G.R. No.

118712, October 06, 1995

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. 118745]

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 & DEVELOP-
MENT CORP., ET AL., RESPONDENTS.

DECISION

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the
weak and the underprivileged should not be carried out to
such an extent as deny justice to the landowner whenever
truth and justice happen to be on his side.[1] As eloquently
stated by Justice lsagani Cruz:

"x x x social justice - or any justice for that matter - is for the
deserving, whether he be a millionaire in his mansion or a
pauper in his hovel.  It is true that, in case of reasonable
doubt, we are called upon to tilt the balance in favor of the
poor, to whom the Constitution fittingly extends its sympathy
and compassion.  But never is it justified to prefer the poor
simply because they are poor, or to reject the rich simply
because they are rich, for justice must always be served, for
poor and rich alike, according to the mandate of the law." [2]

In this agrarian dispute, it is once more imperative that the

aforestated principles be applied in its resolution.
Separate petitions for review were filed by petitioners
Department of Agrarian Reform (DAR) (G.R. No. 118745)
and Land Bank of the Philippines (G.R. No. 118712)
following the adverse ruling by the Court of Appeals in CA-
G.R. SP No. 33465. However, upon motion filed by private
respondents, the petitions were ordered consolidated. [3]

Petitioners assail the decision of the Court of Appeals

promulgated on October 20, 1994, which granted private
respondents' Petition for Certiorari and Mandamus and
ruled as follows:

"WHEREFORE, premises considered, the Petition

for Certiorari and Mandamus is hereby GRANTED:

A) DAR Administrative Order No. 9, Series of 1990 is

declared null and void insofar as it provides for the opening
of trust accounts in lieu of deposits in cash or bonds;

B) Respondent Landbank is ordered to immediately deposit -

not merely 'earmark', 'reserve' or 'deposit in trust' - with an
accessible bank designated by respondent DAR in the names
of the following petitioners the following amounts in cash
and in government financial instruments - within the
parameters of Sec. 18 (1) of RA 6657:

P  1, 455, 207.31 . . .   Pedro L. Yap

P     135, 482.12  . . .   Heirs of Emiliano Santiago

P15, 914,127.77  . . .   AMADCOR;

C) The DAR-designated bank is ordered to allow the

petitioners to withdraw the above-deposited amounts
without prejudice to the final determination of just
compensation by the proper authorities; and
D) Respondent DAR is ordered to 1) immediately conduct
summary administrative proceedings to determine the just
compensation for the lands of the petitioners giving the
petitioners 15 days from notice within which to submit
evidence and to 2) decide the cases within 30 days after they
are submitted for decision."[4]

Likewise, petitioners seek the reversal of the Resolution

dated January 18, 1995,[5] 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, Republic Act No. 6657).

Aggrieved by the alleged lapses of the DAR and the

Landbank with respect to the valuation and payment of
compensation for their land pursuant to the provisions of RA
6657, private respondents filed with this Court a Petition
for Certiorari and Mandamus with prayer for preliminary
mandatory injunction. Private respondents questioned the
validity of DAR Administrative Order No. 6, Series of
1992[6] and DAR Administrative Order No. 9, Series of 1990,
[7]
 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.

Through a Resolution of the Second Division dated February

9, 1994, this Court referred the petition to respondent Court
of Appeals for proper determination and disposition.
As found by respondent court, the following are undisputed:

"Petitioner Pedro Yap alleges that '(o)n 4 September 1992

the transfer certificates of title (TCTs) of petitioner Yap were
totally cancelled by the Registrar of Deeds of Leyte and were
transferred in the names of farmer beneficiaries collectively,
based on the request of the DAR together with a certification
of the Landbank that the sum of P735,337.77 and
P719,869.54 have been earmarked for Landowner Pedro L.
Yap for the parcels of lands covered by TCT Nos. 6282 and
6283, respectively, and issued in lieu thereof TC-563 and
TC?562, respectively, in the names of listed beneficiaries
(ANNEXES 'C' & 'D') without notice to petitioner Yap 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.' (Rollo, p. 6).

"The above allegations are not disputed by any of the

respondents.

"Petitioner Heirs of Emiliano Santiago allege that the heirs

of Emiliano F. Santiago are the owners of a parcel of land
located at Laur, NUEVA ECIJA with an area of 18.5615
hectares covered by TCT No. NT-60359 of the registry of
Deeds of Nueva Ecija, registered in the name of the late
Emiliano F. Santiago; that in November and December 1990,
without notice to the petitioners, the Landbank required and
the beneficiaries executed Actual tillers Deed of Undertaking
(ANNEX 'B') to pay rentals to the LandBank for the use of
their farmlots equivalent to at least 25% of the net harvest;
that on 24 October 1991 the DAR Regional Director issued
an order directing the Landbank to pay the landowner
directly or through the establishment of a trust fund in the
amount of P135,482.12; that on 24 February 1992, the
Landbank reserved in trust P135,482.12 in the name of
Emiliano F. Santiago.  (ANNEX `E'; Rollo, p. 7); that the
beneficiaries stopped paying rentals to the landowners after
they signed the Actual Tiller's Deed of Undertaking
committing themselves to pay rentals to the LandBank
(Rollo, p. 133).

"The above allegations are not disputed by the respondents

except that respondent Landbank claims 1) that it was
respondent DAR, not Landbank which required the
execution of Actual Tillers Deed of Undertaking (ATDU, for
brevity); and 2) that respondent Landbank, although armed
with the ATDU, did not collect any amount as rental from the
substituting beneficiaries (Rollo, p. 99).

"Petitioner Agricultural Management and Development

Corporation (AMADCOR, for brevity) alleges - with respect
to its properties located in San Francisco, Quezon - that the
properties of AMADCOR in San Francisco, Quezon consist of
a parcel of land covered by TCT No. 34314 with an area of
209.9215 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.
[14]
 Petitioners 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 contention is untenable. Section 16(e) of RA 6657

provides as follows:

"Sec. 16. Procedure for Acquisition of Private Lands - x x x

x        x x x     x x x.

(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 Transfer Certificate of
Title (TCT) in the name of the Republic of the
Philippines.       x x x     x x x x x." (Italics supplied)

It is very explicit therefrom 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.  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.  In sum, 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.
[18]
 In this regard, it must be stressed that 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,
[19]
 for settled 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.[20]

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, as heretofore
discussed, Section 16(e) of RA 6657 is very specific that the
deposit must be made only in "cash" or in "LBP bonds".  In
the same vein, petitioners cannot invoke LRA Circular Nos.
29, 29-A and 54 because these implementing regulations
cannot outweigh the clear provision of the law.  Respondent
court therefore did not commit any error in striking down
Administrative Circular No. 9 for being null and void.

Proceeding to the crucial issue of whether or not private

respondents are entitled to withdraw the amounts deposited
in trust in their behalf pending the final resolution of the
cases involving the final valuation of their properties,
petitioners assert the negative.

The contention is premised on the alleged distinction

between the deposit of compensation under Section 16(e) of
RA 6657 and payment of final compensation as provided
under Section 18[21] of the same law.  According to
petitioners, 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. 
To further bolster the contention petitioners cite the
following pronouncements in the case of "Association of
Small Landowners in the Phil. Inc. vs. Secretary of Agrarian
Reform".[22]

"The last major challenge to CARP is that the landowner is

divested of his property even before actual payment to him
in full of just compensation, in contravention of a well-
accepted principle of eminent domain.

xxx                xxx                   xxx

"The CARP Law, for its part conditions the transfer of

possession and ownership of the land to the government on
receipt by the landowner of the corresponding payment or
the deposit by the DAR of 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:
"x x x      x x x 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] (Italics 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:

"x x x     x x x 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] (Italics 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.

SO ORDERED.

Regalado, Puno, and Mendoza, JJ., concur.

Narvasa, C.J., (Chairman), on official leave.