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 Appeal’s 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 denised for lack of
merit. Appealed decision is affirmed.