Land Bank v.

CA
[G.R. No. 118712. October 6, 1995.]

It has been declared that the duty of the court to protect the weak and the underprivileged should
not be carried out to such an extent as deny justice to the landowner whenever truth and justice
happen to be on his side.

FACTS: 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, Republic Act No. 6657). Aggrieved by the alleged lapses of the DAR and the
Landbank with respect to the valuation and payment of compensation for their land pursuant to
the provisions of RA 6657, private respondents filed with this Court a Petition for Certiorari and
Mandamus with prayer for preliminary mandatory injunction. Private respondents questioned
the validity of DAR Administrative Order No. 6, Series of 1992 and DAR Administrative Order No.
9, Series of 1990, and sought to compel the DAR to expedite the pending summary administrative
proceedings to finally determine the just compensation of their properties, and the Landbank to
deposit in cash and bonds the amounts respectively "earmarked," "reserved" and "deposited in
trust accounts" for private respondents, and to allow them to withdraw the same.

 Pedro Yap alleges that the TCTs of petitioner Yap were totally cancelled by the Registrar of
Deeds of Leyte and were transferred in the names of farmer beneficiaries collectively, based
on the request of the DAR together with a certification of the Landbank that the sum of
P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap for the
parcels of lands and issued in lieu thereof in the names of listed beneficiaries without notice
to petitioner Yap and without complying with the requirement of Section 16 (e) of RA 6657
to deposit the compensation in cash and Landbank bonds in an accessible bank.'

 Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a
parcel of land located at Laur, NUEVA ECIJA, registered in the name of the late Emiliano F.
Santiago; that,without notice to the petitioners, the Landbank required and the beneficiaries
executed Actual tillers Deed of Undertaking to pay rentals to the Landbank for the use of their
farmlots equivalent to at least 25% of the net harvest; that the DAR Regional Director issued
an order directing the Landbank to pay the landowner directly or through the establishment
of a trust fund in the amount of P135,482.12; that, the Landbank reserved in trust
P135,482.12 in the name of Emiliano F. Santiago.; that the beneficiaries stopped paying
rentals to the landowners after they signed the Actual Tiller's Deed of Undertaking
committing themselves to pay rentals to the Landbank

 Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity)

alleges — with respect to its properties that a summary administrative proceeding to
determine compensation of the property covered by TCT No. 34314 was conducted by the
DARAB in Quezon City without notice to the landowner; that a decision was rendered fixing
the compensation for the parcel of land at P2,768,326.34 and ordering the Landbank to pay
or establish a trust account for said amount in the name of AMADCOR; and that the trust
 account fixed in the decision was established by adding P1,986,489.73 to the first trust
account. With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that
the property of AMADCOR in Tabaco, Albay that emancipation patents were issued covering
an area of 701.8999 hectares which were registered on 15 February 1988 but no action was
taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a
trust account in the name of AMADCOR was established in the amount of P12,247,217.83,
three notices of acquisition having been previously rejected by AMADCOR.

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 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
under Section 16(e) of RA 6657. Private respondents also assail the fact that the DAR and the
Landbank 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.

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its
rule-making power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that
the issuance of the "Certificate of Deposit" by the Landbank was a substantial compliance with
Section 16(e) of RA 6657 and the ruling in the case of Association of Small Landowners in the
Philippines, Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175
SCRA 343). For its part, petitioner Landbank declared that the issuance of the Certificates of
Deposits was in consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority
where the words "reserved/deposited" were also used.

ISSUE: 1. Whether or not DAR Administrative Order No. 9, Series of 1990, insofar as it provides
for the opening of trust accounts in lieu of deposit in cash or in bonds is valid.

2. Whether or not private respondents are entitled to withdraw the amounts deposited in trust
in their behalf pending the final resolution of the cases involving the final valuation of their
properties

RULING: 1. No. It is very explicit in Section 16(e) of RA 6657 that the deposit must be made only
in "cash" or in "LBP bonds." Nowhere does it appear nor can it be inferred that the deposit can
be made in any other form. 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. In sum, there
is no ambiguity 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 an administrative

agency may be disturbed or set aside by the judicial department if there is an error of law, a grave
abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either
the letter or the spirit of a legislative enactment. 18 In this regard, it must be stressed that 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 thus
con􏰀ned to implementing the law or putting it into effect. Corollary to this is that administrative
regulations cannot extend the law and amend a legislative enactment, for settled 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 rule or regulation, it is the former
that prevails.

2. Yes. 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.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of
RA 6657 and determination of just compensation under Section 18 is unacceptable. 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. The irresistible expropriation of private
respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the
more by withholding that which rightfully belongs to private respondents in exchange for the
taking, under an authority (the "Association" case) that is, however, misplaced. This is misery
twice bestowed on private respondents, which the Court must rectify.