LBP V Yap
LBP V Yap
LBP V Yap
hectares and another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; 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 on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land
covered by TCT No. 34314 with an area of 209.9215 hectares 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 in the amount of P2,768,326.34 fixed in the decision was established by adding
P1,986,489.73 to the first trust account established on 19 December 1991 (ANNEX "G"). With respect
to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the property of AMADCOR in
Tabaco, Albay is covered by TCT No. T-2466 of the Register of Deeds of Albay with an area of
1,629.4578 hectares'; 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. (Rollo, pp. 8-9)
The above allegations are not disputed by the respondents except that respondent Landbank claims
that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due notice
to it (Rollo, p. 100). 8
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. 9 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. 10
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). 12
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. 13
On October 20, 1994, the respondent court rendered the assailed decision in favor of private respondents. 14Petitioners
filed a motion for reconsideration but respondent court denied the same. 15
Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the
appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The Court, however,
denied the motion and instead required the respondents to file their comments. 17
Petitioners submit that respondent court erred in (1) declaring as null and void 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, and (2) 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.
Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657
referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit.
Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular No.
9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to promulgate rules
and regulations in implementing the declared policies of RA 6657.
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. No outright change of ownership is contemplated either.
xxx xxx xxx
Hence the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.
Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found
that:
. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the
Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always
required to be made fully in money" even as the Supreme Court admits in the same case "that the
traditional medium for the payment of just compensation is money and no other" the Supreme
Court in said case did not abandon the "recognized rule . . . that title to the property expropriated shall
pass from the owner to the expropriator only upon full payment of the just
compensation." 23 (Emphasis supplied)
We agree with the observations of respondent court. 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.
Hence, we find it 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. Fittingly, we reiterate the cardinal rule that:
. . . within the context of the State's inherent power of eminent domain, just compensation means not
only the correct determination of the amount to be paid to the owner of the land but also the payment
of the land within a reasonable time from its taking. Without prompt payment, compensation cannot
be considered "just" for the property owner is made to suffer the consequence of being immediately
deprived of his land while being made to wait for a decade or more before actually receiving the
amount necessary to cope with his loss. 24 (Emphasis supplied)
The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of the
Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite this,
cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still
optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be
stressed, however, that in the pursuit of this objective, 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. 26
WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed
decision is AFFIRMED in toto.