MODES OF ACQUISITION

Features of the Land Bank of the

Philippines (LBP) Bonds:
■ 1. 10% of face value of bonds shall mature every year from date of issuance until 10th year
■ 2. bonds are transferable and negotiable
■ 3. Bonds can be used for any of the following:
a. acquisition of land or other real properties of government, including:
-assets under the Asset Privatization Program
- -other assets foreclosed by government financial institutions in the same province or
region where the lands for which the bonds were paid are situated
■ b. acquisition of land shares of government owned or controlled corporations or
shares of stocks
■ owned by government in private corporations
■ c. bail bonds for provisional release of accused persons or performance bonds
■ d. security for loans with government financial institution
■ -provided that proceeds of the loans shall be invested in an economic enterprise
■ e. payment for various taxes and fees to government
■ f. payment for tuition fees of immediate family of original bond holder in government
universities,
■ colleges, trade schools and other institutions
■ g. payment for fees of immediate family of original bond holder in government
hospitals
Sole Cash payment is not valid
■ Landowner cannot insist in cash payment only because it is not sanctioned by the
CARL.
■ The law states that just compensation shall be paid partly in cash and remainder in
terms of bonds, government financial instruments, shares of stocks in GOCC, tax
credits or Land Bank bonds
Case summary
LANDBANK VS. NATIVIDAD

ISSUE:Whether or not PD 27 and EO 228 are the applicable statues

in this case
HELD:

Held:
No. Land Bank’s 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 erroneous.
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) 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
Lubrica v Land Bank
ISSUE: Whether the valuation of just
compensation be based on the value of property
at time of of payment
Held:
Yes, petition is meritorious. 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 aprerequisite before the property can be taken away from its owners

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. 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.
Association of Small Landowners v
Secretary of Agrarian Reform
Facts:

Cases have been consolidated questioning substantially the same legal

issues. As per the first case, petitioners seeks to declare unconstitutional
PD.27 and E.O. No. 228. The second case seeks to prohibit the
implementation of Proc. No. 131 and E.O. No. 229. In the third case, the
petitioner alleges that the then Secretary of Department of Agrarian
Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation
Land transfer
Issue: WON PD 27 and EO 228 and 229 are unconstitutional because
these provisions violate the
separation of powers, due process, equal protection clause, with respect
to the just compensation
given to the petitioners

Held:
No, it’s not. In the objections presented in Section 18, The contention of the petitioners in G.R.
No. 79777 (2nd case) is that the above provision is unconstitutional insofar as it requires the owners of
the expropriated properties to accept just compensation therefore in less than money, which is the only
medium of payment allowed.
It cannot be denied from the former cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been paid in the
past solely in that medium. However, we do not deal here with the traditional exercise of the power of
eminent domain. This is not an ordinary expropriation where only a specific property of relatively
limited area is sought to be taken by the State from its owner for a specific and perhaps local
purpose. Such a program will involve not mere millions of pesos. The cost will be tremendous.
Land Bank vs. CA
GR. NO 118712
October 6,1995
Facts:

Petitioner Pedro Yap alleges that on 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 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 Land bank
bonds in an accessible bank.
DAR maintained that the issuance of the "Certificate of Deposit" by the Land Bank
was a substantial compliance with Section 16(e) of RA 6657
Issue:WON SEction 16(e) is valid under the law wrt to
the contentions of that “trust funds”are included
in the form of payment under RA 6675
RULING:
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 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.
Land Bank v CA
GR no. 128557
Facts:
Private respondent Jose Pascual owned three (3) parcels of land located in Guttaran, Cagayan.
Pursuant to the Land Reform Program of the Government under PD 27 and EO 228, the Department
of Agrarian Reform (DAR) placed these lands under its Operation Land Transfer (OLT). At first,
private respondent refused the valuation, but after receiving notice of the decision of the PARAD,
private respondent accepted the valuation.
However, when the judgment became final and executory, petitioner LBP as the financing arm in the
operation of PD 27 and EO 228 refused to pay thus forcing private respondent to apply for a Writ of
Execution with the PARAD which the latter issued on 24 December 1992. Still, petitioner LBP
declined to comply with the order.
Land Bank argued that for a financing or guarantee agreement to exist there must be at
least three (3) parties: the creditor, the debtor and the financier or the guarantor. Since
petitioner merely guarantees or finances the payment of the value of the land, the
farmer-beneficiaries consent, being the principal debtor, is indispensable and that the
only time petitioner becomes legally bound to finance the transaction is when the
farmer-beneficiary approves the appraised land value. Petitioner fears that if it is forced
to pay the value as determined by the DARAB, the government will suffer losses as the
farmer-beneficiary, who does not agree to the appraised land value, will surely refuse to
reimburse the amounts that petitioner had disbursed. Thus, it asserts, that the
landowner, the DAR the Land Bank and the farmer-beneficiary must all agree to the
value of the land as determined by them.
Issue:
WON Land Bank should finance said payment of the lands in
question

Held: A perusal of the law however shows that the consent of the farmer-beneficiary is not required in
establishing the vinculum juris for the proper compensation of the landowner.

Section 18 of RA 6657states

Sec. 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 the
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
As may be gleaned from the aforementioned section, the landowner, the DAR and the Land Bank are
the only parties involved. The law does not mention the participation of the farmer-beneficiary
Santos v Land Bank
Facts:
It appears that petitioner Edgardo Santos is the plaintiff in Agrarian Case No. RTC 94-3206 for the
determination of just compensation regarding properties which were taken by DAR under P.D. No. 27
in 1972. A preliminary valuation in the amount of P3,543,070.66 had in fact been previously released by the
Land Bank in cash and bond; thus deducting it from the total amount adjudged, the balance unpaid
amounting to P45,698,805.34 which was ordered by the Regional Trial Court to be paid in
accordance with RA 6657. The issue to be resolved is to determine how much should be paid in cash
and how much also should be paid in bonds, to fully satisfy the judgment herein rendered in the
amount of P49,241,876.00

CA Ruling: RA 6657 is clear and leaves no doubt as to its interpretation regarding the manner of
payment of just compensation. The provision allows the landowner to choose the manner of payment
from the list provided therein, but since plaintiff had obviously wanted payment to be made in cash,
then the trial court, through the new presiding judge, Judge Villegas-Llaguno, had only to apply
Section 18 of R.A. 6657 which provides for the payment of a percentage thereon in cash and the
balance in bond, in the exercise of her ministerial duty to execute the decision which had become
final and executory.
Issue:
Whether payment of cash and bonds are
valid under RA 6675
Held:
It is clear from the August 12, 1997 judgment that the compensation was to be paid "in the manner
provided by RA 6657." Pursuant to Section 18 of the same law, payment was to be in cash and
bonds.
Respondent bank was obliged to follow the mandate of the judgment. Hence, its compliance with the
Writ of Execution and the Notice of Garnishment ought to have been construed as an agreement to
pay petitioner in the manner set forth in Republic Act No. 6657.
Paying in cash, as petitioner demands, is not compatible with such judgment. SC understand
petitioner's desire to be paid in cash; after all, his compensation was long overdue. However, we
cannot grant his Petition because it is not sustained by the law and Jurisprudence.