G.R. No. 118712.
 October 6, 1995.* Same; Same; Social Justice; Social justice cannot be invoked to trample on the
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. October 6, 1995.*
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.
Constitutional Law; Comprehensive Agrarian Reform Law; Statutory
Construction; There is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded
construction of the term “deposit.”—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.”
Same; Same; Same; Administrative regulations cannot extend the law and amend a
legislative enactment for settled is the rule that administrative regulations must be in
harmony with the provisions of the law.—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. 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, 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.
Same; Same; Same; The DAR clearly overstepped the limits of its power to enact
rules and regulations when it issued Administrative Circular No. 9.—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.
rights of property owners who under our Constitution and laws are also entitled to
protection.—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. 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.
PETITIONS for review of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
     Gonzales, Aquino & Associates for Land Bank of the Philippines.
     Fernando A. Santiago for private respondents.
FRANCISCO, 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 Isagani 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:
1. 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;
 2. 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:
P1,455,207.31 — Pedro L. Yap
P 135,482.12 — Heirs of Emiliano
Santiago
P15,914,127.77 — AMADCOR;
1. 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
2. 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 farm lots 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
_________________
 Rollo, pp. 109-111.
8
 Sec. 16. Procedure for Acquisition of Private Lands.—For purposes of acquisition of
9
private lands, the following shall be followed:
x x x     x x x     x x x
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. The DAR shall thereafter proceed with the redistribution of the land to the
qualified beneficiaries.
10
 Rollo, p. 111.
156
156 SUPREME COURT REPORTS
ANNOTATED
Land Bank of the Philippines vs.
Court of Appeals
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.
(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 1821 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.
x x x     x x x     x x x
“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.
x x x     x x x     x x x
“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
______________
21
 Section 18. Valuation and Mode of Compensation.—The LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the DAR and LBP
in accordance with the criteria provided for in Sections 16 and 17 and other pertinent
provisions hereof, or as may be finally determined by the court as the just compensation for
the land.
22
 175 SCRA 343.
160
160 SUPREME COURT REPORTS
ANNOTATED
Land Bank of the Philippines vs.
Court of Appeals
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
_______________ Luzon Development Bank vs.
Association of Luzon Development
23
 Decision, Court of Appeals, p. 14.
Bank Employees
161 Petition denied, judgment affirmed.
VOL. 249, OCTOBER 6, 1995 161 Note.—Until expropriation proceedings are instituted in court, the landowners cannot
Land Bank of the Philippines vs. be deprived of its right over the land. (Greater Balanga Dev. Corp vs. Municipality of
Balanga, 239 SCRA 436 [1994])
Court of Appeals
of his property for which he should be fairly and immediately compensated. Fittingly, we ——o0o——
reiterate the cardinal rule that:
“x x x     x x x within the context of the State’s inherent power of eminent domain, just © Copyright 2021 Central Book Supply, Inc. All rights reserved.
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.
______________
24
 Municipality of Makati vs. Court of Appeals, 190 SCRA 207, 213 (1990)
citing Cosculluela vs. The Hon. Court of Appeals, 164 SCRA 393,400 (1988); Provincial
Government of Sorsogon vs. Vda. De Villaroya, 153 SCRA 291, 302 (1987).
25
 175 SCRA 343, 392.
26
 Mata vs. Court of Appeals, 207 SCRA 748, 753 (1992).
162
162 SUPREME COURT REPORTS
ANNOTATED