G.R. No.

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

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

F.

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