G.R. No.

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

petitioner, vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F.
SANTIAGO,AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP.,
respondents

FACTS
The nature of the case is the consolidation of two separate petitions
for review filed byDepartment of Agrarian Reform and Land Bank of the
Philippines, assailing the Court of Appeals decision, which granted
private respondents' petition for Certiorari and Mandamus.
Pedro Yap, Heirs of Emiliano Santiago, Agricultural Management and
DevelopmentCorporation 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),

and sought to compel the DAR toexpedite the pending summary

administrative proceedings to finally determine the justcompensation
of their properties, and the Landbank to deposit in cash and bonds
theamounts respectively "earmarked", "reserved" and "deposited in
trust accounts" for privaterespondents, and to allow them to withdraw
the same. The Supreme Court referred thepetition 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 discretionamounting excess in jurisdiction
because it permits the opening of trust accounts by theLandbank, 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 inbonds.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 Deposit" by the Landbank was a

substantial compliance with Section 16(e) of RA 6657.Landbank
averred that the issuance of the Certificates of Deposits is in
consonance withCircular Nos. 29, 29-A and 54 of the Land Registration
Authority where the words"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 theimmediate and
provisional release of the amounts deposited in trust pending the
finalresolution 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 the corresponding
payment or, in case of rejection or no response from thelandowner,
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 DARshall 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 noambiguity in Section 16(e) of RA 6657 to
warrant an expanded construction of the term"deposit". The conclusive
effect of administrative construction is not absolute. Action of
anadministrative 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 clearlyconflicting with either
the letter or the spirit of a legislative enactment.

The function of promulgating rules and regulations may be

legitimately exercised only for the purpose of carrying the provisions of
the law into effect. The power of administrative agencies is
thusconfined to implementing the law or putting it into effect. Corollary
to this is thatadministrative regulations cannot extend the 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'svaluation, 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