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LAND BANK OF PHILIPPINES v. CA

FACTS:

This case involves separate petitions for review filed by the Department of Agrarian Reform (DAR) and the Land Bank of the Philippines. The petitions seek the reversal of the decision of the Court of Appeals, which declared DAR Administrative Order No. 9, Series of 1990 null and void insofar as it allows the opening of trust accounts in lieu of deposits in cash or bonds. The court also ordered the Land Bank to immediately deposit the compensation amounts in cash and government financial instruments in accessible banks designated by the DAR. The private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes under the Comprehensive Agrarian Reform Law (CARL). They filed a petition questioning the validity of DAR Administrative Order No. 6, Series of 1992 and DAR Administrative Order No. 9, Series of 1990. They also sought to compel the expedited determination of just compensation and for the Land Bank to deposit the compensation amounts in cash and bonds. The court referred the petition to the Court of Appeals. The Court of Appeals found that the alleged lapses of the DAR and Land Bank with respect to the valuation and payment of compensation were undisputed. The private respondents argued that Administrative Order No. 9 was issued without jurisdiction and with grave abuse of discretion because it allows the opening of trust accounts instead of depositing compensation in cash or bonds. The DAR maintained that Administrative Order No. 9 is valid.

ISSUES:

  1. Whether the issuance of Administrative Order No. 9, Series of 1990 by the DAR, which allows the opening of trust accounts as a form of deposit for compensation for expropriated lands, is valid.

  2. Whether private respondents are entitled to the immediate and provisional release of the amounts deposited in trust pending the final resolution of the cases for just compensation.

  3. 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.

  4. Whether or not social justice can be invoked to trample on the rights of property owners.

  5. Whether or not the petition has merit.

RULING:

  1. The issuance of Administrative Order No. 9, Series of 1990 by the DAR, which permits the opening of trust accounts as a form of deposit for compensation for expropriated lands, is declared null and void. Section 16(e) of RA 6657 explicitly provides that the compensation must be deposited in "cash" or in "LBP bonds". The law does not allow for any other form of deposit, including trust accounts. The power of administrative agencies to promulgate rules and regulations is limited to implementing the law, and administrative regulations cannot extend or amend a legislative enactment. Thus, the DAR exceeded its authority in issuing Administrative Order No. 9.

  2. Private respondents are not entitled to the immediate and provisional release of the amounts deposited in trust. Section 16(e) of RA 6657 requires the deposit of compensation in "cash" or in "LBP bonds" before the DAR can take immediate possession of the land. Since the opening of trust accounts is not a valid form of deposit under the law, the compensation cannot be released to private respondents until it is properly deposited in accordance with the law.

  3. The Supreme Court ruled that 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. The distinction between provisional compensation under Section 16(e) and final compensation under Section 18 of RA 6657 for the purpose of exercising the landowners' right to appropriate the same is unnecessary. The immediate effect in both situations is the same - the landowner is deprived of the use and possession of his property and should be fairly and immediately compensated. It is essential for just compensation to be paid promptly to the landowner, as compensation cannot be considered 'just' if the property owner is immediately deprived of his land while being made to wait for a prolonged period before actually receiving the amount necessary to cope with his loss.

  4. Social justice cannot be invoked to trample on the rights of property owners, as both social justice and the rights of property owners are equally important under the Philippine Constitution and laws.

  5. The petition lacks merit and the appealed decision is affirmed in its entirety.

PRINCIPLES:

  • The traditional mode of payment of just compensation is money and no other.

  • Full payment of just compensation is required before the title to the expropriated property is transferred to the expropriator.

  • Just compensation means not only the correct determination of the amount to be paid but also the payment within a reasonable time from the taking of the property.

  • Private landowners' rights must be protected in the implementation of the Comprehensive Agrarian Reform Program, as social justice cannot be invoked to trample on their rights.

  • Social justice cannot be used to violate the rights of property owners.

  • The rights of property owners are entitled to protection under the Philippine Constitution and laws.