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 RE

FACTS:
​In 1958, the Spanish owners of Compañia General de Tabacos de Filipinas (Tabacalera) sold Hacienda Luisita and the Central Azucarera de Tarlac, the sugar mill of the hacienda, to the Tarlac Development Corporation (Tadeco), then owned and controlled by the Jose Cojuangco Sr. Group. The Central Bank of the Philippines assisted Tadeco in obtaining a dollar loan from a US bank. Also, the GSIS extended a PhP5.911 million loan in favor of Tadeco to pay the peso price component of the sale, with the condition that “the lots comprising the Hacienda Luisita 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.” Tadeco however did not comply with this condition. 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) so that the land can be distributed to farmers at cost. Responding, Tadeco 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 Manila RTC rendered judgment ordering Tadeco to surrender Hacienda Luisita to the MAR. Therefrom, Tadeco appealed to the CA. On March 17, 1988, during the administration of President Corazon Cojuangco Aquino, the Office of the Solicitor General moved to withdraw the government’s case against Tadeco, et al. The CA dismissed the case, subject to the PARC’s approval of Tadeco’s proposed stock distribution plan (SDP) in favor of its farmworkers. [Under EO 229 and later RA 6657, Tadeco had the option of availing stock distribution as an alternative modality to actual land transfer to the farmworkers.] On August 23, 1988, Tadeco organized a spin-off corporation, herein petitioner HLI, as vehicle to facilitate stock acquisition by the farmworkers. For this purpose, Tadeco conveyed to HLI the agricultural land portion (4,915.75 hectares) and other farm-related properties of Hacienda Luisita in exchange for HLI shares of stock. On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement of Hacienda Luisita signified in a referendum their acceptance of the proposed HLI’s Stock Distribution Option Plan (SODP). On May 11, 1989, the SDOA was formally entered into by Tadeco, HLI, and the 5,848 qualified FWBs. This attested to by then DAR Secretary Philip Juico. The SDOA embodied the basis and mechanics of HLI’s SDP, which was eventually approved by the PARC after a follow-up referendum conducted by the DAR on October 14, 1989, in which 5,117 FWBs, out of 5,315 who participated, opted to receive shares in HLI. On August 15, 1995, HLI applied for the conversion of 500 hectares of land of the hacienda from agricultural to industrial use, pursuant to Sec. 65 of RA 6657. The DAR approved the application on August 14, 1996, subject to payment of three percent (3%) of the gross selling price to the FWBs and to HLI’s continued compliance with its undertakings under the SDP, among other conditions. On December 13, 1996, HLI, in exchange for subscription of 12,000,000 shares of stocks of Centennary Holdings, Inc. (Centennary), ceded 300 hectares of the converted area to the latter. Subsequently, Centennary sold the entire 300 hectares for PhP750 million to Luisita Industrial Park Corporation (LIPCO), which used it in developing an industrial complex. From this area was carved out 2 parcels, for which 2 separate titles were issued in the name of LIPCO. Later, LIPCO transferred these 2 parcels to the Rizal Commercial Banking Corporation (RCBC) in payment of LIPCO’s PhP431,695,732.10 loan obligations to RCBC. LIPCO’s titles were cancelled and new ones were issued to RCBC. Apart from the 500 hectares, another 80.51 hectares were later detached from Hacienda Luisita and acquired by the government as part of the Subic-Clark-Tarlac Expressway (SCTEX) complex. Thus, 4,335.75 hectares remained of the original 4,915 hectares Tadeco ceded to HLI. Such, was the state of things when two separate petitions reached the DAR in the latter part of 2003. The first was filed by the Supervisory Group of HLI (Supervisory Group), praying for a renegotiation of the SDOA, or, in the alternative, its revocation. The second petition, praying for the revocation and nullification of the SDOA and the distribution of the lands in the hacienda, was filed by Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA). The DAR then constituted a Special Task Force (STF) to attend to issues relating to the SDP of HLI. After investigation and evaluation, the STF found that HLI has not complied with its obligations under RA 6657 despite the implementation of the SDP. On December 22, 2005, the PARC issued the assailed Resolution No. 2005-32-01, recalling/revoking the SDO plan of Tadeco/HLI. It further resolved that the subject lands be forthwith placed under the compulsory coverage or mandated land acquisition scheme of the CARP. From the foregoing resolution, HLI sought reconsideration. Its motion notwithstanding, HLI also filed a petition before the Supreme Court in light of what it considers as the DAR’s hasty placing of Hacienda Luisita under CARP even before PARC could rule or even read the motion for reconsideration. PARC would eventually deny HLI’s motion for reconsideration via Resolution No. 2006-34-01 dated May 3, 2006.

ISSUE:
Whether Hacienda Luisita Inc. can shield itself from the coverage of CARP by invoking exclusive applicability of the Corporation Code under the guise of being a corporate entity

HELD:
​No. 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—generalia specialibus non derogant. It should abundantly be made clear that Hacienda Luisita Inc. was precisely created in order to comply with R.A 9557. It is, thus, paradoxical for Hacienda Luisita Inc. to shield itself from the coverage of CARP by invoking exclusive applicability of the Corporation Code under the guise of being a corporate entity. Evidently, R.A 6657 should be the applicable law to the instant case. Moreover, bearing in mind that with the revocation of the approval of the SDP, HLI will no longer be operating under SDP and will only be treated as an ordinary private corporation; the FWBs who remain as stockholders of HLI will be treated as ordinary stockholders and will no longer be under the protective mantle of RA 6657.