Hacienda Luisita Incorporated vs Presidential Agrarian Reform Council, et al.

,
Case Digest G.R. No. 171101 November 22, 2011
Hacienda Luisita Incorporated vs Presidential Agrarian Reform
Council, et al.,
Facts:The SC en banc voted 11-0 dismissing the petition filed by HLI Affirm
with modifications the resolutions of the Presidential Agrarian Reform Council
(PARC for brevity) revoking Hacienda Luisita Inc. (HLI for brevity) Stock
Distribution Plan (SDP) and placing the subject land in HL under compulsory
coverage of the CARP of the government.
Thereafter, the SC voting 6-5 averred that there are operative facts
that occurred in the premises. The SC thereat declared that the revocation
of the SDP shall, by application of the operative fact principle, give the 5296
qualified Farmworkers Beneficiaries (FWBs for brevity) to choose whether
they want to remain as HLI stockholders or choose actual land distribution.
Considering the premises, DAR immediately scheduled a meeting regarding
the effects of their choice and therefrom proceeded to secret voting of their
choice.
The
parties,
thereafter,
filed
their
Reconsideration regarding the SCs decision.
1)
2)
3)

4)

respective

Motion

for

Issue:
Whether or not operative fact doctrine is applicable in the said case.
Whether or not Sec. 31 of R.A. 6657 unconstitutional.
Whether or not the 10-year period prohibition on the transfer of awarded
lands under RA 6657 lapsed on May 10, 1999, since Hacienda Luisita were
placed under CARP coverage through the SDOA scheme on May 11, 1989,
and thus the qualified FWBs should now be allowed to sell their land interests
in Hacienda Luisita to third parties, whether they have fully paid for the lands
or not?
Whether or not qualified FWBs shall be entitled to the option of remaining
as stockholder be reconsidered.

Ruling:
1) Operative Fact Doctrine is applicable to the instant case. The court ruled
that the doctrine is not limited only to invalid or unconstitutional law but also
to decisions made by the president or the administrative agencies that have
the force and effect of laws, especially if the said decisions produced acts
and consequences that must be respected. That the implementation of PARC
resolution approving SDP of HLI manifested such right and benefits favorable
to the FWBs;

2) The SC said that the constitutionality of Sec. 31 of R.A. 6657 is not the lis
mota of the case and it was not raised at the earliest opportunity and did not
rule on the constitutionality of the law;
3) The SC ruled that it has not yet lapsed on May 10, 1999, and qualified FWBs
are not allowed to sell their land interest in HL to third parties; That the start
of the counting of the prohibitive period shall be ten years from the issuance
and registration of the Emancipation Patent (EP for brevity) or Certificate of
Land Ownership Award (CLOA for brevity), and considering that the EPs and
CLOAs have not yet been issued, the prohibitive period has not started yet.
4) The SC ruled in the affirmative, giving qualified FWBs the option to remain
as stockholder
YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given
an option to remain as stockholders of HLI should be reconsidered.
[The Court reconsidered its earlier decision that the qualified FWBs should be
given an option to remain as stockholders of HLI, inasmuch as these qualified
FWBs will never gain control [over the subject lands] given the present
proportion of shareholdings in HLI. The Court noted that the share of the
FWBs in the HLI capital stock is [just] 33.296%. Thus, even if all the holders
of this 33.296% unanimously vote to remain as HLI stockholders, which is
unlikely, control will never be in the hands of the FWBs. Control means the
majority of [sic] 50% plus at least one share of the common shares and other
voting shares. Applying the formula to the HLI stockholdings, the number of
shares that will constitute the majority is 295,112,101 shares (590,554,220
total HLI capital shares divided by 2 plus one [1] HLI share). The
118,391,976.85 shares subject to the SDP approved by PARC substantially
fall short of the 295,112,101 shares needed by the FWBs to acquire control
over HLI.]
The SC PARTIALLY GRANTED the motions for reconsideration of respondents
PARC, et al., The 6,296 original FWBs shall forfeit and relinquish their rights
over the HLI shares of stock issued to them in favor of HLI. The HLI
Corporate Secretary shall cancel the shares issued to the said FWBs and
transfer them to HLI in the stocks and transfer book. The 4,206 non-qualified
FWBs shall remain as stockholders of HLI.