**Hacienda Luisita, Inc. v. Presidential Agrarian Reform Council (PARC)**
### Facts:
– **1957**: Spanish owners of Compañia General de Tabacos de Filipinas (Tabacalera) sold Hacienda Luisita, a significant expanse of mixed agricultural-industrial-residential land, and the Central Azucarera de Tarlac (CAT) to Tarlac Development Corporation (Tadeco).
– **Conditions of Sale**: The purchase was conditioned on subdividing and selling Hacienda Luisita to tenants under the provisions of the Land Tenure Act.
– **1980**: The government filed suit against Tadeco to surrender Hacienda Luisita for distribution to tenants. This was perceived as a political move against the Aquino family.
– **1988**: The case was dismissed by the Court of Appeals (CA) conditional upon the approval and initial implementation of a Stock Distribution Plan (SDP) for Hacienda Luisita farmworkers.
– **1989**: Tadeco transferred Hacienda Luisita agricultural land to Hacienda Luisita, Inc. (HLI) in exchange for shares. HLI’s SDP, voted by 93% of the farmworkers, included stock instead of land distribution.
– **1995-1998**: HLI converted 500 hectares of agricultural land to industrial use, subdividing and transferring portions to various entities, including the Luisita Industrial Park Corporation (LIPCO) and Rizal Commercial Banking Corporation (RCBC).
– **2003**: Petitions were filed by AMBALA and other groups alleging non-compliance with the SDP terms and violations including unpaid dividends and lack of substantial improvement in farmworkers’ lives.
– **2005**: DAR Secretary Pangandaman submitted a report finding non-compliance by HLI. PARC Resolution No. 2005-32-01 revoked the SDP and mandated compulsory land acquisition.
– **2006**: HLI sought reconsideration of PARC’s decision but was denied via Resolution No. 2006-34-01.
– **Procedural Posture**: HLI filed a Petition for Certiorari and Prohibition with the Supreme Court to set aside PARC’s resolutions and the Notice of Coverage issued by DAR.
### Issues:
1. Did PARC have the jurisdiction and authority to revoke HLI’s SDP?
2. Was the revocation of the SDP sixteen years post-approval lawful without violating constitutional and contractual stipulations?
3. Were the petitions to nullify the SDP legally sound, and did the petitioners have standing?
4. Did intervenors RCBC and LIPCO acquire vested rights as innocent purchasers for value, warranting the exclusion of their properties from CARP coverage?
### Court’s Decision:
**Issue 1: PARC’s Authority**
– **Ruling**: PARC has the implied power to revoke previously approved SDPs to ensure compliance with agrarian reform laws.
– **Rationale**: This authority is underpinned by the principle of necessary implication, where the power to approve includes the power to revoke.
**Issue 2: Timeliness and Constitutionality**
– **Ruling**: The Court largely upheld PARC’s revocation.
– **Rationale**: Under the agrarian reform policy, PARC’s authority extends to revising and ensuring effectivity over such long-term agreements, ensuring compliance with existing laws.
**Issue 3: Standing and Legal Basis**
– **Ruling**: AMBALA and other petitioning groups had real party-in-interest status.
– **Rationale**: Farmworker-beneficiaries are directly affected parties with the right to contest SDPs affecting their socio-economic interests.
**Issue 4: Rights of Innocent Purchasers**
– **Ruling**: RCBC and LIPCO were innocent purchasers for value, and their acquired lands should not be mandatorily distributed under CARP.
– **Rationale**: As good faith purchasers with no notice of defects or encumbrances, their acquisitions are legally protected.
### Doctrine:
**1. Doctrine of Necessary Implication**: Powers granted by law include all necessary powers incidental to their effective exercise.
**2. Non-Impairment of Contracts**: Existing laws form part of contractual agreements and future enactments should not contravene this principle, absent substantial public interest.
**3. Innocent Purchaser for Value**: Protects purchasers who acquire property without notice of any encumbrances or defects in the title, emphasizing financial and legal good faith.
### Class Notes:
**Key Elements:**
– **Stock Distribution Option (SDO)** under agrarian laws: A method where qualified beneficiaries receive shares, not direct land ownership.
– **Doctrine of Necessary Implication**: Ensuring all incidental powers are included with expressed powers.
– **Innocent Purchaser Doctrine**: Protects those who acquire title without notice of any defects or other claims.
**Relevant Legal Statutes:**
– **RA 6657, Sections 2, 30, 31**: Comprehensive Agrarian Reform Law’s stipulations on corporate landowner obligations.
– **Property Registration Decree Sec. 44 (PD 1529)**: Legal shield for registered good faith purchasers.
### Historical Background:
**Agrarian reform in the Philippines**: Rooted in colonial and post-colonial attempts to address land distribution disparities. The 1988 Comprehensive Agrarian Reform Law (CARL) — RA 6657 — aimed to more inclusively redistribute agrarian lands, centered on farmworker socio-economic improvement. The HLI case embodies conflicts inherent in large-scale agrarian reforms, reflecting socio-political, economic, and legal clashes over land rights and corporate compliance.
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