G.R. No. 247339 - Department of Agrarian Reform vs. Lapanday Foods Corp.

Case Digest (G.R. No. 247339)
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Facts:

Agrarian Reform Background and Land Acquisition

Hijo Plantation, Inc. (Hijo Plantation) offered its 450.3958-hectare property in Madaum, Tagum City, Davao del Norte, covered by Transfer Certificate of Title No. C-1118, for inclusion in the Comprehensive Agrarian Reform Program (CARP).
The government purchased the property at PHP 1.03 million per hectare and, after the necessary qualification process, awarded it to 567 identified agrarian reform beneficiaries who organized themselves into the Hijo Employees Agrarian Reform Beneficiaries Cooperative 1 (Hijo Cooperative).
The property was officially awarded on December 23, 1996, with registration of title following on June 22, 1998.

Entry into Agribusiness Venture Arrangements

On October 18, 1999, Hijo Plantation and Hijo Cooperative entered into an agribusiness venture agreement, executed through a Banana Sales and Marketing Agreement where the Cooperative was tasked to grow export-quality bananas for purchase by Hijo Plantation at an agreed price.
Immediately on the same day, Hijo Plantation transferred its rights under the Agreement to Global Fruits Corporation, later renamed Lapanday Foods Corporation (Lapanday).
The agreement was extended to remain in effect until 2019, and on December 17, 2000, Lapanday and Hijo Cooperative executed a Banana Purchase Agreement whereby Hijo Cooperative undertook to sell its Class B Cavendish bananas exclusively to Lapanday.

Internal Disputes Among Agrarian Reform Beneficiaries

Some Hijo Cooperative members opposed the agribusiness venture agreements and broke away from the original cooperative to form the Madaum Agrarian Reform Beneficiaries Association, Incorporated (Madaum Association).
This split resulted in 159 original agrarian reform beneficiaries leaving Hijo Cooperative, which later contributed to contractual and operational disputes between the parties.
Subsequent disagreements led Lapanday to allege that the Madaum Association members had breached contractual obligations.

Judicial and Extrajudicial Developments with Respect to the Compromise Agreement

In response to alleged breaches when Hijo Cooperative refused to deliver bananas as mandated in the agreements, Lapanday initiated legal actions for specific performance and damages both before the Office of the Provincial Agrarian Reform Adjudicator and the Regional Trial Court (RTC).
The RTC, on issuing a writ of preliminary injunction, directed all parties to observe the terms of the agreements.
On April 9, 2011, Lapanday and Hijo Cooperative reached a compromise agreement, which was subsequently approved by the RTC on September 30, 2011, thereby rendering the compromise final and executory.
Later, Lapanday sought to enforce this judicially approved compromise agreement by obtaining an alias writ of execution (November 2, 2016), which provided for the removal of barricades and enforcement actions—measures that affected both Hijo Cooperative and the Madaum Association members.
The enforcement led to episodes of violence, notably on December 12, 2016, when Lapanday security guards shot some members of the Madaum Association, prompting the Department of Agrarian Reform (DAR) to issue a cease-and-desist order to help maintain order.
DAR subsequently moved to quash the alias writ of execution and filed motions to intervene and seek reconsideration, asserting that the actions at hand constituted an agrarian dispute under its exclusive jurisdiction.
Lower courts (RTC and Court of Appeals) denied these motions on the ground that the dispute principally involved contractual obligations under civil law rather than a bona fide agrarian dispute as defined by law.

Contentions and Positions of the Parties

The petitioner, the DAR, contended that the enforcement of the compromise agreement, particularly the removal of Madaum Association members from the San Isidro Farm Area, created an agrarian dispute by infringing on their tenurial rights.
Private respondent Lapanday argued that the controversy was strictly a matter of breach of contract concerning the agribusiness venture agreements and that it fell within the jurisdiction of regular courts.
Other private respondents supported the view that the case did in fact involve an agrarian dispute necessitating referral to the DAR, emphasizing the impact on the agrarian reform beneficiaries' rights.
The dispute ultimately raised two pivotal issues: the nature of the controversy (agrarian dispute versus civil contract matter) and the proper jurisdiction for its resolution.

Issues:

Jurisdiction and Intervention

Whether the petitioner, the Department of Agrarian Reform, has the legal right to intervene in a litigation involving a compromise agreement for specific performance and damages between private respondents.
Whether the controversy arising from the enforcement of the judicially approved compromise agreement constitutes an "agrarian dispute" under Republic Act No. 6657, thereby invoking DAR’s exclusive jurisdiction.

Validity and Enforceability of the Compromise Agreement

Whether the Court of Appeals erred in upholding the final and executory nature of the compromise agreement between Lapanday Foods Corporation and Hijo Employees Agrarian Reform Beneficiaries Cooperative 1.
Whether the issuance of the alias writ of execution, along with subsequent enforcement actions, transformed the subject matter into an agrarian dispute warranting intervention by DAR.

Ruling:

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Ratio:

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Doctrine:

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Case Digest (G.R. No. 247339)
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