G.R. No. 171101

EN BANC

G.R. No. 171101 Hacienda Luisita, Incorporated, Petitioner, v. 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, Julio Zuniga and his Supervisory Group of the Hacienda Luisita, Inc., and Windsor Andaya, Respondents.

Promulgated:

April 24, 2012

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SEPARATE OPINION

(Concurring and Dissenting)

SERENO, J.:

There is never any acceptable reason to be unjust. While this Court must be just and fully sympathetic to the farmers, it cannot also be unjust to the landowner. When the ponente first circulated the draft that became the 05 July 2011 Decision, I was the first to counter that the lands of petitioner Hacienda Luisita, Inc., (HLI) should be immediately distributed to the farmers. One of the theories of my Dissent of even date namely, that the Stock Distribution Option Agreement (SDOA) cannot be upheld because, as designed, the farmworker-beneficiaries (FWBs) would forever be the minority stockholders of petitioner HLI was the same theory used to justify the majoritys reversal in its 22 November 2011 Resolution. Little did I suspect that my position in November, that the reckoning of the time of the taking should follow the uniform jurisprudence of this Court, would be stretched to such wild accusations, with some claiming that I had moved that petitioner HLI be paid ₱10 Billion, and that the FWBs had prayed that I be inhibited from participating in this case for unduly advocating the cause of petitioner HLI. Neither of the two claims is true nor has any basis on the record. This Court has never discussed any monetary values for the land for purposes of just compensation, and none of the justices has even attempted to peg any such value.

In my Separate Opinion to the 22 November 2011 Resolution, I lament the fact that Congress did not choose a revolutionary form of taking for agrarian reform by allowing effective partial confiscation by not requiring payment to the landowners at fair market value.[1] I also advocated the immediate freedom of the land and the FWBs by construing that the 10-year prohibition against transfers of land should not be considered as effective in this case.[2] The FWBs of Hacienda Luisita deserve the full benefits of agrarian reform. But with the Supreme Court consistently requiring that payment to landowners be pegged at fair market value for all kinds of expropriation, and in the case of agrarian reform, pegging it at the time of the notice of coverage, this same Court is required to be fair and observe the same rule by not unduly discriminating against petitioner HLI. Thus, I maintain the position I have earlier expounded in my Opinions in the 05 July 2011 Decision and the 22 November 2011 Resolution, specifically, that petitioner HLI, as any other landowner, is entitled to just compensation for their farmlands to be reckoned at the time of the actual taking of the expropriated property.

There is absolutely no basis on the record to claim that my position will render the lands beyond the FWBs capability to pay. In my Opinion in the 22 November 2011 Resolution, the deliberations of the framers of the Constitution were cited to conclude that there is no strict and absolute correspondence between the fair market value to be awarded to the landowners as just compensation and the amortization payments to be paid by the FWBs to the Land Bank of the Philippines for the awarded agricultural lands.[3] Although the State is obliged to pay the fair market value of the agricultural lands in accordance with the law, rules and jurisprudence, the State does not shift that burden to the FWBs that would receive the expropriated properties. It shall subsidize the repayment schemes for the distributed agricultural lands and offer terms that are affordable to the farmers and allow them to simultaneously pursue their chosen agricultural enterprises on the lands. In fact, under the CARL, the Presidential Agrarian Reform Council or the Land Bank of the Philippines may even reduce the principal obligation or the interest rates on amortization payments to make them more affordable to the FWBs.[4] Hence, a totally different regime of social justice applies when it is the FWBs that will pay the amortization to the State through the Land Bank of the Philippines under the CARL.

Nevertheless, I have listened to the reasoning recently expounded in full by Justice Lucas P. Bersamin and join his position for the most judicious and equitable recourse of remanding the issue of determining just compensation, initially, to the Department of Agrarian Reform, and ultimately, to the Regional Trial Court, acting as a Special Agrarian Court. Considering that the parties had not fully substantiated or argued the determination of the award of just compensation, factual circumstances are clearly lacking for this Court to make a substantial and definitive ruling on significant, yet insufficiently factually-litigated facets of the case. As Justice Bersamin explains, the matter of the time when the taking of the Hacienda Luisita farmlands is to be pegged for purposes of valuation of the property has not been properly raised as an issue by the parties and that factual issue is within the exclusive and original jurisdiction of the Regional Trial Court, acting as a Special Agrarian Court.[5]

In his Separate Opinion, Justice Arturo D. Brion approximates, to some extent, the proper value of the expropriated lands for purposes of just compensation by characterizing petitioner HLI as a builder in good faith and allowing it reimbursement for its improvements on the expropriated lands.[6] As I mentioned in my previous Opinion, I would have been persuaded by Justice Brions reasoning to reckon the period to the 1989 value of the lands, if petitioner HLI would be compensated for the time difference with interest in the interim period when payment was not made by the government.[7] The payment of interest is a superior solution to identifying and assessing each building or improvement attributable to petitioner HLI, as previous corporate landowner since it acquires less factual determination and accounting, which is open again to prolonged dispute and further adjudication. In any case, it seems incongruent to declare petitioner HLI a good faith builder of improvements on the land and yet, expropriate the same land under confiscatory, and hence, punitive values. The nullification of the SDOA and distribution of the lands to the FWBs should not come at the expense of depriving petitioner HLI what is due to it under the Constitution, the law and existing jurisprudence. If petitioner HLI has to be penalized for some historical infraction, then the factual and legal basis for such penalty has to be clearly articulated by the Court.

For the Court to impose the reckoning period for the valuation of the expropriated Hacienda Luisita farmlands to its 1989 levels is an unwarranted departure from what the Philippine legal system has come to understand and accept[8] (and continues to do so, as recently as last month) [9] as the meaning of just compensation in agrarian reform cases since the 1988 Comprehensive Agrarian Reform Law (CARL).[10] The decision taken by the Court today (albeit pro hac vice) to pay petitioner HLI an amount based on outdated values of the expropriated lands is too confiscatory considering the years of jurisprudence built by this Court. No reasonable explanation has been offered in this case to justify such deviation from our past decisions that would lead to a virtual non-compensation for petitioner HLIs lands. The majoritys and Justice Brions legal fiction that the taking is to be reckoned from the time of the approval of the SDOA is unjust for two reasons. First, the uniform jurisprudence on this matter is that taking is actual taking. Second, no clever restatement of the law is acceptable if it will result in injustice, and in this case, to a landowner who is differently treated from every other landowner.

Although I continue to believe that the application of the ordinary reckoning period for the time of the taking of the expropriated property as enunciated in existing agrarian reform jurisprudence is applicable to this case, the resolution of this case, as explained by Justice Bersamin, requires further reception of documentary evidence, administrative investigation and judicial analysis to arrive at the approximate value of the expropriated lands and the amount of just compensation to be paid to petitioner HLI. The records of the case as it now stands sorely lack factual certainty for this Court to make a proper determination of the exact award of just compensation. It has only been in the media that a purported numerical value has been argued; no argument over such amount has ever taken place before this Court. Although this Court can provide guidelines for the concerned judicial authorities, the dearth in evidence to substantiate the value of the lands (regardless of whether it is reckoned from 1989 or 2006) requires that the parties be allowed to present before an impartial authority with jurisdiction to receive evidence, hear their cases and finally decide the matter. The Supreme Court is not a trier of facts. Factual matters such as the scope of the farmlands in the name of Tarlac Development Corporation (TADECO) or petitioner HLI that should be subject to CARP coverage, the number and value of the homelots given, the improvements introduced, the type of lands subject to coverage, and the amounts actually received by both the corporate landowner and the farmworker beneficiaries during the operation of the SDOA have yet to be convincingly determined to arrive at the amount of just compensation. The more equitable solution would be to allow reception of evidence on these factual matters and to relegate the adjudication of the same to the proper trial court with exclusive and original jurisdiction over the controversy.

In the midst of these reasoned disagreements in our separate Opinions as to the period when to determine just compensation, the parties must not lose sight of our near unanimity of the substantial merits of the case that the SDOA is nullified and that the lands should be immediately and without delay be distributed to the farmworker beneficiaries. Hence, the remand of the determination of the just compensation due to petitioner HLI should not in any way hinder the immediate distribution of the farmlands in Hacienda Luisita. Legal processes regarding the determination of the amount to be awarded to the corporate landowner in case of non-acceptance, must not be used to deny the farmworker beneficiaries the legal victory they have long fought for and successfully obtained.

For the foregoing reasons, I join the Separate Concurring and Dissenting Opinion of Justice Lucas P. Bersamin.

MARIA LOURDES P. A. SERENO

Associate Justice

[1] After the fall of the martial law regime and at the start of the new democratic society, a window of opportunity was presented to the State to determine and adopt the type of land and agrarian reform to be implemented. The newly formed administration enjoyed a strong mandate from the people, who desired change and would support a sweeping agrarian reform measure to distribute lands. In this scenario, the State could have chosen a more revolutionary approach, introducing into its agrarian reform program a more confiscatory element. Following the examples of other revolutionary governments, the State could have resorted to simply confiscating agricultural lands under the claim of social justice and the social function of lands, with little need of payment of full just compensation. (Separate Opinion of Justice Sereno in the 22 November 2011 Resolution)

[2] Similarly, qualified FWBs should be afforded the same freedom to have the lands awarded to them transferred, disposed of, or sold, if found to have substantially greater economic value as reclassified lands. The proceeds from the sale of reclassified lands in a free, competitive market may give the qualified FWBs greater options to improve their lives. The funds sourced from the sale may open up greater and more diverse entrepreneurial opportunities for them as opposed to simply tying them to the awarded lands. Severely restricting the options available to them with respect to the use or disposition of the awarded lands will only prolong their bondage to the land instead of freeing them from economic want. Hence, in the interest of equity, the ten-year prohibitive period for the transfer of the Hacienda Luisita lands covered under the CARL shall be deemed to have been lifted, and nothing shall prevent qualified FWBs from negotiating the sale of the lands transferred to them. (Dissenting Opinion of Justice Sereno in the 05 July 2011 Decision)

[3] The approximation of fair value of the expropriated lands as just compensation is not meant to increase the burdens of payment by the qualified FWBs. When the framers of the Constitution originally determined that just compensation, as understood in prevailing jurisprudence, was to be given to landowners in agrarian reform expropriation, the point was clarified that the amounts to be awarded to the landowners were not the exact figures that would in turn be paid by the farmers, in other words it should be subsidized: xxx

Thus, the original intention was that there should be no strict correspondence between the just compensation due to the landowner and the amounts to be paid by the farmworkers: xxx (Separate Opinion of Justice Sereno in the 22 November 2011 Resolution)

[4] SECTION 26. Payment by Beneficiaries. Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The payments for the first three (3) years after the award may be at reduced amounts as established by the PARC: Provided, That the first five (5) annual payments may not be more than five percent (5%) of the value of the annual gross production as established by the DAR. Should the scheduled annual payments after the fifth year exceed ten percent (10%) of the annual gross production and the failure to produce accordingly is not due to the beneficiarys fault, the LBP may reduce the interest rate or reduce the principal obligation to make the repayment affordable. xxx

[5] Concurring and Dissenting Opinion of Justice Bersamin, p. 4.

[6] Separate Opinion (Concurring and Dissenting) of Justice Brion, pp. 11-14.

[7] Although Justice Brion reckoned the period for the valuation of the land to 21 November 1989, he recognized petitioner HLIs entitlement to the value of the improvements that it has introduced into the agricultural lands for the past twenty years. The proposition is akin to the Civil Code situation where a landowner opts to acquire the improvements introduced by a builder in good faith and must necessarily pay their value. Hence, although the land of petitioner HLI is expropriated by the government, there is a need for compensation for the introduction of the improvements actually installed by petitioner HLI, such as roads and other infrastructure, which have evidently improved the value of the property, aside from its appreciation over time. In recognizing the necessity for compensating petitioner HLI for their improvements, pegging the values to its 1989 levels will not be as severely confiscatory, if the value will be included as part of the just compensation to be paid. I would even be willing to accept the formulation proposed by Justice Brion since it would, to a lesser amount, approximates a fair market value of the property. But to simply evaluate the propertys worth to outdated levels and exclude entirely the improvements made and the market appreciation of the lands in all the 17 years that petitioner HLI invested in the lands is not even supportable by the Civil Code. (Separate Opinion of Justice Sereno in the 22 November 2011 Resolution)

[8] LBP v. Spouses Banal, G. R. No. 143276, 20 July 2004, 434 SCRA 543; LBP v. Celada, G. R. No. 164876, 23 January 2006, 479 SCRA 495; Lubrica v. LBP, G. R. No. 170220, 20 November 2006, 507 SCRA 415; LBP v. Lim, G. R. No. 171941, 02 August 2007, 529 SCRA 129; LBP v. Suntay, G. R. No. 157903, 11 October 2007, 535 SCRA 605; Spouses Lee v. LBP, G. R. No. 170422, 07 March 2008, 548 SCRA 52; LBP v. Heirs of Eleuterio Cruz, G. R. No. 175175, 29 September 2008, 567 SCRA 31; LBP v. Dumlao, G. R. No. 167809, 27 November 2008, 572 SCRA 108; LBP v. Gallego, Jr., G. R. No. 173226, 20 January 2009, 576 SCRA 680; LBP v. Kumassie Plantation, G. R. No. 177404 and 178097, 25 June 2009, 591 SCRA 1; LBP v. Rufino, G. R. No. 175644 and 175702, 02 October 2009, 602 SCRA 399; LBP v. Luciano, G. R. No. 165428, 25 November 2009, 605 SCRA 426; LBP v. Dizon, G. R. No. 160394, 27 November 2009, 606 SCRA 66; Heirs of Lorenzo and Carmen Vidad v. LBP, G. R. No. 166461, 30 April 2010, 619 SCRA 609; LBP v. Soriano, G. R. No. 180772 and 180776, 06 May 2010, 620 SCRA 347; LBP v. Barrido, G. R. No. 183688, 18 August 2010, 628 SCRA 454; LBP v. Colarina, G. R. No. 176410, 01 September 2010, 629 SCRA 614; LBP v. Livioco, G. R. No. 170685, 22 September 2010, 631 SCRA 86; LBP v. Escandor, G. R. No. 171685, 11 October 2010, 632 SCRA 504; LBP v. Rivera, G. R. No. 182431, 17 November 2010, 635 SCRA 285; LBP v. DAR, G. R. No. 171840, 04 April 2011.

[9] LBP v. Honey Comb Farms Corp., G.R. No. 169903, 29 February 2012; LBP v. Heirs of Jesus Yujuico, G.R. No. 184719, 21 March 2012.

[10] Republic Act No. 6657.