Hacienda Luisita, Inc. v.

PARC

G.R. No. 171101

VELASCO, JR., J / En Banc

Facts:

In 1957, the Spanish owners of Tabacalera offered to sell Hacienda Luisita as well as their controlling
interest in the sugar mill within the hacienda, the Central Azucarera de Tarlac (CAT), as an indivisible
transaction. The Tarlac Development Corporation (Tadeco), then owned and/or controlled by the Jose
Cojuangco, Sr. Group, was willing to buy. As agreed upon, Tadeco undertook to pay the purchase price
for Hacienda Luisita in pesos, while that for the controlling interest in CAT, in US dollars. To facilitate the
adverted sale-and-purchase package, the Philippine government, through the then Central Bank of the
Philippines, assisted the buyer to obtain a dollar loan from a US bank.

Also, the Government Service Insurance System (GSIS) Board of Trustees extended on November 27,
1957 a PhP5.911 million loan in favor of Tadeco to pay the peso price component of the sale. One of the
conditions contained in the approving GSIS Resolution is that the lots comprising the Hacienda Luisita
shall be subdivided by the applicant-corporation and sold at cost to the tenants, should there be any, and
whenever conditions should exist warranting such action under the provisions of the Land Tenure Act.

On May 7, 1980, the martial law administration filed a suit before the Manila RTC against Tadeco, et al.,
for them to surrender Hacienda Luisita to the then Ministry of Agrarian Reform (MAR, now the
Department of Agrarian Reform [DAR]) so that the land can be distributed to farmers at cost.Eventually,
the Manila RTC rendered judgment ordering Tadeco to surrender Hacienda Luisita to the MAR. The CA
dismissed the case the Marcos government initially instituted and won against Tadeco, et al. The
dismissal action was, however, made subject to the 12

obtention by Tadeco of the PARC's approval of a stock distribution plan (SDP) that must initially be
implemented after such approval shall have been secured.

Issue:

Whether or not the SDP violates the agrarian reform policy under Sec. 2 of RA 6657

Ruling:

No, Sec. 2 of RA 6657 states: It is the policy of the State to pursue a Comprehensive Agrarian Reform
Program (CARP). The welfare of the landless farmers and farm workers will receive the highest
consideration to promote social justice and to move the nation towards sound rural development and
industrialization, and the establishment of owner cultivatorship of economic-sized farms as the basis of
Philippine agriculture.

The agrarian reform program is founded on the right of farmers and regular farm workers, who are
landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive
a share of the fruits thereof. To this end, the State shall encourage the just distribution of all agricultural
lands, subject to the priorities and retention limits set forth in this Act, having taken into account
ecological, developmental, and equity considerations, and subject to the payment of just compensation.
The State shall respect the right of small landowners and shall provide incentives for voluntary land-
sharing.

Paragraph 2 of the above-quoted provision specifically mentions that "a more equitable distribution and
ownership of land . . . shall be undertaken to provide farmers and farm workers with the opportunity to
enhance their dignity and improve the quality of their lives through greater productivity of agricultural
lands." Of note is the term "opportunity" which is defined as a favorable chance or opening offered by
circumstances. Considering this, by no stretch of imagination can said provision be construed as a
guarantee in improving the lives of the FWBs. At best, it merely provides for a possibility or favorable
chance of uplifting the economic status of the FWBs, which may or may not be attained.