %as
supposedly &ade e)pli$it tat te operative fa$t do$trine
applies to e)e$utive a$ts, %i$ are ulti&ately <uasi-
le#islative in nature.
@e disa#ree. =or one, neiter te %e Ag"aani $ase nor
te ,$nicipalit of ,ala"ang $ase ela"orates %at
e)e$utive a$t! &ean. >oreover, %ile orders, rules and
re#ulations issued "y te President or te e)e$utive
"ran$ ave fi)ed definitions and &eanin# in te
*d&inistrative .ode and 1urispruden$e, te prase
e)e$utive a$t! does not ave su$ spe$ifi$ definition
under e)istin# la%s. It sould "e noted tat in te $ases
$ited "y te &inority, no%ere $an it "e found tat te
ter& e)e$utive a$t! is $onfined to te fore#oin#.
.ontrarily, te ter& e)e$utive a$t! is "road enou# to
en$o&pass de$isions of ad&inistrative "odies and
a#en$ies under te e)e$utive depart&ent %i$ are
su"se<uently revo+ed "y te a#en$y in <uestion or
nullified "y te .ourt.
* $ase in point is te $on$urrent appoint&ent of
>a#dan#al 9. :l&a 2:l&a4 as .air&an of te
Presidential .o&&ission on Cood Covern&ent 2P.CC4
and as .ief Presidential Le#al .ounsel 2.PL.4 %i$
%as de$lared un$onstitutional "y tis .ourt in P$"lic
Interest Center, Inc. v. /lma.
[1-]
In said $ase, tis .ourt
ruled tat te $on$urrent appoint&ent of :l&a to tese
offi$es is in violation of ;e$tion 8, par. 2, *rti$le IM-9 of
te 1068 .onstitution, sin$e tese are in$o&pati"le
offi$es. 3ota"ly, te appoint&ent of :l&a as .air&an of
te P.CC and as .PL. is, %itout a <uestion, an
e)e$utive a$t. Prior to te de$laration of
un$onstitutionality of te said e)e$utive a$t, $ertain a$ts
or transa$tions %ere &ade in #ood fait and in relian$e
of te appoint&ent of :l&a %i$ $annot 1ust "e set
aside or invalidated "y its su"se<uent invalidation.
In &an v. -arrios,
[1/]
tis .ourt, in applyin# te operative
fa$t do$trine, eld tat despite te invalidity of te
1urisdi$tion of te &ilitary $ourts over $ivilians, $ertain
operative fa$ts &ust "e a$+no%led#ed to ave e)isted
so as not to tra&ple upon te ri#ts of te a$$used
terein. Relevant tereto, in :lag$er v. ,ilitar
Commission 6o. (H,
[15]
it %as ruled tat &ilitary
tri"unals pertain to te :)e$utive ?epart&ent of te
Covern&ent and are si&ply instru&entalities of te
e)e$utive po%er, provided "y te le#islature for te
President as .o&&ander-in-.ief to aid i& in properly
$o&&andin# te ar&y and navy and enfor$in# dis$ipline
terein, and utili(ed under is orders or tose of is
autori(ed &ilitary representatives.!
[17]
:vidently, te operative fa$t do$trine is not $onfined to
statutes and rules and re#ulations issued "y te
e)e$utive depart&ent tat are a$$orded te sa&e status
as tat of a statute or tose %i$ are <uasi-le#islative in
nature.
:ven assu&in# tat %e Ag"aani initially applied te
operative fa$t do$trine only to e)e$utive issuan$es li+e
orders and rules and re#ulations, said prin$iple $an
noneteless "e applied, "y analo#y, to de$isions &ade
"y te President or te a#en$ies under te e)e$utive
depart&ent. 'is do$trine, in te interest of 1usti$e and
e<uity, $an "e applied li"erally and in a "road sense to
en$o&pass said de$isions of te e)e$utive "ran$. In
+eepin# %it te de&ands of e<uity, te .ourt $an apply
te operative fa$t do$trine to a$ts and $onse<uen$es
tat resulted fro& te relian$e not only on a la% or
e)e$utive a$t %i$ is <uasi-le#islative in nature "ut also
on de$isions or orders of te e)e$utive "ran$ %i$
%ere later nullified. 'is .ourt is not un&indful tat su$
a$ts and $onse<uen$es &ust "e re$o#ni(ed in te
i#er interest of 1usti$e, e<uity and fairness.
;i#nifi$antly, a de$ision &ade "y te President or te
ad&inistrative a#en$ies as to "e $o&plied %it
"e$ause it as te for$e and effe$t of la%, sprin#in# fro&
te po%ers of te President under te .onstitution and
e)istin# la%s. Prior to te nullifi$ation or re$all of said
de$ision, it &ay ave produ$ed a$ts and $onse<uen$es
in $onfor&ity to and in relian$e of said de$ision, %i$
&ust "e respe$ted. It is on tis s$ore tat te operative
fa$t do$trine sould "e applied to a$ts and
$onse<uen$es tat resulted fro& te i&ple&entation of
te P*R. Resolution approvin# te ;?P of ALI.
>ore i&portantly, respondents, and even te &inority,
failed to $learly e)plain o% te option to re&ain in ALI
#ranted to individual far&ers %ould result in ine<uity and
pre1udi$e. @e $an only sur&ise tat respondents
&isinterpreted te option as a referendu& %ere all te
=@9s %ill "e "ound "y a &a1ority vote favorin# te
retention of all te 7,207 =@9s as ALI
sto$+olders. Respondents are definitely &ista+en.
'e fallo of 5ur July 5, 2011 ?e$ision is une<uivo$al tat
only tose =@9s %o si#nified teir desire to re&ain as
ALI sto$+olders are entitled to 16,60/.-2 sares ea$,
%ile tose %o opted not to re&ain as ALI sto$+olders
%ill "e #iven land "y ?*R. 'us, referendu& %as not
re<uired "ut only individual options %ere #ranted to ea$
=@9 %eter or not tey %ill re&ain in ALI.
'e appli$ation of te operative fa$t do$trine to te
=@9s is not ini<uitous and pre1udi$ial to teir interests
"ut is a$tually "enefi$ial and fair to te&. 1irst, tey are
#ranted te ri#t to re&ain in ALI as sto$+olders and
tey a$<uired said sares %itout payin# teir value to
te $orporation. 5n te oter and, te <ualified =@9s
are re<uired to pay te value of te land to te Land
9an+ of te Pilippines 2L9P4 if land is a%arded to te&
"y ?*R pursuant to R* 7758. If te <ualified =@9s
really %ant a#ri$ultural land, ten tey $an si&ply say no
to te option. *nd second, if te operative fa$t do$trine
is not applied to te&, ten te =@9s %ill "e re<uired to
return to ALI te -K produ$tion sare, te -K sare in
te pro$eeds of te sale of te 500-e$tare $onverted
land, and te 60.51-e$tare ;u"i$-.lar+-'arla$
:)press%ay 2;.':M4 lot, te o&elots and oter
"enefits re$eived "y te =@9s fro& ALI. @it te
appli$ation of te operative fa$t do$trine, said "enefits,
o&elots and te -K produ$tion sare and -K sare
fro& te sale of te 500-e$tare and ;.':M lots sall
"e respe$ted %it no o"li#ation to refund or return
te&. 'e re$eipt of tese tin#s is an operative fa$t
tat $an no lon#er "e distur"ed or si&ply i#nored.!
H4I T#( O5(/a*$.( Fa)* Do)*/$n( a% R()o1/%( $n
E01$*,
*s &entioned a"ove, respondents $ontend tat te
operative fa$t do$trine is a rule of e<uity %i$ &ay "e
applied only in te a"sen$e of a la%, and tat in te
instant $ase, tere is a positive la% %i$ &andates te
distri"ution of te land as a result of te revo$ation of te
;?P.
Endenia"ly, te operative fa$t do$trine is a rule of e<uity.
[18]
*s a $o&ple&ent of le#al 1urisdi$tion, e<uity see+s to
rea$ and $o&plete 1usti$e %ere $ourts of la%, trou#
te infle)i"ility of teir rules and %ant of po%er to adapt
teir 1ud#&ents to te spe$ial $ir$u&stan$es of $ases,
are in$o&petent to do so. :<uity re#ards te spirit and
not te letter, te intent and not te for&, te su"stan$e
rater tan te $ir$u&stan$e, as it is variously e)pressed
"y different $ourts.!
[16]
Re&ar+a"ly, it is applied only in
te a"sen$e of statutory la% and never in $ontravention
of said la%.
[10]
In te instant $ase, respondents ar#ue tat te operative
fa$t do$trine sould not "e applied sin$e tere is a
positive la%, parti$ularly, ;e$. -1 of R* 7758, %i$
dire$ts te distri"ution of te land as a result of te
revo$ation of te ;?P. Pertinently, te last para#rap of
;e$. -1 of R* 7758 states,
If %itin t%o 224 years fro& te approval of tis *$t, te
land or sto$+ transfer envisioned a"ove is not &ade or
reali(ed o/ te plan for su$ sto$+ distri"ution approved
"y te P*R. %itin te sa&e period, te a#ri$ultural
land of te $orporate o%ners or $orporation sall "e
su"1e$t to te $o&pulsory $overa#e of tis *$t.
2:&pasis supplied.4
>ar+edly, te use of te %ord Fo/G under te last
para#rap of ;e$. -1 of R* 7758 $onnotes tat te la%
#ives te $orporate lando%ner an option! to avail of te
sto$+ distri"ution option or to ave te ;?P approved
%itin t%o 224 years fro& te approval of R* 7758. 'is
interpretation is $onsistent %it te %ell-esta"lised
prin$iple in statutory $onstru$tion tat [t]e %ord or is a
dis1un$tive ter& si#nifyin# disasso$iation and
independen$e of one tin# fro& te oter tin#s
enu&eratedF it sould, as a rule, "e $onstrued in te
sense in %i$ it ordinarily i&plies, as a dis1un$tive
%ord.!
[20]
In PCI Leasing and 1inance, Inc. v. #iraffeFI
Creative Imaging, Inc.,
[21]
tis .ourt eld,
:vidently, te letter did not &a+e a de&and for te
pay&ent of te P6,2/6,758./8 AND te return of te
e<uip&entF only eiter one of te t%o %as re<uired. 'e
de&and letter %as prepared and si#ned "y *tty.
=lore$ita R. Con(ales, presu&a"ly petitionerGs $ounsel.
*s su$, te use of Fo/G instead of FandG in te letter
$ould ardly "e treated as a si&ple typo#rapi$al error,
"earin# in &ind te nature of te de&and, te a&ount
involved, and te fa$t tat it %as &ade "y a la%yer.
.ertainly *tty. Con(ales %ould ave +no%n tat a %orld
of differen$e e)ists "et%een and! and or! in te &anner
tat te %ord %as e&ployed in te letter.
* rule in statutory $onstru$tion is tat te %ord or! is a
dis1un$tive ter& si#nifyin# disso$iation and
independen$e of one tin# fro& oter tin#s enu&erated
unless te $onte)t re<uires a different interpretation.
[22]
In $*% (2(+(n*a/, %(n%(, Fo/G, a% 1%(d $n a %*a*1*(, $%
a d$%J1n)*$.( a/*$)2( $nd$)a*$n- an a2*(/na*$.(. I* o3*(n
)onn()*% a %(/$(% o3 =o/d% o/ 5/o5o%$*$on%
$nd$)a*$n- a )#o$)( o3 ($*#(/. !#(n Fo/G $% 1%(d, *#(
.a/$o1% +(+4(/% o3 *#( (n1+(/a*$on a/( *o 4( *a6(n
%(5a/a*(2,.
[2-]
'e %ord or! is a dis1un$tive ter& si#nifyin#
disasso$iation and independen$e of one tin# fro& ea$
of te oter tin#s enu&erated.
[2/]
2:&pasis in te
ori#inal.4
Civen tat ALI se$ured approval of its ;?P in 3ove&"er
1060, %ell %itin te t%o-year period re$+oned fro&
June 1066 %en R* 7758 too+ effe$t, ten ALI did not
violate te last para#rap of ;e$. -1 of R* 7758.
Pertinently, said provision does not "ar Es fro& applyin#
te operative fa$t do$trine.
9esides, it sould "e re$o#ni(ed tat tis .ourt, in its
July 5, 2011 ?e$ision, affir&ed te revo$ation of
Resolution 3o. 60-12-2 and ruled for te $o&pulsory
$overa#e of te a#ri$ultural lands of Aa$ienda Luisita in
vie% of ALIGs violation of te ;?P and ?*5 10. 9y
applyin# te operative fa$t do$trine, tis .ourt &erely
#ave te <ualified =@9s te option to re&ain as
sto$+olders of ALI and ruled tat tey %ill retain te
o&elots and oter "enefits %i$ tey re$eived fro&
ALI "y virtue of te ;?P.
It "ears stressin# tat te appli$ation of te operative
fa$t do$trine "y te .ourt in its July 5, 2011 ?e$ision is
favora"le to te =@9s "e$ause not only %ere te =@9s
allo%ed to retain te "enefits and o&elots tey
re$eived under te sto$+ distri"ution s$e&e, tey %ere
also #iven te option to $oose for te&selves %eter
tey %ant to re&ain as sto$+olders of ALI or not. 'is is
in re$o#nition of te fa$t tat despite te $lai&s of
$ertain far&er #roups tat tey represent te <ualified
=@9s in Aa$ienda Luisita, none of te& $an so% tat
tey are duly autori(ed to spea+ on teir "ealf. *s @e
ave &entioned, 'o date, su$ autori(ation do$u&ent,
%i$ %ould lo#i$ally in$lude a list of te na&es of te
autori(in# =@9s, as yet to "e su"&itted to "e part of
te re$ords.!
II. Con%*$*1*$ona2$*, o3 S(). 91, RA ;;<7
=*R> insists tat te issue of $onstitutionality of ;e$. -1
of R* 7758 is te lis mota of te $ase, raised at te
earliest opportunity, and not to "e $onsidered as &oot
and a$ade&i$.
[25]
'is $ontention is un&eritorious. *s @e ave su$$in$tly
dis$ussed in 5ur July 5, 2011 ?e$ision,
@ile tere is indeed an a$tual $ase or $ontroversy,
intervenor =*R>, $o&posed of a s&all &inority of 28
far&ers, as yet to e)plain its failure to $allen#e te
$onstitutionality of ;e$. -l of R* 7758, sin$e as early as
3ove&"er 21, l060 %en P*R. approved te ;?P of
Aa$ienda Luisita or at least %itin a reasona"le ti&e
tereafter and %y its &e&"ers re$eived "enefits fro&
te ;?P %itout so &u$ of a protest. It %as only on
?e$e&"er /, 200- or 1/ years after approval of te ;?P
via P*R. Resolution 3o. 60-12-2 dated 3ove&"er 21,
1060 tat said plan and approvin# resolution %ere
sou#t to "e revo+ed, "ut not, to stress, "y =*R> or any
of its &e&"ers, "ut "y petitioner *>9*L*. =urter&ore,
te *>9*L* petition did 35' <uestion te
$onstitutionality of ;e$. -1 of R* 7758, "ut $on$entrated
on te purported fla%s and #aps in te su"se<uent
i&ple&entation of te ;?P. :ven te pu"li$
respondents, as represented "y te ;oli$itor Ceneral,
did not <uestion te $onstitutionality of te provision. 5n
te oter and, =*R>, %ose 28 &e&"ers for&erly
"elon#ed to *>9*L*, raised te $onstitutionality of ;e$.
-1 only on >ay -, 2008 %en it filed its ;upple&ental
.o&&ent %it te .ourt. 'us, it too+ =*R> so&e
ei#teen 2164 years fro& 3ove&"er 21, 1060 "efore it
$allen#ed te $onstitutionality of ;e$. -1 of R* 7758
%i$ is <uite too late in te day. 'e =*R> &e&"ers
slept on teir ri#ts and even a$$epted "enefits fro& te
;?P %it nary a $o&plaint on te alle#ed
un$onstitutionality of ;e$. -1 upon %i$ te "enefits
%ere derived. 'e .ourt $annot no% "e #oaded into
resolvin# a $onstitutional issue tat =*R> failed to assail
after te lapse of a lon# period of ti&e and te
o$$urren$e of nu&erous events and a$tivities %i$
resulted fro& te appli$ation of an alle#ed
un$onstitutional le#al provision.
It as "een e&pasi(ed in a nu&"er of $ases tat te
<uestion of $onstitutionality %ill not "e passed upon "y
te .ourt unless it is properly raised and presented in an
appropriate $ase at te first opportunity. =*R> is,
terefore, re&iss in "elatedly <uestionin# te
$onstitutionality of ;e$. -1 of R* 7758. 'e se$ond
re<uire&ent tat te $onstitutional <uestion sould "e
raised at te earliest possi"le opportunity is $learly
%antin#.
'e last "ut te &ost i&portant re<uisite tat te
$onstitutional issue &ust "e te very lis mota of te $ase
does not li+e%ise o"tain. 'e lis mota aspe$t is not
present, te$onstitutional issue tendered not "ein#
$riti$al to te resolution of te $ase. 'e unyieldin# rule
as "een to avoid, %enever plausi"le, an issue
assailin# te $onstitutionality of a statute or
#overn&ental a$t. If so&e oter #rounds e)ist "y %i$
1ud#&ent $an "e &ade %itout tou$in# te
$onstitutionality of a la%, su$ re$ourse is
favored. #arcia v. /5ec$tive Secretar e)plains %y,
Lis ,ota R te fourt re<uire&ent to satisfy "efore tis
.ourt %ill underta+e 1udi$ial revie% R &eans tat te
.ourt %ill not pass upon a <uestion of un$onstitutionality,
altou# properly presented, if the case can "e
disposed of on some other gro$nd, s$ch as the
application of the stat$te or the general law. 'e
petitioner &ust "e a"le to so% tat te $ase $annot "e
le#ally resolved unless te $onstitutional <uestion raised
is deter&ined. 'is re<uire&ent is "ased on te rule tat
every la% as in its favor te presu&ption of
$onstitutionalityF to 1ustify its nullifi$ation, tere &ust "e a
$lear and une<uivo$al "rea$ of te .onstitution, and
not one tat is dou"tful, spe$ulative, or ar#u&entative.
'e lis mota in tis $ase, pro$eedin# fro& te "asi$
positions ori#inally ta+en "y *>9*L* 2to %i$ te
=*R> &e&"ers previously "elon#ed4 and te
;upervisory Croup, is te alle#ed non-$o&plian$e "y
ALI %it te $onditions of te ;?P to support a plea for
its revo$ation. *nd "efore te .ourt, te lis mota is
%eter or not P*R. a$ted in #rave a"use of dis$retion
%en it ordered te re$all of te ;?P for su$ non-
$o&plian$e and te fa$t tat te ;?P, as $ou$ed and
i&ple&ented, offends $ertain $onstitutional and statutory
provisions. 'o "e sure, any of tese +ey issues &ay "e
resolved %itout plun#in# into te $onstitutionality of
;e$. -1 of R* 7758. >oreover, loo+in# deeply into te
underlyin# petitions of *>9*L*, et al., it is not te said
se$tion per se tat is invalid, "ut rater it is te alle#ed
appli$ation of te said provision in te ;?P tat is
fla%ed.
It &ay "e %ell to note at tis 1un$ture tat ;e$. 5 of R*
0800, a&endin# ;e$. 8 of R* 7758, as all "ut
superseded ;e$. -1 of R* 7758 vis-J-vis te sto$+
distri"ution $o&ponent of said ;e$. -1. In its pertinent
part, ;e$. 5 of R* 0800 provides, >T?#a* a3*(/ "1n( 90,
B00:, *#( +od(% o3 a)01$%$*$on %#a22 4( 2$+$*(d *o
.o21n*a/, o33(/ *o %(22 and )o+512%o/, a)01$%$*$on.!
'us, for all intents and purposes, te sto$+ distri"ution
s$e&e under ;e$. -1 of R* 7758 is no lon#er an
availa"le option under e)istin# la%. 'e <uestion of
%eter or not it is un$onstitutional sould "e a &oot
issue. 2.itations o&ittedF e&pasis in te ori#inal.4
9ased on te fore#oin# dis<uisitions, @e &aintain tat
tis .ourt is 35' $o&pelled to rule on te
$onstitutionality of ;e$. -1 of R* 7758. In tis re#ard,
@e $larify tat tis .ourt, in its July 5, 2011 ?e$ision,
&ade no rulin# in favor of te $onstitutionality of ;e$. -1
of R* 7758. 'ere %as, o%ever, a deter&ination of te
e)isten$e of an apparent #rave violation of te
.onstitution tat &ay 1ustify te resolution of te issue of
$onstitutionality, to %i$ tis .ourt ruled in te ne#ative.
Aavin# $larified tis &atter, all oter points raised "y
"ot =*R> and *>9*L* $on$ernin# te $onstitutionality
of R* 7758 deserve s$ant $onsideration.
III. Co.(/a-( o3 Co+512%o/, A)01$%$*$on
=*R> ar#ues tat tis .ourt i#nored $ertain &aterial
fa$ts %en it li&ited te &a)i&u& area to "e $overed to
/,015.85 e$tares, %ereas te area tat sould, at te
least, "e $overed is 7,//- e$tares,
[27]
%i$ is te
a#ri$ultural land alle#edly $overed "y R* 7758 and
previously eld "y 'arla$ ?evelop&ent .orporation
2'ade$o4.
[28]
@e $annot su"s$ri"e to tis vie%. ;in$e %at is put in
issue "efore te .ourt is te propriety of te revo$ation
of te ;?P, %i$ only involves /,015.85 as. of
a#ri$ultural land and not 7,//- as., ten @e are
$onstrained to rule only as re#ards te /,015.85 as. of
a#ri$ultural land.
>oreover, as ad&itted "y =*R> itself, tis issue %as
raised for te first ti&e "y =*R> in its >e&orandu&
dated ;epte&"er 2/, 2010 filed "efore tis .ourt.
[26]
In
tis re#ard, it sould "e noted tat [a]s a le#al re$ourse,
te spe$ial $ivil a$tion of $ertiorari is a li&ited for& of
revie%.!
[20]
'e $ertiorari 1urisdi$tion of tis .ourt is
narro% in s$ope as it is restri$ted to resolvin# errors of
1urisdi$tion and #rave a"use of dis$retion, and not errors
of 1ud#&ent.
[-0]
'o allo% additional issues at tis sta#e of
te pro$eedin#s is violative of fair play, 1usti$e and due
pro$ess.
[-1]
3oneteless, it sould "e ta+en into a$$ount tat tis
sould not prevent te ?*R, under its &andate under
te a#rarian refor& la%, fro& su"se<uently su"1e$tin# to
a#rarian refor& oter a#ri$ultural lands ori#inally eld "y
'ade$o tat %ere alle#edly not transferred to ALI "ut
%ere supposedly $overed "y R* 7758.
?*R, o%ever, $ontends tat te de$laration of te
area
[-2]
to "e a%arded to ea$ =@9 is too restri$tive. It
stresses tat in a#ri$ultural landoldin#s li+e Aa$ienda
Luisita, tere are roads, irri#ation $anals, and oter
portions of te land tat are $onsidered $o&&only-
o%ned "y far&%or+ers, and tis &ay ne$essarily result
in te de$rease of te area si(e tat &ay "e a%arded
per =@9.
[--]
?*R also ar#ues tat te July 5, 2011
?e$ision of tis .ourt does not #ive it any lee%ay in
ad1ustin# te area tat &ay "e a%arded per =@9 in
$ase te nu&"er of a$tual <ualified =@9s de$reases.
[-/]
'e ar#u&ent is &eritorious. In order to ensure te
proper distri"ution of te a#ri$ultural lands of Aa$ienda
Luisita per <ualified =@9, and $onsiderin# tat &atters
involvin# stri$tly te ad&inistrative i&ple&entation and
enfor$e&ent of a#rarian refor& la%s are %itin te
1urisdi$tion of te ?*R,
[-5]
it is te latter %i$ sall
deter&ine te area %it %i$ ea$ <ualified =@9 %ill
"e a%arded.
HaI Con.(/%$on o3 A-/$)12*1/a2 Land%
*>9*L* insists tat te $onversion of te a#ri$ultural
lands violated te $onditions of R* 7758 and ?*5 10,
statin# tat +eepin# te land inta$t and unfra#&ented is
one of te essential $onditions of [te] ;?[P], R* 7758
and ?*5 10.!
[-7]
It asserts tat tis provision or
$onditionality is not &ere de$oration and is intended to
ensure tat te far&ers $an $ontinue %it te tilla#e of
te soil espe$ially sin$e it is te only o$$upation tat
&a1ority of te& +no%s.!
[-8]
@e disa#ree. *s @e a&ply dis$ussed in 5ur July 5,
2011 ?e$ision,
.ontrary to te al&ost parallel stan$e of te
respondents, +eepin# Aa$ienda Luisita unfra#&ented is
also not a&on# te i&perative i&positions "y te ;?P,
R* 7758, and ?*5 10.
'e 'er&inal Report states tat te proposed distri"ution
plan su"&itted in 1060 to te P*R. effe$tively assured
te intended sto$+ "enefi$iaries tat te pysi$al
inte#rity of te far& sall re&ain inviolate. *$$ordin#ly,
te 'er&inal Report and te P*R.-assailed resolution
%ould ta+e ALI to tas+ for se$urin# approval of te
$onversion to non-a#ri$ultural uses of 500 e$tares of
te a$ienda. In not too &any %ords, te Report and te
resolution vie% te $onversion as an infrin#e&ent of
;e$. 52a4 of ?*5 10 %i$ reads, a. tat te $ontinued
operation of te $orporation %it its a#ri$ultural land
inta$t and unfra#&ented is via"le %it potential for
#ro%t and in$reased profita"ility.!
'e P*R. is %ron#.
In te first pla$e, ;e$. 52a4HH1ust li+e te su$$eedin#
;e$. 52"4 of ?*5 10 on in$reased in$o&e and #reater
"enefits to <ualified "enefi$iariesHHis "ut one of te
stated $riteria to #uide P*R. in de$idin# on %eter or
not to a$$ept an ;?P. ;aid ;e$. 52a4 does not e)a$t
fro& te $orporate lando%ner-appli$ant te underta+in#
to +eep te far& inta$t and unfra#&ented ad
infinit$m. *nd tere is lo#i$ to ALIGs stated o"servation
tat te +ey prase in te provision of ;e$. 52a4 is
via"ility of $orporate operations!, [%]at is tus re<uired
is not te a#ri$ultural land re&ainin# inta$t ) ) ) "ut te
via"ility of te $orporate operations %it its a#ri$ultural
land "ein# inta$t and unfra#&ented. .orporate operation
&ay "e via"le even if te $orporate a#ri$ultural land
does not re&ain inta$t or [un]fra#&ented.!
[-6]
It is, of $ourse, anti-$li&a$ti$ to &ention tat ?*R
vie%ed te $onversion as not violative of any issuan$e,
let alone under&inin# te via"ility of Aa$ienda LuisitaGs
operation, as te ?*R ;e$retary approved te land
$onversion applied for and its disposition via is
.onversion 5rder dated *u#ust 1/, 1007 pursuant to
;e$. 75 of R* 7758 %i$ reads,
;e$. 75. Conversion of Lands. *fter te lapse of five
years fro& its a%ard %en te land $eases to "e
e$ono&i$ally feasi"le and sound for a#ri$ultural
purposes, or te lo$ality as "e$o&e ur"ani(ed and te
land %ill ave a #reater e$ono&i$ value for residential,
$o&&er$ial or industrial purposes, te ?*R upon
appli$ation of te "enefi$iary or lando%ner %it due
noti$e to te affe$ted parties, and su"1e$t to e)istin#
la%s, &ay autori(e te ) ) ) $onversion of te land and
its dispositions. ) ) )
>oreover, it is %ort notin# tat te appli$ation for
$onversion ad te "a$+in# of 5,000 or so =@9s,
in$ludin# respondents Rene Calan#, and Jose Julio
;uni#a, ten leaders of te *>9*L* and te
;upervisory Croup, respe$tively, as eviden$ed "y te
>anifesto of ;upport tey si#ned and %i$ %as
su"&itted to te ?*R.
[-0]
If at all, tis &eans tat
*>9*L* sould "e estopped fro& <uestionin# te
$onversion of a portion of Aa$ienda Luisita, %i$ its
leader as fully supported.
H4I LIPCO and RCBC a% Inno)(n* P1/)#a%(/%
3o/ &a21(
'e *>9*L*, Rene Calan# and te =*R> are in a$$ord
tat Ri(al .o&&er$ial 9an+in# .orporation 2R.9.4 and
Luisita Industrial Par+ .orporation 2LIP.54 are not
inno$ent pur$asers for value. 'e *>9*L*, in
parti$ular, ar#ues tat LIP.5, "ein# a %olly-o%ned
su"sidiary of ALI, is $on$lusively presu&ed to ave
+no%led#e of te a#rarian dispute on te su"1e$t land
and $ould not fei#n i#noran$e of tis fa$t, espe$ially
sin$e tey ave te sa&e dire$tors and sto$+olders.
[/0]
'is is se$onded "y Rene Calan# and *>9*L*,
trou# te PIL., %i$ inti&ate tat a loo+ at te
Ceneral Infor&ation ;eets of te $o&panies involved in
te transfers of te -00-e$tare portion of Aa$ienda
Luisita, spe$ifi$ally, .entennary Aoldin#s, In$.
2.entennary4, LIP.5 and R.9., %ould readily reveal
tat teir dire$tors are interlo$+ed and $onne$ted to
'ade$o and ALI.
[/1]
Rene Calan# and *>9*L*, trou#
te PIL., also alle#e tat %it te $lear-$ut involve&ent
of te leadersip of all te $orporations $on$erned,
LIP.5 and R.9. $annot fei#n i#noran$e tat te
par$els of land tey "ou#t are under te $overa#e of
te $o&preensive a#rarian refor& pro#ra& [.*RP] and
tat te $onditions of te respe$tive sales are i&"ued
%it pu"li$ interest %ere nor&al property relations in
te .ivil La% sense do not apply.!
[/2]
*vo%in# tat te land su"1e$t of $onversion still re&ains
undeveloped, Rene Calan# and *>9*L*, trou# te
PIL., furter insist tat te $ondition tat [t]e
develop&ent of te land sould "e $o&pleted %itin te
period of five [5] years fro& te issuan$e of tis 5rder!
%as not $o&plied %it. *>9*L* also ar#ues tat sin$e
R.9. and LIP.5 &erely stepped into te soes of ALI,
ten tey &ust $o&ply %it te $onditions i&posed in
te $onversion order.
[/-]
In addition, =*R> avers tat a&on# te $onditions
atta$ed to te $onversion order, %i$ R.9. and
LIP.5 ne$essarily ave +no%led#e of, are 2a4 tat its
approval sall in no %ay a&end, di&inis, or alter te
underta+in# and o"li#ations of ALI as $ontained in te
[;?P] approved on 3ove&"er 21, 1060F and 2"4 tat te
"enefits, %a#es and te li+e, re$eived "y te =@9s sall
not in any %ay "e redu$ed or adversely affe$ted, a&on#
oters.
[//]
'e $ontentions of respondents are %antin#. In te first
pla$e, tere is no denyin# tat R.9. and LIP.5 +ne%
tat te $onverted lands tey "ou#t %ere under te
$overa#e of .*RP. 3everteless, as @e ave
&entioned in 5ur July 5, 2011 ?e$ision, tis does not
ne$essarily &ean tat "ot LIP.5 and R.9. already
a$ted in "ad fait in pur$asin# te $onverted lands. *s
tis .ourt e)plained,
It $annot "e $lai&ed tat R.9. and LIP.5 a$ted in "ad
fait in a$<uirin# te lots tat %ere previously $overed "y
te ;?P. Cood fait $onsists in te possessorGs "elief
tat te person fro& %o& e re$eived it %as te o%ner
of te sa&e and $ould $onvey is title. Cood fait
re<uires a %ell-founded "elief tat te person fro&
%o& title %as re$eived %as i&self te o%ner of te
land, %it te ri#t to $onvey it. 'ere is #ood fait
%ere tere is an onest intention to a"stain fro& ta+in#
any un$ons$ientious advanta#e fro& anoter.! It is te
opposite of fraud.
To 4( %1/(, $n*(/.(no/ RCBC and LIPCO 6n(= *#a*
*#( 2o*% *#(, 4o1-#* =(/( %14J()*(d *o CARP
)o.(/a-( 4, +(an% o3 a %*o)6 d$%*/$41*$on 52an, a%
*#( DAR )on.(/%$on o/d(/ =a% anno*a*(d a* *#( 4a)6
o3 *#( *$*2(% o3 *#( 2o*% *#(, a)01$/(d. Ho=(.(/, *#(,
a/( o3 *#( #on(%* 4(2$(3 *#a* *#( %14J()* 2o*% =(/(
.a2$d2, )on.(/*(d *o )o++(/)$a2 o/ $nd1%*/$a2
51/5o%(% and 3o/ =#$)# %a$d 2o*% =(/( *a6(n o1* o3
*#( CARP )o.(/a-( %14J()* o3 PARC R(%o21*$on No.
8:A1BAB and, #(n)(, )an 4( 2(-a22, and .a2$d2,
a)01$/(d 4, *#(+. *fter all, ;e$. 75 of R* 7758
e)pli$itly allo%s $onversion and disposition of a#ri$ultural
lands previously $overed "y .*RP land a$<uisition after
te lapse of five 254 years fro& its a%ard %en te land
$eases to "e e$ono&i$ally feasi"le and sound for
a#ri$ultural purposes or te lo$ality as "e$o&e
ur"ani(ed and te land %ill ave a #reater e$ono&i$
value for residential, $o&&er$ial or industrial
purposes.! >oreover, ?*R notified all te affe$ted
parties, &ore parti$ularly te =@9s, and #ave te& te
opportunity to $o&&ent or oppose te proposed
$onversion. ?*R, after #oin# trou# te ne$essary
pro$esses, #ranted te $onversion of 500 e$tares of
Aa$ienda Luisita pursuant to its pri&ary 1urisdi$tion
under ;e$. 50 of R* 7758 to deter&ine and ad1udi$ate
a#rarian refor& &atters and its ori#inal e)$lusive
1urisdi$tion over all &atters involvin# te i&ple&entation
of a#rarian refor&. 'e ?*R $onversion order "e$a&e
final and e)e$utory after none of te =@9s interposed
an appeal to te .*. In tis fa$tual settin#, R.9. and
LIP.5 pur$ased te lots in <uestion on teir onest
and %ell-founded "elief tat te previous re#istered
o%ners $ould le#ally sell and $onvey te lots tou#
tese %ere previously su"1e$t of .*RP $overa#e. :r#o,
R.9. and LIP.5 a$ted in #ood fait in a$<uirin# te
su"1e$t lots. 2:&pasis supplied.4
In te se$ond pla$e, te alle#ation tat te $onverted
lands re&ain undeveloped is $ontradi$ted "y te
eviden$e on re$ord, parti$ularly, *nne) M! of LIP.5Gs
>e&orandu& dated ;epte&"er 2-, 2010,
[/5]
%i$ as
poto#raps so%in# tat te land as "een partly
developed.
[/7]
.ertainly, it is a #eneral rule tat te
fa$tual findin#s of ad&inistrative a#en$ies are $on$lusive
and "indin# on te .ourt %en supported "y su"stantial
eviden$e.
[/8]
Ao%ever, tis rule ad&its of $ertain
e)$eptions, one of %i$ is %en te findin#s of fa$t are
pre&ised on te supposed a"sen$e of eviden$e and
$ontradi$ted "y te eviden$e on re$ord.
[/6]
In te tird pla$e, "y ar#uin# tat te $o&panies
involved in te transfers of te -00-e$tare portion of
Aa$ienda Luisita ave interlo$+in# dire$tors and, tus,
+no%led#e of one &ay already "e i&puted upon all te
oter $o&panies, *>9*L* and Rene Calan#, in effe$t,
%ant tis .ourt to pier$e te veil of $orporate fi$tion.
Ao%ever, pier$in# te veil of $orporate fi$tion is
%arranted only in $ases %en te separate le#al entity
is used to defeat pu"li$ $onvenien$e, 1ustify %ron#,
prote$t fraud, or defend $ri&e, su$ tat in te $ase of
t%o $orporations, te la% %ill re#ard te $orporations as
&er#ed into one.!
[/0]
*s su$$in$tly dis$ussed "y te
.ourt in2elarde v. Lope0, Inc.,
[50]
Petitioner ar#ues neverteless tat 1urisdi$tion over te
su"sidiary is 1ustified "y pier$in# te veil of $orporate
fi$tion. Pier$in# te veil of $orporate fi$tion is %arranted,
o%ever, only in $ases %en te separate le#al entity is
used to defeat pu"li$ $onvenien$e, 1ustify %ron#, prote$t
fraud, or defend $ri&e, su$ tat in te $ase of t%o
$orporations, te la% %ill re#ard te $orporations as
&er#ed into one. 'e rationale "eind pier$in# a
$orporationGs identity is to re&ove te "arrier "et%een
te $orporation fro& te persons $o&prisin# it to t%art
te fraudulent and ille#al s$e&es of tose %o use te
$orporate personality as a sield for underta+in# $ertain
pros$ri"ed a$tivities.
In applyin# te do$trine of pier$in# te veil of $orporate
fi$tion, te follo%in# re<uisites &ust "e esta"lised, 214
$ontrol, not &erely &a1ority or $o&plete sto$+ $ontrolF 224
su$ $ontrol &ust ave "een used "y te defendant to
$o&&it fraud or %ron#, to perpetuate te violation of a
statutory or oter positive le#al duty, or disonest a$ts in
$ontravention of plaintiffGs le#al ri#tsF and 2-4 te
aforesaid $ontrol and "rea$ of duty &ust pro)i&ately
$ause te in1ury or un1ust loss $o&plained of.

2.itations
o&itted.4
3o%ere, o%ever, in te pleadin#s and oter re$ords of
te $ase $an it "e #atered tat respondent as
$o&plete $ontrol over ;+y Iision, not only of finan$es
"ut of poli$y and "usiness pra$ti$e in respe$t to
te transa$tion atta$+ed, so tat ;+y Iision ad at te
ti&e of te transa$tion no separate &ind, %ill or
e)isten$e of its o%n. 'e e)isten$e of interlo$+in#
dire$tors, $orporate offi$ers and sareolders is not
enou# 1ustifi$ation to pier$e te veil of $orporate fi$tion
in te a"sen$e of fraud or oter pu"li$ poli$y
$onsiderations.
*"sent any alle#ation or proof of fraud or oter pu"li$
poli$y $onsiderations, te e)isten$e of interlo$+in#
dire$tors, offi$ers and sto$+olders is not enou#
1ustifi$ation to pier$e te veil of $orporate fi$tion as in te
instant $ase.
*nd in te fourt pla$e, te fa$t tat tis .ourt, in its July
5, 2011 ?e$ision, ordered te pay&ent of te pro$eeds
of te sale of te $onverted land, and even of te 60.51-
e$tare land sold to te #overn&ent, trou# te 9ases
.onversion ?evelop&ent *utority, to te <ualified
=@9s, effe$tively fulfils te $onditions in te $onversion
order, to %it, 214 tat its approval sall in no %ay a&end,
di&inis, or alter te underta+in# and o"li#ations of ALI
as $ontained in te ;?P approved on 3ove&"er 21,
1060F and 224 tat te "enefits, %a#es and te li+e,
re$eived "y te =@9s sall not in any %ay "e redu$ed
or adversely affe$ted, a&on# oters.
* vie% as also "een advan$ed tat te 200-e$tare lot
transferred to Luisita Realty .orporation 2LR.4 sould
"e in$luded in te $o&pulsory $overa#e "e$ause te
$orporation did not intervene.
@e disa#ree. ;in$e te 200-e$tare lot for&ed part of
te ;?P tat %as nullified "y P*R. Resolution 2005--2-
01, tis .ourt is $onstrained to &a+e a rulin# on te
ri#ts of LR. over te said lot. >oreover, te 500-
e$tare portion of Aa$ienda Luisita, of %i$ te 200-
e$tare portion sold to LR. and te -00-e$tare portion
su"se<uently a$<uired "y LIP.5 and R.9. %ere part
of, %as already te su"1e$t of te *u#ust 1/, 1007 ?*R
.onversion 5rder. 9y virtue of te said $onversion order,
te land %as already re$lassified as
industrialD$o&&er$ial land not su"1e$t to $o&pulsory
$overa#e. 'us, if @e pla$e te 200-e$tare lot sold to
LR. under $o&pulsory $overa#e, tis .ourt %ould, in
effe$t, "e disre#ardin# te ?*R .onversion 5rder, %i$
as lon# attained its finality. *nd as tis .ourt eld
in -er"oso v. CA,
[51]
5n$e final and e)e$utory, te
.onversion 5rder $an no lon#er "e <uestioned.!
9esides, to disre#ard te .onversion 5rder trou# te
revo$ation of te approval of te ;?P %ould $reate
undue pre1udi$e to LR., %i$ is not even a party to te
pro$eedin#s "elo%, and %ould "e tanta&ount to
deprivation of property %itout due pro$ess of la%.
3onetess, te &inority is of te ada&ant vie% tat
sin$e LR. failed to intervene in te instant $ase and
%as, terefore, una"le to present eviden$e supportin# its
#ood fait pur$ase of te 200-e$tare $onverted land,
ten LR. sould "e #iven full opportunity to present its
$ase "efore te ?*R. 'is &inority vie% is a
$ontradi$tion in itself. Civen tat LR. did not intervene
and is, terefore, not a party to te instant $ase, ten it
%ould "e in$on#ruous to order te& to present eviden$e
"efore te ?*R. ;u$ an order, if issued "y tis .ourt,
%ould not "e "indin# upon te LR..
>oreover, LR. &ay "e $onsidered to ave =a$.(d its
ri#t to parti$ipate in te instant petition sin$e it did not
intervene in te ?*R pro$eedin#s for te nullifi$ation of
te P*R. Resolution 3o. 60-12-2 %i$ approved te
;?P.
H)I P/o)((d% o3 *#( %a2( o3 *#( <00A#()*a/(
)on.(/*(d 2and
and o3 *#( 80.<1A#()*a/( 2and 1%(d 3o/ *#( SCTEN
*s previously &entioned, @e ruled in 5ur July 5, 2011
?e$ision tat sin$e te .ourt e)$luded te 500-e$tare
lot su"1e$t of te *u#ust 1/, 1007 .onversion 5rder and
te 60.51-e$tare ;.':M lot a$<uired "y te
#overn&ent fro& $o&pulsory $overa#e, ten ALI and its
su"sidiary, .entennary, sould "e lia"le to te =@9s for
te pri$e re$eived for said lots. 'us,
'ere is a $lai& tat, sin$e te sale and transfer of te
500 e$tares of land su"1e$t of te *u#ust 1/, 1007
.onversion 5rder and te 60.51-e$tare ;.':M lot
$a&e after $o&pulsory $overa#e as ta+en pla$e, te
=@9s sould ave teir $orrespondin# sare of te
landGs value. 'ere is &erit in te $lai&. ;in$e te ;?P
approved "y P*R. Resolution 3o. 60-12-2 as "een
nullified, ten all te lands su"1e$t of te ;?P %ill
auto&ati$ally "e su"1e$t of $o&pulsory $overa#e under
;e$. -1 of R* 7758. ;in$e te .ourt e)$luded te 500-
e$tare lot su"1e$t of te *u#ust 1/, 1007 .onversion
5rder and te 60.51-e$tare ;.':M lot a$<uired "y te
#overn&ent fro& te area $overed "y ;?P, ten ALI and
its su"sidiary, .entennary, sall "e lia"le to te =@9s for
te pri$e re$eived for said lots. ALI sall "e lia"le for te
value re$eived for te sale of te 200-e$tare land to
LR. in te a&ount of PP 500,000,000 and te
e<uivalent value of te 12,000,000 sares of its
su"sidiary, .entennary, for te -00-e$tare lot sold to
LIP.5 for te $onsideration of PP
850,000,000. Li+e%ise, ALI sall "e lia"le for PP
60,511,500 as $onsideration for te sale of te 60.51-
e$tare ;.':M lot.
@e, o%ever, note tat ALI as alle#edly paid -K of te
pro$eeds of te sale of te 500-e$tare land and 60.51-
e$tare ;.':M lot to te =@9s. @e also ta+e into
a$$ount te pay&ent of ta)es and e)penses relatin# to
te transfer of te land and ALIGs state&ent tat &ost, if
not all, of te pro$eeds %ere used for le#iti&ate
$orporate purposes. In order to deter&ine on$e and for
all %eter or not all te pro$eeds %ere properly utili(ed
"y ALI and its su"sidiary, .entennary, ?*R %ill en#a#e
te servi$es of a reputa"le a$$ountin# fir& to "e
approved "y te parties to audit te "oo+s of ALI to
deter&ine if te pro$eeds of te sale of te 500-e$tare
land and te 60.51-e$tare ;.':M lot %ere a$tually
used for le#iti&ate $orporate purposes, titlin# e)penses
and in $o&plian$e %it te *u#ust 1/, 1007 .onversion
5rder. 'e $ost of te audit %ill "e souldered "y
ALI. If after su$ audit, it is deter&ined tat tere
re&ains a "alan$e fro& te pro$eeds of te sale, ten
te "alan$e sall "e distri"uted to te <ualified =@9s.
ALI, o%ever, ta+es e)$eption to te a"ove-&entioned
rulin# and $ontends tat it is not proper to distri"ute te
unspent or unused "alan$e of te pro$eeds of te sale
of te 500-e$tare $onverted land and 60.51-e$tare
;.':M lot to te <ualified =@9s for te follo%in#
reasons, 214 te pro$eeds of te sale "elon# to te
$orporation, ALI, as $orporate $apital and assets in
su"stitution for te portions of its land asset %i$ %ere
sold to tird partiesF 224 to distri"ute te $as sales
pro$eeds of te portions of te land asset to te =@9s,
%o are sto$+olders of ALI, is to dissolve te
$orporation and distri"ute te pro$eeds as li<uidatin#
dividends %itout even payin# te $reditors of te
$orporationF and 2-4 te doin# of said a$ts %ould violate
te strin#ent provisions of te .orporation .ode and
$orporate pra$ti$e.
[52]
*pparently, ALI see+s re$ourse to te .orporation .ode
in order to avoid its lia"ility to te =@9s for te pri$e
re$eived for te 500-e$tare $onverted lot and te
60.51-e$tare ;.':M lot. Ao%ever, as @e ave
esta"lised in 5ur July 5, 2011 ?e$ision, te ri#ts,
o"li#ations and re&edies of te parties in te instant
$ase are pri&arily #overned "y R* 7758 and ALI $annot
sield itself fro& te .*RP $overa#e &erely under te
$onvenien$e of "ein# a $orporate entity. In tis re#ard, it
sould "e unders$ored tat te a#ri$ultural lands eld "y
ALI "y virtue of te ;?P are no ordinary assets. 'ese
are spe$ial assets, "e$ause, ori#inally, tese sould
ave "een distri"uted to te =@9s %ere it not for te
approval of te ;?P "y P*R.. 'us, te #overn&ent
$annot rene#e on its responsi"ility over tese assets.
Li+e%ise, ALI is no ordinary $orporation as it %as for&ed
and or#ani(ed pre$isely to &a+e use of tese
a#ri$ultural lands a$tually intended for distri"ution to te
=@9s. 'us, it $annot sield itself fro& te $overa#e of
.*RP "y invo+in# te .orporation .ode. *s e)plained
"y te .ourt,
ALI also parlays te notion tat te parties to te ;?5*
sould no% loo+ to te .orporation .ode, instead of to
R* 7758, in deter&inin# teir ri#ts, o"li#ations and
re&edies. 'e .ode, it adds, sould "e te appli$a"le
la% on te disposition of te a#ri$ultural land of ALI.
Con*/a/, *o *#( .$(= o3 HLI, *#( /$-#*%, o42$-a*$on%
and /(+(d$(% o3 *#( 5a/*$(% *o *#( SDOA (+4od,$n-
*#( SDP a/( 5/$+a/$2, -o.(/n(d 4, RA ;;<7. It sould
a"undantly "e &ade $lear tat ALI %as pre$isely $reated
in order to $o&ply %it R* 7758, %i$ te 5;C aptly
des$ri"ed as te &oter la%! of te ;?5* and te ;?P.
[5-]
I* $%, *#1%, 5a/adoD$)a2 3o/ HLI *o %#$(2d $*%(23 3/o+
*#( )o.(/a-( o3 CARP 4, $n.o6$n- (D)21%$.(
a552$)a4$2$*, o3 *#( Co/5o/a*$on Cod( 1nd(/ *#(
-1$%( o3 4($n- a )o/5o/a*( (n*$*,.
!$*#o1* $n an, =a, +$n$+$C$n- *#( /(2(.an)( o3 *#(
Co/5o/a*$on Cod( %$n)( *#( F!B% o3 HLI a/( a2%o
%*o)6#o2d(/%, $*% a552$)a4$2$*, $% 2$+$*(d a% *#( /$-#*%
o3 *#( 5a/*$(% a/$%$n- 3/o+ *#( SDP %#o12d no* 4(
+ad( *o %1552an* o/ )$/)1+.(n* *#( a-/a/$an /(3o/+
5/o-/a+.
@itout dou"t, te .orporation .ode is te #eneral la%
providin# for te for&ation, or#ani(ation and re#ulation
of private $orporations. 5n te oter and, R* 7758 is
te spe$ial la% on a#rarian refor&. *s "et%een a
#eneral and spe$ial la%, te latter sall prevailR
generalia speciali"$s non derogant.
[5/]
9esides, te
present i&passe "et%een ALI and te private
respondents is not an intra-$orporate dispute %i$
ne$essitates te appli$ation of te .orporation .ode.
@at private respondents <uestioned "efore te ?*R is
te proper i&ple&entation of te ;?P and ALIGs
$o&plian$e %it R* 7758. :vidently, R* 7758 sould "e
te appli$a"le la% to te instant $ase. 2:&pasis
supplied.4
.onsiderin# tat te 500-e$tare $onverted land, as %ell
as te 60.51-e$tare ;.':M lot, sould ave "een
in$luded in te $o&pulsory $overa#e %ere it not for teir
$onversion and valid transfers, ten it is only "ut proper
tat te pri$e re$eived for te sale of tese lots sould
"e #iven to te <ualified =@9s. In effe$t, te pro$eeds
fro& te sale sall ta+e te pla$e of te lots.
'e .ourt, in its July 5, 2011 ?e$ision, o%ever, ta+es
into a$$ount, inter alia, te pay&ent of ta)es and
e)penses relatin# to te transfer of te land, as %ell as
ALIGs state&ent tat &ost, if not all, of te pro$eeds
%ere used for le#iti&ate $orporate purposes.
*$$ordin#ly, @e ordered te dedu$tion of te ta)es and
e)penses relatin# to te transfer of titles to te
transferees, and te e)penditures in$urred "y ALI and
.entennary for le#iti&ate $orporate purposes, a&on#
oters.
5n tis note, ?*R $lai&s tat te [l]e#iti&ate $orporate
e)penses sould not "e dedu$ted as tere is no "asis
for it, espe$ially sin$e only te auditin# to "e $ondu$ted
on te finan$ial re$ords of ALI %ill reveal te a&ounts to
"e offset "et%een ALI and te =@9s.!
[55]
'e $ontention is un&eritorious. 'e possi"ility of an
offsettin# sould not prevent Es fro& dedu$tin# te
le#iti&ate $orporate e)penses in$urred "y ALI and
.entennary. *fter all, te .ourt as ordered for a proper
auditin# [i]n order to deter&ine on$e and for all %eter
or not all te pro$eeds %ere properly utili(ed "y ALI and
its su"sidiary, .entennary.! In tis re#ard, ?*R is tas+ed
to en#a#e te servi$es of a reputa"le a$$ountin# fir& to
"e approved "y te parties to audit te "oo+s of ALI to
deter&ine if te pro$eeds of te sale of te 500-e$tare
land and te 60.51-e$tare ;.':M lot %ere a$tually
used for le#iti&ate $orporate purposes, titlin# e)penses
and in $o&plian$e %it te *u#ust 1/, 1007 .onversion
5rder.! *lso, it sould "e noted tat it is ALI %i$ sall
soulder te $ost of audit to redu$e te "urden on te
part of te =@9s. .on$o&itantly, te le#iti&ate
$orporate e)penses in$urred "y ALI and .entennary, as
%ill "e deter&ined "y a reputa"le a$$ountin# fir& to "e
en#a#ed "y ?*R, sall "e a&on# te allo%a"le
dedu$tions fro& te pro$eeds of te sale of te 500-
e$tare land and te 60.51-e$tare ;.':M lot.
@e, o%ever, find tat te -K produ$tion sare sould
not "e dedu$ted fro& te pro$eeds of te sale of te
500-e$tare $onverted land and te 60.51-e$tare
;.':M lot. 'e -K produ$tion sare, li+e te
o&elots, %as a&on# te "enefits re$eived "y te
=@9s as far&ands in te a#ri$ultural enterprise of ALI
and, tus, sould not "e ta+en a%ay fro& te =@9s.
.ontrarily, te &inority is of te vie% tat as a
$onse<uen$e of te revo$ation of te ;?P, te parties
sould "e restored to teir respe$tive $onditions prior to
its e)e$ution and approval, su"1e$t to te appli$ation of
te prin$iple of set-off or $o&pensation. ;u$ vie% is
patently &ispla$ed.
'e la% on $ontra$ts, i.e. &utual restitution, does not
apply to te $ase at "ar. 'o reiterate, %at %as a$tually
revo+ed "y tis .ourt, in its July 5, 2011 ?e$ision, is
P*R. Resolution 3o. 60-12-2 approvin# te ;?P. 'o
elu$idate, it %as te ;?P, not te ;?5*, %i$ %as
presented for approval "y 'ade$o to ?*R.
[57]
'e ;?P
e)plained te &e$ani$s of te sto$+ distri"ution "ut did
not &a+e any referen$e nor $orrelation to te ;?5*.
'e pertinent portions of te proposal read,
>:.A*3I.; 5= ;'5.O ?I;'RI9E'I53 PL*3
Ender ;e$tion -1 of Repu"li$ *$t 3o. 7758, a
$orporation o%nin# a#ri$ultural land &ay distri"ute
a&on# te <ualified "enefi$iaries su$ proportion or
per$enta#e of its $apital sto$+ tat te value of te
a#ri$ultural land a$tually devoted to a#ri$ultural
a$tivities, "ears in relation to te $orporationGs total
assets. Con3o/+a42, =$*# *#$% 2(-a2 5/o.$%$on, Ta/2a)
D(.(2o5+(n* Co/5o/a*$on #(/(4, %14+$*% 3o/
a55/o.a2 a %*o)6 d$%*/$41*$on 52an *#a* (n.$%$on% *#(
3o22o=$n-,
[58]
2'er&s and $onditions o&ittedF e&pasis
supplied4
) ) ) )
T#( a4o.( %*o)6 d$%*/$41*$on 52an $% #(/(4,
%14+$**(d on te "asis of all tese "enefits tat te
far&%or+er-"enefi$iaries of Aa$ienda Luisita %ill re$eive
under its provisions in addition to teir re#ular
$o&pensation as far&ands in te a#ri$ultural enterprise
and te frin#e "enefits #ranted to te& "y teir $olle$tive
"ar#ainin# a#ree&ent %it &ana#e&ent.
[56]
*lso, P*R. Resolution 3o. 60-12-2 reads as follo%s,
R:;5LE'I53 *PPR5II3C 'A: ;'5.O
?I;'RI9E'I53 PL*3 5= '*RL*. ?:I:L5P>:3'
.5>P*3LDA*.I:3?* LEI;I'* I3.5RP5R*':?
2'?.DALI4
35@ 'A:R:=5R:, on &otion duly se$onded,
RESOL&ED, a% $* $% #(/(4, /(%o2.(d, *o a55/o.( *#(
%*o)6 d$%*/$41*$on 52an o3 TDCMHLI.
E3*3I>5E;LL *PPR5I:?.
[50]
2:&pasis supplied4
.learly, %at %as approved "y P*R. is te ;?P and not
te ;?5*. 'ere is, terefore, no "asis for tis .ourt to
apply te la% on $ontra$ts to te revo$ation of te said
P*R. Resolution.
I&. "1%* Co+5(n%a*$on
In 5ur July 5, 2011 ?e$ision, @e stated tat ALI sall
"e paid 1ust $o&pensation for te re&ainin# a#ri$ultural
land tat %ill "e transferred to ?*R for land distri"ution
to te =@9s.! @e also ruled tat te date of te ta+in#!
is 3ove&"er 21, 1060, %en P*R. approved ALIGs ;?P
per P*R. Resolution 3o. 60-12-2.
In its ,otion for Clarification and Partial Reconsideration,
ALI disa#rees %it te fore#oin# rulin# and $ontends
tat te ta+in#! sould "e re$+oned fro& finality of te
?e$ision of tis .ourt, or at te very least, te re$+onin#
period &ay "e ta$+ed to January 2, 2007, te date %en
te 3oti$e of .overa#e %as issued "y te ?*R pursuant
to P*R. Resolution 3o. 2007--/-01 re$allin#Drevo+in#
te approval of te ;?P.
[70]
=or teir part, >allari, et al. ar#ue tat te valuation of
te land $annot "e "ased on 3ove&"er 21, 1060, te
date of approval of te ;?P. Instead, tey aver tat te
date of ta+in#! for valuation purposes is a fa$tual issue
"est left to te deter&ination of te trial $ourts.
[71]
*t te oter end of te spe$tru&, *>9*L* alle#es tat
ALI sould no lon#er "e paid 1ust $o&pensation for te
a#ri$ultural land tat %ill "e distri"uted to te =@9s,
sin$e te >anila Re#ional 'rial .ourt 2R'.4 already
rendered a de$ision orderin# te .o1uan#$os to transfer
te $ontrol of Aa$ienda Luisita to te >inistry of *#rarian
Refor&, %i$ %ill distri"ute te land to s&all far&ers
after $o&pensatin# te lando%ners P-.066 &illion.!
[72]
In
te event, o%ever, tat tis .ourt %ill rule tat ALI is
indeed entitled to $o&pensation, *>9*L* $ontends tat
it sould "e pe##ed at forty tousand pesos 2PP
/0,0004 per e$tare, sin$e tis %as te sa&e value tat
'ade$o de$lared in 1060 to &a+e sure tat te far&ers
%ill not o%n te &a1ority of its sto$+s.
[7-]
?espite te a"ove propositions, @e &aintain tat te
date of ta+in#! is 3ove&"er 21, 1060, te date %en
P*R. approved ALIGs ;?P per P*R. Resolution 3o.
60-12-2, in vie% of te fa$t tat tis is te ti&e tat te
=@9s %ere $onsidered to o%n and possess te
a#ri$ultural lands in Aa$ienda Luisita. 'o "e pre$ise,
tese lands "e$a&e su"1e$t of te a#rarian refor&
$overa#e trou# te sto$+ distri"ution s$e&e only
upon te approval of te ;?P, tat is, 3ove&"er 21,
1060. 'us, su$ approval is a+in to a noti$e of
$overa#e ordinarily issued under $o&pulsory a$<uisition.
=urter, any dou"t sould "e resolved in favor of te
=@9s. *s tis .ourt eld in Pere0FRosario v. CA,
[7/]
It is an esta"lised so$ial and e$ono&i$ fa$t tat te
es$alation of poverty is te drivin# for$e "eind te
politi$al distur"an$es tat ave in te past $o&pro&ised
te pea$e and se$urity of te people as %ell as te
$ontinuity of te national order. 'o su"due tese a$ute
distur"an$es, te le#islature over te $ourse of te
istory of te nation passed a series of la%s $al$ulated
to a$$elerate a#rarian refor&, ulti&ately to raise te
&aterial standards of livin# and eli&inate dis$ontent.
*#rarian refor& is a per$eived solution to so$ial
insta"ility. T#( (d$)*% o3 %o)$a2 J1%*$)( 3o1nd $n *#(
Con%*$*1*$on and *#( 5142$) 5o2$)$(% *#a* 1nd(/=/$*(
*#(+, *#( (D*/ao/d$na/, na*$ona2 (D5(/$(n)(, and *#(
5/(.a$2$n- na*$ona2 )on%)$o1%n(%%, a22 )o++and *#(
-/(a* d(5a/*+(n*% o3 -o.(/n+(n* *o *$2* *#( 4a2an)(
$n 3a.o/ o3 *#( 5oo/ and 1nd(/5/$.$2(-(d =#(n(.(/
/(a%ona42( do14* a/$%(% $n *#( $n*(/5/(*a*$on o3 *#(
2a=. 9ut anne)ed to te #reat and sa$red $ar#e of
prote$tin# te %ea+ is te dia&etri$ fun$tion to put every
effort to arrive at an e<uita"le solution for all parties
$on$erned, te 1ural postulates of so$ial 1usti$e $annot
sield ille#al a$ts, nor do tey san$tion false sy&paty
to%ards a $ertain $lass, nor yet sould tey deny 1usti$e
to te lando%ner %enever trut and 1usti$e appen to
"e on er side. In te o$$upation of te le#al <uestions
in all a#rarian disputes %ose out$o&es $an si#nifi$antly
affe$t so$ietal ar&ony, te $onsiderations of so$ial
advanta#e &ust "e %ei#ed, an in<uiry into te
prevailin# so$ial interests is ne$essary in te ad1ust&ent
of $onfli$tin# de&ands and e)pe$tations of te people,
and te so$ial interdependen$e of tese interests,
re$o#ni(ed. 2:&pasis supplied.4
'e &inority $ontends tat it is te date of te noti$e of
$overa#e, tat is, January 2, 2007, %i$ is
deter&inative of te 1ust $o&pensation ALI is entitled to
for its e)propriated lands. 'o support its $ontention, it
$ited nu&erous $ases %ere te ti&e of te ta+in# %as
re$+oned on te date of te issuan$e of te noti$e of
$overa#e.
Ao%ever, a perusal of te $ases $ited "y te &inority
%ould reveal tat none of te& involved te sto$+
distri"ution s$e&e. 'us, said $ases do not s<uarely
apply to te instant $ase. >oreover, it sould "e noted
tat it is pre$isely "e$ause te sto$+ distri"ution option is
a distin$tive &e$anis& under R* 7758 tat it $annot "e
treated si&ilarly %it tat of $o&pulsory land a$<uisition
as tese are t%o 224 different &odalities under te
a#rarian refor& pro#ra&. *s @e ave stated in 5ur July
5, 2011 ?e$ision, R* 7758 provides t%o 224 alternative
&odalities, i.e., land or sto$+ transfer, pursuant to eiter
of %i$ te $orporate lando%ner $an $o&ply %it
.*RP.!
In tis re#ard, it sould "e noted tat %en ALI
su"&itted te ;?P to ?*R for approval, it $annot "e
#ainsaid tat te sto$+ distri"ution s$e&e is $learly
ALIGs preferred &odality in order to $o&ply %it .*RP.
*nd %en te ;?P %as approved, sto$+s %ere #iven to
te =@9s in lieu of land distri"ution. *s aptly o"served
"y te &inority itself, [i]nstead of e)propriatin# lands,
%at te #overn&ent too+ and distri"uted to te =@9s
%ere sares of sto$+ of petitioner ALI in proportion to te
value of te a#ri$ultural lands tat sould ave "een
e)propriated and turned over to te =@9s.! It $annot,
terefore, "e denied tat upon te approval of te ;?P
su"&itted "y ALI, te a#ri$ultural lands of Aa$ienda
Luisita "e$a&e su"1e$t of .*RP $overa#e. :vidently, te
approval of te ;?P too+ te pla$e of a noti$e of
$overa#e issued under $o&pulsory a$<uisition.
*lso, it is surprisin# tat %ile te &inority opines tat
under te sto$+ distri"ution option, title to te property
re&ains %it te $orporate lando%ner, which should
presu!ablA be do!inated bA far!ers with !aBoritA
stoc$holdings in the corporation,! it still insists tat
te 1ust $o&pensation tat sould "e #iven to ALI is to
"e re$+oned on January 2, 2007, te date of te
issuan$e of te noti$e of $overa#e, even after it found
tat te =@9s did not ave te &a1ority sto$+oldin#s in
ALI $ontrary to te supposed avo%ed poli$y of te la%.
In effe$t, %at te &inority %ants is to pre1udi$e te
=@9s t%i$e. Civen tat te =@9s sould ave ad
&a1ority sto$+oldin#s in ALI "ut did not, te &inority still
%ants te #overn&ent to pay i#er 1ust $o&pensation
to ALI. :ven if it is te #overn&ent %i$ %ill pay te 1ust
$o&pensation to ALI, tis %ill also affe$t te =@9s as
tey %ill "e payin# i#er a&orti(ations to te
#overn&ent if te ta+in#! %ill "e $onsidered to ave
ta+en pla$e only on January 2, 2007.
'e fore#oin# not%itstandin#, it "ears stressin# tat te
?*RYs land valuation is only preli&inary and is not, "y
any &eans, final and $on$lusive upon te lando%ner.
'e lando%ner $an file an ori#inal a$tion %it te R'.
a$tin# as a spe$ial a#rarian $ourt to deter&ine 1ust
$o&pensation. 'e $ourt as te ri#t to revie% %it
finality te deter&ination in te e)er$ise of %at is
ad&ittedly a 1udi$ial fun$tion.
[75]
* vie% as also "een advan$ed tat ALI sould pay te
<ualified =@9s rental for te use and possession of te
land up to te ti&e it surrenders possession and $ontrol
over tese lands. @at tis vie% fails to $onsider is te
fa$t tat te =@9s are also sto$+olders of ALI prior to
te revo$ation of P*R. Resolution 3o. 60-12-2. *lso,
te in$o&e earned "y te $orporation fro& its
possession and use of te land ulti&ately redounded to
te "enefit of te =@9s "ased on its "usiness
operations in te for& of salaries, "enefits voluntarily
#ranted "y ALI and oter frin#e "enefits under teir
.olle$tive 9ar#ainin# *#ree&ent. 'at "ein# so, tere
%ould "e un1ust enri$&ent on te part of te =@9s if
ALI %ill still "e re<uired to pay rent for te use of te
land in <uestion.
&. Sa2( *o T#$/d Pa/*$(%
'ere is a vie% tat sin$e te a#ri$ultural lands in
Aa$ienda Luisita %ere pla$ed under .*RP $overa#e
trou# te ;?5* s$e&e on >ay 11, 1060, ten te
10-year period proi"ition on te transfer of a%arded
lands under R* 7758 lapsed on >ay 10, 1000, and,
$onse<uently, te <ualified =@9s sould already "e
allo%ed to sell tese lands %it respe$t to teir land
interests to tird parties, in$ludin# ALI, re#ardless of
%eter tey ave fully paid for te lands or not.
'e proposition is erroneous. ;e$. 28 of R* 7758 states,
;:.. 28. &ransfera"ilit of Awarded Lands. - Land%
a)01$/(d 4, 4(n(3$)$a/$(% 1nd(/ *#$% A)* +a, no* 4(
%o2d, */an%3(//(d o/ )on.(,(d (D)(5* *#/o1-#
#(/(d$*a/, %1))(%%$on, o/ *o *#( -o.(/n+(n*, o/ *o
*#( LBP, o/ *o o*#(/ 01a2$3$(d 4(n(3$)$a/$(% 3o/ a
5(/$od o3 *(n H10I ,(a/%' Provided, o%ever, 'at te
$ildren or te spouse of te transferor sall ave a ri#t
to repur$ase te land fro& te #overn&ent or L9P
%itin a period of t%o 224 years. ?ue noti$e of te
availa"ility of te land sall "e #iven "y te L9P to te
9aran#ay *#rarian Refor& .o&&ittee 29*R.4 of te
"aran#ay %ere te land is situated. 'e Provin$ial
*#rarian .oordinatin# .o&&ittee 2P*R..5>4, as
erein provided, sall, in turn, "e #iven due noti$e
tereof "y te 9*R..
I3 *#( 2and #a% no* ,(* 4((n 3122, 5a$d 4, *#(
4(n(3$)$a/,, te ri#t to te land &ay "e transferred or
$onveyed, %it prior approval of te ?*R, *o an, #($/ o3
*#( 4(n(3$)$a/, o/ *o an, o*#(/ 4(n(3$)$a/, =#o, a% a
)ond$*$on 3o/ %1)# */an%3(/ o/ )on.(,an)(, %#a22
)12*$.a*( *#( 2and #$+%(23. =ailin# $o&plian$e ere%it,
te land sall "e transferred to te L9P %i$ sall #ive
due noti$e of te availa"ility of te land in te &anner
spe$ified in te i&&ediately pre$edin# para#rap.
In te event of su$ transfer to te L9P, te latter sall
$o&pensate te "enefi$iary in one lu&p su& for te
a&ounts te latter as already paid, to#eter %it te
value of i&prove&ents e as &ade on te land.
2:&pasis supplied.4
'o i&ple&ent te a"ove-<uoted provision, inter alia,
?*R issued *d&inistrative 5rder 3o. 1, ;eries of 1060
2?*5 14 entitled R$les and Proced$res #overning Land
&ransactions. ;aid Rules set fort te rules on validity of
land transa$tions, to %it,
II. REL:; 53 I*LI?I'L 5= L*3? 'R*3;*.'I53;
*. 'e follo%in# transa$tions are valid,
1. 'ose e)e$uted "y te ori#inal lando%ner in favor
of te <ualified "enefi$iary fro& a&on# tose $ertified "y
?*R.
2. 'ose in favor of te #overn&ent, ?*R or te Land
9an+ of te Pilippines.
-. 'ose $overin# lands retained "y te lando%ner
under ;e$tion 7 of R.*. 7758 duly $ertified "y te
desi#nated ?*R Provin$ial *#rarian Refor& 5ffi$er
2P*R54 as a retention area, e)e$uted in favor of
transferees %ose total landoldin#s in$lusive of te
land to "e a$<uired do not e)$eed five 254 e$taresF
su"1e$t, o%ever, to te ri#t of pre-e&ption andDor
rede&ption of tenantDlessee under ;e$tion 11 and 12 of
R.*. -6//, as a&ended.
) ) ) )
/. 'ose e)e$uted "y "enefi$iaries $overin# lands
a$<uired under any a#rarian refor& la% in favor of te
#overn&ent, ?*R, L9P or oter <ualified "enefi$iaries
$ertified "y ?*R.
<. 'ose e)e$uted a3*(/ *(n H10I ,(a/% 3/o+ *#(
$%%1an)( and /(-$%*/a*$on o3 *#( E+an)$5a*$on
Pa*(n* o/ C(/*$3$)a*( o3 Land O=n(/%#$5 A=a/d.
9. 'e follo%in# transa$tions are not valid,
1. ;ale, disposition, lease &ana#e&ent $ontra$t or
transfer of possession of private lands e)e$uted "y te
ori#inal lando%ner prior to June 15, 1066, %i$ are
re#istered on or "efore ;epte&"er 1-, 1066, or tose
e)e$uted after June 15, 1066, $overin# an area in
e)$ess of te five-e$tare retention li&it in violation of
R.*. 7758.
2. 'ose $overin# lands a$<uired "y te "enefi$iary
under R.*. 7758 and e)e$uted %itin ten 2104 years fro&
te issuan$e and re#istration of an :&an$ipation Patent
or .ertifi$ate of Land 5%nersip *%ard.
-. 'ose e)e$uted in favor of a person or persons not
<ualified to a$<uire land under R.*. 7758.
/. ;ale, transfer, $onveyan$e or $an#e of nature of
te land outside of ur"an $enters and $ity li&its eiter in
%ole or in part as of June 15, 1066, %en R.*. 7758
too+ effe$t, e)$ept as provided for under ?*R
*d&inistrative 5rder 3o. 15, series of 1066.
5. ;ale, transfer or $onveyan$e "y "enefi$iary of te
ri#t to use or any oter usufru$tuary ri#t over te land
e a$<uired "y virtue of "ein# a "enefi$iary, in order to
$ir$u&vent te la%.
) ) ) ) 2:&pasis supplied.4
@itout a dou"t, under R* 7758 and ?*5 1, te
a%arded lands &ay only "e transferred or $onveyed
after ten 2104 years fro&
te $%%1an)( and /(-$%*/a*$on of te e&an$ipation
patent 2:P4 or $ertifi$ate of land o%nersip a%ard
2.L5*4. .onsiderin# tat te :Ps or .L5*s ave not
yet "een issued to te <ualified =@9s in te instant
$ase, te 10-year proi"itive period as not even
started. ;i#nifi$antly, te re$+onin# point is *#(
$%%1an)( o3 *#( EP o/ CLOA, and no* *#( 52a)$n- o3
*#( a-/$)12*1/a2 2and% 1nd(/ CARP )o.(/a-(.
>oreover, if @e &aintain te position tat te <ualified
=@9s sould "e i&&ediately allo%ed te option to sell
or $onvey te a#ri$ultural lands in Aa$ienda Luisita, ten
all efforts at a#rarian refor& %ould "e rendered nu#atory
"y tis .ourt, sin$e, at te end of te day, tese lands
%ill 1ust "e transferred to persons not entitled to land
distri"ution under .*RP. *s aptly noted "y te late
;enator 3eptali Con(ales durin# te Joint .on#ressional
.onferen$e .o&&ittee on te .o&preensive *#rarian
Refor& Pro#ra& 9ills,
;:3. C53X*L:;. M, 5o$n* $%, a% +1)# a% 5o%%$42(
2(* *#( %a$d 2and% 4( d$%*/$41*(d 1nd(/ CARP /(+a$n
=$*# *#( 4(n(3$)$a/$(% and *#($/ #($/% "e$ause tat is
te lesson tat %e ave to learn fro& P? 3o. 28. If you
%ill tal+ %it te .on#ress&en representin# 3ueva :$i1a,
Pa&pan#a and .entral Lu(on provin$es, la% or no
la%, ,o1 =$22 3$nd o1* *#a* +o/( *#an on(A*#$/d o3 *#(
o/$-$na2, o3 *#( 2and% d$%*/$41*(d 1nd(/ PD B7 a/( no
2on-(/ o=n(d, 5o%%(%%(d o/ 4($n- =o/6(d 4, *#(
-/an*((% o/ *#( a=a/d((% o3 *#( %a+(, %o+(*#$n-
=#$)# =( o1-#* *o a.o$d 1nd(/ *#( CARP 4$22 *#a* =(
a/( -o$n- *o (na)*.
[77]
2:&pasis supplied.4
@orse, "y raisin# tat te <ualified "enefi$iaries &ay sell
teir interest "a$+ to ALI, tis s&a$+s of outri#t
indifferen$e to te provision on retention li&its
[78]
under
R* 7758, as tis .ourt, in effe$t, %ould "e allo%in# ALI,
te previous lando%ner, to o%n &ore tan five 254
e$tares of a#ri$ultural land, %i$ @e $annot
$ountenan$e. 'ere is a "i# differen$e "et%een te
o%nersip of a#ri$ultural lands "y ALI under te sto$+
distri"ution s$e&e and its eventual a$<uisition of te
a#ri$ultural lands fro& te <ualified =@9s under te
proposed "uy-"a$+ s$e&e. 'e rule on retention li&its
does not apply to te for&er "ut only to te latter in vie%
of te fa$t tat te sto$+ distri"ution s$e&e is
san$tioned "y ;e$. -1 of R* 7758, %i$ spe$ifi$ally
allo%s $orporations to divest a proportion of teir $apital
sto$+ tat te a#ri$ultural land, a$tually devoted to
a#ri$ultural a$tivities, "ears in relation to te $o&panyGs
total assets.! 5n te oter and, no spe$ial rules e)ist
under R* 7758 $on$ernin# te proposed "uy-"a$+
s$e&eF en$e, te #eneral rules on retention li&its
sould apply.
=urter, te position tat te <ualified =@9s are no%
free to transa$t %it tird parties $on$ernin# teir land
interests, re#ardless of %eter tey ave fully paid for
te lands or not, also trans#resses te se$ond
para#rap of ;e$. 28 of R* 7758, %i$ plainly states
tat [i]f te land as not yet "een fully paid "y te
"enefi$iary, te ri#t to te land &ay "e transferred or
$onveyed, %it prior approval of te ?*R, to any eir of
te "enefi$iary or to any oter "enefi$iary %o, as a
$ondition for su$ transfer or $onveyan$e, sall $ultivate
te land i&self. =ailin# $o&plian$e ere%it, te land
sall "e transferred to te L9P ) ) ).! @en te %ords
and prases in te statute are $lear and une<uivo$al, te
la% is applied a$$ordin# to its e)press ter&s.
[76]
2er"a
legis non est recedend$m, or fro& te %ords of a statute
tere sould "e no departure.
[70]
'e &inority, o%ever, posits tat [t]o insist tat te
=@9sG ri#ts sleep for a period of ten years is unrealisti$,
and &ay seriously deprive te& of real opportunities to
$apitali(e and &a)i&i(e te vi$tory of dire$t land
distri"ution.! 9y insistin# tat @e disre#ard te ten-year
restri$tion under te la% in te $ase at "ar, te &inority,
in effe$t, %ants tis .ourt to en#a#e in 1udi$ial
le#islation, %i$ is violative of te prin$iple of
separation of po%ers.
[80]
'e dis$ourse "y Ru"en :.
*#palo, in is "oo+ on statutory $onstru$tion, is
enli#tenin#,
@ere te la% is $lear and una&"i#uous, it &ust "e
ta+en to &ean e)a$tly %at it says and te $ourt as no
$oi$e "ut to see to it tat its &andate is o"eyed. @ere
te la% is $lear and free fro& dou"t or a&"i#uity, tere is
no roo& for $onstru$tion or interpretation. T#1%, =#(/(
=#a* $% no* )2(a/2, 5/o.$d(d $n *#( 2a= $% /(ad $n*o
*#( 2a= 4, )on%*/1)*$on 4()a1%( $* $% +o/( 2o-$)a2
and =$%(, $* =o12d 4( *o (n)/oa)# 15on 2(-$%2a*$.(
5/(/o-a*$.( *o d(3$n( *#( =$%do+ o3 *#( 2a=, =#$)# $%
J1d$)$a2 2(-$%2a*$on. Fo/ =#(*#(/ a %*a*1*( $% =$%( o/
(D5(d$(n* $% no* 3o/ *#( )o1/*% *o d(*(/+$n(. Co1/*%
+1%* ad+$n$%*(/ *#( 2a=, no* a% *#(, *#$n6 $* o1-#* *o
4( 41* a% *#(, 3$nd $* and =$*#o1* /(-a/d *o
)on%(01(n)(%.
[81]
2:&pasis supplied.4
*nd as aptly stated "y .ief Justi$e Renato .orona in
is ?issentin# 5pinion in Ang Ladlad L#-& Part v.
C:,/L/C,
[82]
Re#ardless of te personal "eliefs and "iases of its
individual &e&"ers, tis .ourt $an only apply and
interpret te .onstitution and te la%s. Its po%er is not to
$reate poli$y "ut to re$o#ni(e, revie% or reverse te
poli$y $rafted "y te politi$al depart&ents if and %en a
proper $ase is "rou#t "efore it. 5ter%ise, it %ill tread
on te dan#erous #rounds of 1udi$ial le#islation.
.onsidera"ly, tis .ourt is left %it no oter re$ourse "ut
to respe$t and apply te la%.
&I. G/o1nd% 3o/ R(.o)a*$on o3 *#( SDP
*>9*L* and =*R> reiterate tat i&provin# te
e$ono&i$ status of te =@9s is a&on# te le#al
o"li#ations of ALI under te ;?P and is an i&perative
i&position "y R* 7758 and ?*5 10.
[8-]
=*R> furter
asserts tat [i]f tat &ini&u& tresold is not &et, %y
allo% [sto$+ distri"ution option] at all, unless te purpose
is not so$ial 1usti$e "ut a politi$al a$$o&&odation to te
po%erful.!
[8/]
.ontrary to te assertions of *>9*L* and =*R>,
no%ere in te ;?P, R* 7758 and ?*5 10 $an it "e
inferred tat i&provin# te e$ono&i$ status of te =@9s
is a&on# te le#al o"li#ations of ALI under te ;?P or is
an i&perative i&position "y R* 7758 and ?*5 10, a
violation of %i$ %ould 1ustify dis$ardin# te sto$+
distri"ution option. *s @e ave painsta+in#ly e)plained
in 5ur July 5, 2011 ?e$ision,


In te 'er&inal Report adopted "y P*R., it is stated tat
te ;?P violates te a#rarian refor& poli$y under ;e$. 2
of R* 7758, as te said plan failed to enan$e te
di#nity and i&prove te <uality of lives of te =@9s
trou# #reater produ$tivity of a#ri$ultural lands. @e
disa#ree.

;e$. 2 of R* 7758 states,

;:.'I53 2. %eclaration of Principles and Policies. It is
te poli$y of te ;tate to pursue a .o&preensive
*#rarian Refor& Pro#ra& 2.*RP4. 'e %elfare of te
landless far&ers and far& %or+ers %ill re$eive te
i#est $onsideration to pro&ote so$ial 1usti$e and to
&ove te nation to%ards sound rural develop&ent and
industriali(ation, and te esta"lis&ent of o%ner
$ultivatorsip of e$ono&i$-si(ed far&s as te "asis of
Pilippine a#ri$ulture.
'o tis end, a &ore e<uita"le distri"ution and o%nersip
of land, %it due re#ard to te ri#ts of lando%ners to
1ust $o&pensation and to te e$olo#i$al needs of te
nation, sall "e underta+en to provide far&ers and far&
%or+ers =$*# *#( o55o/*1n$*, *o (n#an)( *#($/ d$-n$*,
and $+5/o.( *#( 01a2$*, o3 *#($/ 2$.(% *#/o1-# -/(a*(/
5/od1)*$.$*, o3 a-/$)12*1/a2 2and%.
'e a#rarian refor& pro#ra& is founded on te ri#t of
far&ers and re#ular far& %or+ers, %o are landless, to
o%n dire$tly or $olle$tively te lands tey till or, in te
$ase of oter far& %or+ers, to re$eive a sare of te
fruits tereof. 'o tis end, te ;tate sall en$oura#e te
1ust distri"ution of all a#ri$ultural lands, su"1e$t to te
priorities and retention li&its set fort in tis *$t, avin#
ta+en into a$$ount e$olo#i$al, develop&ental, and e<uity
$onsiderations, and su"1e$t to te pay&ent of 1ust
$o&pensation. 'e ;tate sall respe$t te ri#t of s&all
lando%ners and sall provide in$entives for voluntary
land-sarin#.
Para#rap 2 of te a"ove-<uoted provision spe$ifi$ally
&entions tat a &ore e<uita"le distri"ution and
o%nersip of land ) ) ) sall "e underta+en to provide
far&ers and far& %or+ers %it te o55o/*1n$*, to
enan$e teir di#nity and i&prove te <uality of teir
lives trou# #reater produ$tivity of a#ri$ultural
lands.! 5f note is te ter& opportunity! %i$ is defined
as a favora"le $an$e or openin# offered "y
$ir$u&stan$es. .onsiderin# tis, "y no stret$ of
i&a#ination $an said provision "e $onstrued as a
#uarantee in i&provin# te lives of te =@9s. *t "est, it
&erely provides for a possi"ility or favora"le $an$e of
upliftin# te e$ono&i$ status of te =@9s, %i$ &ay or
&ay not "e attained.
Pertinently, i&provin# te e$ono&i$ status of te =@9s
is neiter a&on# te le#al o"li#ations of ALI under te
;?P nor an i&perative i&position "y R* 7758 and ?*5
10, a violation of %i$ %ould 1ustify dis$ardin# te sto$+
distri"ution option. 3otin# in tat option a#ree&ent,
la% or depart&ent order indi$ates oter%ise.
;i#nifi$antly, ALI dra%s parti$ular attention to its avin#
paid its =@9s, durin# te re#i&e of te ;?P 21060-
20054, so&e PP - "illion "y %ay of salariesD%a#es and
i#er "enefits e)$lusive of free ospital and &edi$al
"enefits to teir i&&ediate fa&ily. *nd atta$ed as
*nne) C! to ALIGs >e&orandu& is te $ertified true
report of te finan$e &ana#er of Jose .o1uan#$o T ;ons
5r#ani(ations-'arla$ 5perations, $aptioned as
.ACI/6%A L7ISI&A, I6C. Salaries, -enefits and Credit
Privileges 8in &ho$sand Pesos9 Since the Stoc' :ption
was Approved " PARC;CARP,! detailin# %at
ALI #ave teir %or+ers fro& 1060 to 2005. 'e su&
total, as added up "y te .ourt, yields te follo%in#
nu&"ers, 'otal ?ire$t .as 5ut 2;alariesD@a#es T .as
9enefits4 U PP 2,028,6/6F 'otal 3on-?ire$t .as 5ut
2AospitalD>edi$al 9enefits4 U PP -0-,0/0. 'e $as
out fi#ures, as stated in te report, in$lude te $ost of
o&elotsF te PP 150 &illion or so representin# -K of
te #ross produ$e of te a$iendaF and te PP -8.5
&illion representin# -K fro& te pro$eeds of te sale of
te 500-e$tare $onverted lands. @ile not in$luded in
te report, ALI &anifests avin# #iven te =@9s -K of
te PP 60 &illion paid for te 60 e$tares of land
traversed "y te ;.':M. 5n top of tese, it is %ort
re&e&"erin# tat te sares of sto$+s %ere #iven "y
ALI to te =@9s for free. Ierily, te =@9s ave
"enefited fro& te ;?P.
'o address ur#in#s tat te =@9s "e allo%ed to
disen#a#e fro& te ;?P as ALI as not any%ay earned
profits trou# te years, it $annot "e over-e&pasi(ed
tat, as a &atter of $o&&on "usiness sense, no
$orporation $ould #uarantee a profita"le run all te ti&e.
*s as "een su##ested, one of te +ey features of an
;?P of a $orporate lando%ner is te li+eliood of te
$orporate vei$le not earnin#, or, %orse still, losin#
&oney.
'e .ourt is fully a%are tat one of te $riteria under
?*5 10 for te P*R. to $onsider te advisa"ility of
approvin# a sto$+ distri"ution plan is te li+eliood tat
te plan =o12d /(%12* $n $n)/(a%(d $n)o+( and
-/(a*(/ 4(n(3$*% *o >01a2$3$(d 4(n(3$)$a/$(%? *#an $3
*#( 2and% =(/( d$.$d(d and d$%*/$41*(d *o *#(+
$nd$.$d1a22,.! 9ut as aptly noted durin# te oral
ar#u&ents, ?*5 10 ou#t to ave not, as it $annot,
a$tually e)a$t assuran$e of su$$ess on so&etin# tat is
su"1e$t to te %ill of &an, te for$es of nature or te
inerent ris+y nature of "usiness.
[85]
Just li+e in a$tual
land distri"ution, an ;?P $annot #uarantee, as indeed
te ;?5* does not #uarantee, a $o&forta"le life for te
=@9s. 'e .ourt $an ta+e 1udi$ial noti$e of te fa$t tat
tere %ere &any instan$es %erein after a far&%or+er
"enefi$iary as "een a%arded %it an a#ri$ultural land,
e 1ust su"se<uently sells it and is eventually left %it
notin# in te end.
In all ten, te onerous $ondition of te =@9sG e$ono&i$
status, teir life of ardsip, if tat really "e te $ase,
$an ardly "e attri"uted to ALI and its ;?P and provide
a valid #round for te planGs revo$ation. 2.itations
o&ittedF e&pasis in te ori#inal.4
'is .ourt, despite te a"ove oldin#, still affir&ed te
revo$ation "y P*R. of its approval of te ;?P "ased on
te follo%in# #rounds, 214 failure of ALI to fully $o&ply
%it its underta+in# to distri"ute o&elots to te =@9s
under te ;?PF 224 distri"ution of sares of sto$+ to te
=@9s "ased on te nu&"er of &an days! or nu&"er of
days %or+ed! "y te =@9 in a yearGs ti&eF and 2-4 -0-
year ti&efra&e for te i&ple&entation or distri"ution of
te sares of sto$+ to te =@9s.
Just te sa&e, >allari, et al. posit tat te o&elots
re<uired to "e distri"uted ave all "een distri"uted
pursuant to te ;?5*, and tat %at &erely re&ains to
"e done is te release of title fro& te Re#ister of
?eeds.
[87]
'ey furter assert tat tere as "een no
dilution of sares as te $orporate re$ords %ould so%
tat if ever not all of te 16,60/.-2 sares %ere #iven to
te a$tual ori#inal =@9, te re$ipient of te differen$e is
te ne)t of +in or $ildren of said ori#inal =@9.
[88]
'us,
tey su"&it tat sin$e te sares %ere #iven to te
sa&e fa&ily "enefi$iary,! tis sould "e dee&ed as
su"stantial $o&plian$e %it te provisions of ;e$. / of
?*5 10.
[86]
*lso, tey ar#ue tat tere as "een no
violation of te tree-&ont period to i&ple&ent te ;?P
as &andated "y ;e$. 11 of ?*5, sin$e tis provision
&ust "e read in li#t of ;e$. 10 of :)e$utive 5rder 3o.
220, te pertinent portion of %i$ reads, 'e approval
"y te P*R. of a plan for su$ sto$+ distri"ution, and its
initial i&ple&entation, sall "e dee&ed $o&plian$e %it
te land distri"ution re<uire&ent of te .*RP.!
[80]
*#ain, te &atters raised "y >allari, et al. ave "een
e)tensively dis$ussed "y te .ourt in its July 5, 2011
?e$ision. *s stated,
On T$*2(% *o Ho+(2o*%
Ender R* 7758, te distri"ution of o&elots is re<uired
only for $orporations or "usiness asso$iations o%nin# or
operatin# far&s %i$ opted for land distri"ution. ;e$.
-0 of R* 7758 states,
;:.. -0. .omelots and 1armlots for ,em"ers of
Cooperatives. 'e individual &e&"ers of te
$ooperatives or $orporations &entioned in te pre$edin#
se$tion sall "e provided %it o&elots and s&all
far&lots for teir fa&ily use, to "e ta+en fro& te land
o%ned "y te $ooperative or $orporation.
'e pre$edin# se$tion! referred to in te a"ove-<uoted
provision is as follo%s,
;:.. 20. 1arms :wned or :perated " Corporations or
:ther -$siness Associations.In te $ase of far&s
o%ned or operated "y $orporations or oter "usiness
asso$iations, te follo%in# rules sall "e o"served "y te
P*R..
In #eneral, lands sall "e distri"uted dire$tly to te
individual %or+er-"enefi$iaries.
In $ase it is not e$ono&i$ally feasi"le and sound to
divide te land, ten it sall "e o%ned $olle$tively "y te
%or+er-"enefi$iaries %o sall for& a %or+ersG
$ooperative or asso$iation %i$ %ill deal %it te
$orporation or "usiness asso$iation. Entil a ne%
a#ree&ent is entered into "y and "et%een te %or+ersG
$ooperative or asso$iation and te $orporation or
"usiness asso$iation, any a#ree&ent e)istin# at te ti&e
tis *$t ta+es effe$t "et%een te for&er and te previous
lando%ner sall "e respe$ted "y "ot te %or+ersG
$ooperative or asso$iation and te $orporation or
"usiness asso$iation.
3oti$ea"ly, te fore#oin# provisions do not &a+e
referen$e to $orporations %i$ opted for sto$+
distri"ution under ;e$. -1 of R* 7758. .on$o&itantly,
said $orporations are not o"li#ed to provide for it e)$ept
"y stipulation, as in tis $ase.
Ender te ;?P, ALI undertoo+ to su"divide and allo$ate
for free and %itout $ar#e a&on# te <ualified fa&ily-
"enefi$iaries ) ) ) residential or o&elots of not &ore
tan 2/0 s<. &. ea$, %it ea$ fa&ily "enefi$iary "ein#
assured of re$eivin# and o%nin# a o&elot in te "arrio
or "aran#ay %ere it a$tually resides,! %itin a
reasona"le ti&e.!
>ore tan si)teen 2174 years ave elapsed fro& te ti&e
te ;?P %as approved "y P*R., and yet, it is still te
$ontention of te =@9s tat not all %as #iven te 2/0-
s<uare &eter o&elots and, of tose %o %ere already
#iven, so&e still do not ave te $orrespondin# titles.
?urin# te oral ar#u&ents, ALI %as afforded te $an$e
to refute te fore#oin# alle#ation "y su"&ittin# proof tat
te =@9s %ere already #iven te said o&elots,
Justi$e Ielas$o, ) ) ) 'ere is also an alle#ation tat te
far&er "enefi$iaries, te <ualified fa&ily "enefi$iaries
%ere not #iven te 2/0 s<uare &eters ea$. ;o, $an you
also [prove] tat te <ualified fa&ily "enefi$iaries %ere
already provided te 2/0 s<uare &eter o&elots.
*tty. *sun$ion, @e %ill, your Aonor please.
5ter tan te finan$ial report, o%ever, no oter
su"stantial proof so%in# tat all te <ualified
"enefi$iaries ave re$eived o&elots %as su"&itted "y
ALI. Aen$e, tis .ourt is $onstrained to rule tat ALI as
not yet fully $o&plied %it its underta+in# to distri"ute
o&elots to te =@9s under te ;?P.
On FMan Da,%G and *#( M()#an$)% o3 S*o)6
D$%*/$41*$on
In our revie% and analysis of par. - of te ;?5* on te
&e$ani$s and ti&elines of sto$+ distri"ution, @e find
tat it .$o2a*(% t%o 224 provisions of ?*5 10. Par. - of
te ;?5* states,
-. *t te end of ea$ fis$al year, for a period of -0
years, te ;:.53? P*R'L [ALI] sall arran#e %it te
=IR;' P*R'L ['?.] te a$<uisition and distri"ution to
te 'AIR? P*R'L [=@9s] on te "asis of nu&"er of
days %or+ed and at no $ost to te& of one-tirtiet
21D-04 of 116,-01,087.65 sares of te $apital sto$+ of
te ;:.53? P*R'L tat are presently o%ned and eld
"y te =IR;' P*R'L, until su$ ti&e as te entire "lo$+
of 116,-01,087.65 sares sall ave "een $o&pletely
a$<uired and distri"uted to te 'AIR? P*R'L.
9ased on te a"ove-<uoted provision, te distri"ution of
te sares of sto$+ to te =@9s, al"eit not entailin# a
$as out fro& te&, is $ontin#ent on te nu&"er of &an
days,! tat is, te nu&"er of days tat te =@9s ave
%or+ed durin# te year. 'is for&ula deviates fro& ;e$.
1 of ?*5 10, %i$ de$rees te distri"ution of e<ual
nu&"er of sares to te =@9s as te &ini&u& ratio of
sares of sto$+ for purposes of $o&plian$e %it ;e$. -1
of R* 7758. *s stated in ;e$. / of ?*5 10,
;e$tion /. Stoc' %istri"$tion Plan.'e [;?P]
su"&itted "y te $orporate lando%ner-appli$ant sall
provide for *#( d$%*/$41*$on o3 an (01a2 n1+4(/ o3
%#a/(% o3 *#( %a+( )2a%% and .a21(, =$*# *#( %a+(
/$-#*% and 3(a*1/(% a% a22 o*#(/ %#a/(%, *o (a)# o3 *#(
01a2$3$(d 4(n(3$)$a/$(%. 'is distri"ution plan in all
$ases, sall "e at least te +$n$+1+ /a*$o for purposes
of $o&plian$e %it ;e$tion -1 of R.*. 3o. 7758.
On *o5 o3 *#( +$n$+1+ /a*$o provided under ;e$tion -
of tis I&ple&entin# Cuideline, te $orporate lando%ner-
appli$ant &ay adopt add$*$ona2 %*o)6 d$%*/$41*$on
%)#(+(% *a6$n- $n*o a))o1n* 3a)*o/% %1)# a% /an6,
%(n$o/$*,, %a2a/,, 5o%$*$on and o*#(/ )$/)1+%*an)(%
=#$)# +a, 4( d((+(d d(%$/a42( a% a +a**(/ o3
%o1nd )o+5an, 5o2$),.
'e a"ove proviso #ives t%o 224 sets or $ate#ories of
sares of sto$+ %i$ a <ualified "enefi$iary $an a$<uire
fro& te $orporation under te ;?P. 'e first pertains,
as earlier e)plained, to te &andatory &ini&u& ratio of
sares of sto$+ to "e distri"uted to te =@9s in
$o&plian$e %it ;e$. -1 of R* 7758. 'is &ini&u& ratio
$onte&plates of tat 5/o5o/*$on o3 *#( )a5$*a2 %*o)6
o3 *#( )o/5o/a*$on *#a* *#( a-/$)12*1/a2 2and, a)*1a22,
d(.o*(d *o a-/$)12*1/a2 a)*$.$*$(%, 4(a/% $n /(2a*$on *o
*#( )o+5an,7% *o*a2 a%%(*%.! It is tis set of sares of
sto$+ %i$, in line %it ;e$. / of ?*5 10, is supposed
to "e allo$ated for te distri"ution of an e<ual nu&"er of
sares of sto$+ of te sa&e $lass and value, %it te
sa&e ri#ts and features as all oter sares, to ea$ of
te <ualified "enefi$iaries.!
5n te oter and, te se$ond set or $ate#ory of sares
parta+es of a #ratuitous e)tra #rant, &eanin# tat tis
set or $ate#ory $onstitutes an au#&entation sareDs tat
te $orporate lando%ner &ay #ive under an additional
sto$+ distri"ution s$e&e, ta+in# into a$$ount su$
varia"les as ran+, seniority, salary, position and li+e
fa$tors %i$ te &ana#e&ent, in te e)er$ise of its
sound dis$retion, &ay dee& desira"le.
9efore anytin# else, it sould "e stressed tat, at te
ti&e P*R. approved ALIGs ;?P, ALI
re$o#ni(ed ;,B:; individuals as <ualified =@9s. *nd
under te -0-year sto$+ distri"ution pro#ra& envisa#ed
under te plan, =@9s %o $a&e in after 1060, ne%
=@9s in fine, &ay "e a$$o&&odated, as tey appear to
ave in fa$t "een a$$o&&odated as eviden$ed "y teir
re$eipt of ALI sares.
3o% ten, "y providin# tat te nu&"er of sares of te
ori#inal 1060 =@9s sall depend on te nu&"er of &an
days,! ALI violated te afore-<uoted rule on sto$+
distri"ution and effe$tively deprived te =@9s of e<ual
sares of sto$+ in te $orporation, for, in net effe$t, tese
7,207 <ualified =@9s, %o teoreti$ally ad #iven up
teir ri#ts to te land tat $ould ave "een distri"uted to
te&, suffered a dilution of teir due sare entitle&ent.
*s as "een o"served durin# te oral ar#u&ents, ALI
as $osen to use te sares ear&ar+ed for
far&%or+ers as re%ard syste& $ips to %ater do%n te
sares of te ori#inal 7,207 =@9s. Parti$ularly,
Justi$e *"ad, If te ;?5* did not ta+e pla$e, te oter
tin# tat %ould ave appened is tat tere %ould "e
.*RPP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, 'atGs te only point I %ant to +no% ) ) ).
3o%, "ut tey $ose to enter ;?5* instead of pla$in#
te land under .*RP. *nd for tat reason tose %o
%ould ave #otten teir sares of te land a$tually #ave
up teir ri#ts to tis land in pla$e of te sares of te
sto$+, is tat $orre$tP
*tty. ?ela >er$ed, It %ould "e tat %ay, Lour Aonor.
Justi$e *"ad, Ri#t no%, also te #overn&ent, in a %ay,
#ave up its ri#t to o%n te land "e$ause tat %ay te
#overn&ent ta+es o%n [si$] te land and distri"ute it to
te far&ers and pay for te land, is tat $orre$tP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, *nd ten you #ave tirty-tree per$ent
2--K4 of te sares of ALI to te far&ers at tat ti&e
tat nu&"ered ) ) ) tose %o si#ned five tousand four
undred ninety ei#t 25,/064 "enefi$iaries, is tat
$orre$tP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, 9ut later on, after assi#nin# te& teir
sares, so&e %or+ers $a&e in fro& 1060, 1000, 1001,
1002 and te rest of te years tat you #ave additional
sares %o %ere not in te ori#inal list of o%nersP
*tty. ?ela >er$ed, Les, Lour Aonor.
Justi$e *"ad, ?id tose ne% %or+ers #ive up any ri#t
tat %ould ave "elon# to te& in 1060 %en te land
%as supposed to ave "een pla$ed under .*RPP
*tty. ?ela >er$ed, If you are tal+in# or referrin#S
2interrupted4
Justi$e *"ad, 3oneW Lou tell &e. 3one. 'ey #ave up no
ri#ts to landP
*tty. ?ela >er$ed, 'ey did not do te sa&e tin# as %e
did in 1060, Lour Aonor.
Justi$e *"ad, 3o, if tey %ere not %or+ers in 1060 %at
land did tey #ive upP 3one, if tey "e$o&e %or+ers
later on.
*tty. ?ela >er$ed, 3one, Lour Aonor, I %as referrin#,
Lour Aonor, to te ori#inalS 2interrupted4
Justi$e *"ad, ;o %y is it tat te ri#ts of tose %o
#ave up teir lands %ould "e diluted, "e$ause te
$o&pany as $osen to use te sares as re%ard
syste& for ne% %or+ers %o $o&e inP It is not tat te
ne% %or+ers, in effe$t, "e$o&e 1ust %or+ers of te
$orporation %ose sto$+olders %ere already fi)ed. 'e
'*?:.5 %o as sares tere a"out si)ty si) per$ent
277K4 and te five tousand four undred ninety ei#t
25,/064 far&ers at te ti&e of te ;?5*P :)plain to &e.
@y, %y %ill you ) ) ) %at ri#t or %ere did you #et
tat ri#t to use tis sares, to %ater do%n te sares of
tose %o sould ave "een "enefited, and to use it as
a re%ard syste& de$ided "y te $o&panyP
=ro& te a"ove dis$ourse, it is $lear as day tat te
ori#inal 7,207 =@9s, %o %ere <ualified "enefi$iaries at
te ti&e of te approval of te ;?P, suffered fro&
%aterin# do%n of sares. *s deter&ined earlier, ea$
ori#inal =@9 is entitled to 16,60/.-2 ALI sares. 'e
ori#inal =@9s #ot less tan te #uaranteed 16,60/.-2
ALI sares per "enefi$iary, "e$ause te a$<uisition and
distri"ution of te ALI sares %ere "ased on &an days!
or nu&"er of days %or+ed! "y te =@9 in a yearGs
ti&e. *s e)plained "y ALI, a "enefi$iary needs to %or+
for at least -8 days in a fis$al year "efore e or se
"e$o&es entitled to ALI sares. If it falls "elo% -8 days,
te =@9, unfortunately, does not #et any sare at year
end. 'e nu&"er of ALI sares distri"uted varies
dependin# on te nu&"er of days te =@9s %ere
allo%ed to %or+ in one year. @orse, ALI ired
far&%or+ers in addition to te ori#inal 7,207 =@9s, su$
tat, as indi$ated in te .o&plian$e dated *u#ust 2,
2010 su"&itted "y ALI to te .ourt, te total nu&"er of
far&%or+ers of ALI as of said date stood at 10,502. *ll
tese far&%or+ers, %i$ in$lude te ori#inal 7,207
=@9s, %ere #iven sares out of te 116,0-1,087.65 ALI
sares representin# te --.207K of te total outstandin#
$apital sto$+ of ALI. .learly, te &ini&u& individual
allo$ation of ea$ ori#inal =@9 of 16,60/.-2 sares %as
diluted as a result of te use of &an days! and te
irin# of additional far&%or+ers.
Coin# into anoter "ut related &atter, par. - of te ;?5*
e)pressly providin# for a -0-year ti&efra&e for ALI-to-
=@9s sto$+ transfer is an arran#e&ent $ontrary to %at
;e$. 11 of ?*5 10 pres$ri"es. ;aid ;e$. 11 provides for
te i&ple&entation of te approved sto$+ distri"ution
plan %itin tree 2-4 &onts fro& re$eipt "y te
$orporate lando%ner of te approval of te plan "y
P*R.. In fa$t, "ased on te said provision, te transfer
of te sares of sto$+ in te na&es of te <ualified
=@9s sould "e re$orded in te sto$+ and transfer
"oo+s and &ust "e su"&itted to te ;:. %itin si)ty
2704 days fro& i&ple&entation. *s stated,
;e$tion 11. Implementation;,onitoring of Plan.'e
approved sto$+ distri"ution plan sall
"e $+52(+(n*(d =$*#$n *#/(( H9I +on*#% 3/o+
/()($5* 4, *#( )o/5o/a*( 2ando=n(/Aa552$)an* o3 *#(
a55/o.a2 *#(/(o3 4, *#( PARC, and te transfer of te
sares of sto$+s in te na&es of te <ualified
"enefi$iaries sall "e re$orded in sto$+ and transfer
"oo+s and %14+$**(d *o *#( S()1/$*$(% and ED)#an-(
Co++$%%$on HSECI =$*#$n %$D*, H;0I da,% 3/o+ *#(
%a$d $+52(+(n*a*$on o3 *#( %*o)6 d$%*/$41*$on 52an.
It is evident fro& te fore#oin# provision tat te
i&ple&entation, tat is, te distri"ution of te sares of
sto$+ to te =@9s, &ust "e &ade %itin tree 2-4
&onts fro& re$eipt "y ALI of te approval of te sto$+
distri"ution plan "y P*R.. @ile neiter of te $lasin#
parties as &ade a $o&pellin# $ase of te trust of tis
provision, te .ourt is of te vie% and so olds tat te
intent is to $o&pel te $orporate lando%ner to $o&plete,
not &erely initiate, te transfer pro$ess of sares %itin
tat tree-&ont ti&efra&e. Reinfor$in# tis $on$lusion
is te 70-day sto$+ transfer re$ordin# 2%it te ;:.4
re<uire&ent re$+oned fro& te i&ple&entation of te
;?P.
'o te .ourt, tere is a purpose, %i$ is at on$e
dis$erni"le as it is pra$ti$al, for te tree-&ont
tresold. Re&ove tis ti&eline and te $orporate
lando%ner $an verita"ly evade $o&plian$e %it a#rarian
refor& "y si&ply deferrin# to a"surd li&its te
i&ple&entation of te sto$+ distri"ution s$e&e.
'e ar#u&ent is ur#ed tat te tirty 2-04-year
distri"ution pro#ra& is 1ustified "y te fa$t tat, under
;e$. 27 of R* 7758, pay&ent "y "enefi$iaries of land
distri"ution under .*RP sall "e &ade in tirty 2-04
annual a&orti(ations. 'o ALI, said se$tion provides a
1ustifyin# di&ension to its -0-year sto$+ distri"ution
pro#ra&.
ALIGs relian$e on ;e$. 27 of R* 7758, <uoted in part
"elo%, is o"viously &ispla$ed as te said provision
$learly deals %it land distri"ution.
;:.. 27. Pament " -eneficiaries. Lands a%arded
pursuant to tis *$t sall "e paid for "y te "enefi$iaries
to te L9P in tirty 2-04 annual a&orti(ations ) ) ).
'en, too, te ones o"li#ed to pay te L9P under te
said provision are te "enefi$iaries. 5n te oter and,
in te instant $ase, aside fro& te fa$t tat %at is
involved is sto$+ distri"ution, it is te $orporate
lando%ner %o as te o"li#ation to distri"ute te
sares of sto$+ a&on# te =@9s.
:vidently, te land transfer "enefi$iaries are #iven tirty
2-04 years %itin %i$ to pay te $ost of te land tus
a%arded te& to &a+e it less $u&"erso&e for te& to
pay te #overn&ent. 'o "e sure, te reason
underpinnin# te -0-year a$$o&&odation does not
apply to $orporate lando%ners in distri"utin# sares of
sto$+ to te <ualified "enefi$iaries, as te sares &ay "e
issued in a &u$ sorter period of ti&e.
'a+in# into a$$ount te a"ove dis$ussion, te revo$ation
of te ;?P "y P*R. sould "e upeld for violatin# ?*5
10. It "ears stressin# tat under ;e$. /0 of R* 7758, te
P*R. and te ?*R ave te po%er to issue rules and
re#ulations, su"stantive or pro$edural. 9ein# a produ$t
of su$ rule-&a+in# po%er, ?*5 10 as te for$e and
effe$t of la% and &ust "e duly $o&plied %it. 'e P*R.
is, terefore, $orre$t in revo+in# te ;?P. .onse<uently,
te P*R. Resolution 3o. 60-12-2 dated 3ove&"er 21,
l060 approvin# te ALIGs ;?P is nullified and voided.
2.itations o&ittedF e&pasis in te ori#inal.4
9ased on te fore#oin# rulin#, te $ontentions of >allari,
et al. are eiter not supported "y te eviden$e on re$ord
or are utterly &ispla$ed. 'ere is, terefore, no "asis for
te .ourt to reverse its rulin# affir&in# P*R. Resolution
3o. 2005--2-01 and P*R. Resolution 3o. 2007--/-01,
revo+in# te previous approval of te ;?P "y P*R..
&II. Con*/o2 o.(/ A-/$)12*1/a2 Land%
*fter avin# dis$ussed and $onsidered te different
$ontentions raised "y te parties in teir respe$tive
&otions, @e are no% left to $ontend %it one $ru$ial
issue in te $ase at "ar, tat is, $ontrol over te
a#ri$ultural lands "y te <ualified =@9s.
Epon a revie% of te fa$ts and $ir$u&stan$es, @e
reali(e tat te =@9s %ill never ave $ontrol over tese
a#ri$ultural lands for as lon# as tey re&ain as
sto$+olders of ALI. In 5ur July 5, 2011 ?e$ision, tis
.ourt &ade te follo%in# o"servations,
'ere is, tus, notin# un$onstitutional in te for&ula
pres$ri"ed "y R* 7758. T#( 5o2$), on a-/a/$an /(3o/+
$% *#a* )on*/o2 o.(/ *#( a-/$)12*1/a2 2and +1%* a2=a,%
4( $n *#( #and% o3 *#( 3a/+(/%. 'en it falls on te
soulders of ?*R and P*R. to see to it te far&ers
sould al%ays o%n &a1ority of te $o&&on sares
entitled to ele$t te &e&"ers of te "oard of dire$tors to
ensure tat te far&ers %ill ave a $lear &a1ority in te
"oard. 9efore te ;?P is approved, stri$t s$rutiny of te
proposed ;?P &ust al%ays "e underta+en "y te ?*R
and P*R., su$ tat te value of te a#ri$ultural land
$ontri"uted to te $orporation &ust al%ays "e &ore tan
50K of te total assets of te $orporation to ensure tat
te &a1ority of te &e&"ers of te "oard of dire$tors are
$o&posed of te far&ers. 'e P*R. $o&posed of te
President of te Pilippines and $a"inet se$retaries &ust
see to it tat $ontrol over te "oard of dire$tors rests %it
te far&ers "y re1e$tin# te in$lusion of non-a#ri$ultural
assets %i$ %ill yield te &a1ority in te "oard of
dire$tors to non-far&ers. *ny deviation, o%ever, "y
P*R. or ?*R fro& te $orre$t appli$ation of te for&ula
pres$ri"ed "y te se$ond para#rap of ;e$. -1 of R*
7785 does not &a+e said provision $onstitutionally
infir&. Rater, it is te appli$ation of said provision tat
$an "e $allen#ed. :r#o, ;e$. -1 of R* 7758 does not
tren$ on te $onstitutional poli$y of ensurin# $ontrol "y
te far&ers. 2:&pasis supplied.4
In line %it 5ur findin# tat $ontrol over a#ri$ultural
lands &ust al%ays "e in te ands of te far&ers, @e
re$onsider our rulin# tat te <ualified =@9s sould "e
#iven an option to re&ain as sto$+olders of ALI,
inas&u$ as tese <ualified =@9s %ill never #ain
$ontrol #iven te present proportion of sareoldin#s in
ALI.
* revisit of ALIGs Proposal for ;to$+ ?istri"ution under
.*RP and te ;to$+ ?istri"ution 5ption *#ree&ent
2;?5*4 upon %i$ te proposal %as "ased reveals tat
te total assets of ALI is PP 500,55/,220, %ile te
value of te /,015.8/77 e$tares is PP
107,7-0,000. .onse<uently, te sare of te far&er-
"enefi$iaries in te ALI $apital sto$+ is --.207K
2107,7-0,000 divided "y 500,55/.2204F 116,-01,087.65
ALI sares represent --.207K. 'us, even if all te
olders of te 116,-01,087.65 ALI sares unani&ously
vote to re&ain as ALI sto$+olders, %i$ is unli+ely,
$ontrol %ill never "e pla$ed in te ands of te far&er-
"enefi$iaries. .ontrol, of $ourse, &eans te &a1ority of
50K plus at least one sare of te $o&&on sares and
oter votin# sares. *pplyin# te for&ula to te ALI
sto$+oldin#s, te nu&"er of sares tat %ill $onstitute
te &a1ority is 205,112,101 sares 2500,55/,220 divided
"y 2 plus one [1] ALI sare4. 'e 116,-01,087.65
sares su"1e$t to te ;?P approved "y P*R.
su"stantially fall sort of te 205,112,101 sares needed
"y te =@9s to a$<uire $ontrol over ALI. Aen$e, $ontrol
$an 3:I:R "e attained "y te =@9s. 'ere is even no
assuran$e tat 100K of te 116,-01,087.65 sares
issued to te =@9s %ill all "e voted in favor of stayin# in
ALI, ta+in# into a$$ount te previous referendu& a&on#
te far&ers %ere said sares %ere not voted
unani&ously in favor of retainin# te ;?P. In li#t of te
fore#oin# $onsideration, te option to re&ain in ALI
#ranted to te individual =@9s %ill ave to "e re$alled
and revo+ed.
>oreover, "earin# in &ind tat %it te revo$ation of te
approval of te ;?P, ALI %ill no lon#er "e operatin#
under ;?P and %ill only "e treated as an ordinary
private $orporationF te =@9s %o re&ain as
sto$+olders of ALI %ill "e treated as ordinary
sto$+olders and %ill no lon#er "e under te prote$tive
&antle of R* 7758.
In addition to te fore#oin#, in vie% of te operative fa$t
do$trine, all te "enefits and o&elots
[60]
re$eived "y all
te =@9s sall "e respe$ted %it no o"li#ation to refund
or return te&, sin$e, as @e ave &entioned in our July
5, 2011 ?e$ision, te "enefits ) ) ) %ere re$eived "y
te =@9s as far&ands in te a#ri$ultural enterprise of
ALI and oter frin#e "enefits %ere #ranted to te&
pursuant to te e)istin# $olle$tive "ar#ainin# a#ree&ent
%it 'ade$o.!
5ne last point, te ALI land sall "e distri"uted only to
te 7,207 ori#inal =@9s. 'e re&ainin# /,207 =@9s are
not entitled to any portion of te ALI land, "e$ause te
ri#ts to said land %ere vested only in te 7,207 ori#inal
=@9s pursuant to ;e$. 22 of R* 7758.
In tis re#ard, ?*R sall verify te identities of te 7,207
ori#inal =@9s, $onsistent %it its ad&inistrative
prero#ative to identify and sele$t te a#rarian refor&
"enefi$iaries under R* 7758.
[61]
!HEREFORE, te ,otion for Partial
Reconsideration dated July 20, 2011 filed "y pu"li$
respondents Presidential *#rarian Refor& .oun$il and
?epart&ent of *#rarian Refor&, te ,otion for
Reconsideration dated July 10, 2011 filed "y private
respondent *lyansa n# &#a >an##a#a%an# 9u+id sa
Aa$ienda Luisita, te,otion for Reconsideration dated
July 21, 2011 filed "y respondent-intervenor
=ar&%or+ers *#rarian Refor& >ove&ent, In$., and
te ,otion for Reconsiderationdated July 22, 2011 filed
"y private respondents Rene Calan# and *>9*L*
are PARTIALL GRANTED =$*# /(%5()* *o *#( o5*$on
-/an*(d *o *#( o/$-$na2 3a/+=o/6(/A4(n(3$)$a/$(% o3
Ha)$(nda L1$%$*a *o /(+a$n =$*# Ha)$(nda L1$%$*a,
In)., %i$ is ere"y RECALLED and SET ASIDE.
'e ,otion for Clarification and Partial
Reconsideration dated July 21, 2011 filed "y petitioner
ALI and te ,otion for Reconsideration dated July 21,
2011 filed "y private respondents 3oel >allari, Julio
;uni#a, ;upervisory Croup of Aa$ienda Luisita, In$. and
@indsor *ndaya are DENIED.
'e fallo of te .ourtGs July 5, 2011 ?e$ision is ere"y
a&ended and sall read,
P*R. Resolution 3o. 2005--2-01 dated ?e$e&"er 22,
2005 and Resolution 3o. 2007--/-01 dated >ay -,
2007, pla$in# te lands su"1e$t of ALIGs ;?P under
$o&pulsory $overa#e on &andated land a$<uisition
s$e&e of te .*RP, are ere"y AFFIRMED %it te
follo%in# &odifi$ations,
*ll salaries, "enefits, te -K of te #ross sales of
te produ$tion of te a#ri$ultural lands, te -K sare in
te pro$eeds of te sale of te 500-e$tare $onverted
land and te 60.51-e$tare ;.':M lot and te o&elots
already re$eived "y te 10,502 =@9s $o&posed of
7,207 ori#inal =@9s and te /,207 non-<ualified =@9s
sall "e respe$ted %it no o"li#ation to refund or return
te&. 'e 7,207 ori#inal =@9s sall forfeit and
relin<uis teir ri#ts over te ALI sares of sto$+ issued
to te& in favor of ALI. 'e ALI .orporate ;e$retary
sall $an$el te sares issued to te said =@9s and
transfer te& to ALI in te sto$+s and transfer "oo+,
%i$ transfers sall "e e)e&pt fro& ta)es, fees and
$ar#es. 'e /,207 non-<ualified =@9s sall re&ain as
sto$+olders of ALI.

?*R sall se#re#ate fro& te ALI a#ri$ultural land %it
an area of /,015.85 e$tares su"1e$t of P*R.Gs ;?P-
approvin# Resolution 3o. 60-12-2 te 500-e$tare lot
su"1e$t of te *u#ust 1/, l007 .onversion 5rder and te
60.51-e$tare lot sold to, or a$<uired "y, te #overn&ent
as part of te ;.':M $o&ple). *fter te se#re#ation
pro$ess, as indi$ated, is done, te re&ainin# area sall
"e turned over to ?*R for i&&ediate land distri"ution to
te ori#inal 7,207 =@9s or teir su$$essors-in-interest
%i$ %ill "e identified "y te ?*R. 'e /,207 non-
<ualified =@9s are not entitled to any sare in te land
to "e distri"uted "y ?*R.

ALI is dire$ted to pay te ori#inal 7,207 =@9s te
$onsideration of PP 500,000,000 re$eived "y it fro&
Luisita Realty, In$. for te sale to te latter of 200
e$tares out of te 500 e$tares $overed "y te *u#ust
1/, 1007 .onversion 5rder, te $onsideration of PP
850,000,000 re$eived "y its o%ned su"sidiary,
.entennary Aoldin#s, In$., for te sale of te re&ainin#
-00 e$tares of te afore&entioned 500-e$tare lot to
Luisita Industrial Par+ .orporation, and te pri$e of PP
60,511,500 paid "y te #overn&ent trou# te 9ases
.onversion ?evelop&ent *utority for te sale of te
60.51-e$tare lot used for te $onstru$tion of te ;.':M
road net%or+. =ro& te total a&ount of PP
1,--0,511,500 2PP 500,000,000 [ PP 850,000,000 [
PP 60,511,500 U PP 1,--0,511,5004 sall "e dedu$ted
te -K of te pro$eeds of said transfers tat %ere paid
to te =@9s, te ta)es and e)penses relatin# to te
transfer of titles to te transferees, and te e)penditures
in$urred "y ALI and .entennary Aoldin#s, In$. for
le#iti&ate $orporate purposes. =or tis purpose, ?*R is
ordered to en#a#e te servi$es of a reputa"le
a$$ountin# fir& approved "y te parties to audit te
"oo+s of ALI and .entennary Aoldin#s, In$. to deter&ine
if te PP 1,--0,511,500 pro$eeds of te sale of te
tree 2-4 afore&entioned lots %ere a$tually used or
spent for le#iti&ate $orporate purposes. *ny unspent or
unused "alan$e and any disallo%ed e)penditures as
deter&ined "y te audit sall "e distri"uted to te 7,207
ori#inal =@9s.
ALI is entitled to 1ust $o&pensation for te
a#ri$ultural land tat %ill "e transferred to ?*R to "e
re$+oned fro& 3ove&"er 21, 1060 %i$ is te date of
issuan$e of P*R. Resolution 3o. 60-12-2. ?*R and
L9P are ordered to deter&ine te $o&pensation due to
ALI.
?*R sall su"&it a $o&plian$e report after si) 274
&onts fro& finality of tis 1ud#&ent. It sall also su"&it,
after su"&ission of te $o&plian$e report, <uarterly
reports on te e)e$ution of tis 1ud#&ent %itin te first
15 days after te end of ea$ <uarter, until fully
i&ple&ented.
'e te&porary restrainin# order is lifted.
SO ORDERED.