Department of Agrarian Reform v. Lapanday Foods Corporation
REITERATIONFacts
The Antecedents: Hijo Plantation, Inc. offered its property in Madaum, Tagum City, Davao del Norte, for the Comprehensive Agrarian Reform Program (CARP). The property was purchased by the government and awarded to 567 agrarian reform beneficiaries who organized into Hijo Employees Agrarian Reform Beneficiaries Cooperative 1 (Hijo Cooperative). Hijo Plantation and Hijo Cooperative entered into an agribusiness venture agreement and a Banana Sales and Marketing Agreement. Hijo Plantation transferred its rights to Global Fruits Corporation, later renamed Lapanday Foods Corporation (Lapanday). Some Hijo Cooperative members opposed the agreements, formed Madaum Agrarian Reform Beneficiaries Association, Incorporated (Madaum Association), and left Hijo Cooperative. Lapanday charged Madaum Association leaders with contract violations. Lapanday took over the land, blocked access, and padlocked gates, preventing banana delivery. Hijo Cooperative members erected makeshift packing houses and sold to other buyers. Procedural History: Lapanday filed an action for specific performance before the Provincial Agrarian Reform Adjudicator (PARAD), which directed parties to preserve the status quo. Lapanday also filed a complaint for specific performance and damages with an application for a writ of preliminary injunction against Hijo Cooperative and its officers before the Regional Trial Court (RTC), which issued the injunction. Lapanday and Hijo Cooperative entered into a compromise agreement, approved by the RTC on September 30, 2011. Meanwhile, Madaum Association filed a Petition for Reinstatement, Accounting of Harvest and Damages against Hijo Cooperative before the PARAD, which was granted. Hijo Cooperative and Madaum Association executed a Kasabutan, approved by the PARAD, reinstating Madaum Association members. Hijo Cooperative filed a petition to revoke the Banana Purchase Agreement with Lapanday. Lapanday moved for a writ of execution of the RTC's compromise agreement approval. The RTC issued a writ of execution. Lapanday applied for an alias writ of execution, alleging the San Isidro Farm Area was part of its managing area. The RTC issued the alias writ of execution on November 2, 2016. Lapanday security guards shot Madaum Association members, prompting the Department of Agrarian Reform (DAR) to issue a cease-and-desist order. Lapanday's petition for certiorari against the DAR's order was denied by the Court of Appeals (CA). The DAR moved to quash the alias writ of execution, arguing primary jurisdiction over agrarian disputes. The RTC denied the DAR's motion, stating the compromise agreement was final and executory and the controversy did not arise from an agrarian dispute. The RTC denied the DAR's motion to intervene and motion for reconsideration. The DAR filed a petition for certiorari with the CA, which was denied. The CA ruled there was no agrarian dispute as the controversy originated from agribusiness venture agreements. The CA denied the DAR's motion for reconsideration. The Petition: The DAR filed a Petition for Review on Certiorari before the Supreme Court, asserting an agrarian dispute existed because Madaum Association members were removed from the San Isidro Farm Area due to the enforcement of the alias writ of execution. The DAR argued that while the interpretation and enforcement of the compromise agreement do not per se constitute an agrarian dispute, one arose when Madaum Association members were prevented from exercising their tenurial rights. The DAR also contended that the agribusiness venture agreements were governed by DAR Administrative Order No. 9, Series of 2006, which provided mechanisms for dispute resolution, and that the Presidential Agrarian Reform Council (PARC) had pending jurisdiction over the cancellation of the Banana Purchase Agreement.
Issue(s)
Whether the Department of Agrarian Reform (DAR) can intervene in an action for specific performance and damages over a compromise agreement concerning the fruits of land awarded to agrarian reform beneficiaries, considering the nature of the dispute and the applicability of civil law provisions on contracts. Whether the Court of Appeals erred in upholding the Compromise Agreement between Lapanday Foods Corporation and Hijo Employees Agrarian Reform Beneficiaries Cooperative 1, particularly regarding the finality and executory nature of the agreement and whether the subsequent refusal of some members to abide by the agreement constitutes a supervening event.
Ruling
The Petition is unmeritorious. The Supreme Court denied the Petition for Review on Certiorari filed by the Department of Agrarian Reform. FOR THESE REASONS, the Petition is DENIED.
Ratio Decidendi
On the issue of DAR's intervention and the nature of the dispute: The Supreme Court reiterated the ruling in Stanfilco Employees Agrarian Reform Beneficiaries Multi-Purpose Cooperative v. Dole Phils., stating that when an issue centers around agreements on the produce from Comprehensive Agrarian Reform Program (CARP) covered agricultural lands, civil law provisions on contracts apply, and jurisdiction falls on regular courts, not the Department of Agrarian Reform (DAR). The Court found that the issue presented was not novel and that the case at bar required the application of civil law provisions on breaches of contract, rather than agrarian reform principles. There was no tenancy relationship subsisting between the respondents, and the Hijo Cooperative maintained ownership of the land, only allowing Lapanday to manage part of the awarded land in the compromise agreement. The complaint filed by Lapanday was for specific performance, which requires the interpretation of civil law provisions on contracts and proof of breach of contract. Therefore, the issues to be resolved did not involve an agrarian dispute that would require the DAR's intervention, and the lower courts did not err in denying the DAR's motion to intervene. On the issue of the Court of Appeals' decision to uphold the Compromise Agreement: The compromise agreement between Hijo Cooperative and Lapanday was freely entered into and judicially approved, making it final and executory with the effect of res judicata. The subsequent refusal of some members to abide by the agreement was not a supervening event that would render its execution unjust and inequitable. The Court of Appeals correctly observed that the case did not involve any issue on tenurial arrangement or compensation of agricultural lands or terms and conditions of transfer of ownership from landowners to farm workers, but rather the liability for damages due to breach of contract, which would be governed by the New Civil Code relating to contracts, damages, and human relations. The claim of the Madaum Association members was considered a separate matter that was taken cognizance of by the DAR Secretary, pending determination. The enforcement of the writ of alias execution merely sought compliance from Hijo Cooperative and its members with the judicially approved compromise agreement, which was the same subject matter of the case and the judgment that became final and executory.
Main Doctrine
When the issue centers around agreements on the produce from Comprehensive Agrarian Reform Program covered agricultural lands, civil law provisions on contracts apply, and jurisdiction falls on regular courts, not the Department of Agrarian Reform, even if agrarian reform beneficiaries are involved.