The Supreme Court ruled that the Presidential Agrarian Reform Council (PARC) has the jurisdiction, power, and authority to nullify, recall, revoke, or rescind the Stock Distribution Option Agreement (SDOA) between Hacienda Luisita, Inc. (HLI) and its farm workers. The Court found that HLI was created specifically to comply with the Comprehensive Agrarian Reform Law (CARP) of 1988, which is the "mother law" of the SDOA and Stock Distribution Plan. As the special law on agrarian reform, CARP takes precedence over the general Corporation Code in disputes involving implementation of the stock distribution plan and HLI's compliance with CARP.
The Supreme Court ruled that the Presidential Agrarian Reform Council (PARC) has the jurisdiction, power, and authority to nullify, recall, revoke, or rescind the Stock Distribution Option Agreement (SDOA) between Hacienda Luisita, Inc. (HLI) and its farm workers. The Court found that HLI was created specifically to comply with the Comprehensive Agrarian Reform Law (CARP) of 1988, which is the "mother law" of the SDOA and Stock Distribution Plan. As the special law on agrarian reform, CARP takes precedence over the general Corporation Code in disputes involving implementation of the stock distribution plan and HLI's compliance with CARP.
The Supreme Court ruled that the Presidential Agrarian Reform Council (PARC) has the jurisdiction, power, and authority to nullify, recall, revoke, or rescind the Stock Distribution Option Agreement (SDOA) between Hacienda Luisita, Inc. (HLI) and its farm workers. The Court found that HLI was created specifically to comply with the Comprehensive Agrarian Reform Law (CARP) of 1988, which is the "mother law" of the SDOA and Stock Distribution Plan. As the special law on agrarian reform, CARP takes precedence over the general Corporation Code in disputes involving implementation of the stock distribution plan and HLI's compliance with CARP.
The Supreme Court ruled that the Presidential Agrarian Reform Council (PARC) has the jurisdiction, power, and authority to nullify, recall, revoke, or rescind the Stock Distribution Option Agreement (SDOA) between Hacienda Luisita, Inc. (HLI) and its farm workers. The Court found that HLI was created specifically to comply with the Comprehensive Agrarian Reform Law (CARP) of 1988, which is the "mother law" of the SDOA and Stock Distribution Plan. As the special law on agrarian reform, CARP takes precedence over the general Corporation Code in disputes involving implementation of the stock distribution plan and HLI's compliance with CARP.
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Hacienda Luisita, Incorporated vs PARC (GR No.
171101, July 5, 2011)
EN BANC G.R. No. 171101 July 5, 2011
HACIENDA LUISITA, INCORPORATED, Petitioner, LUISITA INDUSTRIAL PARK CORPORATION and RIZAL COMMERCIAL BANKING CORPORATION, Petitioners- in-Intervention, vs. PRESIDENTIAL AGRARIAN REFORM COUNCIL; SECRETARY NASSER PANGANDAMAN OF THE DEPARTMENT OF AGRARIAN REFORM; ALYANSA NG MGA MANGGAGAWANG BUKID NG HACIENDA LUISITA, RENE GALANG, NOEL MALLARI, and JULIO SUNIGA1 and his SUPERVISORY GROUP OF THE HACIENDA LUISITA, INC. and WINDSOR ANDAYA, Respondents.
D E C I S I O N, VELASCO, JR., J.:
Facts: Tarlac Development Corporation or TADECO owned by Jose Cojuangco Sr.,
bought the 6,000 hectares land of Haciend Luisita in Tarlac and the sugar mill within the hacienda from the original owner TABACALERA. Prior to the transfer of ownership, the Philippine government, thru GSIS assisted and extended loans to TADECO for the payment of the land. One of the conditions on the loan agreement between them was the lots comprising the hacienda shall be distributed and sold to its tenants ten years after.
Marcos administration filed an expropriation suit against TADECO to surrender the
Hacienda to the then Ministry of Agrarian Reform so that the land can be distributed to the farmers at cost. Tadec, on the other hand alleged that Hacienda Luisita does not have tenants, besides which sugar lands –– of which the hacienda consisted––are not covered by existing agrarian reform legislations. The RTC rendered judgment ordering TADECO to surrender Hacienda Luisita to the MAR.
In 1988, RA 6657 or the CARP law was passed. It is a program aimed at redistributing public and private agricultural lands to farmers and farm workers who are landless. One of the lands covered by this law is the Hacienda Luisita. In 1988, the OSG moved to dismiss the government’s case against TADECO. The CA dismissed it, but the dismissal was subject to the condition that TADECO shall obtain the approval of farm worker beneficiaries to the SDP Stock Distribution Plan and to ensure its implementation Section 31 of the CARP Law which allows either land transfer or stock transfer as two alternative modes in distributing land ownership to the FWBs. Since the stock distribution scheme is the preferred option of TADECO, it organized a spin-off corporation, the Hacienda Luisita Inc. (HLI), as vehicle to facilitate stock acquisition by the farmers. Then the Presidential Agrarian Reform Council (PARC), led by then DAR Secretary Miriam Santiago, approved the SDP of TADECO/HLI.
From 1989 to 2005, the HLI claimed to have extended those benefits to the farm workers. This was contested by two groups representing the interests of the farmers – the HLI Supervisory Group and the AMBALA. They claimed that they haven’t actually received those benefits in full, that HLI violated the terms, and that their lives haven’t really improved contrary to the promise and rationale of the SDOA.
The DAR created a Special Task Force to attend to the issues and to review the terms of the SDOA. On its resolution, PARC revoked HLI Stock Distribution Plan (SDP) and placed the subject land in HL under compulsory coverage of the CARP of the government.
HLI assails the jurisdiction of the PARC to recall the SDOA. It argues that the parties to the SDOA should now look to the Corporation Code, instead of to RA 6657, in determining their rights, obligations and remedies. The Code, it adds, should be the applicable law on the disposition of the agricultural land of HLI.
Issue: WHETHER PARC HAVE JURISDICTION, POWER AND/OR AUTHORITY TO
NULLIFY, RECALL, REVOKE OR RESCIND THE SDOA
Ruling: Yes. It should abundantly be made clear that HLI was precisely created in order to comply with RA 6657, which the OSG aptly described as the "mother law" of the SDOA and the SDP. It is, thus, paradoxical for HLI to shield itself from the coverage of CARP by invoking exclusive applicability of the Corporation Code under the guise of being a corporate entity.
Without in any way minimizing the relevance of the Corporation Code since the FWBs of HLI are also stockholders, its applicability is limited as the rights of the parties arising from the SDP should not be made to supplant or circumvent the agrarian reform program.
Without doubt, the Corporation Code is the general law providing for the formation, organization and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall prevail.
Besides, the present impasse between HLI and the private respondents is not an intra- corporate dispute which necessitates the application of the Corporation Code. What private respondents questioned before the DAR is the proper implementation of the SDP and HLI’s compliance with RA 6657. Evidently, RA 6657 should be the applicable law to the instant case.
