G.R. No.

118712 | October 6, 1995 | LAND BANK OF THE PHILIPPINES,

petitioner, vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF
E M I L I A N O F . S A N T I A G O , AGRICULTURAL MANAGEMENT &
DEVELOPMENT CORP.,
respondents
.

| FRANCISCO,R.,
J.:
FACTS
The nature of the case is the consolidation of two separate petitions for
r e v i e w f i l e d b yD e p a r t m e n t o f A g r a r i a n R e f o r m a n d L a n d B a n k o f t h e
P h i l i p p i n e s , a s s a i l i n g t h e C o u r t o f Appeal’s decision, which granted private
respondents' petition for
Certiorari
and
Mandamus.
Pedro Yap, Heirs of Emiliano Santiago, Agricultural
M a n a g e m e n t a n d D e v e l o p m e n t Corporation or AMADCOR (private
respondents)

are landowners whose landholdings wereacquired by the DAR and subjected to

transfer schemes to qualified beneficiaries under theComprehensive Agrarian Reform
Law (RA 6657). Aggrieved by the alleged lapses of the DARand the Landbank with respect to
the valuation and payment of compensation for their land,private respondents filed with the
Supreme Court a petition questioning the validity of DARAdministrative Order No.
6 (1992)

and No. 9 (1990),

a n d s o u g h t t o c o m p e l t h e D A R t o expedite the pending summary

administrative proceedings to finally determine the just c o m p e n s a t i o n o f
their properties, and the Landbank to deposit in cash and bonds
t h e amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for
privater e s p o n d e n t s , a n d t o a l l o w t h e m t o w i t h d r a w t h e s a m e . T h e S u p r e m e
C o u r t r e f e r r e d t h e petition to CA for proper determination and disposition. The CA found
the following facts undisputed:Respondents argued that Admin. Order No. 9 (1990) was issued
in grave abuse of discretiona m o u n t i n g e x c e s s i n j u r i s d i c t i o n b e c a u s e i t p e r m i t s
t h e o p e n i n g o f t r u s t a c c o u n t s b y t h e Landbank, 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 underSection 16(e) of RA 6657. DAR and the Landbank
merely "earmarked", "deposited in trust" or"reserved" the compensation in their names as
landowners despite the clear mandate thatbefore taking possession of the property,
the compensation must be deposited in cash or in bonds.On the other hand, petitioner
DAR contended that Admin Order No. 9 is a valid exercise of itsrule-making power pursuant
to Section 49 of RA 6657.

The issuance of the "Certificate of D e p o s i t " b y t h e L a n d b a n k w a s a

s u b s t a n t i a l c o m p l i a n c e w i t h S e c t i o n 1 6 ( e ) o f R A 6 6 5 7 . Landbank averred that
the issuance of the Certificates of Deposits is in cons onance withC i r c u l a r N o s .
29, 29-A and 54 of the Land Registration Authority where
t h e w o r d s "reserved/deposited" were also used.
ISSUES
1. WON CA erred in declaring as null and void DAR Admin Order No. 9 (1990)
insofar as itprovides for the opening of trust accounts in lieu of deposit in cash or in bonds2.
WON CA erred in holding that private respondents are entitled as a matter of right
to thei m m e d i a t e a n d p r o v i s i o n a l r e l e a s e o f t h e a m o u n t s d e p o s i t e d i n t r u s t
p e n d i n g t h e f i n a l resolution of the cases it has filed for just compensation.

RULING:
NO. Section 16 (e) of RA 6657 provides:Procedure for Acquisition of Private Lands. (e)
Upon receipt by the landowner of t h e c o r r e s p o n d i n g p a ym e n t o r , i n c a s e o f
r e j e c t i o n o r n o r e s p o n s e f r o m t h e landowner, upon
the deposit with an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds
in accordance with this Act, the DAR shall take immediate possession of the land and shall
request the proper Registerof Deeds to issue a TCT in the name of the Republic of the
Philippines.It is explicit that the deposit must be made only in "cash" or in "LBP bonds".
Nowhere does itappear nor can it be inferred that the deposit can be made in any other
form. There is noa m b i g u i t y i n S e c t i o n 1 6 ( e ) o f R A 6 6 5 7 t o w a r r a n t a n
e x p a n d e d c o n s t r u c t i o n o f t h e t e r m "deposit". T h e c o n c l u s i v e e f f e c t o f
administrative construction is not absolute. Action of
a n administrative agency may be disturbed or set aside by the judicial department if there is
anerror of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretion
clearlyc o n f l i c t i n g w i t h e i t h e r t h e l e t t e r o r t h e s p i r i t o f a l e g i s l a t i v e
enactment.

T h e f u n c t i o n o f promulgating rules and regulations may be legitimate ly

exercised only for the purpose of carrying the provisions of the law into effect. The
power of administrative agencies is thus c o n f i n e d t o i m p l e m e n t i n g t h e
law or putting it into effect. Corollary to this is
t h a t administrative regulations cannot extend t he law and amend a legislative
enactment,

forsettled is the rule that administrative regulations must be in harmony with the provisions
of the law. And in case there is a discrepancy between the basic law and an implementing ruleor
regulation, it is the former that prevails.2. YES. To withhold the right of the landowners to
appropriate the amounts already depositedin 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 anduse of such properties, is an
oppressive exercise of eminent domain. It is unnecessary todistinguish between
provisional compensation under Section 16(e) and final compensationunder 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
andpossession of his property for which he should be fairly and immediately
compensated.Wherefore, petition is denied for lack of merit. Appealed decision is affirmed.

G.R. No. 118712 Case Digest

G.R. No. 118712, October 6, 1995

Landbank of the Philippines
vs Court of Appeals, Pedro Yap, Heirs of Emiliano Santiago,
Agricultural Management and Development Corp.
Ponente: Francisco

Facts:
Yap and Santiago are landowners whose landholdings were acquired
by the DAR, subjecting it for transfer to qualified CARP
beneficiaries. Aggrieved by the compensation valuation of DAR
and LBP, respondents filed a petition for certiorari and
mandamus with a preliminary mandatory injunction. The case was
referred to CA for proper determination and disposition.

Respondents argued that DAR and LBP committed grave abuse of

discretion and acted without jurisdiction when they opened
trusts accounts in lieu of the depositing in cash or bonds,
before the lands was taken and the titles are cancelled.
Respondents claim that before the taking of the property, the
compensation must be deposited in cash or bonds.

DAR, maintained that the certificate of deposit was a

substantial compliance with the rule on taking and compensation.
LBP confirms that the certificate of deposit expresses
"reserved/deposited".

CA ruled in favor of Yap and Santiago. DAR filed a petition.

DAR, maintain that the word "deposit" referred merely to the act
of depositing and in no way excluded the opening of a trust
account as form of deposit.

Issue: Whether the opening of trust account tantamount to

deposit.

Ruling:
Contention of DAR is untenable. Section 16 of RA 6657 provides:
(e) Upon receipt by the landowner of the corresponding
payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated
by the DAR of the compensation in cash or in LBP bonds in
accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of
Deeds to issue a Transfer Certificate of Title (TCT) in the name
of the Republic of the Philippines. . . . (emphasis supplied)

It is very explicit that the deposit must be made only in cash

or LBP bonds, there is no ambiguity.