LANDBANK v.

CA (1995)

FACTS
This is a consolidated petition to assail the decision of the CA declaring DAR Admin Order No. 9
(1990) insofar as it provided for opening of trust accounts in lieu of deposits in cash or bonds. Pedro Yap,
the heirs of Emiliano Santiago and Agricultural Management & Devt Corp (RESPONDENTS) owned lands
which were subjected under the operation of the CARL.
For YAP, TCTs were issued to the beneficiaries (LEYTE 2 TCTs) without notice to him 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 for Php 1.455M.
For HEIRS (NUEVA ECIJA 18.6 hectares), they were also not notified and the DAR Regional
Director ordered Landbank to pay the HEIRS through the establishment of a trust fund for Php 135.5 k.
For AMADCOR (QUEZON 373 hectares), a summary administrative proceeding to determine
just compensation was conducted by DARAB without notice to AMADCOR. A trust fund was also
established in its behalf for Php 12.2M.
RESPONDENTS claim they were aggrieved with respect to the valuation and payment of just
compensation, and as a result questioned the validity of Admin Order No. 6 (1992) and Admin Order 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 them, and
to allow them to withdraw the same.

ISSUE / HELD
(1) WON deposit as used in Section 16(e) of the CARL merely referred to the act of depositing
and INCLUDES the opening of a trust account as a form of deposit.
NO. Sec. 16 explicitly provides that payment is via depositing IN CASH or IN LBP BONDS. The
DAR clearly overstepped its rule-making powers in expanding deposit to include setting up trust
accounts.

(2) WON RESPONDENTS are entitled to immediately withdraw the amounts in the trust accounts.
LBP and DAR contends that there is a distinction between the deposit of compensation under
Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18). They claim
that the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final
valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no
reference to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the
landowner because the latter amount is only provisional and intended merely to secure possession of the
property pending final valuation. They rely on the ruling in Association of Small Landowners in the Phil.
Inc. vs. Secretary of Agrarian Reform, where the SC declared that divesting the landowners of the property
even before full payment does not violate due process in that no outright change of ownership is
contemplated.
The CA correctly held that despite the revolutionary character of agrarian reform, this does not
dispense with the settled rule that there must be full payment of just compensation before the title to the
expropriated property is transferred, There can be no distinction in the use of deposit in Section 16(e)
and 18. 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.
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.