LAND BANK OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., respondents.
G.R. No. 118712
October 6, 1995 (2D)

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., ET AL., respondents.
G.R. No. 118745
October 6, 1995

Facts: Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR)
(G.R. No. 118745) and Land Bank of the Philippines (LBP) (G.R. No. 118712) following the adverse ruling
by the Court of Appeals, granting private respondents' Petition for Certiorari and Mandamus. However,
upon motion filed by private respondents, the petitions were ordered consolidated. Likewise,
petitioners seek the reversal of the Resolution, denying their motion for reconsideration.

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
(CARL). Aggrieved by the alleged lapses of the DAR and LBP with respect to the valuation and payment
of compensation for their land pursuant to the provisions of RA 6657, private respondents filed with the
Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. 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 LBP, 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 LBP 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. The respondent
court rendered the assailed decision in favor of private respondents. Petitioners filed a motion for
reconsideration but respondent court denied the same, hence, the instant petitions.

Issue: Whether or not the deposit may be made in other forms besides cash or LBP bonds

Held: 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 Section 16(e) of RA
6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". 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.

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.

Issue: Whether or not there should be a distinction the deposit of compensation and determination of
just compensation

Held: 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 deposit of
compensation (provisional) under Section 16(e) and determination of just compensation (final) 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.