Here are selected November 2011 rulings of the Supreme Court of the Philippines on political law.
Constitutional Law
Agrarian reform; control over agricultural lands. Upon review of the facts and circumstances, the Court concluded that the farm worker beneficiaries (FWBs) will never have control over the agricultural lands as long as they remain as stockholders of HLI. Since control over agricultural lands must always be in the hands of the farmers, the Court reconsidered its earlier ruling that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control given the present proportion of shareholdings in HLI. A revisit of HLI’s Proposal for Stock Distribution under CARP and the Stock Distribution Option Agreement upon which the proposal was based reveals that the total assets of HLI is PhP590,554,220, while the value of the 4,915.7466 hectares is PhP196,630,000. Consequently, the share of the farmer-beneficiaries in the HLI capital stock is 33.296% (196,630,000 divided by 590,554.220); 118,391,976.85 HLI shares represent 33.296%. Thus, even if all the holders of the 118,391,976.85 HLI shares unanimously vote to remain as HLI stockholders, which is unlikely, control will never be placed in the hands of the farmer-beneficiaries. Control, of course, means the majority of 50% plus at least one share of the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 divided by 2 plus one HLI share). 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 FWBs to acquire control of HLI. Hence, control can never be attained by the FWBs. There is even no assurance that 100% of the 118,391,976.85 shares issued to the FWBs will all be voted in favor of staying in HLI, taking into account the previous referendum among the farmers where said shares were not voted unanimously in favor of retaining the SDP. In light of the foregoing consideration, the option to remain in HLI granted to the individual FWBs will have to be recalled and revoked. 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. Hacienda Luisita Incorporated vs. Presidential Agrarian Reform Council, et al., G.R. No. 171101. November 22, 2011.
