Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al.

,
G.R. No. 171101, November 22, 2011

I. THE FACTS

On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to

DISMISS/DENY the petition filed by HLI and AFFIRM with MODIFICATIONS
the resolutions of the PARC revoking HLI‘s Stock Distribution Plan (SDP) and
placing the subject lands in Hacienda Luisita under compulsory coverage of the
Comprehensive Agrarian Reform Program (CARP) of the government.

The Court however did not order outright land distribution. Voting 6-5, the Court
noted that there are operative facts that occurred in the interim and which the
Court cannot validly ignore. Thus, the Court declared that the revocation of the
SDP must, by application of the operative fact principle, give way to the right of
the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose
whether they want to remain as HLI stockholders or [choose actual land
distribution]. It thus ordered the Department of Agrarian Reform (DAR) to
“immediately schedule meetings with the said 6,296 FWBs and explain to them the
effects, consequences and legal or practical implications of their choice, after which the
FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing
their signatures or placing their thumbmarks, as the case may be, over their printed
names.”

The parties thereafter filed their respective motions for reconsideration of the
Court decision.

II. THE ISSUES

. (1) Is the operative fact doctrine available in this case?

. (2) Is Sec. 31 of RA 6657 unconstitutional?

. (3) Can‘t the Court order that DAR‘s compulsory acquisition of Hacienda
Lusita cover the full 6,443 hectares allegedly
covered by RA 6657 and previously held by Tarlac Development
Corporation (Tadeco), and not just the 4,915.75 hectares
covered by HLI‘s SDP?

. (4) Is the date of the ―takingǁ (for purposes of determining the just
compensation payable to HLI) November 21, 1989, when
 PARC approved HLI‘s SDP?

. (5) Has the 10-year period prohibition on the transfer of awarded lands
under RA 6657 lapsed on May 10, 1999 (since
Hacienda Luisita were placed under CARP coverage through the SDOA
scheme on May 11, 1989), and thus the qualified FWBs should now be
allowed to sell their land interests in Hacienda Luisita to third parties,
whether they have fully paid for the lands or not?

. (6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision
that the qualified FWBs be given an option to remain as stockholders of
HLI be reconsidered?

III. THE RULING

[The Court PARTIALLY GRANTED the motions for reconsideration of respondents

PARC, et al. with respect to the option granted to the original farmworkers-
beneficiaries (FWBs) of Hacienda Luisita to remain with petitioner HLI, which option
the Court thereby RECALLED and SET ASIDE. It reconsidered its earlier decision
that the qualified FWBs should be given an option to remain as stockholders of HLI,
and UNANIMOUSLY directed immediate land distribution to the qualified FWBs.]

1. YES, the operative fact doctrine is applicable in this case.

[The Court maintained its stance that the operative fact doctrine is applicable in this
case since, contrary to the

suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional
laws but also applies to decisions made by the President or the administrative agencies
that have the force and effect of laws. Prior to the nullification or recall of said
decisions, they may have produced acts and consequences that must be respected. It is
on this score that the operative fact doctrine should be applied to acts and consequences
that resulted from the implementation of the PARC Resolution approving the SDP of
HLI. The majority stressed that the application of the operative fact doctrine by the
Court in its July 5, 2011 decision was in fact favorable to the FWBs because not only
were they allowed to retain the benefits and homelots they received under the stock
distribution scheme, they were also given the option to choose for themselves whether
they want to remain as stockholders of HLI or not.]