LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF
APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., respondentsG.R. No. 118712 | October 6, 1995
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.
Petitioner Pedro Yap alleges that on Sept. 4, 1992, the TCTs
of the petitioner were totally cancelled by the ROD of Leyte and were
transferred in the name of farmer beneficiaries, based on the request of 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 Yap for the parcels of
lands covered by the said TCTs, and issued in lieu thereof another TCTs in the
name of listed beneficiaries without prior notice to Yap and without complying with
the required deposit of compensation in cash and Landbank bonds in an
accessible bank.
Petitioner Heirs of Emiliano Santiago allege that they are
the owners of a parcel of land located at Laur, NUEVA ECIJA with an area of
18.5615 hectares covered by TCT No. NT-60359 registered in the name of the late
Emiliano F. Santiago; that in November and December 1990, without notice to the
petitioners, the Landbank required and executed Actual tillers Deed of
Undertaking with the beneficiaries to pay rentals to the LandBank for the use
of their farm lots equivalent to at least 25% of the net harvest; that on 24
October 1991 the DAR Regional Director issued an order directing Landbank to
pay the landowner directly or through the establishment of a trust fund in the
amount of P135,482.12; that on 24 February 1992, 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) alleges that a summary proceeding to determine the compensation of
the property was conducted by the DARAB on their properties in San Francisco,
Quezon without notice; that a decision was rendered fixing the compensation for
the 209-hectare parcel of land at P2,768,326.34 and ordered the Landbank to pay
or establish a trust account for the said amount in the name of AMADCOR. With respect
with their property in Tabaco, Albay, AMADOR alleged that emancipation patents
were issued covering 701-hectares of their 1629-hectare land, but no action was
taken by DAR to fix the compensation for the said land; that a trust account in
the name of AMADCOR was established in the amount of P12,247,217.83, 3 notices
of acquisition having been previously rejected by AMADCOR.
Aggrieved by the alleged lapses of the DAR and the Landbank
with respect to the valuation and payment of compensation for their land, private
respondents filed 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.
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. 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:
Whether or not the assailed Administrative order is valid
RULING:
Section 16(e) of RA 6657 provides as follows:
“Sec. 16. Procedure
for Acquisition of Private Lands—
x x x x x x x x x.
(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. x x x x x x x x.”
It is very explicit therefrom 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.”
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, as heretofore
discussed, Section 16(e) of RA 6657 is very specific that the deposit must be
made only in “cash” or in “LBP bonds.” In the same vein, petitioners cannot
invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations
cannot outweigh the clear provision of the law.
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.
Vigilance over the rights of the landowners is equally
important because social justice cannot be invoked to trample on the rights of
property owners, who under our Constitution and laws are also entitled to protection.
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