G.R. No.

103125 May 17, 1993

PROVINCE OF CAMARINES SUR, represented by GOV. LUIS
R. VILLAFUERTE and HON. BENJAMIN V. PANGA as
Presiding Judge of RTC Branch 33 at Pili, Camarines Sur,
petitioners,
vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO
SAN JOAQUIN and EFREN SAN JOAQUIN, respondents.

the Clerk of Court of the amount of P5,714.00, the amount

provisionally fixed by the trial court to answer for damages that
private respondents may suffer in the event that the
expropriation cases do not prosper. The trial court issued a writ
of possession in an order dated January18, 1990.
The San Joaquins filed a motion for relief from the order,
authorizing the Province of Camarines Sur to take possession
of their property and a motion to admit an amended motion to
dismiss. Both motions were denied in the order dated February
1990.

QUIASON, J.:
In this appeal by certiorari from the decision of the Court of
Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N. San
Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is
asked to decide whether the expropriation of agricultural lands
by local government units is subject, to the prior approval of
the Secretary of the Agrarian Reform, as the implementator of
the agrarian reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the
Province of Camarines Sur passed Resolution No. 129, Series
of 1988, authorizing the Provincial Governor to purchase or
expropriate property contiguous to the provincial capitol site, in
order to establish a pilot farm for non-food and non-traditional
agricultural crops and a housing project for provincial
government employees.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a fiveyear Comprehensive Development plan, some of the vital
components of which includes the establishment of model and
pilot farm for non-food and non-traditional agricultural crops,
soil testing and tissue culture laboratory centers, 15 small
scale technology soap making, small scale products of plaster
of paris, marine biological and sea farming research center,and
other progressive feasibility concepts objective of which is to
provide the necessary scientific and technology know-how to
farmers and fishermen in Camarines Sur and to establish a
housing project for provincial government employees;

In their petition before the Court of Appeals, the San Joaquins

asked: (a) that Resolution No. 129, Series of 1988 of the
Sangguniang Panlalawigan be declared null and void; (b) that
the complaints for expropriation be dismissed; and (c) that the
order dated December 6, 1989 (i) denying the motion to
dismiss and (ii) allowing the Province of Camarines Sur to take
possession of the property subject of the expropriation and the
order dated February 26, 1990, denying the motion to admit
the amended motion to dismiss, be set aside. They also asked
that an order be issued to restrain the trial court from enforcing
the writ of possession, and thereafter to issue a writ of
injunction.
In its answer to the petition, the Province of Camarines Sur
claimed that it has the authority to initiate the expropriation
proceedings under Sections 4 and 7 of Local Government
Code (B.P. Blg. 337) and that the expropriations are for a
public purpose.
Asked by the Court of Appeals to give his Comment to the
petition, the Solicitor General stated that under Section 9 of the
Local Government Code (B.P. Blg. 337), there was no need for
the approval by the Office of the President of the exercise by
the Sangguniang Panlalawigan of the right of eminent domain.
However, the Solicitor General expressed the view that the
Province of Camarines Sur must first secure the approval of
the Department of Agrarian Reform of the plan to expropriate
the lands of petitioners for use as a housing project.

WHEREAS, there are contiguous/adjacent properties to be

(sic) present Provincial Capitol Site ideally suitable to establish
the same pilot development center;

The Court of Appeals set aside the order of the trial court,
allowing the Province of Camarines Sur to take possession of
private respondents' lands and the order denying the
admission of the amended motion to dismiss. It also ordered
the trial court to suspend the expropriation proceedings until
after the Province of Camarines Sur shall have submitted the
requisite approval of the Department of Agrarian Reform to
convert the classification of the property of the private
respondents from agricultural to non-agricultural land.

WHEREFORE . . . .

Hence this petition.

Pursuant to the Resolution, the Province of Camarines Sur,

through its Governor, Hon. Luis R.Villafuerte, filed two separate
cases for expropriation against Ernesto N. San Joaquin and
Efren N. San Joaquin, docketed as Special Civil Action Nos. P17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines
Sur, presided by the Hon. Benjamin V. Panga.

It must be noted that in the Court of Appeals, the San Joaquins

asked for: (i) the dismissal of the complaints for expropriation
on the ground of the inadequacy of the compensation offered
for the property and (ii) the nullification of Resolution No. 129,
Series of 1988 of the Sangguniang Panlalawigan of the
Province of Camarines Sur.

Forthwith, the Province of Camarines Sur filed a motion for the

issuance of writ of possession. The San Joaquins failed to
appear at the hearing of the motion.

The Court of Appeals did not rule on the validity of the

questioned resolution; neither did it dismiss the complaints.
However, when the Court of Appeals ordered the suspension
of the proceedings until the Province of Camarines Sur shall
have obtained the authority of the Department of Agrarian
Reform to change the classification of the lands sought to be
expropriated from agricultural to non-agricultural use, it
assumed that the resolution is valid and that the expropriation
is for a public purpose or public use.

WHEREAS, the province would need additional land to be

acquired either by purchase or expropriation to implement the
above program component;

The San Joaquins moved to dismiss the complaints on the

ground of inadequacy of the price offered for their property. In
an order dated December 6, 1989, the trial court denied the
motion to dismiss and authorized the Province of Camarines
Sur to take possession of the property upon the deposit with

Modernly, there has been a shift from the literal to a broader

interpretation of "public purpose" or "public use" for which the
power of eminent domain may be exercised. The old concept
was that the condemned property must actually be used by the
general public (e.g. roads, bridges, public plazas, etc.) before
the taking thereof could satisfy the constitutional requirement
of "public use". Under the new concept, "public use" means
public advantage, convenience or benefit, which tends to
contribute to the general welfare and the prosperity of the
whole community, like a resort complex for tourists or housing
project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220
[1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]).
The expropriation of the property authorized by the questioned
resolution is for a public purpose. The establishment of a pilot
development center would inure to the direct benefit and
advantage of the people of the Province of Camarines Sur.
Once operational, the center would make available to the
community invaluable information and technology on
agriculture, fishery and the cottage industry. Ultimately, the
livelihood of the farmers, fishermen and craftsmen would be
enhanced. The housing project also satisfies the public
purpose requirement of the Constitution. As held in Sumulong
v. Guerrero, 154 SCRA 461, "Housing is a basic human need.
Shortage in housing is a matter of state concern since it
directly and significantly affects public health, safety, the
environment and in sum the general welfare."
It is the submission of the Province of Camarines Sur that its
exercise of the power of eminent domain cannot be restricted
by the provisions of the Comprehensive Agrarian Reform Law
(R.A. No. 6657), particularly Section 65 thereof, which requires
the approval of the Department of Agrarian Reform before a
parcel of land can be reclassified from an agricultural to a nonagricultural land.
The Court of Appeals, following the recommendation of the
Solicitor General, held that the Province of Camarines Sur
must comply with the provision of Section 65 of the
Comprehensive Agrarian Reform Law and must first secure the
approval of the Department of Agrarian Reform of the plan to
expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220,
petitioners raised the issue of whether the Philippine Tourism
Authority can expropriate lands covered by the "Operation
Land Transfer" for use of a tourist resort complex. There was a
finding that of the 282 hectares sought to be expropriated, only
an area of 8,970 square meters or less than one hectare was
affected by the land reform program and covered by
emancipation patents issued by the Ministry of Agrarian
Reform. While the Court said that there was "no need under
the facts of this petition to rule on whether the public purpose is
superior or inferior to another purpose or engage in a
balancing of competing public interest," it upheld the
expropriation after noting that petitioners had failed to
overcome the showing that the taking of 8,970 square meters
formed part of the resort complex. A fair and reasonable
reading of the decision is that this Court viewed the power of
expropriation as superior to the power to distribute lands under
the land reform program.
The Solicitor General denigrated the power to expropriate by
the Province of Camarines Sur by stressing the fact that local
government units exercise such power only by delegation.
(Comment, pp. 14-15; Rollo, pp. 128-129)

It is true that local government units have no inherent power of

eminent domain and can exercise it only when expressly
authorized by the legislature (City of Cincinnati v. Vester, 28l
US 439, 74 L.ed. 950, 50 SCt. 360). It is also true that in
delegating the power to expropriate, the legislature may retain
certain control or impose certain restraints on the exercise
thereof by the local governments (Joslin Mfg. Co. v.
Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While
such delegated power may be a limited authority, it is complete
within its limits. Moreover, the limitations on the exercise of the
delegated power must be clearly expressed, either in the law
conferring the power or in other legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant
to Section 9 of B.P. Blg. 337, the Local Government Code,
which provides:
A local government unit may, through its head and acting
pursuant to a resolution of its sanggunian exercise the right of
eminent domain and institute condemnation proceedings for
public use or purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that
local government, units must first secure the approval of the
Department of Land Reform for the conversion of lands from
agricultural to non-agricultural use, before they can institute the
necessary expropriation proceedings. Likewise, there is no
provision in the Comprehensive Agrarian Reform Law which
expressly subjects the expropriation of agricultural lands by
local government units to the control of the Department of
Agrarian Reform. The closest provision of law that the Court of
Appeals could cite to justify the intervention of the Department
of Agrarian Reform in expropriation matters is Section 65 of the
Comprehensive Agrarian Reform Law, which reads:
Sec. 65. Conversion of Lands. After the lapse of five (5)
years from its award, when the land ceases to be economically
feasible and sound for, agricultural purposes, or the locality has
become urbanized and the land will have a greater economic
value for residential, commercial or industrial purposes, the
DAR, upon application of the beneficiary or the landowner, with
due notice to the affected parties, and subject to existing laws,
may authorize the reclassification or conversion of the land and
its disposition: Provided, That the beneficiary shall have fully
paid his obligation.
The opening, adverbial phrase of the provision sends signals
that it applies to lands previously placed under the agrarian
reform program as it speaks of "the lapse of five (5) years from
its award."
The rules on conversion of agricultural lands found in Section 4
(k) and 5 (1) of Executive Order No. 129-A, Series of 1987,
cannot be the source of the authority of the Department of
Agrarian Reform to determine the suitability of a parcel of
agricultural land for the purpose to which it would be devoted
by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to
approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is
limited to the applications for reclassification submitted by the
land owners or tenant beneficiaries.
Statutes conferring the power of eminent domain to political
subdivisions cannot be broadened or constricted by implication
(Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219
NYS 2d. 241).

To sustain the Court of Appeals would mean that the local

government units can no longer expropriate agricultural lands
needed for the construction of roads, bridges, schools,
hospitals, etc, without first applying for conversion of the use of
the lands with the Department of Agrarian Reform, because all
of these projects would naturally involve a change in the land
use. In effect, it would then be the Department of Agrarian
Reform to scrutinize whether the expropriation is for a public
purpose or public use.
Ordinarily, it is the legislative branch of the local government
unit that shall determine whether the use of the property
sought to be expropriated shall be public, the same being an
expression of legislative policy. The courts defer to such
legislative determination and will intervene only when a
particular undertaking has no real or substantial relation to the
public use (United States Ex Rel Tennessee Valley Authority v.
Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel
Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174
NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter
how broad their terms are, do not embrace the sovereign
unless the sovereign is specially mentioned as subject thereto
(Alliance of Government Workers v. Minister of Labor and
Employment, 124 SCRA 1 [1983]). The Republic of the
Philippines, as sovereign, or its political subdivisions, as
holders of delegated sovereign powers, cannot be bound by
provisions of law couched in general term.
The fears of private respondents that they will be paid on the
basis of the valuation declared in the tax declarations of their
property, are unfounded. This Court has declared as
unconstitutional the Presidential Decrees fixing the just
compensation in expropriation cases to be the value given to
the condemned property either by the owners or the assessor,
whichever was lower ([Export Processing Zone Authority v.
Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay
v. Ramirez, 183 SCRA 528 [1990], the rules for determining
just compensation are those laid down in Rule 67 of the Rules
of Court, which allow private respondents to submit evidence
on what they consider shall be the just compensation for their
property.
WHEREFORE, the petition is GRANTED and the questioned
decision of the Court of Appeals is set aside insofar as it (a)
nullifies the trial court's order allowing the Province of
Camarines Sur to take possession of private respondents'
property; (b) orders the trial court to suspend the expropriation
proceedings; and (c) requires the Province of Camarines Sur
to obtain the approval of the Department of Agrarian Reform to
convert or reclassify private respondents' property from
agricultural to non-agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it
sets aside the order of the trial court, denying the amended
motion to dismiss of the private respondents.
SO ORDERED.
ROXAS & COMPANY, INC.,
Petitioner,
- versus DAMBA-NFSW and the DEPARTMENT OF AGRARIAN
REFORM,
Respondents.
RESOLUTION
CARPIO MORALES, J.:

This resolves the Motion for Reconsideration filed on January

13, 2010 by Roxas & Co., Inc. (Roxas & Co.) and the Motion
for Partial Reconsideration filed on January 29, 2010 by
Damayan ng Manggagawang Bukid sa Asyenda RoxasNational Federation of Sugar Workers (DAMBA-NFSW) and
Katipunan ng mga Magbubukid sa Hacienda Roxas, Inc.
(KAMAHARI), et al., which both assail the Courts December 4,
2009 Decision in these consolidated cases.
After the above-mentioned Motions were filed, Roxas & Co.
filed on April 26, 2010 a Motion to Hold in Abeyance the
Resolution of its earlier Motion for Reconsideration.
Roxas & Co. moves for reconsideration on the following
grounds:
I.
CLOA 6654, INSOFAR AS IT COVERS
THE 3 PARCELS OF LAND WITH AN AGGREGATE AREA OF
103.1436 HECTARES, SHOULD BE CANCELLED IN VIEW
OF THE FINAL AND EXECUTORY 02 APRIL 1996 COURT OF
APPEALS DECISION EXEMPTING THE SAID PROPERTIES
FROM THE COVERAGE OF THE COMPREHENSIVE
AGRARIAN REFORM LAW (CARL).
II.
CLOA 6654, INSOFAR AS IT COVERS
THE REMAINING 410 HECTARES,
SHOULD BE
CANCELLED PURSUANT TO SECTION IV (B) (10) OF DAR
MEMORANDUM ORDER NO. 2, SERIES OF 1994.
III.
WITH THE CARP-EXEMPTION OF THE 9
PARCELS OF LAND WITH AN AGGREGATE AREA OF
45.9771 HECTARES, ROXAS LIABILITY TO PAY
DISTURBANCE COMPENSATION IS LIMITED TO ITS
AGRICULTURAL LESSEES AND NOT TO ALL FARMERBENEFICIARIES FOUND IN THE SUBJECT PROPERTIES
PURSUANT TO REPUBLIC ACT NO. 3844, AS AMENDED,
AND THE RULING IN BACALING VS. MUYA.
IV.
THE ADDITIONAL CERTIFICATIONS
WERE SUBMITTED TO PROVE THAT THE 51.5472HECTARE PROPERTIES ARE CARP-EXEMPT, AND
COROLLARILY, ADDRESS THE GROUNDS USED BY THEN
DAR SECRETARY IN DENYING ROXAS INITIAL
EXEMPTION
APPLICATION.
THE
ALLEGED
INCONSISTENCIES ARE EITHER IMMATERIAL OR CAN BE
READILY EXPLAINED.
V.
BASED ON THE EVIDENCE SUBMITTED
BY ROXAS, THE 51.5472-HECTARE PROPERTIES
SUBJECT OF G.R. NO. 179650 ARE CARP-EXEMPT.
HENCE, THE PREMATURE INSTALLATION BY THE DAR OF
SEVERAL FARMER-BENEFICIARIES IN THE PROPERTIES
IS ILLEGAL.
VI.
THE ROXAS LANDHOLDINGS SHOULD
BE DECLARED EXEMPT FROM THE COVERAGE OF CARP.
A.
APPLYING DAR V. FRANCO, THE
ROXAS LANDHOLDINGS SHOOULD BE DECLARED CARPEXEMPT IN VIEW OF THE PTA ENACTMENT DELINEATING
SPECIFIC TOURISM AREAS.
B.
CONSISTENT WITH THE DAR
EXEMPTION ORDER CITED IN THE FRANCO CASE AND
THE SUBMISSION OF THE OFFICE OF THE SOLICITOR
GENERAL, THE ROXAS LANDHOLDINGS, WHICH ARE
(A) LOCATED WITHIN THE PTA-IDENTIFIED TOURISM
PRIORITY AREAS AND (B) INCLUDED IN THE NASUGBU

TOURISM DEVELOPMENT PLAN, SHOULD BE DECLARED

CARP-EXEMPT.
C.
WITH THE PTA ENACTMENT, THE
ROXAS LANDHOLDINGS ARE CARP-EXEMPT FOLLOWING
THE COURTS PRONOUNCEMENT THAT THE ONLY TIME
[THE NATALIA AND ALLARDE CASES] MAY FIND
APPLICATION IS WHEN THE PTA ACTUALLY IDENTIFIES
WELL-DEFINED GEOGRAPHIC AREAS WITHIN THE ZONE
WITH POTENTIAL TOURISM VALUE. [1]
On the other hand, DAMBA-NFSW and KAMAHARI, et al.
move for partial reconsideration of the assailed Decision on the
following grounds:
I. THE [COURT] COMMITTED A REVERSIBLE ERROR IN
RULING TO EXEMPT FROM CARP COVERAGE THE
SUBJECT NINE (9) LOTS WITH ALLEGED AREA OF 45.9771
HECTARES OF HACIENDA PALICO BASED ON NASUGBU
MUNICIPAL ZONING ORDINANCE NO. 4, SERIES OF 1982,
NOTWITHSTANDING THE FACT THAT:
A.
ROXAS [& CO.] MISERABLY FAILED TO
SHOW PROOF THAT THE SUBJECT ZONING ORDINANCE
UNDER ZONE A. VII THEREOF, SPECIFICALLY DELINEATE
THE SAID LOTS TO HAVE BEEN RE-CLASSIFIED TO NONAGRICULTURAL USE;
B.
ROXAS [& CO.] HAS MERE FALSE
CERTIFICATIONS ISSUED BY THE HLURB AND MPDC OF
NASUGBU WHICH DO NOT FIND SUPPORT IN THE
REFERRED MUNICIPAL ZONING ORDINANCE;
C.
ROXAS [& CO.] FAILED TO SUBMIT IN
EVIDENCE THE COMPREHENSIVE LAND USE PLAN OF
NASUGBU,
BATANGAS
PROVING
SUCH
RECLASSIFICATION TO NON-AGRICULTURAL USE OF
SUBJECT LOTS PRIOR TO THE ENACTMENT OF R.A. 6657
ON JUNE 15, 1988; AND
D.
ROXAS [& CO.] MISERABLY FAILED TO
IDENTIFY SUBJECT LOTS BOTH IN AREAS COVERED AND
LOCATIONS.
II.
GRANTING ARGUENDO THAT THE SUBJECT
NASUGBU MUNICIPAL ZONING ORDINANCE NO. 4,
SERIES OF 1982 IS A VALID BASIS FOR EXEMPTION FROM
CARP COVERAGE OF SUBJECT PARCELS OF LAND, AND
FURTHER GRANTING ARGUENDO THAT ROXAS WAS
ABLE TO PROVE THAT THE SUBJECT LOTS ARE WITHIN
THE PU[R]PORTED URBAN CORE ZONE, STILL THE
[COURT] COMMITTED A REVERSIBLE ERROR IN
UPHOLDING THE COURT OF APPEALS AND THE DAR
SECRETARY[S] ORDER OF CARP EXEMPTION WITHOUT
OBSERVING THE RIGHT OF THE FARMER-BENEFICIARIES
TO PROCEDURAL DUE PROCESS.
Preliminarily, the Court denies Roxas & Co.s Motion to Hold in
Abeyance the Resolution of its earlier Motion for
Reconsideration for lack of merit. Roxas & Co. asks the Court
to hold its judgment on its motion for reconsideration pending
the outcome of its application with the Tourism Infrastructure
and Enterprise Zone Authority (TIEZA) for the designation of
fourteen geographic areas of the Roxas Properties as
[tourism enterprise zones], pursuant to the Tourism Act.
It bears stressing that Roxas & Co.s pending application with
TIEZA is totally immaterial to the resolution of the present
petitions which delve mainly on the issue of whether the

subject lands are exempt from Comprehensive Agrarian

Reform Program (CARP) coverage.
While the Court acknowledged the passage of the Tourism Act
as another vehicle for potential tourism areas to be exempted
from CARP coverage, that did not in any way pronounce as
meritorious Roxas & Co.s subsequent application with the
TIEZA to declare its properties as tourism enterprise zones.
That is for the TIEZA, not this Court, to determine. Whatever
decision the TIEZA renders in Roxas & Co.s application does
not in any way affect the merits of these consolidated cases.
Roxas & Co. cannot have it both ways. It must either zealously
argue its legal position if it believes it to be meritorious or
altogether abandon it if it has reservations. Its Motion to Hold
in Abeyance the Resolution of its earlier Motion for
Reconsideration effectively coaxes the Court to wait for the
outcome of its TIEZA application and ultimately delay the final
resolution of these consolidated cases.
On Roxas & Co.s Motion for Reconsideration, no substantial
arguments were raised to warrant a reconsideration of the
Decision. The Motion contains merely an amplification of the
main arguments and factual matters already submitted to and
pronounced without merit by the Court in its Decision. In the
Courts considered view, nothing more is left to be discussed,
clarified or done in these cases since all the main issues raised
have been passed upon and definitely resolved.
Roxas & Co. raises the fringe issue that DAR Memorandum
Circular No. 7 (Series of 2004) has no force and effect since
the said DAR Memorandum Circular was not published and
filed with the Office of the National Administrative Register.
The contention fails. It should be stressed that there is no
need for the publication and filing of the said DAR
Memorandum Circular with the ONAR as it is merely an
administrative interpretation.[2]
Interpretative rule x x x x is promulgated by the administrative
agency to interpret, clarify or explain statutory regulations
under which the administrative body operates. The purpose or
objective of an interpretative rule is merely to construe the
statute being administered. It purports to do no more than
interpret the statute. Simply, the rules tries to say what the
statute means. Generally, it refers to no single person or party
in particular but concerns all those belonging to the same class
which may be covered by the said interpretative rule. It need
not be published and neither is a hearing required since it is
issued by the administrative body as an incident of its power to
enforce the law and is intended merely to clarify statutory
provisions for proper observance by the people. x x x x.[3]
(Emphasis and underscoring supplied)
Roxas & Co. goes on to contend that its liability to pay
disturbance compensation is limited to its agricultural lessees
only and not to farmer-beneficiaries, citing Republic Act No.
3844 (RA 3844), as amended, and Bacaling v. Muya.[4]
Roxas & Co. is merely nitpicking on the issue. Since the DAR
had initially issued CLOAs to the farmer-beneficiaries of the
nine parcels of land in Hacienda Palico, the assailed Decision
merely reiterated the original designation of the affected
individuals as farmer-beneficiaries who should be entitled to
disturbance compensation before the cancellation of their
respective CLOAs is effected. This is in pursuance of the
directive of DAR Administrative Order No. 6 (Series of 1994)
which mandates the payment of disturbance compensation

before Roxas & Co.s application for exemption may be

completely granted.
As for the Motion for Partial Reconsideration of DAMBA-NFSW
and KAMAHARI, et al., the same likewise fails as it only
rehashes earlier arguments which have been adequately
passed upon by the Court. Notably, the main arguments
raised by the Motion are evidentiary in nature that have been
resolved by the DAR Secretary, whose decision on factual
controversies deserve utmost respect, if not finality.
Finally, the Court reiterates the explanation of the DAR
Secretary why CLOA holders need not be informed of the
pending application for exemption, to wit:

DECISION
TINGA, J.:
This is a Petition for Review[1] dated December 6, 1996
assailing the Decision[2] of the Regional Trial Court[3] dated
July 5, 1996 which ordered the Department of Agrarian Reform
(DAR) and petitioner Land Bank of the Philippines (Land Bank)
to pay private respondents the amount of P30.00 per square
meter as just compensation for the States acquisition of
private respondents properties under the land reform program.
The facts follow.

As regards the first ground raised by [DAMBA-NSFW], it

should be remembered that an application for CARPexemption pursuant to DOJ Opinion No. 44, series of 1990, as
implemented by DAR Administrative Order No. 6, series of
1994, is non-adversarial or non-litigious in nature. Hence,
applicant is correct in saying that nowhere in the rules is it
required that occupants of a landholding should be notified of
an initiated or pending exemption application.

On May 14, 1993, private respondents filed a petition before

the trial court for the determination of just compensation for
their agricultural lands situated in Arayat, Pampanga, which
were acquired by the government pursuant to Presidential
Decree No. 27 (PD 27). The petition named as respondents
the DAR and Land Bank. With leave of court, the petition was
amended to implead as co-respondents the registered tenants
of the land.

xxxx

After trial, the court rendered the assailed Decision the

dispositive portion of which reads:

With regard [to] the allegation that oppositors-movants are

already CLOA holders of subject propert[ies] and deserve to be
notified, as owners, of the initiated questioned exemption
application, is of no moment. The Supreme Court in the case
of Roxas [&] Co., Inc. v. Court of Appeals, 321 SCRA 106, held:
We stress that the failure of respondent DAR to comply with
the requisites of due process in the acquisition proceedings
does not give this Court the power to nullify the CLOAs already
issued to the farmer beneficiaries. x x x x. Anyhow, the
farmer[-]beneficiaries hold the property in trust for the rightful
owner of the land.
Since subject landholding has been validly determined to be
CARP-exempt, therefore, the previous issuance of the CLOA
of oppositors-movants is erroneous. Hence, similar to the
situation of the above-quoted Supreme Court Decision,
oppositors-movants only hold the property in trust for the
rightful owners of the land and are not the owners of subject
landholding who should be notified of the exemption
application of applicant Roxas & Company, Incorporated.
Finally, this Office finds no substantial basis to reverse the
assailed Orders since there is substantial compliance by the
applicant with the requirements for the issuance of exemption
clearance under DAR AO 6 (1994).[5]
WHEREFORE, the Motion for Reconsideration filed by Roxas
& Co., Inc. and the Motion for Partial Reconsideration filed by
DAMBA-NFSW and KAMAHARI are DENIED for lack of merit.
No further pleadings shall be entertained. Let entry of judgment
be made in due course.
SO ORDERED.
[G.R. No. 127198. May 16, 2005]
LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI
G. C. NATIVIDAD, Presiding Judge of the Regional Trial Court,
Branch 48, San Fernando, Pampanga, and JOSE R. CAGUIAT
represented by Attorneys-in-fact JOSE T. BARTOLOME and
VICTORIO MANGALINDAN, respondents.

WHEREFORE, judgment is hereby rendered in favor of

petitioners and against respondents, ordering respondents,
particularly, respondents Department of Agrarian Reform and
the Land Bank of the Philippines, to pay these lands owned by
petitioners and which are the subject of acquisition by the State
under its land reform program, the amount of THIRTY PESOS
(P30.00) per square meter, as the just compensation due for
payment for same lands of petitioners located at San Vicente
(or Camba), Arayat, Pampanga.
Respondent Department of Agrarian Reform is also ordered to
pay petitioners the amount of FIFTY THOUSAND PESOS
(P50,000.00) as Attorneys Fee, and to pay the cost of suit.
SO ORDERED.[4]
DAR and Land Bank filed separate motions for reconsideration
which were denied by the trial court in its Order[5] dated July
30, 1996 for being pro forma as the same did not contain a
notice of hearing. Thus, the prescriptive period for filing an
appeal was not tolled. Land Bank consequently failed to file a
timely appeal and the assailed Decision became final and
executory.
Land Bank then filed a Petition for Relief from Order Dated 30
July 1996,[6] citing excusable negligence as its ground for
relief. Attached to the petition for relief were two affidavits of
merit claiming that the failure to include in the motion for
reconsideration a notice of hearing was due to accident and/or
mistake.[7] The affidavit of Land Banks counsel of record
notably states that he simply scanned and signed the Motion
for Reconsideration for Agrarian Case No. 2005, Regional Trial
Court of Pampanga, Branch 48, not knowing, or unmindful that
it had no notice of hearing[8] due to his heavy workload.
The trial court, in its Order[9] of November 18, 1996, denied
the petition for relief because Land Bank lost a remedy in law
due to its own negligence.
In the instant petition for review, Land Bank argues that the
failure of its counsel to include a notice of hearing due to
pressure of work constitutes excusable negligence and does

not make the motion for reconsideration pro forma considering

its allegedly meritorious defenses. Hence, the denial of its
petition for relief from judgment was erroneous.
According to Land Bank, private respondents should have
sought the reconsideration of the DARs valuation of their
properties.
Private respondents thus failed to exhaust
administrative remedies when they filed a petition for the
determination of just compensation directly with the trial court.
Land Bank also insists that the trial court erred in declaring that
PD 27 and Executive Order No. 228 (EO 228) are mere
guidelines in the determination of just compensation, and in
relying on private respondents evidence of the valuation of the
properties at the time of possession in 1993 and not on Land
Banks evidence of the value thereof as of the time of
acquisition in 1972.
Private respondents filed a Comment[10] dated February 22,
1997, averring that Land Banks failure to include a notice of
hearing in its motion for reconsideration due merely to
counsels heavy workload, which resulted in the motion being
declared pro forma, does not constitute excusable negligence,
especially in light of the admission of Land Banks counsel that
he has been a lawyer since 1973 and has mastered the
intricate art and technique of pleading.
Land Bank filed a Reply[11] dated March 12, 1997 insisting
that equity considerations demand that it be heard on
substantive issues raised in its motion for reconsideration.
The Court gave due course to the petition and required the
parties to submit their respective memoranda.[12] Both parties
complied.[13]

The failure to attach a notice of hearing would have been less

odious if committed by a greenhorn but not by a lawyer who
claims to have mastered the intricate art and technique of
pleading.[15]
Indeed, a motion that does not contain the requisite notice of
hearing is nothing but a mere scrap of paper. The clerk of
court does not even have the duty to accept it, much less to
bring it to the attention of the presiding judge.[16] The trial
court therefore correctly considered the motion for
reconsideration pro forma. Thus, it cannot be faulted for
denying Land Banks motion for reconsideration and petition
for relief from judgment.
It should be emphasized at this point that procedural rules are
designed to facilitate the adjudication of cases. Courts and
litigants alike are enjoined to abide strictly by the rules. While
in certain instances, we allow a relaxation in the application of
the rules, we never intend to forge a weapon for erring litigants
to violate the rules with impunity. The liberal interpretation and
application of rules apply only in proper cases of demonstrable
merit and under justifiable causes and circumstances. While it
is true that litigation is not a game of technicalities, it is equally
true that every case must be prosecuted in accordance with
the prescribed procedure to ensure an orderly and speedy
administration of justice. Party litigants and their counsel are
well advised to abide by, rather than flaunt, procedural rules for
these rules illumine the path of the law and rationalize the
pursuit of justice.[17]
Aside from ruling on this procedural issue, the Court shall also
resolve the other issues presented by Land Bank, specifically
as regards private respondents alleged failure to exhaust
administrative remedies and the question of just compensation.

The petition is unmeritorious.

At issue is whether counsels failure to include a notice of
hearing constitutes excusable negligence entitling Land Bank
to a relief from judgment.
Section 1, Rule 38 of the 1997 Rules of Civil Procedure
provides:
Sec. 1. Petition for relief from judgment, order, or other
proceedings.When a judgment or final order is entered, or
any other proceeding is thereafter taken against a party in any
court through fraud, accident, mistake, or excusable
negligence, he may file a petition in such court and in the same
case praying that the judgment, order or proceeding be set
aside.
As can clearly be gleaned from the foregoing provision, the
remedy of relief from judgment can only be resorted to on
grounds of fraud, accident, mistake or excusable negligence.
Negligence to be excusable must be one which ordinary
diligence and prudence could not have guarded against.[14]
Measured against this standard, the reason profferred by Land
Banks counsel, i.e., that his heavy workload prevented him
from ensuring that the motion for reconsideration included a
notice of hearing, was by no means excusable.
Indeed, counsels admission that he simply scanned and
signed the Motion for Reconsideration for Agrarian Case No.
2005, Regional Trial Court of Pampanga, Branch 48, not
knowing, or unmindful that it had no notice of hearing speaks
volumes of his arrant negligence, and cannot in any manner be
deemed to constitute excusable negligence.

Land Bank avers that private respondents should have sought

the reconsideration of the DARs valuation instead of filing a
petition to fix just compensation with the trial court.
The records reveal that Land Banks contention is not entirely
true. In fact, private respondents did write a letter[18] to the
DAR Secretary objecting to the land valuation summary
submitted by the Municipal Agrarian Reform Office and
requesting a conference for the purpose of fixing just
compensation. The letter, however, was left unanswered
prompting private respondents to file a petition directly with the
trial court.
At any rate, in Philippine Veterans Bank v. Court of Appeals,
[19] we declared that there is nothing contradictory between
the DARs primary jurisdiction to determine and adjudicate
agrarian reform matters and exclusive original jurisdiction over
all matters involving the implementation of agrarian reform,
which includes the determination of questions of just
compensation, and the original and exclusive jurisdiction of
regional trial courts over all petitions for the determination of
just compensation.
The first refers to administrative
proceedings, while the second refers to judicial proceedings.
In accordance with settled principles of administrative law,
primary jurisdiction is vested in the DAR to determine in a
preliminary manner the just compensation for the lands taken
under the agrarian reform program, but such determination is
subject to challenge before the courts. The resolution of just
compensation cases for the taking of lands under agrarian
reform is, after all, essentially a judicial function.[20]

Thus, the trial did not err in taking cognizance of the case as
the determination of just compensation is a function addressed
to the courts of justice.
Land Banks contention that the property was acquired for
purposes of agrarian reform on October 21, 1972, the time of
the effectivity of PD 27, ergo just compensation should be
based on the value of the property as of that time and not at
the time of possession in 1993, is likewise erroneous. In Office
of the President, Malacaang, Manila v. Court of Appeals,[21]
we ruled that the seizure of the landholding did not take place
on the date of effectivity of PD 27 but would take effect on the
payment of just compensation.

SUNTAY III,
Petitioners,
- versusLAND BANK OF THE PHILIPPINES,
Respondent.

Promulgated:

November 20,
2006
x
--------------------------------------------------------------------------------------- x
DECISION

Under the factual circumstances of this case, the agrarian

reform process is still incomplete as the just compensation to
be paid private respondents has yet to be settled. Considering
the passage of Republic Act No. 6657 (RA 6657)[22] before the
completion of this process, the just compensation should be
determined and the process concluded under the said law.
Indeed, RA 6657 is the applicable law, with PD 27 and EO 228
having only suppletory effect, conformably with our ruling in
Paris v. Alfeche.[23]
Section 17 of RA 6657 which is particularly relevant, providing
as it does the guideposts for the determination of just
compensation, reads as follows:
Sec. 17. Determination of Just Compensation.In determining
just compensation, the cost of acquisition of the land, the
current value of like properties, its nature, actual use and
income, the sworn valuation by the owner, the tax declarations,
and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by
the farmers and the farm-workers and by the Government to
the property as well as the non-payment of taxes or loans
secured from any government financing institution on the said
land shall be considered as additional factors to determine its
valuation.
It would certainly be inequitable to determine just
compensation based on the guideline provided by PD 27 and
EO 228 considering the DARs failure to determine the just
compensation for a considerable length of time. That just
compensation should be determined in accordance with RA
6657, and not PD 27 or EO 228, is especially imperative
considering that just compensation should be the full and fair
equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and
ample.[24]
In this case, the trial court arrived at the just compensation due
private respondents for their property, taking into account its
nature as irrigated land, location along the highway, market
value, assessors value and the volume and value of its
produce. This Court is convinced that the trial court correctly
determined the amount of just compensation due private
respondents in accordance with, and guided by, RA 6657 and
existing jurisprudence.
WHEREFORE,
petitioner.

the petition

is

DENIED. Costs

against

SO ORDERED.
JOSEFINA S. LUBRICA, in her
capacity as Assignee of FEDERICO
C. SUNTAY, NENITA SUNTAY
TAEDO and EMILIO A.M.

G.R. No. 170220

YNARES-SANTIAGO, J.:
This Petition for Review on Certiorari under Rule 45 of
the Rules of Court assails the October 27, 2005 Amended
Decision[1] of the Court of Appeals in CA-G.R. SP No. 77530,
which vacated its May 26, 2004 Decision affirming (a) the
Order of the Regional Trial Court of San Jose, Occidental
Mindoro, Branch 46, acting as Special Agrarian Court, in
Agrarian Case Nos. R-1339 and R-1340, dated March 31,
2003 directing respondent Land Bank of the Philippines (LBP)
to deposit the provisional compensation as determined by the
Provincial Agrarian Reform Adjudicator (PARAD); (b) the May
26, 2003 Resolution denying LBPs motion for reconsideration;
and (c) the May 27, 2003 Order requiring Teresita V. Tengco,
LBPs Land Compensation Department Manager, to comply
with the March 31, 2003 Order.
The facts of the case are as follows:
Petitioner Josefina S. Lubrica is the assignee[2] of
Federico C. Suntay over certain parcels of agricultural land
located at Sta. Lucia, Sablayan, Occidental Mindoro, with an
area of 3,682.0285 hectares covered by Transfer Certificate of
Title (TCT) No. T-31 (T-1326)[3] of the Registry of Deeds of
Occidental Mindoro. In 1972, a portion of the said property
with an area of 311.7682 hectares, was placed under the land
reform program pursuant to Presidential Decree No. 27 (1972)
[4] and Executive Order No. 228 (1987).[5] The land was
thereafter subdivided and distributed to farmer beneficiaries.
The Department of Agrarian Reform (DAR) and the LBP fixed
the value of the land at P5,056,833.54 which amount was
deposited in cash and bonds in favor of Lubrica.
On the other hand, petitioners Nenita Suntay-Taedo
and Emilio A.M. Suntay III inherited from Federico Suntay a
parcel of agricultural land located at Balansay, Mamburao,
Occidental Mindoro covered by TCT No. T-128[6] of the
Register of Deeds of Occidental Mindoro, consisting of two
lots, namely, Lot 1 with an area of 45.0760 hectares and Lot 2
containing an area of 165.1571 hectares or a total of 210.2331
hectares. Lot 2 was placed under the coverage of P.D. No. 27
but only 128.7161 hectares was considered by LBP and valued
the same at P1,512,575.05.
Petitioners rejected the valuation of their properties,
hence the Office of the Provincial Agrarian Reform Adjudicator
(PARAD) conducted summary administrative proceedings for
determination of just compensation. On January 29, 2003, the
PARAD fixed the preliminary just compensation at
P51,800,286.43 for the 311.7682 hectares (TCT No. T-31) and
P21,608,215.28 for the 128.7161 hectares (TCT No. T-128).[7]

Not satisfied with the valuation, LBP filed on February

17, 2003, two separate petitions[8] for judicial determination of
just compensation before the Regional Trial Court of San Jose,
Occidental Mindoro, acting as a Special Agrarian Court,
docketed as Agrarian Case No. R-1339 for TCT No. T-31 and
Agrarian Case No. R-1340 for TCT No. T-128, and raffled to
Branch 46 thereof.
Petitioners filed separate Motions to Deposit the
Preliminary Valuation Under Section 16(e) of Republic Act
(R.A.) No. 6657 (1988)[9] and Ad Cautelam Answer praying
among others that LBP deposit the preliminary compensation
determined by the PARAD.
On March 31, 2003, the trial court issued an Order[10]
granting petitioners motion, the dispositive portion of which
reads:
WHEREFORE, Ms. Teresita V. Tengco, of the Land
Compensation Department I (LCD I), Land Bank of the
Philippines, is hereby ordered pursuant to Section 16 (e) of RA
6657 in relation to Section 2, Administrative Order No. 8,
Series of 1991, to deposit the provisional compensation as
determined by the PARAD in cash and bonds, as follows:
1.
In Agrarian Case No. R-1339, the amount of P
51,800,286.43, minus the amount received by the Landowner;
2.
In Agrarian Case No. R-1340, the amount of P
21,608,215.28, less the amount of P 1,512,575.16, the amount
already deposited.
Such deposit must be made with the Land Bank of the
Philippines, Manila within five (5) days from receipt of a copy of
this order and to notify this court of her compliance within such
period.
Let this order be served by the Sheriff of this Court at the
expense of the movants.
SO ORDERED.[11]
LBPs motion for reconsideration was denied in a
Resolution[12] dated May 26, 2003. The following day, May
27, 2003, the trial court issued an Order[13] directing Ms.
Teresita V. Tengco, LBPs Land Compensation Department
Manager, to deposit the amounts.
Thus, on June 17, 2003, LBP filed with the Court of
Appeals a Petition for Certiorari and Prohibition under Rule 65
of the Rules of Court with application for the issuance of a
Temporary Restraining Order and Writ of Preliminary Injunction
docketed as CA-G.R. SP No. 77530.[14]
On June 27, 2003, the appellate court issued a 60-day
temporary restraining order[15] and on October 6, 2003, a writ
of preliminary injunction.[16]
On May 26, 2004, the Court of Appeals rendered a
Decision[17] in favor of the petitioners, the dispositive portion
of which reads:
WHEREFORE, premises considered, there being no
grave abuse of discretion, the instant Petition for Certiorari and
Prohibition is DENIED. Accordingly, the Order dated March 31,
2003, Resolution dated May 26, 2003, and Order dated May
27, 2003 are hereby AFFIRMED. The preliminary injunction We
previously issued is hereby LIFTED and DISSOLVED.
SO ORDERED.[18]

The Court of Appeals held that the trial court correctly

ordered LBP to deposit the amounts provisionally determined
by the PARAD as there is no law which prohibits LBP to make
a deposit pending the fixing of the final amount of just
compensation. It also noted that there is no reason for LBP to
further delay the deposit considering that the DAR already took
possession of the properties and distributed the same to
farmer-beneficiaries as early as 1972.
LBP moved for reconsideration which was granted. On
October 27, 2005, the appellate court rendered the assailed
Amended Decision,[19] the dispositive portion of which reads:
Wherefore, in view of the prescription of a different
formula in the case of Gabatin which We hold as cogent and
compelling justification necessitating Us to effect the reversal
of Our judgment herein sought to be reconsidered, the instant
Motion for Reconsideration is GRANTED, and Our May 26,
2004 Decision is hereby VACATED and ABANDONED with the
end in view of giving way to and acting in harmony and in
congruence with the tenor of the ruling in the case of Gabatin.
Accordingly, the assailed rulings of the Special Agrarian Court
is (sic) commanded to compute and fix the just compensation
for the expropriated agricultural lands strictly in accordance
with the mode of computation prescribed (sic) Our May 26,
2004 judgment in the case of Gabatin.
SO ORDERED.[20]
In the Amended Decision, the Court of Appeals held that
the immediate deposit of the preliminary value of the
expropriated properties is improper because it was erroneously
computed. Citing Gabatin v. Land Bank of the Philippines,[21]
it held that the formula to compute the just compensation
should be: Land Value = 2.5 x Average Gross Production x
Government Support Price. Specifically, it held that the value
of the government support price for the corresponding
agricultural produce (rice and corn) should be computed at the
time of the legal taking of the subject agricultural land, that is,
on October 21, 1972 when landowners were effectively
deprived of ownership over their properties by virtue of P.D.
No. 27. According to the Court of Appeals, the PARAD
incorrectly used the amounts of P500 and P300 which are the
prevailing government support price for palay and corn,
respectively, at the time of payment, instead of P35 and P31,
the prevailing government support price at the time of the
taking in 1972.
Hence, this petition raising the following issues:
A.
THE COURT A QUO HAS DECIDED THE CASE IN A
WAY NOT IN ACCORD WITH THE LATEST DECISION OF
THE SUPREME COURT IN THE CASE OF LAND BANK OF
THE PHILIPPINES VS. HON. ELI G.C. NATIVIDAD, ET AL.,
G.R. NO. 127198, PROM. MAY 16, 2005; and[22]
B.
THE COURT A QUO HAS, WITH GRAVE GRAVE
ABUSE OF DISCRETION, SO FAR DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS, DECIDING ISSUES THAT HAVE NOT BEEN
RAISED, AS TO CALL FOR AN EXERCISE OF THE POWER
OF SUPERVISION.[23]
Petitioners insist that the determination of just
compensation should be based on the value of the
expropriated properties at the time of payment. Respondent
LBP, on the other hand, claims that the value of the realties

should be computed as of October 21, 1972 when P.D. No. 27

took effect.
The petition is impressed with merit.
In the case of Land Bank of the Philippines v. Natividad,
[24] the Court ruled thus:
Land Banks contention that the property was acquired for
purposes of agrarian reform on October 21, 1972, the time of
the effectivity of PD 27, ergo just compensation should be
based on the value of the property as of that time and not at
the time of possession in 1993, is likewise erroneous. In Office
of the President, Malacaang, Manila v. Court of Appeals, we
ruled that the seizure of the landholding did not take place on
the date of effectivity of PD 27 but would take effect on the
payment of just compensation.
The Natividad case reiterated the Courts ruling in Office of the
President v. Court of Appeals[25] that the expropriation of the
landholding did not take place on the effectivity of P.D. No. 27
on October 21, 1972 but seizure would take effect on the
payment of just compensation judicially determined.
Likewise, in the recent case of Heirs of Francisco R. Tantoco,
Sr. v. Court of Appeals,[26] we held that expropriation of
landholdings covered by R.A. No. 6657 take place, not on the
effectivity of the Act on June 15, 1988, but on the payment of
just compensation.
In the instant case, petitioners were deprived of their properties
in 1972 but have yet to receive the just compensation therefor.
The parcels of land were already subdivided and distributed to
the farmer-beneficiaries thereby immediately depriving
petitioners of their use. Under the circumstances, it would be
highly inequitable on the part of the petitioners to compute the
just compensation using the values at the time of the taking in
1972, and not at the time of the payment, considering that the
government and the farmer-beneficiaries have already
benefited from the land although ownership thereof have not
yet been transferred in their names. Petitioners were deprived
of their properties without payment of just compensation which,
under the law, is a prerequisite before the property can be
taken away from its owners.[27] The transfer of possession
and ownership of the land to the government are conditioned
upon the receipt by the landowner of the corresponding
payment or deposit by the DAR of the compensation with an
accessible bank. Until then, title remains with the landowner.
[28]
Our ruling in Association of Small Landowners in the
Philippines, Inc. v. Secretary of Agrarian Reform[29] is
instructive, thus:
It is true that P.D. No. 27 expressly ordered the emancipation
of tenant-farmer as October 21, 1972 and declared that he
shall be deemed the owner of a portion of land consisting of a
family-sized farm except that no title to the land owned by him
was to be actually issued to him unless and until he had
become a full-fledged member of a duly recognized farmers
cooperative. It was understood, however, that full payment of
the just compensation also had to be made first, conformably
to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full
owners as of October 21, 1972 of the land they acquired by
virtue of Presidential Decree No. 27 (Emphasis supplied.)

it was obviously referring to lands already validly acquired

under the said decree, after proof of full-fledged membership in
the farmers cooperatives and full payment of just
compensation. 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.
We also note that the expropriation proceedings in the instant
case was initiated under P.D. No. 27 but the agrarian reform
process is still incomplete considering that the just
compensation to be paid to petitioners has yet to be settled.
Considering the passage of R.A. No. 6657 before the
completion of this process, the just compensation should be
determined and the process concluded under the said law.
Indeed, R.A. No. 6657 is the applicable law, with P.D. No. 27
and E.O. No. 228 having only suppletory effect.[30]
In Land Bank of the Philippines v. Court of Appeals,[31] we
held that:
RA 6657 includes PD 27 lands among the properties which the
DAR shall acquire and distribute to the landless. And to
facilitate the acquisition and distribution thereof, Secs. 16, 17
and 18 of the Act should be adhered to.
Section 18 of R.A. No. 6657 mandates that the LBP shall
compensate the landowner in such amount as may be agreed
upon by the landowner and the DAR and the LBP or as may be
finally determined by the court as the just compensation for the
land. In determining just compensation, the cost of the
acquisition of the land, the current value of like properties, its
nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by
government assessors shall be considered. The social and
economic benefits contributed by the farmers and the
farmworkers and by the government to the property as well as
the nonpayment of taxes or loans secured from any
government financing institution on the said land shall be
considered as additional factors to determine its valuation.[32]
Corollarily, we held in Land Bank of the Philippines v.
Celada[33] that the above provision was converted into a
formula by the DAR through Administrative Order No. 05, S.
1998, to wit:
Land Value (LV) = (Capitalized Net Income x 0.6) +
(Comparable Sales x 0.3) + (Market Value per Tax Declaration
x 0.1)
Petitioners were deprived of their properties way back in
1972, yet to date, they have not yet received just
compensation. Thus, it would certainly be inequitable to
determine just compensation based on the guideline provided
by P.D. No. 227 and E.O. No. 228 considering the failure to
determine just compensation for a considerable length of time.
That just compensation should be determined in accordance
with R.A. No. 6657 and not P.D. No. 227 or E.O. No. 228, is
important considering that just compensation should be the full
and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and
ample.[34]

WHEREFORE, premises considered, the petition is

GRANTED. The assailed Amended Decision dated October
27, 2005 of the Court of Appeals in CA-G.R. SP No. 77530 is
REVERSED and SET ASIDE. The Decision dated May 26,
2004 of the Court of Appeals affirming (a) the March 31, 2003
Order of the Special Agrarian Court ordering the respondent
Land Bank of the Philippines to deposit the just compensation
provisionally determined by the PARAD; (b) the May 26, 2003
Resolution denying respondents Motion for Reconsideration;
and (c) the May 27, 2003 Order directing Teresita V. Tengco,
respondents Land Compensation Department Manager to
comply with the March 31, 2003 Order, is REINSTATED. The
Regional Trial Court of San Jose, Occidental Mindoro, Branch
46, acting as Special Agrarian Court is ORDERED to proceed
with dispatch in the trial of Agrarian Case Nos. R-1339 and R1340, and to compute the final valuation of the subject
properties based on the aforementioned formula.
SO ORDERED.
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.

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

135,482.12

Heirs of Emiliano Santiago

15,914,127.77

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

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.

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.

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 Isagani Cruz:
. . . 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

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).

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.

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',

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
xxx

xxx

xxx

(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. . . . (emphasis
supplied)

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

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".

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, 29A 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

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

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

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:
. . . 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 (Emphasis 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:
. . . 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
(Emphasis 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.