CMU vs.

DARAB
G.R. No. 100091

Facts:
Petitioner, the CMU, is an agricultural education institution owned and run by the state located
in the town of Musuan, Bukidnon province. It started as a farm school at Marilang, Bukidnon, in early
1910, in response to the public demand for and agricultural school in Mindanao.
In 1960s it was converted into a college with campus in Musuan, and became known as the
CMU. Primarily an agricultural university, the school was the answer to the need for training people in
order to develop the agricultural potential of the island of Mindanao.
On January 16, 1958 the late president Carlos P. Garcia, issued Proclamation No. 476,
withdrawing from sale or settlement and reserving for the Mindanao Agricultural College, a site which
would be the future campus of what is now the CMU. A total land area comprising 3080 hectares was
surveyed and registered and titled in the name of the petitioner.
In the early 1960s student population of the school was less than 3000. By 1988, the student
population had expanded to some 13000 students. To cope with the increase in its enrollment, it has
expanded and improved its educational facilities partly from government appropriation and partly by self-
help measures.
In 1984, the CMU approved Resolution No. 160, a livelihood program called Kilusang Sariling
Sikap Program under which the land resources of the University were leased to its faculty and
employees. This arrangement was covered by a written contract. Under this program, the faculty and staff
combine themselves to groups of five members each, and the CMU provided technical know-how,
practical training and all kinds of assistance, to enable each group to cultivate 4-5 hectares of land for the
lowland rice project. The contract prohibits participants and their hired workers to establish houses or live
in the project area and to use the cultivated land as a collateral for any kind of loan. It was expressly
stipulated that no landlord-tenant relationship existed between the CMU and the faculty and/or
employees.
Among the participants in this program were Alvin Obrique, Felix Guinanao, Joven Caballero,
Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a Physics Instructor at
the CMU while the others were employees in the lowland rice project. The other complainants, who were
not members of the faculty or non-academic staff of the CMU, were hired workers or laborers of the
participants in this program.
When petitioner Dr. Leonardo Chua became President of the CMU in July 1986, he discontinued
the agri-business project for the production of rice, corn and sugar cane known as Agri-Business
Management and Training Project, due to losses incurred while carrying on the said project. Some CMU
personnel, among whom were the complainants, were laid-off when this project was discontinued. As
Assistant Director of this agri-business project, Obrique was found guilty of mishandling the CMU funds
and was separated from service by virtue of Executive Order No. 17, the re-organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called
CMU-Income Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and
promote the spirit of self-reliance, provide socio-economic and technical training in actual field project
implementation and augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-
Integrated Development Foundation (CMU-IDF) and groups of "seldas" of 5 CMU employees, the CMU
would provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year.
The participants agreed not to allow their hired laborers or members of their family to establish
any house or live within the vicinity of the project area and not to use the allocated lot as collateral for a
loan. It was expressly provided that no tenant-landlord relationship would exist as a result of the
Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff members who were still
employed with the CMU and was not made available to former workers or employees. In the middle of
1987, to cushion the impart of the discontinuance of the rice, corn and sugar cane project on the lives of
its former workers, the CMU allowed them to participate in the CMU-IEP as special participants.
 The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose
contracts were not renewed were served with notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar can project, the
loss of jobs due to termination or separation from the service and the alleged harassment by school
authorities, all contributed to, and precipitated the filing of, the complaint.
On the basis of the above facts, the DARAB found that the private respondents were not tenants
and cannot therefore be beneficiaries under the CARP. At the same time, the DARAB ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the CMU land and their
inclusion in the CARP for distribution to qualified beneficiaries.

Issue/s:
Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of
Status of Tenants and coverage of land under CARP.
Whether or not respondent Court of Appeals committed serious errors and GADALEJ in
dismissing the Petition for Review on Certiorari and affirming the decision of DARAB

Held:
Petition is meritorious.

Ratio:
We agree with the DARAB's finding that Obrique, et. al. are not tenants. Under the terms of the
written agreement signed by Obrique, et. al., pursuant to the livelihood program called "Kilusang Sariling
Sikap Program", it was expressly stipulated that no landlord-tenant relationship existed between the CMU
and the faculty and staff (participants in the project). The CMU did not receive any share from the
harvest/fruits of the land tilled by the participants. What the CMU collected was a nominal service fee and
land use participant's fee in consideration of all the kinds of assistance given to the participants by the
CMU.
In the same paragraph of their complaint, complainants claim that they are landless peasants.
This allegation requires proof and should not be accepted as factually true. Obrique is not a landless
peasant. The facts showed he was Physics Instructor at CMU holding a very responsible position was
separated from the service on account of certain irregularities he committed while Assistant Director of
the Agri-Business Project of cultivating lowland rice. Others may, at the moment, own no land in Bukidnon
but they may not necessarily be so destitute in their places of origin. No proof whatsoever appears in the
record to show that they are landless peasants.
The evidence on record establish without doubt that the complainants were originally authorized
or given permission to occupy certain areas of the CMU property for a definite purpose to carry out
certain university projects as part of the CMU's program of activities pursuant to its avowed purpose of
giving training and instruction in agricultural and other related technologies, using the land and other
resources of the institution as a laboratory for these projects. Their entry into the land of the CMU was
with the permission and written consent of the owner, the CMU, for a limited period and for a specific
purpose. After the expiration of their privilege to occupy and cultivate the land of the CMU, their
continued stay was unauthorized and their settlement on the CMU's land was without legal authority. A
person entering upon lands of another, not claiming in good faith the right to do so by virtue of any title
of his own, or by virtue of some agreement with the owner or with one whom he believes holds title to
the land, is a squatter. Squatters cannot enter the land of another surreptitiously or by stealth, and under
the umbrella of the CARP, claim rights to said property as landless peasants. Under Section 73 of R.A.
6657, persons guilty of committing prohibited acts of forcible entry or illegal detainer do not qualify as
beneficiaries and may not avail themselves of the rights and benefits of agrarian reform. Any such person
who knowingly and willfully violates the above provision of the Act shall be punished with imprisonment
or fine at the discretion of the Court. Therefore, private respondents, not being tenants nor proven to be
landless peasants, cannot qualify as beneficiaries under the CARP.
The questioned decision of the Adjudication Board, affirmed by the Court of Appeals, segregating
400 hectares from the CMU land is primarily based on the alleged fact that the land subject is "not
directly, actually and exclusively used for school sites, because the same was leased to Philippine Packing
Corporation (now Del Monte Philippines)".
In support of this view, the Board held that the "respondent University failed to show that it is
using actually, really, truly and in fact, the questioned area to the exclusion of others, nor did it show that
the same is directly used without any intervening agency or person", and "there is no definite and
concrete showing that the use of said lands are essentially indispensable for educational purposes". The
reliance by the respondents Board and Appellate Tribunal on the technical or literal definition from
Moreno's Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary reader a classroom
meaning of the phrase "is actually directly and exclusively", but in so doing they missed the true meaning
of Section 10, R.A. 6657, as to what lands are exempted or excluded from the coverage of the CARP.
The construction given by the DARAB to Section 10 restricts the land area of the CMU to its
present needs or to a land area presently, actively exploited and utilized by the university in carrying out
its present educational program with its present student population and academic facility overlooking the
very significant factor of growth of the university in the years to come. By the nature of the CMU, which is
a school established to promote agriculture and industry, the need for a vast tract of agricultural land and
for future programs of expansion is obvious. It was in this same spirit that President Garcia issued
Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural
College (forerunner of the CMU) a land reservation of 3,080 hectares as its future campus. It was set up in
Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide-open
spaces to grow as an agricultural educational institution, to develop and train future farmers of Mindanao
and help attract settlers to that part of the country.
The first land use plan of the CARP was prepared in 1975 and since then it has undergone several
revisions in line with changing economic conditions, national economic policies and financial limitations
and availability of resources. The CMU, through Resolution No. 160 S. 1984, pursuant to its development
plan, adopted a multi-disciplinary applied research extension and productivity program called the
"Kilusang Sariling Sikap Project" (CMU-KSSP).
The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils.,
Inc.) was leased long before the CARP was passed. The agreement with the Philippine Packing Corporation
was not a lease but a Management and Development Agreement, a joint undertaking where use by the
Philippine Packing Corporation of the land was part of the CMU research program, with the direct
participation of faculty and students. Said contracts with the Philippine Packing Corporation and others of
a similar nature were made prior to the enactment of R.A. 6657 and were directly connected to the
purpose and objectives of the CMU as an educational institution. As soon as the objectives of the
agreement for the joint use of the CMU land were achieved as of June 1988, the CMU adopted a blue
print for the exclusive use and utilization of said areas to carry out its own research and agricultural
experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU,
the school is in the best position to resolve and answer the question and pass upon the problem of its
needs in relation to its avowed objectives for which the land was given to it by the State. Neither the
DARAB nor the Court of Appeals has the right to substitute its judgment or discretion on this matter,
unless the evidentiary facts are so manifest as to show that the CMU has no real for the land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the
Court of Appeals in its Decision dated August 20, 1990, is not covered by the CARP becauase (1) It is not
alienable and disposable land of the public domain; (2) The CMU land reservation is not in excess of
specific limits as determined by Congress; (3) It is private land registered and titled in the name of its
lawful owner, the CMU; (4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands
are actually, directly and exclusively used and found to be necessary for school site and campus, including
experimental farm stations for educational purposes, and for establishing seed and seedling research and
pilot production centers.
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB
is limited only to matters involving the implementation of the CARP. It is restricted to agrarian cases and
controversies involving lands falling within the coverage of the aforementioned program. It does not
include those, which are actually, directly, and exclusively used and found to be necessary for, among
such purposes, school sites and campuses for setting up experimental farm stations, research and pilot
production centers.
Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it
involving a portion of the CMU's titled school site, as the portion of the CMU land reservation ordered
segregated is actually, directly and exclusively used and found by the school to be necessary for its
purposes. The CMU has constantly raised the issue of the DARAB's lack of jurisdiction and has questioned
the respondent's authority to hear, try and adjudicate the case at bar. Despite the law and the evidence
on record tending to establish that the fact that the DARAB had no jurisdiction, it made the adjudication
now subject of review.
In this case, DARAB found that the complainants are not share tenants or lease holders of the
CMU, yet it ordered the "segregation of a suitable compact and contiguous area of Four Hundred
hectares, more or less", from the CMU land reservation, and directed the DAR Regional Director to
implement its order of segregation. Having found that the complainants in this agrarian dispute for
Declaration of Tenancy Status are not entitled to claim as beneficiaries of the CARP because they are not
share tenants or leaseholders, its order for the segregation of 400 hectares of the CMU land was without
legal authority.
We do not believe that the quasi-judicial function of the DARAB carries with it greater authority
than ordinary courts to make an award beyond what was demanded by the complainants/petitioners,
even in an agrarian dispute. Where the quasi-judicial body finds that the complainants/petitioners are not
entitled to the rights they are demanding, it is an erroneous interpretation of authority for that quasi-
judicial body to order private property to be awarded to future beneficiaries. The order segregation 400
hectares of the CMU land was issued on a finding that the complainants are not entitled as beneficiaries,
and on an erroneous assumption that the CMU land which is excluded or exempted under the law is
subject to the coverage of the CARP. Going beyond what was asked by the complainants who were not
entitled to the relief prayed the complainants who were not entitled to the relief prayed for,
constitutes a grave abuse of discretion because it implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction.
The education of the youth and agrarian reform are admittedly among the highest priorities in
the government socio-economic programs. In this case, neither need give way to the other. Certainly,
there must still be vast tracts of agricultural land in Mindanao outside the CMU land reservation which
can be made available to landless peasants, assuming the claimants here, or some of them, can qualify as
CARP beneficiaries. To our mind, the taking of the CMU land which had been segregated for educational
purposes for distribution to yet uncertain beneficiaries is a gross misinterpretation of the authority and
jurisdiction granted by law to the DARAB.
It is the opinion of the Court that the evidence is sufficient to sustain a finding of grave abuse of
discretion by respondents Court of Appeals and DAR Adjudication Board. Declaring the decision of the
DARAB dated September 4, 1989 and the decision of the Court of Appeals dated August 20, 1990,
affirming the decision of the quasi-judicial body, as null and void and ordered to be set aside.
 ASSOCIATION OF SMALL LAND OWNERS VS. SEC OF DAR

These are four consolidated cases questioning the constitutionality of the Comprehensive
Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A.
No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes a
call for the adoption by the State of an agrarian reform program. The State shall, by law,
undertake an agrarian reform program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted in 1963. P.D. No.
27 was promulgated in 1972 to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for landowners.
In 1987, President Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor of
the beneficiaries of PD 27 and providing for the valuation of still unvalued lands covered by the
decree as well as the manner of their payment. In 1987, P.P. No. 131, instituting a
comprehensive agrarian reform program (CARP) was enacted; later, E.O. No. 229, providing the
mechanics for its (PP131s) implementation, was also enacted. Afterwhich is the enactment of
R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law, while considerably
changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as
they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from the land
distribution scheme provided for in R.A. 6657. The Association is comprised of landowners of
ricelands and cornlands whose landholdings do not exceed 7 hectares. They invoke that since
their landholdings are less than 7 hectares, they should not be forced to distribute their land to
their tenants under R.A. 6657 for they themselves have shown willingness to till their own land. In
short, they want to be exempted from agrarian reform program because they claim to belong to a
different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on
the ground that these laws already valuated their lands for the agrarian reform program and that
the specific amount must be determined by the Department of Agrarian Reform (DAR). Manaay
averred that this violated the principle in eminent domain which provides that only courts can
determine just compensation. This, for Manaay, also violated due process for under the
constitution, no property shall be taken for public use without just compensation.
Manaay also questioned the provision which states that landowners may be paid for their land in
bonds and not necessarily in cash. Manaay averred that just compensation has always been in
the form of money and not in bonds.
ISSUE:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of
cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt from
the agrarian reform program. Under the law, classification has been defined as the grouping of
persons or things similar to each other in certain particulars and different from each other in these
same particulars. To be valid, it must conform to the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated alike
both as to the rights conferred and the liabilities imposed. The Association have not shown that
they belong to a different class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the burden of
implementing land reform must be rejected. There is a substantial distinction between these two
classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of justice except
only where its discretion is abused to the detriment of the Bill of Rights. In the contrary, it appears
that Congress is right in classifying small landowners as part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts.
However, there is no law which prohibits administrative bodies like the DAR from determining just
compensation. In fact, just compensation can be that amount agreed upon by the landowner and
the government even without judicial intervention so long as both parties agree. The DAR can
determine just compensation through appraisers and if the landowner agrees, then judicial
intervention is not needed. What is contemplated by law however is that, the just compensation
determined by an administrative body is merely preliminary. If the landowner does not agree with
the finding of just compensation by an administrative body, then it can go to court and the
determination of the latter shall be the final determination. This is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.

3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise
of eminent domain. The agrarian reform program is a revolutionary exercise of eminent domain.
The program will require billions of pesos in funds if all compensation have to be made in cash
if everything is in cash, then the government will not have sufficient money hence,
bonds, and other securities, i.e., shares of stocks, may be used for just
compensation.

LAND BANK OF THE PHILIPPINES, Petitioner,

vs. HON. ELI G. C. NATIVIDAD and JOSE R. CAGUIAT
G.R. No. 127198. May 16, 2005

FACTS:

Private respondents filed a petition before the trial court for the determination of just
compensation for their agricultural lands, which were acquired by the government
pursuant to PD 27. The RTC ordered Land Bank and DAR to pay respondents' land for
P30 per square meters. Land Bank was not able to file its motion for reconsideration on
time because the motion filed by its counsel lacked a notice of hearing. Land Bank argues
that the failure of its counsel is due to intense work-pressure and constitutes excusable
negligence, so the trial court should have heard the relief in accordance with Sec 1 of
Rule 38 of the 1997 Rules of Civil Procedure. Land Bank also argues that respondents
failed to exhaust administrative remedies when they filed a petition for the
determination of just compensation directly with the trial court because they should have
first sought reconsideration of the DAR's valuation of their properties. Landbank also avers that
just compensation must be based on the PD 27 because the property was acquired for purposes
of agrarian reform on October 21, 1972, the time of the effectivity of PD 27.

Issue : 1. w/n the just compensation shall be based on pd 27?

2. whether counsels failure to include a notice of hearing constitutes
excusable negligence entitling Land Bank to a relief from judgment.

HELD:
1. As can clearly be gleaned from the foregoing provision, the remedy of relief from
judgment can only be resorted to on grounds of fraud, accident, mistake or excusable
negligence. Negligence to be excusable must be one which ordinary diligence and
prudence could not have guarded against. Measured against this standard, the reason
profferred by Land Banks counsel, i.e., that his heavy workload prevented him from
ensuring that the motion for reconsideration included a notice of hearing, was by no
means excusable.
Indeed, counsels admission that he simply scanned and signed the Motion for
Reconsideration for Agrarian Case No. 2005, Regional Trial Court of Pampanga, Branch 48, not
knowing, or unmindful that it had no notice of hearing speaks volumes of his arrant negligence,
and cannot in any manner be deemed to constitute excusable negligence.

2. We ruled that the seizure of the landholding did not take place on the date of effectivity
of PD 27 but would take effect on the payment of just compensation. Under the factual
circumstances of this case, the agrarian reform process is still incomplete as the just
compensation to be paid private respondents has yet to be settled. Considering the
passage of Republic Act No. 6657 (RA 6657)[22] before the completion of this process,
the just compensation should be determined and the process concluded under the said
law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having only
suppletory effect.

Section 17 of RA 6657 which is particularly relevant, providing as it does the guideposts for
the determination of just compensation, reads as follows:

Sec. 17. Determination of Just Compensation.In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed by the farmers and
the farm-workers and by the Government to the property as well as the non-payment of taxes or
loans secured from any government financing institution on the said land shall be considered as
additional factors to determine its valuation.

It would certainly be inequitable to determine just compensation based on the guideline

provided by PD 27 and EO 228 considering the DARs failure to determine the just compensation
for a considerable length of time. That just compensation should be determined in accordance
with RA 6657, and not PD 27 or EO 228, is especially imperative considering that just
compensation should be the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.[24]
In this case, the trial court arrived at the just compensation due private respondents for their
property, taking into account its nature as irrigated land, location along the highway, market
value, assessors value and the volume and value of its produce. This Court is convinced that the
trial court correctly determined the amount of just compensation due private respondents in
accordance with, and guided by, RA 6657 and existing jurisprudence.

LAND BANK OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL
MANAGEMENT & DEVELOPMENT CORP., respondents.
G.R. No. 118712
October 6, 1995 (2D)

Facts: Separate petitions for review were filed by petitioners Department of Agrarian Reform
(DAR) (G.R. No. 118745) and Land Bank of the Philippines (LBP) (G.R. No. 118712) following the
adverse ruling by the Court of Appeals, granting private respondents' Petition for Certiorari and
Mandamus. However, upon motion filed by private respondents, the petitions were ordered
consolidated. Likewise, petitioners seek the reversal of the Resolution, denying their motion for
reconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and
subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian
Reform Law (CARL). Aggrieved by the alleged lapses of the DAR and LBP with respect to the
valuation and payment of compensation for their land pursuant to the provisions of RA 6657,
private respondents filed with the Court a Petition for Certiorari and Mandamus with prayer for
preliminary mandatory injunction. Private respondents argued that Administrative Order No. 9,
Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it
permits the opening of trust accounts by the LBP, in lieu of depositing in cash or bonds in an
accessible bank designated by the DAR, the compensation for the land before it is taken and the
titles are cancelled as provided under Section 16(e) of RA 6657. Private respondents also assail
the fact that the DAR and the LBP merely "earmarked", "deposited in trust" or "reserved" the
compensation in their names as landowners despite the clear mandate that before taking
possession of the property, the compensation must be deposited in cash or in bonds. The
respondent court rendered the assailed decision in favor of private respondents. Petitioners
filed a motion for reconsideration but respondent court denied the same, hence, the instant
petitions.

Issue: Whether or not the deposit may be made in other forms besides cash or LBP bonds

Held: In the present suit, the DAR clearly overstepped the limits of its power to enact rules
and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the
opening of a trust account in behalf of the landowner as compensation for his property because
Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP
bonds". If it were the intention to include a "trust account" among the valid modes of deposit
that should have been made express, or at least, qualifying words ought to have appeared from
which it can be fairly deduced that a "trust account" is allowed.

The ruling in the "Association" case merely recognized the extraordinary nature of the
expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional
mode of payment of compensation and recognized payment other than in cash. It did not,
however, dispense with the settled rule that there must be full payment of just compensation
before the title to the expropriated property is transferred.

Issue: Whether or not there should be a distinction the deposit of compensation and
determination of just compensation

Held: To withhold the right of the landowners to appropriate the amounts already deposited
in their behalf as compensation for their properties simply because they rejected the DAR's
valuation, and notwithstanding that they have already been deprived of the possession and use
of such properties is an oppressive exercise of eminent domain. It is unnecessary to distinguish
between deposit of compensation (provisional) under Section 16(e) and determination of just
compensation (final) under Section 18 for purposes of exercising the landowners' right to
appropriate the same. The immediate effect in both situations is the same the landowner is
deprived of the use and possession of his property for which he should be fairly and
immediately compensated.

JOSEFINA S. LUBRICA, in her capacity as Assignee of FEDERICO C. SUNTAY, NENITA

SUNTAY TAEDO and EMILIO A.M. SUNTAY III, Petitioners, vs.LAND BANK OF THE
PHILIPPINES, Respondent.

FACTS:

Petitioner Josefina S. Lubrica is the assignee2 of Federico C. Suntay over certain parcels of
agricultural land located at Sta. Lucia, Sablayan, Occidental Mindoro, with an area of 3,682.0285
hectares covered by Transfer Certificate of Title (TCT).
In 1972, a portion of the said property with an area of 311.7682 hectares, was placed under the
land reform program pursuant to Presidential Decree No. 27 (1972) 4 and Executive Order No.
228 (1987).5 The land was thereafter subdivided and distributed to farmer beneficiaries. The
Department of Agrarian Reform (DAR) and the LBP fixed the value of the land at P5,056,833.54
which amount was deposited in cash and bonds in favor of Lubrica.
Nenita Suntay-Taedo and Emilio A.M. Suntay III inherited from Federico Suntay a parcel of
agricultural land consisting of two lots, namely, Lot 1 with an area of 45.0760 hectares and Lot 2
containing an area of 165.1571 hectares or a total of 210.2331 hectares. Lot 2 was placed under
the coverage of P.D. No. 27 but only 128.7161 hectares was considered by LBP and valued the
same at P1,512,575.05.
Petitioners rejected the valuation of their properties, hence the Office of the Provincial Agrarian
Reform Adjudicator (PARAD) conducted summary administrative proceedings for determination
of just compensation.

Petitioners insist that the determination of just compensation should be based on the value of the
expropriated properties at the time of payment. Respondent LBP, on the other hand, claims that
the value of the realties should be computed as of October 21, 1972 when P.D. No. 27 took
effect.

ISSUE: WON the determination of just compensation should be based on the value of the
expropriated properties at the time of payment.

HELD: Yes, at the time of the payment.

 As ruled in Lanbank vs. Natividad.: We ruled that the seizure of the landholding did not
take place on the date of effectivity of PD 27 but would take effect on the payment of just
compensation.
In the instant case, petitioners were deprived of their properties in 1972 but have yet to
receive the just compensation therefor. The parcels of land were already subdivided and
distributed to the farmer-beneficiaries thereby immediately depriving petitioners of their
use. Under the circumstances, it would be highly inequitable on the part of the petitioners to
compute the just compensation using the values at the time of the taking in 1972, and not at the
time of the payment, considering that the government and the farmer-beneficiaries have already
benefited from the land although ownership thereof have not yet been transferred in their names.
Petitioners were deprived of their properties without payment of just compensation which, under
the law, is a prerequisite before the property can be taken away from its owners. 27 The transfer of
possession and ownership of the land to the government are conditioned upon the receipt by the
landowner of the corresponding payment or deposit by the DAR of the compensation with an
accessible bank. Until then, title remains with the landowner.
The CARP Law, for its part, conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding payment or the deposit
by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title
also remains with the landowner. No outright change of ownership is contemplated either.
Petitioners were deprived of their properties way back in 1972, yet to date, they have not yet
received just compensation. Thus, it would certainly be inequitable to determine just
compensation based on the guideline provided by P.D. No. 227 and E.O. No. 228 considering the
failure to determine just compensation for a considerable length of time. That just compensation
should be determined in accordance with R.A. No. 6657 and not P.D. No. 227 or E.O. No. 228, is
important considering that just compensation should be the full and fair equivalent of the property
taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.