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 by Department 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 Development Corporation or AMADCOR
(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 (RA 6657). 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 with the Supreme Court a petition questioning the validity of DAR Administrative Order No. 6 (1992) and No. 9
(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. The Supreme Court referred the 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 discretion amounting excess in
jurisdiction 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. 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 inbonds. On the other hand, petitioner DAR contended that Admin Order
No. 9 is a valid exercise of its rule-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 with Circular Nos. 29, 29-A
and 54 of the Land Registration Authority where the words"reserved/deposited" were also used.
ISSUES:
1. Whether or not the CA erred in declaring as null and void DAR Admin Order No. 9 (1990) insofar as it provides for
the opening of trust accounts in lieu of deposit in cash or in bonds
2. Whether or not the CA erred in holding that private respondents are entitled as a matter of right to the immediate
and provisional release of the amounts deposited in trust pending the final resolution of the cases it has filed for
just compensation.
RULING: 1. 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 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 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 it appear nor
can it be inferred that the deposit can be made in any other form. 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.
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 confined 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, 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 rule or regulation, it is the former
that prevails.
2. YES. 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 (P 1,455,207.31 Pedro L. Yap/ P
135,482.12 Heirs of Emiliano Santiago/ P 15,914,127.77 AMADCOR), and notwithstanding that they have already been
deprived of the possession and use of such properties, is an oppressive exercise of eminent domain. It is unnecessary to
distinguish between provisional compensation under Section 16(e) and final compensation under 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 and possession of his property for which he should be fairly and immediately
compensated. Wherefore, petition is denied for lack of merit. Appealed decision is affirmed.