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SC unanimously decides to give Hacienda Luisita to farmers

MANILA, Philippines (Nov 24, 2011) – The family President Benigno Aquino III's shall soon find themselves landless as the Supreme Court orders the distribution of the Cojuangco-owned 4,915.75-hectare Hacienda Luisita in Tarlac to over 6,000 farmer workers-beneficiaries of the sugar estate.

The SC, in the 56-page ruling obtained by The Star last night, recalled and set aside the option granted to the farmers to remain as stockholders of Hacienda Luisita Inc. (HLI).

The SC granted the appeal of farmers belonging to Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (Ambala) and Farm Workers Agrarian Reform Movement (FARM) and partially considered its ruling last July 5 that gave them the option of land or shares of stock.

The justices unanimously agreed that the contested land should be distributed by HLI to the original 6,296 farmer-beneficiaries pursuant to an order of the Presidential Agrarian Reform Council (PARC) in December.

This was contrary to a report published in another major newspaper prior to the promulgation of the decision, which said that only a majority of the justices voted for total land distribution.

"PARC Resolution No. 2005-32-01 dated Dec. 22, 2005 and Resolution No. 2006-34-01 dated May 3, 2006, placing the lands subject of HLI's SDP (stock distribution plan) under compulsory coverage on mandated land acquisition scheme of the CARP (Comprehensive Agrarian Reform Program) are hereby affirmed," stated the resolution penned by Associate Justice Presbitero Velasco Jr.

The Court also denied the partial motion for reconsideration of HLI and instead directed it to pay the original workers-beneficiaries the over P1.33 billion it earned from selling the 500-hectare converted portion of the land estate.

Covered by the order were the P500-million it received from Luisita Realty Inc. for the sale of 200 converted hectares, P750 million for the sale of another 300 hectares converted land to Luisita Industrial Park Corp. by its subsidiary, Centennary Holdings Inc., and the P80,511,500 it received from the government for the Subic-Clark-Tarlac-Expressway (SCTEx) project.

From the total amount, the three-percent proceeds of the transfers paid to the farmer workers-beneficiaries shall be deducted.

HLI would also be entitled to just compensation for the transfer of the agricultural land, which will be determined by Department of Agrarian Reform (DAR) and the Land Bank of the Philippines.

All magistrates of the SC-except Senior Associated Justice Antonio Carpio who again inhibited from the deliberations - voted for total land distribution, but had different views in terms of justifications and conditions for its implementation. They were divided by five different opinions.

The majority opinion of Justice Velasco, which was supported by five others, held that the SDP earlier approved by the SC as an option would not give the farmers control over the agricultural lands.

"Upon review of the facts and circumstances, we realize that the farmer workers-beneficiaries will never have control over these agricultural lands for as long as they remain as stockholders of HLI.

"In line with our finding that control over agricultural lands must always be in the hands of the farmers, we reconsider our ruling that the qualified farmer workers-beneficiaries should be given an option to remain as stockholders of HLI, inasmuch as these qualified farmer workers-beneficiaries will never gain control given the present proportion of shareholdings in HLI," the ruling stated.

It explained that the 118,391,976.85 shares of stocks of farmers – or a third of the total assets of HLI that is equivalent to the value of the land (P196,630,000) – would keep the farmers in the minority ownership.

"The number of shares that will constitute the majority is 295,112,101. 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 farmer workers-beneficiaries to acquire control," it stressed.

Associated Justices Teresita Leonardo-de Castro, Diosdado Peralta, Mariano del Castillo, Jose Perez and Roberto Abad concurred in this majority ruling, which did not state that it was already final and unappealable.

Whit this, the SC ordered the DAR to verify the identities of the original 6,296 farmer workers-beneficiaries and make sure the remaining 4,206 would not be granted land that they are not entitled to under section 22 of Republic Act 6657 (Comprehensive Agrarian Reform Law of 1988).

It also ordered the government to respect "all salaries, benefits, the three percent of gross sales of the production of the agricultural lands, the three percent share in the proceeds of the sale of the 500-hectareconverted land and the 80.51-hectare SCTEx lot and the home lots already received by 10,502 farmer workers-beneficiaries with no obligation to refund or return them."

In ordering distribution of the remaining 4,335 hectares, the Court said the original 6,296 beneficiaries "shall forfeit and relinquish their rights over the HLI shares of stock issued to them in favor of HLI."

Lastly, the DAR was directed to submit a compliance report after six months from finality of the ruling and quarterly reports until full execution of the orders.

Still, the SC clarified that farmer workers-beneficiaries cannot be stripped of their right to remain as stockholders. In such cases, they were directed to inform the DAR of their waiving of right to the agricultural land before they could be entitled to a share in the remaining assets of HLI – including the just compensation to be paid for the agricultural lands.

Operative fact

Despite ordering total land distribution of Hacienda Luisita, majority of the justices maintained their stand that the doctrine of “operative fact” – the legal principle of equity – applies in this case.

Chief Justice Renato Corona and Associated Justices Martin Villarama Jr. and Jose Mendoza disagreed.

Although they concurred in the result of the voting, they submitted another opinion and held that section 31 of RA 6657, which allowed stock distribution, was unconstitutional in the first place.

Corona, in his 25-page opinion also obtained by The STAR, said the price of the land to be distributed to the original farmer workers-beneficiaries should be based on the fair market value of the land in November 1989.

Justice Ma. Lourdes Sereno opposed this, saying the land price should be pegged at the market value in 2008. This opinion, which did not get support from any other justices, would make it harder for the farmers to claim their lands due to much higher price.

Justice Arturo Brion also had a separate opinion, saying restitution should take place and parties should “account and restore what they received from one another” as consequence of the nullification of the SDO.

The magistrate said compensation or set-off mechanisms could be applied for this purpose. This position, however, did not get the support of any other justice.

Justice Lucas Bersamin also submitted a separate opinion, where he said the home lots granted to the farmers do not form part of the total area of agricultural lands that should be distributed to the farmers.

“I submit therefore that the HLI as the landowner should be justly compensated also for the home lots,” he said.

He was joined by Justices Bienvenido Reyes and Estela Perlas-Bernabe in this position.

Earlier in the day, SC spokesman Midas Marquez said the release of the ruling was deferred last Tuesday when justices voted in full-court session after a magistrate failed to submit her opinion.

He dispelled speculations that the ruling on Hacienda Luisita was the SC’s vengeance to earlier defiant actions of the administration of President Aquno to its orders.

“This case has always been in the agenda of the (full-court) for the past two months. It’s just that the decision would not be released pending submission of all opinions,” he explained.

Marquez also said that if the Court would rule in favor of the farmers, it will be favorable to the Aquino administration since their appeal was supported by DAR.

The STAR learned from a court insider that the magistrates agreed to finally vote on the case last Tuesday, but Justice Sereno was still not ready with her opinion.

In August last year, the SC held oral arguments on the case. It also created a mediation panel to end the dispute between HLI and its farmer-beneficiaries through amicable settlement that had been suspended after the parties failed to reach an agreement after six meetings within the 30-day period prescribed by the Court.

The panel chaired by retired SC justice Alicia Austria-Martinez, however, has opted to leave to the SC the decision on whether or not to continue with the mediation, considering the refusal of a faction of farmers from the Ambala to participate in the proceedings.

Also last year, HLI and factions of farmers’ groups signed a new compromise agreement giving the farmers the chance to remain as HLI stockholders, or receive their share of Hacienda Luisita land.

Many voted to retain their stocks and receive cash from HLI, only to complain later that they only got minuscule amounts.

Ambala, however, asked the SD to junk the compromise deal because it was signed even before the SC could rule on the validity of the SDO.

The rival faction also questioned the authority of the signatories in the agreement to represent the plantation’s farmer-beneficiaries.

The compromise agreement was already superceded by the SC ruling.

Palace: No comment

Malacañang refused to comment on reports that the SC is about to hand down a decision that would be unfavorable to President Aquino’s family that owns Hacienda Luisita.

“We’re still waiting, so we cannot have any comment. We will reserve our comments on the Hacienda Luisita issue. We don’t want to speculate on the motivation, as anyone else, we’d be expecting the decision on the HLI,” said presidential spokesman Edwin Lacierda.

He said they only knew about the case from the newspapers, which hinted that the HLI case was on the SC agenda last Tuesday, but was not taken up, although the verdict may be released today.

“We don’t have any advance notice rather than the news report that came out in a broadsheet,” the Cabinet members told a news briefing.

Meanwhile, the Kilusang Magbubukid ng Pilipinas (KMP) said the distribution of Hacienda Luisita to rightful farmer-beneficiaries is long overdue.

“If true, the SC decision is the fruit of the Hacienda Luisita farm workers’ militant struggle. The vast landholding should have been distributed a long time ago,” said KMP deputy secretary-general Randall Echanis.

He said that this is a step forward but Hacienda Luisita farm workers would continue the struggle.

“They would continue to assert their legitimate right over the land especially under the administration of Aquino who is the biggest stumbling block to Hacienda Luisita farmers’ aspiration for genuine land reform,” he added.  (From