Daguman, Jennifer Rodriguez, Lean Sibayan, Elyza
Agrarian Law
Case Digest: HACIEDA L!ISI"A #S $RESIDE"IAL A%RARIA RE&'R( C'!CIL &AC"S: &AC"S: Durin uring g the the incum ncumbe benc ncy y of Pres Presid iden entt Coraz orazon on Aquin quino, o,th the e comprehensive agrarian reform program (CARP) as instituted to cover a!! agric agricu! u!tu tura! ra! !ands !ands"" #$ec #$ecuti utive ve %rder %rder &o" &o" '' '' creat created ed the the Pres Presid iden enti tia! a! Agrarian Reform Counci! (PARC) (PARC) as the highest po!icyma*ing body that form formu! u!at ates es a!! a!! po!i po!ic cies, ies, ru! ru!es, es, and and regu regu!a !ati tion ons s nece necess ssar ary y for the imp!ementation of CARP" CARP" +aciend +acienda a uisit uisita a de -ar!ac r!ac is a .,//0he .,//0hecta ctare re mi$ed mi$ed agricu! agricu!tur tura! a! industria!residentia! e$panse oned by Compaia 1enera! de -abacos de 2i!ipinas (-abaca!era)" 3n 456, the 7panish so!d +acienda uisita to-ar!ac Deve!opment Corporation (-adeco), then oned and contro!!ed by the 8ose Co9uangco, 7r" 1roup" -he 1overnment 7ervice 3nsurance 7ystem oard of -rustees e$tended a !oan to -adecoi -adecoith th the condition cond ition that the !ots i!! be so!d at cost to the tenants" %n ;ay 6, 4<=, the ;artia! a administration fi!ed a suit before the ;ani!a Regiona! -ria! Courtagainst -adeco for them to surrender +acienda uisita to the ;inistry of Agrarian Reform so that the !and can be distributed to farmers at cost" -adecoresponded -adecoresponded by a!!eging that +acienda uisita does not have tenants and that its sugar !ands are not covered by the e$isting agrarian reform programs" -he ;ani!a R-C rendered 9udgment ordering -adeco to surrender +acienda uisita to the ;inistry of Agrarian Reform" >pon appea!, the CA dism dismis isse sed d the the case case that that the the ;arc ;arcos os gove govern rnme ment nt inst instit itut uted ed ith ith the the condition that a stoc* distribution p!an must be imp!emented after such approva! sha!! have been secured" 7ection 04 of RA ..56 provides to a!ternative moda!ities hich are either !and or stoc* transfer"transfer"-he he stoc* distribution distribution scheme appeared appeared to be -adec deco?s o?s pref prefer erre red d opt option" ion" -adec deco orga organi nize zed d +acie acien nda uis uisit ita a 3nco 3ncorp rpor orat atio ion n (+3 (+3)) as vehi vehic! c!e e to faci faci!i !ita tate te stoc stoc* * acqu acquis isit itio ion n by the the farm farm or*e or*ers rsb ben enef efic icia iari ries es (2@ (2@)" )" 3t assi assign gned ed and and conv convey eyed ed to +3 +3 /,4 /,45" 5"65 65 hect hectar ares es agri agricu cu!t !tur ura! a! !and !and port portio ion n and and othe otherr farm farmr re! e!at ated ed properties of +acienda uisita in e$change for +3 shares of stoc*" -o accommodate the assets transfer to +3, it increased its capita! stoc* to /==,===,=== shares ith par va!ue of PhP 4share, 45=,===,=== of hich ere to be issued on!y to qua!ified and registered beneficiaries of the CARP ARP, and and the remai emaini ning ng '5=, '5=,== ===, =,== === = to any any stoc stoc*h *ho! o!de derr of the the 1
corporation" After deducting the tota! !iabi!ities of the farm,this trans!ated to 055,504,/.' shares ith a par va!ue of PhP 4shares" %n ;ay , 4<, the 7toc* Distribution %ption Agreement (7D%A) as entered into by -adeco, +3, and the 5,< qua!ified 2@ and attested to by then DAR 7ecretary Phi!ip 8uico" 3nc!uded in the distribution p!an are productionsharing equiva!ent to three percent of gross sa!es from the production of the agricu!tura! !and payab!e to the 2@s in cash dividends or incentive bonus and distribution of free home!ots of not more than '/= square meters each to fami!ybeneficiaries" -he productionsharing is payab!e irrespective of hether +3 ma*es money or not" %n &ovember '4, 4<, PARC, under then 7ec" Defensor7antiago, approved the 7DP of -adeco and +3 after its c!aims that the proposed revisions in the 7DP ere a!ready inc!uded in the amended agreement" 2rom 4< to '==5, +3 c!aimed to have distributed P0,===,===,=== orth of sa!aries, ages and fringe benefits, 5 mi!!ion shares of stoc* and '/=square meter home!ots to the farmor*ersbeneficiaries" ;eanhi!e, +3 app!ied for the conversion of 5== hectares of !and of the hacienda from agricu!tura! to industria! use, pursuant to 7ec" .5 of RA ..56" DAR 7ec" #rnesto 1ari!ao, approved the app!ication sub9ect to payment of three percent of the gross se!!ing price to the 2@s and to +3s continued comp!iance ith its underta*ings under the 7DP" %n December 40, 4., +3 ceded 0== hectares toCentennary and '== hectares to uisita Rea!ty Corporation (RC)" 7ubsequent!y, Centennary so!d the entire 0== hectares to uisita 3ndustria! Par* Corporation (3PC%)" ater on, 3PC% transferred the parce!s to the Riza! Commercia! an*ing Corporation" Another <="54 hectares ere !ater detached from the area coverage of +acienda uisita hich had been acquired by the government as part of the 7ubicC!ar*-ar!ac #$pressaycomp!e$" 3n abso!ute terms, /,005"65 hectares remained of the origina! /,45 hectares -adeco ceded to +3" +3 7upervisory 1roups and A!yansangmga;anggagaangu*idng +acienda uisita fi!ed to separate comp!aintsa!!eging that +3 had fai!ed to give them their dividends, the one percent (4B) share in gross sa!es and the thirtythree percent (00B) share in the proceeds of the sa!e of the converted 5== hectares of !and" -hey c!aimed that their !ives have not improved anda!so cited vio!ations by +3 of the 7D%As terms" -hey prayed for a renegotiation of the 7D%A, orits revocation" -he DAR constituted a 7pecia! -as* 2orce to attend to issues re!ating to the 7DP" -he report indicated that +3 has not comp!ied ith its ob!igations under RA ..56 despite the imp!ementation of the 7DP"DAR 7ec" Pangandaman recommended to the PARC #$ecutive Committee the revocation of PARC Reso!ution approving +3?s 7DP and ordered the 2
acquisition of +acienda uisita through the compu!sory acquisition scheme" -he DAR -ar!ac provincia! office issued the &otice of Coverage hich +3 received" Petitioner +acienda uisita, 3nc" fi!ed a petition for Certiorari and Prohibition under Ru!e .5 to set aside PARC Reso!ution revo*ing the 7D% p!an and the imp!ementation of the &otice of Coverage" -his Court promu!gated a Decisionon 8u!y 5, '=44affirming the Presidentia! Agrarian Reform Counci! Reso!ution of revocation of the 7D% p!an ith the modification that the origina! .,'. qua!ified farmor*er beneficiaries of +acienda uisita (2@s) sha!! have the option to remain as stoc*ho!ders of +3"+3 sha!! be paid 9ust compensation for the remaining agricu!tura! !and that i!! be transferred to DAR for !and distribution to the 2@s" -he date of the ta*ing is &ovember '4, 4<, hen PARC approved +3?s 7DP" -he date of ta*ing is not on ;ay 44, 4< hen the 7D%A as e$ecuted, since it as the 7DP, not the 7D%A, that as approved by PARC"
ISS!E: 3- 37 &%- PR%P#R, #3-+#R 3& A@ %R 3& #>3-, -% R#CE%& -+# PA;#&- %2 8>7- C%;P#&7A-3%& 2R%; &%F#;#R '4, 4< @+#& -+# PARC, -+#& >&D#R -+# C+A3R;A&7+3P %2 DAR 7#CR#-AR ;3R3A; D#2#&7%R7A&-3A1%, APPR%F#D -+# 7-%CE D37-R3>-3%& PA& (7DP) PR%P%7#D -AD#C%+3, #CA>7#: (4) -+A- PARC R#7%>-3%& &%" <4'' DA-#D &%F#;#R '4, 4< @A7 &%- -+# AC->A -AE3&1 %2 -+# -AD#C%s+3s A1R3C>->RA A&DG (') -+# R#CA %R R#F%CA-3%& >&D#R R#7%>-3%& &%" '==50'=4 %2 -+A- 7DP -+# @ PARC >&D#R -+# C+A3R;A&7+3P %2 DAR 7#CR#-AR &A77#R PA&1A&DA;A& %& D#C#;#R '', '==5 %R 4. #AR7 #AR3#R @+#& -+# 7DP @A7 APPR%F#D D3D &%R#7>- 3& AC->A -AE3&1 %& &%F#;#R '4, 4<G (0) -% PA -+# 8>7- C%;P#&7A-3%& A7 %2 &%F#;#R '4, 4< %R '' #AR7 ACE @%>D # AR3-RAR, >&8>7-, A&D %PPR#773F#, C%&73D#R3&1 -+# 3;PR%F#;#&-7, #HP#&7#7 3& -+# ;A3&-#&A&C# A&D PR#7#RFA-3%& %2 -+# A&D, A&D R37# 3& A&D PR3C#7 %R FA># %2 -+# PR%P#R-"
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R!LI%: 8ust Compensation 3n %ur 8u!y 5, '=44 Decision, @e stated that +3 sha!! be paid 9ust compensation for the remaining agricu!tura! !and that i!! be transferred to DAR for !and distribution to the 2@s" @e a!so ru!ed that the date of the ta*ing is &ovember '4, 4<, hen PARC approved +3s 7DP per PARC Reso!ution &o" <4''" Despite the above propositions, @e maintain that the date of ta*ing is &ovember '4, 4<, the date hen PARC approved +3s 7DP per PARC Reso!ution &o" <4'', in vie of the fact that this is the time that the 2@s ere considered to on and possess the agricu!tura! !ands in +acienda uisita" -o be precise, these !ands became sub9ect of the agrarian reform coverage through the stoc* distribution scheme on!y upon the approva! of the 7DP, that is, &ovember '4, 4<" -hus, such approva! is a*in to a notice of coverage ordinari!y issued under compu!sory acquisition" 2urther, any doubt shou!d be reso!ved in favor of the 2@s" As this Court he!d in PerezRosario v" CA: 3t is an estab!ished socia! and economic fact that the esca!ation of poverty is the driving force behind the po!itica! disturbances that have in the past compromised the peace and security of the peop!e as e!! as the continuity of the nationa! order" -o subdue these acute disturbances, the !egis!ature over the course of the history of the nation passed a series of !as ca!cu!ated to acce!erate agrarian reform, u!timate!y to raise the materia! standards of !iving and e!iminate discontent" Agrarian reform is a perceived so!ution to socia! instabi!ity" -he edicts of socia! 9ustice found in the Constitution and the pub!ic po!icies that underrite them, the e$traordinary nationa! e$perience, and the prevai!ing nationa! consciousness, a!! command the great departments of government to ti!t the ba!ance in favor of the poor and underprivi!eged henever reasonab!e doubt arises in the interpretation of the !a" ut anne$ed to the great and sacred charge of protecting the ea* is the diametric function to put every effort to arrive at an equitab!e so!ution for a!! parties concerned: the 9ura! postu!ates of socia! 9ustice cannot shie!d i!!ega! acts, nor do they sanction fa!se sympathy toards a certain c!ass, nor yet shou!d they deny 9ustice to the !andoner henever truth and 9ustice happen to be on her side" 3n the occupation of the !ega! questions in a!! agrarian disputes hose outcomes can significant!y affect societa! harmony, the considerations of socia! advantage must be eighed, an inquiry into the prevai!ing socia! interests is necessary in the ad9ustment of conf!icting demands and e$pectations of the peop!e, and the socia! interdependence of these interests, recognized" (#mphasis supp!ied") -he minority contends that it is the date of the notice of coverage, that is, 8anuary ', '==., hich is determinative of the 9ust compensation +3 is entit!ed to for its e$propriated !ands" -o support its contention, it cited 4
numerous cases here the time of the ta*ing as rec*oned on the date of the issuance of the notice of coverage" +oever, a perusa! of the cases cited by the minority ou!d revea! that none of them invo!ved the stoc* distribution scheme" -hus, said cases do not square!y app!y to the instant case" ;oreover, it shou!d be noted that it is precise!y because the stoc* distribution option is a distinctive mechanism under RA ..56 that it cannot be treated simi!ar!y ith that of compu!sory !and acquisition as these are to (') different moda!ities under the agrarian reform program" As @e have stated in %ur 8u!y 5, '=44 Decision, RA ..56 provides to (') a!ternative moda!ities, i"e", !and or stoc* transfer, pursuant to either of hich the corporate !andoner can comp!y ith CARP" 3n this regard, it shou!d be noted that hen +3 submitted the 7DP to DAR for approva!, it cannot be gainsaid that the stoc* distribution scheme is c!ear!y +3s preferred moda!ity in order to comp!y ith CARP" And hen the 7DP as approved, stoc*s ere given to the 2@s in !ieu of !and distribution" As apt!y observed by the minority itse!f, IiJnstead of e$propriating !ands, hat the government too* and distributed to the 2@s ere shares of stoc* of petitioner +3 in proportion to the va!ue of the agricu!tura! !ands that shou!d have been e$propriated and turned over to the 2@s" 3t cannot, therefore, be denied that upon the approva! of the 7DP submitted by +3, the agricu!tura! !ands of +acienda uisita became sub9ect of CARP coverage" #vident!y, the approva! of the 7DP too* the p!ace of a notice of coverage issued under compu!sory acquisition" A!so, it is surprising that hi!e the minority opines that under the stoc* distribution option, tit!e to the property remains ith the corporate !andoner, hich shou!d presumab!y be dominated by farmers ith ma9ority stoc*ho!dings in the corporation, it sti!! insists that the 9ust compensation that shou!d be given to +3 is to be rec*oned on 8anuary ', '==., the date of the issuance of the notice of coverage, even after it found that the 2@s did not have the ma9ority stoc*ho!dings in +3 contrary to the supposed avoed po!icy of the !a" 3n effect, hat the minority ants is to pre9udice the 2@s tice" 1iven that the 2@s shou!d have had ma9ority stoc*ho!dings in +3 but did not, the minority sti!! ants the government to pay higher 9ust compensation to +3" #ven if it is the government hich i!! pay the 9ust compensation to +3, this i!! a!so affect the 2@s as they i!! be paying higher amortizations to the government if the ta*ing i!! be considered to have ta*en p!ace on!y on 8anuary ', '==." -he foregoing notithstanding, it bears stressing that the DARKs !and va!uation is on!y pre!iminary and is not, by any means, fina! and conc!usive upon the !andoner" -he !andoner can fi!e an origina! action ith the R-C acting as a specia! agrarian court to determine 9ust compensation" -he court has the right to revie ith fina!ity the determination in the e$ercise of hat is admitted!y a 9udicia! function" 5
A vie has a!so been advanced that +3 shou!d pay the qua!ified 2@s renta! for the use and possession of the !and up to the time it surrenders possession and contro! over these !ands" @hat this vie fai!s to consider is the fact that the 2@s are a!so stoc*ho!ders of +3 prior to the revocation of PARC Reso!ution &o" <4''" A!so, the income earned by the corporation from its possession and use of the !and u!timate!y redounded to the benefit of the 2@s based on its business operations in the form of sa!aries, benefits vo!untari!y granted by +3 and other fringe benefits under their Co!!ective argaining Agreement" -hat being so, there ou!d be un9ust enrichment on the part of the 2@s if +3 i!! sti!! be required to pay rent for the use of the !and in question"
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