Cases

Justcompensationisdefinedasthefullandfairequivalentofthepropertytakenfromitsownerbythe
expropriator.39IthasbeenrepeatedlystressedbythisCourtthatthemeasureisnotthetakersgainbut
theownersloss.40Thewordjustisusedtointensifythemeaningofthewordcompensationto
conveytheideathattheequivalenttoberenderedforthepropertytobetakenshallbereal,substantial,
full,ample.41
Itbearsrepeatingthatthemeasureschallengedinthesepetitionscontemplatemorethanamere
regulationoftheuseofprivatelandsunderthepolicepower.Wedealherewithanactualtakingof
privateagriculturallandsthathasdispossessedtheownersoftheirpropertyanddeprivedthemofallits
beneficialuseandenjoyment,toentitlethemtothejustcompensationmandatedbytheConstitution.
AsheldinRepublicofthePhilippinesv.Castellvi,42thereiscompensabletakingwhenthefollowing
conditionsconcur:(1)theexpropriatormustenteraprivateproperty;(2)theentrymustbeformore
thanamomentaryperiod;(3)theentrymustbeunderwarrantorcoloroflegalauthority;(4)the
propertymustbedevotedtopublicuseorotherwiseinformallyappropriatedorinjuriouslyaffected;
and(5)theutilizationofthepropertyforpublicusemustbeinsuchawayastoousttheownerand
deprivehimofbeneficialenjoymentoftheproperty.Alltheserequisitesareenvisionedinthemeasures
beforeus.
WheretheStateitselfistheexpropriator,itisnotnecessaryforittomakeadeposituponitstaking
possessionofthecondemnedproperty,asthecompensationisapubliccharge,thegoodfaithofthe
publicispledgedforitspayment,andalltheresourcesoftaxationmaybeemployedinraisingthe
amount.43Nevertheless,Section16(e)oftheCARPLawprovidesthat:
Uponreceiptbythelandownerofthecorrespondingpaymentor,incaseofrejectionornoresponse
fromthelandowner,uponthedepositwithanaccessiblebankdesignatedbytheDARofthe
compensationincashorinLBPbondsinaccordancewiththisAct,theDARshalltakeimmediate
possessionofthelandandshallrequesttheproperRegisterofDeedstoissueaTransferCertificateof
Title(TCT)inthenameoftheRepublicofthePhilippines.TheDARshallthereafterproceedwiththe
redistributionofthelandtothequalifiedbeneficiaries.
Objectionisraised,however,tothemanneroffixingthejustcompensation,whichitisclaimedis
entrustedtotheadministrativeauthoritiesinviolationofjudicialprerogatives.Specificreferenceis

madetoSection16(d),whichprovidesthatincaseoftherejectionordisregardbytheownerofthe
offerofthegovernmenttobuyhisland
theDARshallconductsummaryadministrativeproceedingstodeterminethecompensationforthe
landbyrequiringthelandowner,theLBPandotherinterestedpartiestosubmitevidenceastothejust
compensationfortheland,withinfifteen(15)daysfromthereceiptofthenotice.Aftertheexpiration
oftheaboveperiod,thematterisdeemedsubmittedfordecision.TheDARshalldecidethecasewithin
thirty(30)daysafteritissubmittedfordecision.
2.LandBankofthePhils.v.Natividad,G.R.No.127198.May16,2005
SECONDDIVISION
[G.R.No.127198.May16,2005]
LANDBANKOFTHEPHILIPPINES,petitioner,vs.HON.ELIG.C.NATIVIDAD,PresidingJudge
oftheRegionalTrialCourt,Branch48,SanFernando,Pampanga,andJOSER.CAGUIATrepresented
byAttorneysinfactJOSET.BARTOLOMEandVICTORIOMANGALINDAN,respondents.
DECISION
TINGA,J.:
ThisisaPetitionforReview[1]datedDecember6,1996assailingtheDecision[2]oftheRegionalTrial
Court[3]datedJuly5,1996whichorderedtheDepartmentofAgrarianReform(DAR)andpetitioner
LandBankofthePhilippines(LandBank)topayprivaterespondentstheamountofP30.00persquare
meterasjustcompensationfortheStatesacquisitionofprivaterespondentspropertiesundertheland
reformprogram.
Thefactsfollow.
OnMay14,1993,privaterespondentsfiledapetitionbeforethetrialcourtforthedeterminationofjust
compensationfortheiragriculturallandssituatedinArayat,Pampanga,whichwereacquiredbythe
governmentpursuanttoPresidentialDecreeNo.27(PD27).Thepetitionnamedasrespondentsthe
DARandLandBank.Withleaveofcourt,thepetitionwasamendedtoimpleadascorespondentsthe
registeredtenantsoftheland.
Aftertrial,thecourtrenderedtheassailedDecisionthedispositiveportionofwhichreads:
WHEREFORE,judgmentisherebyrenderedinfavorofpetitionersandagainstrespondents,ordering
respondents,particularly,respondentsDepartmentofAgrarianReformandtheLandBankofthe
Philippines,topaytheselandsownedbypetitionersandwhicharethesubjectofacquisitionbythe
Stateunderitslandreformprogram,theamountofTHIRTYPESOS(P30.00)persquaremeter,asthe
justcompensationdueforpaymentforsamelandsofpetitionerslocatedatSanVicente(orCamba),
Arayat,Pampanga.
RespondentDepartmentofAgrarianReformisalsoorderedtopaypetitionerstheamountofFIFTY
THOUSANDPESOS(P50,000.00)asAttorneysFee,andtopaythecostofsuit.
SOORDERED.[4]
DARandLandBankfiledseparatemotionsforreconsiderationwhichweredeniedbythetrialcourtin
itsOrder[5]datedJuly30,1996forbeingproformaasthesamedidnotcontainanoticeof
hearing.Thus,theprescriptiveperiodforfilinganappealwasnottolled.LandBankconsequently
failedtofileatimelyappealandtheassailedDecisionbecamefinalandexecutory.
LandBankthenfiledaPetitionforRelieffromOrderDated30July1996,[6]citingexcusable
negligenceasitsgroundforrelief.Attachedtothepetitionforreliefweretwoaffidavitsofmerit
claimingthatthefailuretoincludeinthemotionforreconsiderationanoticeofhearingwasdueto
accidentand/ormistake.[7]TheaffidavitofLandBankscounselofrecordnotablystatesthathesimply
scannedandsignedtheMotionforReconsiderationforAgrarianCaseNo.2005,RegionalTrialCourt
ofPampanga,Branch48,notknowing,orunmindfulthatithadnonoticeofhearing[8]duetohisheavy
workload.
Thetrialcourt,initsOrder[9]ofNovember18,1996,deniedthepetitionforreliefbecauseLandBank
lostaremedyinlawduetoitsownnegligence.

Intheinstantpetitionforreview,LandBankarguesthatthefailureofitscounseltoincludeanoticeof
hearingduetopressureofworkconstitutesexcusablenegligenceanddoesnotmakethemotionfor
reconsiderationproformaconsideringitsallegedlymeritoriousdefenses.Hence,thedenialofits
petitionforrelieffromjudgmentwaserroneous.
AccordingtoLandBank,privaterespondentsshouldhavesoughtthereconsiderationoftheDARs
valuationoftheirproperties.Privaterespondentsthusfailedtoexhaustadministrativeremedieswhen
theyfiledapetitionforthedeterminationofjustcompensationdirectlywiththetrialcourt.LandBank
alsoinsiststhatthetrialcourterredindeclaringthatPD27andExecutiveOrderNo.228(EO228)are
mereguidelinesinthedeterminationofjustcompensation,andinrelyingonprivaterespondents
evidenceofthevaluationofthepropertiesatthetimeofpossessionin1993andnotonLandBanks
evidenceofthevaluethereofasofthetimeofacquisitionin1972.
PrivaterespondentsfiledaComment[10]datedFebruary22,1997,averringthatLandBanksfailureto
includeanoticeofhearinginitsmotionforreconsiderationduemerelytocounselsheavyworkload,
whichresultedinthemotionbeingdeclaredproforma,doesnotconstituteexcusablenegligence,
especiallyinlightoftheadmissionofLandBankscounselthathehasbeenalawyersince1973and
hasmasteredtheintricateartandtechniqueofpleading.
LandBankfiledaReply[11]datedMarch12,1997insistingthatequityconsiderationsdemandthatitbe
heardonsubstantiveissuesraisedinitsmotionforreconsideration.
TheCourtgaveduecoursetothepetitionandrequiredthepartiestosubmittheirrespective
memoranda.[12]Bothpartiescomplied.[13]
Thepetitionisunmeritorious.
Atissueiswhethercounselsfailuretoincludeanoticeofhearingconstitutesexcusablenegligence
entitlingLandBanktoarelieffromjudgment.
Section1,Rule38ofthe1997RulesofCivilProcedureprovides:
Sec.1.Petitionforrelieffromjudgment,order,orotherproceedings.Whenajudgmentorfinalorderis
entered,oranyotherproceedingisthereaftertakenagainstapartyinanycourtthroughfraud,accident,
mistake,orexcusablenegligence,hemayfileapetitioninsuchcourtandinthesamecaseprayingthat
thejudgment,orderorproceedingbesetaside.
Ascanclearlybegleanedfromtheforegoingprovision,theremedyofrelieffromjudgmentcanonly
beresortedtoongroundsoffraud,accident,mistakeorexcusablenegligence.Negligencetobe
excusablemustbeonewhichordinarydiligenceandprudencecouldnothaveguardedagainst.[14]
Measuredagainstthisstandard,thereasonprofferredbyLandBankscounsel,i.e.,thathisheavy
workloadpreventedhimfromensuringthatthemotionforreconsiderationincludedanoticeofhearing,
wasbynomeansexcusable.
Indeed,counselsadmissionthathesimplyscannedandsignedtheMotionforReconsiderationfor
AgrarianCaseNo.2005,RegionalTrialCourtofPampanga,Branch48,notknowing,orunmindful
thatithadnonoticeofhearingspeaksvolumesofhisarrantnegligence,andcannotinanymannerbe
deemedtoconstituteexcusablenegligence.
Thefailuretoattachanoticeofhearingwouldhavebeenlessodiousifcommittedbyagreenhornbut
notbyalawyerwhoclaimstohavemasteredtheintricateartandtechniqueofpleading.[15]
Indeed,amotionthatdoesnotcontaintherequisitenoticeofhearingisnothingbutamerescrapof
paper.Theclerkofcourtdoesnotevenhavethedutytoacceptit,muchlesstobringittotheattention
ofthepresidingjudge.[16]Thetrialcourtthereforecorrectlyconsideredthemotionfor
reconsiderationproforma.Thus,itcannotbefaultedfordenyingLandBanksmotionfor
reconsiderationandpetitionforrelieffromjudgment.
Itshouldbeemphasizedatthispointthatproceduralrulesaredesignedtofacilitatetheadjudicationof
cases.Courtsandlitigantsalikeareenjoinedtoabidestrictlybytherules.Whileincertaininstances,
weallowarelaxationintheapplicationoftherules,weneverintendtoforgeaweaponforerring
litigantstoviolatetheruleswithimpunity.Theliberalinterpretationandapplicationofrulesapplyonly
inpropercasesofdemonstrablemeritandunderjustifiablecausesandcircumstances.Whileitistrue
thatlitigationisnotagameoftechnicalities,itisequallytruethateverycasemustbeprosecutedin
accordancewiththeprescribedproceduretoensureanorderlyandspeedyadministrationofjustice.
Partylitigantsandtheircounselarewelladvisedtoabideby,ratherthanflaunt,proceduralrulesfor
theserulesilluminethepathofthelawandrationalizethepursuitofjustice. [17]
Asidefromrulingonthisproceduralissue,theCourtshallalsoresolvetheotherissuespresentedby
LandBank,specificallyasregardsprivaterespondentsallegedfailuretoexhaustadministrative
remediesandthequestionofjustcompensation.

LandBankaversthatprivaterespondentsshouldhavesoughtthereconsiderationoftheDARs
valuationinsteadoffilingapetitiontofixjustcompensationwiththetrialcourt.
TherecordsrevealthatLandBankscontentionisnotentirelytrue.Infact,privaterespondentsdidwrite
aletter[18]totheDARSecretaryobjectingtothelandvaluationsummarysubmittedbytheMunicipal
AgrarianReformOfficeandrequestingaconferenceforthepurposeoffixingjustcompensation.The
letter,however,wasleftunansweredpromptingprivaterespondentstofileapetitiondirectlywiththe
trialcourt.
Atanyrate,inPhilippineVeteransBankv.CourtofAppeals,[19]wedeclaredthatthereisnothing
contradictorybetweentheDARsprimaryjurisdictiontodetermineandadjudicateagrarianreform
mattersandexclusiveoriginaljurisdictionoverallmattersinvolvingtheimplementationofagrarian
reform,whichincludesthedeterminationofquestionsofjustcompensation,andtheoriginaland
exclusivejurisdictionofregionaltrialcourtsoverallpetitionsforthedeterminationofjust
compensation.Thefirstreferstoadministrativeproceedings,whilethesecondreferstojudicial
proceedings.
Inaccordancewithsettledprinciplesofadministrativelaw,primaryjurisdictionisvestedintheDARto
determineinapreliminarymannerthejustcompensationforthelandstakenundertheagrarianreform
program,butsuchdeterminationissubjecttochallengebeforethecourts.Theresolutionofjust
compensationcasesforthetakingoflandsunderagrarianreformis,afterall,essentiallyajudicial
function.[20]
Thus,thetrialdidnoterrintakingcognizanceofthecaseasthedeterminationofjustcompensationis
afunctionaddressedtothecourtsofjustice.
LandBankscontentionthatthepropertywasacquiredforpurposesofagrarianreformonOctober21,
1972,thetimeoftheeffectivityofPD27,ergojustcompensationshouldbebasedonthevalueofthe
propertyasofthattimeandnotatthetimeofpossessionin1993,islikewiseerroneous.InOfficeofthe
President,Malacaang,Manilav.CourtofAppeals,[21]weruledthattheseizureofthelandholdingdid
nottakeplaceonthedateofeffectivityofPD27butwouldtakeeffectonthepaymentofjust
compensation.
Underthefactualcircumstancesofthiscase,theagrarianreformprocessisstillincompleteasthejust
compensationtobepaidprivaterespondentshasyettobesettled.ConsideringthepassageofRepublic
ActNo.6657(RA6657)[22]beforethecompletionofthisprocess,thejustcompensationshouldbe
determinedandtheprocessconcludedunderthesaidlaw.Indeed,RA6657istheapplicablelaw,with
PD27andEO228havingonlysuppletoryeffect,conformablywithourrulinginParisv.Alfeche.[23]
Section17ofRA6657whichisparticularlyrelevant,providingasitdoestheguidepostsforthe
determinationofjustcompensation,readsasfollows:
Sec.17.DeterminationofJustCompensation.Indeterminingjustcompensation,thecostofacquisition
oftheland,thecurrentvalueoflikeproperties,itsnature,actualuseandincome,theswornvaluation
bytheowner,thetaxdeclarations,andtheassessmentmadebygovernmentassessorsshallbe
considered.Thesocialandeconomicbenefitscontributedbythefarmersandthefarmworkersandby
theGovernmenttothepropertyaswellasthenonpaymentoftaxesorloanssecuredfromany
governmentfinancinginstitutiononthesaidlandshallbeconsideredasadditionalfactorstodetermine
itsvaluation.
Itwouldcertainlybeinequitabletodeterminejustcompensationbasedontheguidelineprovidedby
PD27andEO228consideringtheDARsfailuretodeterminethejustcompensationforaconsiderable
lengthoftime.ThatjustcompensationshouldbedeterminedinaccordancewithRA6657,andnotPD
27orEO228,isespeciallyimperativeconsideringthatjustcompensationshouldbethefullandfair
equivalentofthepropertytakenfromitsownerbytheexpropriator,theequivalentbeingreal,
substantial,fullandample.[24]
Inthiscase,thetrialcourtarrivedatthejustcompensationdueprivaterespondentsfortheirproperty,
takingintoaccountitsnatureasirrigatedland,locationalongthehighway,marketvalue,assessors
valueandthevolumeandvalueofitsproduce.ThisCourtisconvincedthatthetrialcourtcorrectly
determinedtheamountofjustcompensationdueprivaterespondentsinaccordancewith,andguided
by,RA6657andexistingjurisprudence.
WHEREFORE,thepetitionisDENIED.Costsagainstpetitioner.
SOORDERED.
Puno,(Chairman),AustriaMartinez,Callejo,Sr.,andChicoNazario,JJ.,concur.
3.LandBankofthePhils.vs.CA,GRNo.118712,Oct.6,1995

RepublicofthePhilippines
SUPREMECOURT
Manila
SECONDDIVISION

G.R.No.118712October6,1995
LANDBANKOFTHEPHILIPPINES,petitioner,
vs.
COURTOFAPPEALS,PEDROL.YAP,HEIRSOFEMILIANOF.SANTIAGO,AGRICULTURAL
MANAGEMENT&DEVELOPMENTCORP.,respondents.
G.R.No.118745October6,1995
DEPARTMENTOFAGRARIANREFORM,representedbytheSecretaryofAgrarian
Reform,petitioner,
vs.
COURTOFAPPEALS,PEDROL.YAP,HEIRSOFEMILIANOF.SANTIAGO,AGRICULTURAL
MANAGEMENT&DEVELOPMENTCORP.,ETAL.,respondents.

FRANCISCO,R.,J.:
Ithasbeendeclaredthatthedutyofthecourttoprotecttheweakandtheunderprivilegedshouldnotbe
carriedouttosuchanextentasdenyjusticetothelandownerwhenevertruthandjusticehappentobe
onhisside.1AseloquentlystatedbyJusticeIsaganiCruz:
...socialjusticeoranyjusticeforthatmatterisforthedeserving,whetherhebeamillionairein
hismansionorapauperinhishovel.Itistruethat,incaseofreasonabledoubt,wearecalleduponto
tiltthebalanceinfavorofthepoor,towhomtheConstitutionfittinglyextendsitssympathyand
compassion.Butneverisitjustifiedtopreferthepoorsimplybecausetheyarepoor,ortorejectthe
richsimplybecausetheyarerich,forjusticemustalwaysbeserved,forpoorandrichalike,according
tothemandateofthelaw.2
Inthisagrariandispute,itisoncemoreimperativethattheaforestatedprinciplesbeappliedinits
resolution.
SeparatepetitionsforreviewwerefiledbypetitionersDepartmentofAgrarianReform(DAR)(G.R.
No.118745)andLandBankofthePhilippines(G.R.No.118712)followingtheadverserulingbythe
CourtofAppealsinCAG.R.SPNo.33465.However,uponmotionfiledbyprivaterespondents,the
petitionswereorderedconsolidated.3
PetitionersassailthedecisionoftheCourtofAppealspromulgatedonOctober20,1994,whichgranted
privaterespondents'PetitionforCertiorariandMandamusandruledasfollows:
WHEREFORE,premisesconsidered,thePetitionforCertiorariandMandamusisherebyGRANTED:
a)DARAdministrativeOrderNo.9,Seriesof1990isdeclarednullandvoidinsofarasitprovidesfor
theopeningoftrustaccountsinlieuofdepositsincashorbonds;
b)RespondentLandbankisorderedtoimmediatelydepositnotmerely"earmark","reserve"or
"depositintrust"withanaccessiblebankdesignatedbyrespondentDARinthenamesofthe
followingpetitionersthefollowingamountsincashandingovernmentfinancialinstrumentswithin
theparametersofSec.18(1)ofRA6657:
P1,455,207.31PedroL.Yap
P135,482.12HeirsofEmilianoSantiago
P15,914,127.77AMADCOR;
c)TheDARdesignatedbankisorderedtoallowthepetitionerstowithdrawtheabovedeposited
amountswithoutprejudicetothefinaldeterminationofjustcompensationbytheproperauthorities;
and
d)RespondentDARisorderedto1)immediatelyconductsummaryadministrativeproceedingsto
determinethejustcompensationforthelandsofthepetitionersgivingthepetitioners15daysfrom
noticewithinwhichtosubmitevidenceandto2)decidethecaseswithin30daysaftertheyare
submittedfordecision.4
Likewise,petitionersseekthereversaloftheResolutiondatedJanuary18,1995,5denyingtheirmotion
forreconsideration.

PrivaterespondentsarelandownerswhoselandholdingswereacquiredbytheDARandsubjectedto
transferschemestoqualifiedbeneficiariesundertheComprehensiveAgrarianReformLaw(CARL,
RepublicActNo.6657).
AggrievedbytheallegedlapsesoftheDARandtheLandbankwithrespecttothevaluationand
paymentofcompensationfortheirlandpursuanttotheprovisionsofRA6657,privaterespondents
filedwiththisCourtaPetitionforCertiorariandMandamuswithprayerforpreliminarymandatory
injunction.PrivaterespondentsquestionedthevalidityofDARAdministrativeOrderNo.6,Seriesof
19926andDARAdministrativeOrderNo.9,Seriesof1990,7andsoughttocompeltheDARto
expeditethependingsummaryadministrativeproceedingstofinallydeterminethejustcompensation
oftheirproperties,andtheLandbanktodepositincashandbondstheamountsrespectively
"earmarked","reserved"and"depositedintrustaccounts"forprivaterespondents,andtoallowthemto
withdrawthesame.
ThroughaResolutionoftheSecondDivisiondatedFebruary9,1994,thisCourtreferredthepetitionto
respondentCourtofAppealsforproperdeterminationanddisposition.
Asfoundbyrespondentcourt,thefollowingareundisputed:
PetitionerPedroYapallegesthat"(o)n4September1992thetransfercertificatesoftitle(TCTs)of
petitionerYapweretotallycancelledbytheRegistrarofDeedsofLeyteandweretransferredinthe
namesoffarmerbeneficiariescollectively,basedontherequestoftheDARtogetherwitha
certificationoftheLandbankthatthesumofP735,337.77andP719,869.54havebeenearmarkedfor
LandownerPedroL.YapfortheparcelsoflandscoveredbyTCTNos.6282and6283,respectively,
andissuedinlieuthereofTC563andTC562,respectively,inthenamesoflistedbeneficiaries
(ANNEXES"C"&"D")withoutnoticetopetitionerYapandwithoutcomplyingwiththerequirement
ofSection16(e)ofRA6657todepositthecompensationincashandLandbankbondsinanaccessible
bank.(Rollo,p.6).
Theaboveallegationsarenotdisputedbyanyoftherespondents.
PetitionerHeirsofEmilianoSantiagoallegethattheheirsofEmilianoF.Santiagoaretheownersofa
parceloflandlocatedatLaur,NUEVAECIJAwithanareaof18.5615hectarescoveredbyTCTNo.
NT60359oftheregistryofDeedsofNuevaEcija,registeredinthenameofthelateEmilianoF.
Santiago;thatinNovemberandDecember1990,withoutnoticetothepetitioners,theLandbank
requiredandthebeneficiariesexecutedActualtillersDeedofUndertaking(ANNEX"B")topay
rentalstotheLandBankfortheuseoftheirfarmlotsequivalenttoatleast25%ofthenetharvest;that
on24October1991theDARRegionalDirectorissuedanorderdirectingtheLandbanktopaythe
landownerdirectlyorthroughtheestablishmentofatrustfundintheamountofP135,482.12,thaton
24February1992,theLandbankreservedintrustP135,482.12inthenameofEmilianoF.Santiago.
(ANNEX"E";Rollo,
p.7);thatthebeneficiariesstoppedpayingrentalstothelandownersaftertheysignedtheActual
Tiller'sDeedofUndertakingcommittingthemselvestopayrentalstotheLandBank(Rollo,p.133).
TheaboveallegationsarenotdisputedbytherespondentsexceptthatrespondentLandbankclaims1)
thatitwasrespondentDAR,notLandbankwhichrequiredtheexecutionofActualTillersDeedof
Undertaking(ATDU,forbrevity);and2)thatrespondentLandbank,althougharmedwiththeATDU,
didnotcollectanyamountasrentalfromthesubstitutingbeneficiaries(Rollo,p.99).
PetitionerAgriculturalManagementandDevelopmentCorporation(AMADCOR,forbrevity)alleges
withrespecttoitspropertieslocatedinSanFrancisco,QuezonthatthepropertiesofAMADCOR
inSanFrancisco,QuezonconsistofaparceloflandcoveredbyTCTNo.34314withanareaof
209.9215hectaresandanotherparcelcoveredbyTCTNo.10832withanareaof163.6189hectares;
thatasummaryadministrativeproceedingtodeterminecompensationofthepropertycoveredbyTCT
No.34314wasconductedbytheDARABinQuezonCitywithoutnoticetothelandowner;thata
decisionwasrenderedon24November1992(ANNEX"F")fixingthecompensationfortheparcelof
landcoveredbyTCTNo.34314withanareaof209.9215hectaresatP2,768,326.34andorderingthe
LandbanktopayorestablishatrustaccountforsaidamountinthenameofAMADCOR;andthatthe
trustaccountintheamountofP2,768,326.34fixedinthedecisionwasestablishedbyadding
P1,986,489.73tothefirsttrustaccountestablishedon19December1991(ANNEX"G").Withrespect
topetitionerAMADCOR'spropertyinTabaco,Albay,itisallegedthatthepropertyofAMADCORin
Tabaco,AlbayiscoveredbyTCTNo.T2466oftheRegisterofDeedsofAlbaywithanareaof
1,629.4578hectares';thatemancipationpatentswereissuedcoveringanareaof701.8999hectares
whichwereregisteredon15February1988butnoactionwastakenthereafterbytheDARtofixthe
compensationforsaidland;thaton21April1993,atrustaccountinthenameofAMADCORwas

establishedintheamountofP12,247,217.83',threenoticesofacquisitionhavingbeenpreviously
rejectedbyAMADCOR.(Rollo,pp.89)
TheaboveallegationsarenotdisputedbytherespondentsexceptthatrespondentLandbankclaimsthat
petitionerfailedtoparticipateintheDARABproceedings(landvaluationcase)despiteduenoticetoit
(Rollo,p.100).8
PrivaterespondentsarguedthatAdministrativeOrderNo.9,Seriesof1990wasissuedwithout
jurisdictionandwithgraveabuseofdiscretionbecauseitpermitstheopeningoftrustaccountsbythe
Landbank,inlieuofdepositingincashorbondsinanaccessiblebankdesignatedbytheDAR,the
compensationforthelandbeforeitistakenandthetitlesarecancelledasprovidedunderSection16(e)
ofRA6657.9PrivaterespondentsalsoassailthefactthattheDARandtheLandbankmerely
"earmarked","depositedintrust"or"reserved"thecompensationintheirnamesaslandownersdespite
theclearmandatethatbeforetakingpossessionoftheproperty,thecompensationmustbedepositedin
cashorinbonds.10
PetitionerDAR,however,maintainedthatAdministrativeOrderNo.9isavalidexerciseofitsrule
makingpowerpursuanttoSection49ofRA6657.11Moreover,theDARmaintainedthattheissuance
ofthe"CertificateofDeposit"bytheLandbankwasasubstantialcompliancewithSection16(e)ofRA
6657andtherulinginthecaseofAssociationofSmallLandownersinthePhilippines,Inc.,et
al.vs.Hon.SecretaryofAgrarianReform,G.R.No.78742,July14,1989(175SCRA343).12
Foritspart,petitionerLandbankdeclaredthattheissuanceoftheCertificatesofDepositswasin
consonancewithCircularNos.29,29Aand54oftheLandRegistrationAuthoritywherethewords
"reserved/deposited"werealsoused.13
OnOctober20,1994,therespondentcourtrenderedtheassaileddecisioninfavorofprivate
respondents.14Petitionersfiledamotionforreconsiderationbutrespondentcourtdeniedthesame.15
Hence,theinstantpetitions.
OnMarch20,1995,privaterespondentsfiledamotiontodismissthepetitioninG.R.No.118745
allegingthattheappealhasnomeritandismerelyintendedtodelaythefinalityoftheappealed
decision.16TheCourt,however,deniedthemotionandinsteadrequiredtherespondentstofiletheir
comments.17
Petitionerssubmitthatrespondentcourterredin(1)declaringasnullandvoidDARAdministrative
OrderNo.9,Seriesof1990,insofarasitprovidesfortheopeningoftrustaccountsinlieuofdepositin
cashorinbonds,and(2)inholdingthatprivaterespondentsareentitledasamatterofrighttothe
immediateandprovisionalreleaseoftheamountsdepositedintrustpendingthefinalresolutionofthe
casesithasfiledforjustcompensation.
Anentthefirstassignmentoferror,petitionersmaintainthattheword"deposit"asusedinSection
16(e)ofRA6657referredmerelytotheactofdepositingandinnowayexcludedtheopeningofatrust
accountasaformofdeposit.Thus,inoptingfortheopeningofatrustaccountastheacceptableform
ofdepositthroughAdministrativeCircularNo.9,petitionerDARdidnotcommitanygraveabuseof
discretionsinceitmerelyexerciseditspowertopromulgaterulesandregulationsinimplementingthe
declaredpoliciesofRA6657.
Thecontentionisuntenable.Section16(e)ofRA6657providesasfollows:
Sec.16.ProcedureforAcquisitionofPrivateLands
xxxxxxxxx
(e)Uponreceiptbythelandownerofthecorrespondingpaymentor,incaseofrejectionornoresponse
fromthelandowner,uponthedepositwithanaccessiblebankdesignatedbytheDARofthe
compensationincashorinLBPbondsinaccordancewiththisAct,theDARshalltakeimmediate
possessionofthelandandshallrequesttheproperRegisterofDeedstoissueaTransferCertificateof
Title(TCT)inthenameoftheRepublicofthePhilippines....(emphasissupplied)
Itisveryexplicittherefromthatthedepositmustbemadeonlyin"cash"orin"LBPbonds".Nowhere
doesitappearnorcanitbeinferredthatthedepositcanbemadeinanyotherform.Ifitwerethe
intentiontoincludea"trustaccount"amongthevalidmodesofdeposit,thatshouldhavebeenmade
express,oratleast,qualifyingwordsoughttohaveappearedfromwhichitcanbefairlydeducedthata
"trustaccount"isallowed.Insum,thereisnoambiguityinSection16(e)ofRA6657towarrantan
expandedconstructionoftheterm"deposit".
Theconclusiveeffectofadministrativeconstructionisnotabsolute.Actionofanadministrativeagency
maybedisturbedorsetasidebythejudicialdepartmentifthereisanerroroflaw,agraveabuseof
powerorlackofjurisdictionorgraveabuseofdiscretionclearlyconflictingwitheithertheletterorthe
spiritofalegislativeenactment.18Inthisregard,itmustbestressedthatthefunctionofpromulgating

rulesandregulationsmaybelegitimatelyexercisedonlyforthepurposeofcarryingtheprovisionsof
thelawintoeffect.Thepowerofadministrativeagenciesisthusconfinedtoimplementingthelawor
puttingitintoeffect.Corollarytothisisthatadministrativeregulationscannotextend
thelawandamendalegislativeenactment,19forsettledistherulethatadministrativeregulationsmust
beinharmonywiththeprovisionsofthelaw.Andincasethereisadiscrepancybetweenthebasiclaw
andanimplementingruleorregulation,itistheformerthatprevails.20
Inthepresentsuit,theDARclearlyoversteppedthelimitsofitspowertoenactrulesandregulations
whenitissuedAdministrativeCircularNo.9.Thereisnobasisinallowingtheopeningofatrust
accountinbehalfofthelandownerascompensationforhispropertybecause,asheretoforediscussed,
Section16(e)ofRA6657isveryspecificthatthedepositmustbemadeonlyin"cash"orin"LBP
bonds".Inthesamevein,petitionerscannotinvokeLRACircularNos.29,29Aand54becausethese
implementingregulationscannotoutweightheclearprovisionofthelaw.Respondentcourttherefore
didnotcommitanyerrorinstrikingdownAdministrativeCircularNo.9forbeingnullandvoid.
Proceedingtothecrucialissueofwhetherornotprivaterespondentsareentitledtowithdrawthe
amountsdepositedintrustintheirbehalfpendingthefinalresolutionofthecasesinvolvingthefinal
valuationoftheirproperties,petitionersassertthenegative.
Thecontentionispremisedontheallegeddistinctionbetweenthedepositofcompensationunder
Section16(e)ofRA6657andpaymentoffinalcompensationasprovidedunderSection1821ofthe
samelaw.Accordingtopetitioners,therightofthelandownertowithdrawtheamountdepositedinhis
behalfpertainsonlytothefinalvaluationasagreeduponbythelandowner,theDARandtheLBPor
thatadjudgedbythecourt.Ithasnoreferencetoamountdepositedinthetrustaccountpursuantto
Section16(e)incaseofrejectionbythelandownerbecausethelatteramountisonlyprovisionaland
intendedmerelytosecurepossessionofthepropertypendingfinalvaluation.Tofurtherbolsterthe
contentionpetitionerscitethefollowingpronouncementsinthecaseof"AssociationofSmall
LandownersinthePhil.Inc.vs.SecretaryofAgrarianReform".22
ThelastmajorchallengetoCARPisthatthelandownerisdivestedofhispropertyevenbeforeactual
paymenttohiminfullofjustcompensation,incontraventionofawellacceptedprincipleofeminent
domain.
xxxxxxxxx
TheCARPLaw,foritspartconditionsthetransferofpossessionandownershipofthelandtothe
governmentonreceiptbythelandownerofthecorrespondingpaymentorthedepositbytheDARof
thecompensationincashorLBPbondswithanaccessiblebank.Untilthen,titlealsoremainswiththe
landowner.Nooutrightchangeofownershipiscontemplatedeither.
xxxxxxxxx
Hencetheargumentthattheassailedmeasuresviolatedueprocessbyarbitrarilytransferringtitle
beforethelandisfullypaidformustalsoberejected.
Notably,however,theaforecitedcasewasusedbyrespondentcourtindiscardingpetitioners'assertion
asitfoundthat:
...despitethe"revolutionary"characteroftheexpropriationenvisionedunderRA6657whichledthe
SupremeCourt,inthecaseofAssociationofSmallLandownersinthePhil.Inc.vs.Secretaryof
AgrarianReform(175SCRA343),toconcludethat"paymentsofthejustcompensationisnotalways
requiredtobemadefullyinmoney"evenastheSupremeCourtadmitsinthesamecase"thatthe
traditionalmediumforthepaymentofjustcompensationismoneyandnoother"theSupremeCourt
insaidcasedidnotabandonthe"recognizedrule...thattitletothepropertyexpropriatedshallpass
fromtheownertotheexpropriatoronlyuponfullpaymentofthejustcompensation."23(Emphasis
supplied)
Weagreewiththeobservationsofrespondentcourt.Therulinginthe"Association"casemerely
recognizedtheextraordinarynatureoftheexpropriationtobeundertakenunderRA6657thereby
allowingadeviationfromthetraditionalmodeofpaymentofcompensationandrecognizedpayment
otherthanincash.Itdidnot,however,dispensewiththesettledrulethattheremustbefullpaymentof
justcompensationbeforethetitletotheexpropriatedpropertyistransferred.
TheattempttomakeadistinctionbetweenthedepositofcompensationunderSection16(e)ofRA
6657anddeterminationofjustcompensationunderSection18isunacceptable.Towithholdtheright
ofthelandownerstoappropriatetheamountsalreadydepositedintheirbehalfascompensationfor
theirpropertiessimplybecausetheyrejectedtheDAR'svaluation,andnotwithstandingthattheyhave
alreadybeendeprivedofthepossessionanduseofsuchproperties,isanoppressiveexerciseof
eminentdomain.Theirresistibleexpropriationofprivaterespondents'propertieswaspainfulenough

forthem.ButpetitionerDARrubbeditinallthemorebywithholdingthatwhichrightfullybelongsto
privaterespondentsinexchangeforthetaking,underanauthority(the"Association"case)thatis,
however,misplaced.Thisismiserytwicebestowedonprivaterespondents,whichtheCourtmust
rectify.
Hence,wefinditunnecessarytodistinguishbetweenprovisionalcompensationunderSection16(e)
andfinalcompensationunderSection18forpurposesofexercisingthelandowners'righttoappropriate
thesame.Theimmediateeffectinbothsituationsisthesame,thelandownerisdeprivedoftheuseand
possessionofhispropertyforwhichheshouldbefairlyandimmediatelycompensated.Fittingly,we
reiteratethecardinalrulethat:
...withinthecontextoftheState'sinherentpowerofeminentdomain,justcompensationmeansnot
onlythecorrectdeterminationoftheamounttobepaidtotheownerofthelandbutalsothepayment
ofthelandwithinareasonabletimefromitstaking.Withoutpromptpayment,compensationcannotbe
considered"just"forthepropertyownerismadetosuffertheconsequenceofbeingimmediately
deprivedofhislandwhilebeingmadetowaitforadecadeormorebeforeactuallyreceivingthe
amountnecessarytocopewithhisloss.24(Emphasissupplied)
Thepromulgationofthe"Association"decisionendeavoredtoremovealllegalobstaclesinthe
implementationoftheComprehensiveAgrarianReformProgramandclearthewayforthetrue
freedomofthefarmer.25Butdespitethis,casesinvolvingitsimplementationcontinuetomultiplyand
clogthecourts'dockets.Nevertheless,wearestilloptimisticthatthegoaloftotallyemancipatingthe
farmersfromtheirbondagewillbeattainedinduetime.Itmustbestressed,however,thatinthe
pursuitofthisobjective,vigilanceovertherightsofthelandownersisequallyimportantbecausesocial
justicecannotbeinvokedtotrampleontherightsofpropertyowners,whounderourConstitutionand
lawsarealsoentitledtoprotection.26
WHEREFORE,theforegoingpremisesconsidered,thepetitionisherebyDENIEDforlackofmerit
andtheappealeddecisionisAFFIRMEDintoto.
SOORDERED.
Regalado,PunoandMendoza,JJ.,concur.
Narvasa,C.J.,isonleave.
4.Lubricav.LandBankofthePhils.,G.R.No.170220.November20,2006
FIRSTDIVISION

JOSEFINAS.LUBRICA,inherG.R.No.170220
capacityasAssigneeofFEDERICO
C.SUNTAY,NENITASUNTAY
TAEDOandEMILIOA.M.
SUNTAYIII,
Petitioners,Present:
Panganiban,C.J.(Chairperson),
versusYnaresSantiago,
AustriaMartinez,
Callejo,Sr.,and
ChicoNazario,JJ.
LANDBANKOFTHEPHILIPPINES,
Respondent.Promulgated:

November20,2006
xx

DECISION

YNARESSANTIAGO,J.:

ThisPetitionforReviewonCertiorariunderRule45oftheRulesofCourtassailstheOctober27,2005
AmendedDecision[1]oftheCourtofAppealsinCAG.R.SPNo.77530,whichvacateditsMay26,
2004Decisionaffirming(a)theOrderoftheRegionalTrialCourtofSanJose,OccidentalMindoro,
Branch46,actingasSpecialAgrarianCourt,inAgrarianCaseNos.R1339andR1340,datedMarch
31,2003directingrespondentLandBankofthePhilippines(LBP)todeposittheprovisional
compensationasdeterminedbytheProvincialAgrarianReformAdjudicator(PARAD);(b)theMay
26,2003ResolutiondenyingLBPsmotionforreconsideration;and(c)theMay27,2003Order
requiringTeresitaV.Tengco,LBPsLandCompensationDepartmentManager,tocomplywiththe
March31,2003Order.
Thefactsofthecaseareasfollows:

PetitionerJosefinaS.Lubricaistheassignee[2]ofFedericoC.Suntayovercertainparcelsof
agriculturallandlocatedatSta.Lucia,Sablayan,OccidentalMindoro,withanareaof3,682.0285
hectarescoveredbyTransferCertificateofTitle(TCT)No.T31(T1326)[3]oftheRegistryofDeeds
ofOccidentalMindoro.In1972,aportionofthesaidpropertywithanareaof311.7682hectares,was
placedunderthelandreformprogrampursuanttoPresidentialDecreeNo.27(1972)[4]andExecutive
OrderNo.228(1987).[5]Thelandwasthereaftersubdividedanddistributedtofarmer
beneficiaries.TheDepartmentofAgrarianReform(DAR)andtheLBPfixedthevalueofthelandat
P5,056,833.54whichamountwasdepositedincashandbondsinfavorofLubrica.

Ontheotherhand,petitionersNenitaSuntayTaedoandEmilioA.M.SuntayIIIinheritedfrom
FedericoSuntayaparcelofagriculturallandlocatedatBalansay,Mamburao,OccidentalMindoro
coveredbyTCTNo.T128[6]oftheRegisterofDeedsofOccidentalMindoro,consistingoftwolots,
namely,Lot1withanareaof45.0760hectaresandLot2containinganareaof165.1571hectaresora
totalof210.2331hectares.Lot2wasplacedunderthecoverageofP.D.No.27butonly128.7161
hectareswasconsideredbyLBPandvaluedthesameatP1,512,575.05.
Petitionersrejectedthevaluationoftheirproperties,hencetheOfficeoftheProvincialAgrarian
ReformAdjudicator(PARAD)conductedsummaryadministrativeproceedingsfordeterminationof
justcompensation.OnJanuary29,2003,thePARADfixedthepreliminaryjustcompensationat
P51,800,286.43forthe311.7682hectares(TCTNo.T31)andP21,608,215.28forthe128.7161
hectares(TCTNo.T128).[7]

Notsatisfiedwiththevaluation,LBPfiledonFebruary17,2003,twoseparatepetitions[8]forjudicial
determinationofjustcompensationbeforetheRegionalTrialCourtofSanJose,OccidentalMindoro,
actingasaSpecialAgrarianCourt,docketedasAgrarianCaseNo.R1339forTCTNo.T31and
AgrarianCaseNo.R1340forTCTNo.T128,andraffledtoBranch46thereof.

PetitionersfiledseparateMotionstoDepositthePreliminaryValuationUnderSection16(e)of
RepublicAct(R.A.)No.6657(1988)[9]andAdCautelamAnswerprayingamongothersthatLBP
depositthepreliminarycompensationdeterminedbythePARAD.

OnMarch31,2003,thetrialcourtissuedanOrder[10]grantingpetitionersmotion,thedispositive
portionofwhichreads:

WHEREFORE,Ms.TeresitaV.Tengco,oftheLandCompensationDepartmentI(LCDI),LandBank
ofthePhilippines,isherebyorderedpursuanttoSection16(e)ofRA6657inrelationtoSection2,
AdministrativeOrderNo.8,Seriesof1991,todeposittheprovisionalcompensationasdeterminedby
thePARADincashandbonds,asfollows:

1.InAgrarianCaseNo.R1339,theamountofP51,800,286.43,minustheamountreceivedbythe
Landowner;
2.InAgrarianCaseNo.R1340,theamountofP21,608,215.28,lesstheamountofP1,512,575.16,the
amountalreadydeposited.

SuchdepositmustbemadewiththeLandBankofthePhilippines,Manilawithinfive(5)daysfrom
receiptofacopyofthisorderandtonotifythiscourtofhercompliancewithinsuchperiod.

10

LetthisorderbeservedbytheSheriffofthisCourtattheexpenseofthemovants.

SOORDERED.[11]

LBPsmotionforreconsiderationwasdeniedinaResolution[12]datedMay26,2003.Thefollowing
day,May27,2003,thetrialcourtissuedanOrder[13]directingMs.TeresitaV.Tengco,LBPsLand
CompensationDepartmentManager,todeposittheamounts.

Thus,onJune17,2003,LBPfiledwiththeCourtofAppealsaPetitionforCertiorariandProhibition
underRule65oftheRulesofCourtwithapplicationfortheissuanceofaTemporaryRestraining
OrderandWritofPreliminaryInjunctiondocketedasCAG.R.SPNo.77530.[14]

OnJune27,2003,theappellatecourtissueda60daytemporaryrestrainingorder[15]andonOctober6,
2003,awritofpreliminaryinjunction.[16]

OnMay26,2004,theCourtofAppealsrenderedaDecision[17]infavorofthepetitioners,the
dispositiveportionofwhichreads:

WHEREFORE,premisesconsidered,therebeingnograveabuseofdiscretion,theinstantPetitionfor
CertiorariandProhibitionisDENIED.Accordingly,theOrderdatedMarch31,2003,Resolution
datedMay26,2003,andOrderdatedMay27,2003areherebyAFFIRMED.Thepreliminary
injunctionWepreviouslyissuedisherebyLIFTEDandDISSOLVED.

SOORDERED.[18]

TheCourtofAppealsheldthatthetrialcourtcorrectlyorderedLBPtodeposittheamounts
provisionallydeterminedbythePARADasthereisnolawwhichprohibitsLBPtomakeadeposit
pendingthefixingofthefinalamountofjustcompensation.Italsonotedthatthereisnoreasonfor
LBPtofurtherdelaythedepositconsideringthattheDARalreadytookpossessionoftheproperties
anddistributedthesametofarmerbeneficiariesasearlyas1972.

LBPmovedforreconsiderationwhichwasgranted.OnOctober27,2005,theappellatecourtrendered
theassailedAmendedDecision,[19]thedispositiveportionofwhichreads:

Wherefore,inviewoftheprescriptionofadifferentformulainthecaseofGabatinwhichWeholdas
cogentandcompellingjustificationnecessitatingUstoeffectthereversalofOurjudgmentherein
soughttobereconsidered,theinstantMotionforReconsiderationisGRANTED,andOurMay26,
2004DecisionisherebyVACATEDandABANDONEDwiththeendinviewofgivingwaytoand
actinginharmonyandincongruencewiththetenoroftherulinginthecaseofGabatin.Accordingly,
theassailedrulingsoftheSpecialAgrarianCourtis(sic)commandedtocomputeandfixthejust
compensationfortheexpropriatedagriculturallandsstrictlyinaccordancewiththemodeof
computationprescribed(sic)OurMay26,2004judgmentinthecaseofGabatin.

SOORDERED.[20]

IntheAmendedDecision,theCourtofAppealsheldthattheimmediatedepositofthepreliminary
valueoftheexpropriatedpropertiesisimproperbecauseitwaserroneouslycomputed.CitingGabatin
v.LandBankofthePhilippines,[21]itheldthattheformulatocomputethejustcompensationshouldbe:
LandValue=2.5xAverageGrossProductionxGovernmentSupportPrice.Specifically,itheldthat
thevalueofthegovernmentsupportpriceforthecorrespondingagriculturalproduce(riceandcorn)
shouldbecomputedatthetimeofthelegaltakingofthesubjectagriculturalland,thatis,onOctober
21,1972whenlandownerswereeffectivelydeprivedofownershipovertheirpropertiesbyvirtueof
P.D.No.27.AccordingtotheCourtofAppeals,thePARADincorrectlyusedtheamountsofP500and
P300whicharetheprevailinggovernmentsupportpriceforpalayandcorn,respectively,atthetimeof
payment,insteadofP35andP31,theprevailinggovernmentsupportpriceatthetimeofthetakingin
1972.

11

Hence,thispetitionraisingthefollowingissues:

A.THECOURTAQUOHASDECIDEDTHECASEINAWAYNOTINACCORDWITHTHE
LATESTDECISIONOFTHESUPREMECOURTINTHECASEOFLANDBANKOF
THEPHILIPPINESVS.HON.ELIG.C.NATIVIDAD,ETAL.,G.R.NO.127198,PROM.MAY16,
2005;and[22]

B.THECOURTAQUOHAS,WITHGRAVEGRAVEABUSEOFDISCRETION,SOFAR
DEPARTEDFROMTHEACCEPTEDANDUSUALCOURSEOFJUDICIALPROCEEDINGS,
DECIDINGISSUESTHATHAVENOTBEENRAISED,ASTOCALLFORANEXERCISEOF
THEPOWEROFSUPERVISION.[23]

Petitionersinsistthatthedeterminationofjustcompensationshouldbebasedonthevalueofthe
expropriatedpropertiesatthetimeofpayment.RespondentLBP,ontheotherhand,claimsthatthe
valueoftherealtiesshouldbecomputedasofOctober21,1972whenP.D.No.27tookeffect.
Thepetitionisimpressedwithmerit.

InthecaseofLandBankofthePhilippinesv.Natividad,[24]theCourtruledthus:

LandBankscontentionthatthepropertywasacquiredforpurposesofagrarianreformonOctober21,
1972,thetimeoftheeffectivityofPD27,ergojustcompensationshouldbebasedonthevalueofthe
propertyasofthattimeandnotatthetimeofpossessionin1993,islikewiseerroneous.InOfficeof
thePresident,Malacaang,Manilav.CourtofAppeals,weruledthattheseizureofthelandholdingdid
nottakeplaceonthedateofeffectivityofPD27butwouldtakeeffectonthepaymentofjust
compensation.

TheNatividadcasereiteratedtheCourtsrulinginOfficeofthePresidentv.CourtofAppeals[25]thatthe
expropriationofthelandholdingdidnottakeplaceontheeffectivityofP.D.No.27onOctober21,
1972butseizurewouldtakeeffectonthepaymentofjustcompensationjudiciallydetermined.

Likewise,intherecentcaseofHeirsofFranciscoR.Tantoco,Sr.v.CourtofAppeals,[26]weheldthat
expropriationoflandholdingscoveredbyR.A.No.6657takeplace,notontheeffectivityoftheAct
onJune15,1988,butonthepaymentofjustcompensation.

Intheinstantcase,petitionersweredeprivedoftheirpropertiesin1972buthaveyettoreceivethejust
compensationtherefor.Theparcelsoflandwerealreadysubdividedanddistributedtothefarmer
beneficiariestherebyimmediatelydeprivingpetitionersoftheiruse.Underthecircumstances,itwould
behighlyinequitableonthepartofthepetitionerstocomputethejustcompensationusingthevaluesat
thetimeofthetakingin1972,andnotatthetimeofthepayment,consideringthatthegovernmentand
thefarmerbeneficiarieshavealreadybenefitedfromthelandalthoughownershipthereofhavenotyet
beentransferredintheirnames.Petitionersweredeprivedoftheirpropertieswithoutpaymentofjust
compensationwhich,underthelaw,isaprerequisitebeforethepropertycanbetakenawayfromits
owners.[27]Thetransferofpossessionandownershipofthelandtothegovernmentareconditioned
uponthereceiptbythelandownerofthecorrespondingpaymentordepositbytheDARofthe
compensationwithanaccessiblebank.Untilthen,titleremainswiththelandowner.[28]

OurrulinginAssociationofSmallLandownersinthePhilippines,Inc.v.SecretaryofAgrarian
Reform[29]isinstructive,thus:

ItistruethatP.D.No.27expresslyorderedtheemancipationoftenantfarmerasOctober21,1972and
declaredthatheshallbedeemedtheownerofaportionoflandconsistingofafamilysizedfarm
exceptthatnotitletothelandownedbyhimwastobeactuallyissuedtohimunlessanduntilhehad
becomeafullfledgedmemberofadulyrecognizedfarmerscooperative.Itwasunderstood,however,
thatfullpaymentofthejustcompensationalsohadtobemadefirst,conformablytotheconstitutional
requirement.

WhenE.O.No.228,categoricallystatedinitsSection1that:

12


AllqualifiedfarmerbeneficiariesarenowdeemedfullownersasofOctober21,1972oftheland
theyacquiredbyvirtueofPresidentialDecreeNo.27(Emphasissupplied.)

itwasobviouslyreferringtolandsalreadyvalidlyacquiredunderthesaiddecree,afterproofoffull
fledgedmembershipinthefarmerscooperativesandfullpaymentofjustcompensation.xxx

TheCARPLaw,foritspart,conditionsthetransferofpossessionandownershipofthelandtothe
governmentonreceiptbythelandownerofthecorrespondingpaymentorthedepositbytheDARof
thecompensationincashorLBPbondswithanaccessiblebank.Untilthen,titlealsoremainswiththe
landowner.Nooutrightchangeofownershipiscontemplatedeither.

WealsonotethattheexpropriationproceedingsintheinstantcasewasinitiatedunderP.D.No.27but
theagrarianreformprocessisstillincompleteconsideringthatthejustcompensationtobepaidto
petitionershasyettobesettled.ConsideringthepassageofR.A.No.6657beforethecompletionof
thisprocess,thejustcompensationshouldbedeterminedandtheprocessconcludedunderthesaid
law.Indeed,R.A.No.6657istheapplicablelaw,withP.D.No.27andE.O.No.228havingonly
suppletoryeffect.[30]

InLandBankofthePhilippinesv.CourtofAppeals,[31]weheldthat:

RA6657includesPD27landsamongthepropertieswhichtheDARshallacquireanddistributetothe
landless.Andtofacilitatetheacquisitionanddistributionthereof,Secs.16,17and18oftheActshould
beadheredto.

Section18ofR.A.No.6657mandatesthattheLBPshallcompensatethelandownerinsuchamountas
maybeagreeduponbythelandownerandtheDARandtheLBPorasmaybefinallydeterminedby
thecourtasthejustcompensationfortheland.Indeterminingjustcompensation,thecostofthe
acquisitionoftheland,thecurrentvalueoflikeproperties,itsnature,actualuseandincome,thesworn
valuationbytheowner,thetaxdeclarations,andtheassessmentmadebygovernmentassessorsshall
beconsidered.Thesocialandeconomicbenefitscontributedbythefarmersandthefarmworkersand
bythegovernmenttothepropertyaswellasthenonpaymentoftaxesorloanssecuredfromany
governmentfinancinginstitutiononthesaidlandshallbeconsideredasadditionalfactorstodetermine
itsvaluation.[32]

Corollarily,weheldinLandBankofthePhilippinesv.Celada[33]thattheaboveprovisionwas
convertedintoaformulabytheDARthroughAdministrativeOrderNo.05,S.1998,towit:

LandValue(LV)=(CapitalizedNetIncomex0.6)+(ComparableSalesx0.3)+(MarketValueper
TaxDeclarationx0.1)

Petitionersweredeprivedoftheirpropertieswaybackin1972,yettodate,theyhavenotyetreceived
justcompensation.Thus,itwouldcertainlybeinequitabletodeterminejustcompensationbasedonthe
guidelineprovidedbyP.D.No.227andE.O.No.228consideringthefailuretodeterminejust
compensationforaconsiderablelengthoftime.Thatjustcompensationshouldbedeterminedin
accordancewithR.A.No.6657andnotP.D.No.227orE.O.No.228,isimportantconsideringthat
justcompensationshouldbethefullandfairequivalentofthepropertytakenfromitsownerbythe
expropriator,theequivalentbeingreal,substantial,fullandample. [34]

WHEREFORE,premisesconsidered,thepetitionisGRANTED.TheassailedAmendedDecision
datedOctober27,2005oftheCourtofAppealsinCAG.R.SPNo.77530isREVERSEDandSET
ASIDE.TheDecisiondatedMay26,2004oftheCourtofAppealsaffirming(a)theMarch31,2003
OrderoftheSpecialAgrarianCourtorderingtherespondentLandBankofthePhilippinestodeposit
thejustcompensationprovisionallydeterminedbythePARAD;(b)theMay26,2003Resolution
denyingrespondentsMotionforReconsideration;and(c)theMay27,2003OrderdirectingTeresitaV.
Tengco,respondentsLandCompensationDepartmentManagertocomplywiththeMarch31,2003
Order,isREINSTATED.TheRegionalTrialCourtofSanJose,OccidentalMindoro,Branch46,acting

13

asSpecialAgrarianCourtisORDEREDtoproceedwithdispatchinthetrialofAgrarianCaseNos.R
1339andR1340,andtocomputethefinalvaluationofthesubjectpropertiesbasedonthe
aforementionedformula.

SOORDERED.

PARTVLandValuation
1.LandValuationunderOperationLandTransferpursuanttoPD27
MALACAANG
Manila
PRESIDENTIALDECREENo.27October21,1972
DECREEINGTHEEMANCIPATIONOFTENANTSFROMTHEBONDAGEOFTHESOIL,
TRANSFERRINGTOTHEMTHEOWNERSHIPOFTHELANDTHEYTILLANDPROVIDING
THEINSTRUMENTSANDMECHANISMTHEREFOR
Inasmuchastheoldconceptoflandownershipbyafewhasspawnedvalidandlegitimategrievances
thatgaverisetoviolentconflictandsocialtension,
TheredressofsuchlegitimategrievancesbeingoneofthefundamentalobjectivesoftheNewSociety,
SinceReformationmuststartwiththeemancipationofthetillerofthesoilfromhisbondage,
NOW,THEREFORE,I,FERDINANDE.MARCOS,PresidentofthePhilippines,byvirtueofthe
powersvestedinmebytheConstitutionasCommanderinChiefofalltheArmedForcesofthe
Philippines,andpursuanttoProclamationNo.1081,datedSeptember21,1972,andGeneralOrderNo.
1datedSeptember22,1972,asamendeddoherebydecreeandordertheemancipationofalltenant
farmersasofthisday,October21,1972:
Thisshallapplytotenantfarmersofprivateagriculturallandsprimarilydevotedtoriceandcornunder
asystemofsharecroporleasetenancy,whetherclassifiedaslandedestateornot;
Thetenantfarmer,whetherinlandclassifiedaslandedestateornot,shallbedeemedownerofa
portionconstitutingafamilysizefarmoffive(5)hectaresifnotirrigatedandthree(3)hectaresif
irrigated;
Inallcases,thelandownermayretainanareaofnotmorethanseven(7)hectaresifsuchlandowneris
cultivatingsuchareaorwillnowcultivateit;
Forthepurposeofdeterminingthecostofthelandtobetransferredtothetenantfarmerpursuantto
thisDecree,thevalueofthelandshallbeequivalenttotwoandonehalf(21/2)timestheaverage
harvestofthreenormalcropyearsimmediatelyprecedingthepromulgationofthisDecree;
Thetotalcostoftheland,includinginterestattherateofsix(6)percentumperannum,shallbepaid
bythetenantinfifteen(15)yearsoffifteen(15)equalannualamortizations;
Incaseofdefault,theamortizationdueshallbepaidbythefarmers'cooperativeinwhichthe
defaultingtenantfarmerisamember,withthecooperativehavingarightofrecourseagainsthim;
Thegovernmentshallguarantysuchamortizationswithsharesofstockingovernmentownedand
governmentcontrolledcorporations;
NotitletothelandownedbythetenantfarmersunderthisDecreeshallbeactuallyissuedtoatenant
farmerunlessanduntilthetenantfarmerhasbecomeafullfledgedmemberofadulyrecognized
farmer'scooperative;
TitletolandacquiredpursuanttothisDecreeortheLandReformProgramoftheGovernmentshallnot
betransferableexceptbyhereditarysuccessionortotheGovernmentinaccordancewiththeprovisions
ofthisDecree,theCodeofAgrarianReformsandotherexistinglawsandregulations;
TheDepartmentofAgrarianReformthroughitsSecretaryisherebyempoweredtopromulgaterules
andregulationsfortheimplementationofthisDecree.
Alllaws,executiveorders,decreesandrulesandregulations,orpartsthereof,inconsistentwiththis
Decreeareherebyrepealedandormodifiedaccordingly.
DoneintheCityofManila,this21stdayofOctober,intheyearofOurLord,nineteenhundredand
seventytwo.

14

2.PD27andEO228:ValuationFormulaunderpara.4ofPD27andSec.2ofEO228
Forthepurposeofdeterminingthecostofthelandtobetransferredtothetenantfarmerpursuantto
thisDecree,thevalueofthelandshallbeequivalenttotwoandonehalf(21/2)timestheaverage
harvestofthreenormalcropyearsimmediatelyprecedingthepromulgationofthisDecree;[Para,4of
PD27]
Sec.2.Henceforth,thevaluationofriceandcornlandscoveredbyP.D.No.27shallbebasedonthe
averagegrossproductiondeterminedbytheBarangayCommitteeonLandProductioninaccordance
withDepartmentMemorandumCircularNo.26,Seriesof1973,andrelatedissuancesandregulations
oftheDepartmentofAgrarianReform.Theaveragegrossproductionperhectareshallbemultipliedby
twoandahalf(2.5),theproductofwhichshallbemultipliedbyThirtyFivePesos(P35.00),the
governmentsupportpriceforonecavanof50kilosofpalayonOctober21,1972,orThirtyOnePesos
(P31.00),thegovernmentsupportpriceforonecavanof50kilosofcornonOctober21,1972,andthe
amountarrivedatshallbethevalueofthericeandcornland,asthecasemaybe,forthepurposeof
determiningitscosttothefarmerandcompensationtothelandowner.
LeaserentalspaidtothelandownerbythefarmerbeneficiaryafterOctober21,1972,shallbe
consideredasadvancepaymentfortheland.Intheeventofdisputewiththelandownerregardingthe
amountofleaserentalpaidbythefarmerbeneficiary,theDepartmentofAgrarianReformandthe
BarangayCommitteeonLandProductionconcernedshallresolvethedisputewithinthirty(30)days
fromitssubmissionpursuanttoDepartmentofAgrarianReformMemorandumCircularNo.26,Series
of1973,andotherpertinentissuances.Intheeventapartyquestionsincourttheresolutionofthe
dispute,thelandownerscompensationclaimshallstillbeprocessedforpaymentandtheproceeds
shallbeheldintrustbytheTrustDepartmentoftheLandBankinaccordancewiththeprovisionsof
Section5hereof,pendingtheresolutionofthedisputebeforethecourt.[Sec.2ofEO228,s.1987]
3.DeterminationofJustCompensationSec.17,RA6657
Section17.DeterminationofJustCompensation.Indeterminingjustcompensation,thecostof
acquisitionoftheland,thecurrentvalueofthelikeproperties,itsnature,actualuseandincome,the
swornvaluationbytheowner,thetaxdeclarations,andtheassessmentmadebygovernmentassessors
shallbeconsidered.Thesocialandeconomicbenefitscontributedbythefarmersandthefarmworkers
andbytheGovernmenttothepropertyaswellasthenonpaymentoftaxesorloanssecuredfromany
governmentfinancinginstitutiononthesaidlandshallbeconsideredasadditionalfactorstodetermine
itsvaluation.
4.ValuationandModeofCompensationSec.18,RA6657
TheLBPshallcompensatethelandownerinsuchamountsasmaybeagreeduponbythelandowner
andtheDARandtheLBP,inaccordancewiththecriteriaprovidedforinSections16and17,andother
pertinentprovisionshereof,orasmaybefinallydeterminedbythecourt,asthejustcompensationfor
theland.
Thecompensationshallbepaidononeofthefollowingmodes,attheoptionofthelandowner:
(1)Cashpayment,underthefollowingtermsandconditions;
Twentyfivepercent(25%)cash,thebalancetobe
(a)Forlandsabovefifty(50)hectares,insofarasthe
paidingovernmentfinancialinstrumentsnegotiable
excesshectarageisconcerned.
atanytime.
Thirtypercent(30%)cash,thebalance
(b)Forlandsabovetwentyfour(24)hectaresand
tobepaidingovernmentfinancialinstruments
uptofifty(50)hectares.
negotiableatanytime.
Thirtyfivepercent(35%)cash,thebalance
etobepaidingovernmentfinancialinstruments
(c)Forlandstwentyfour(24)hectaresandbelow.
negotiableatanytime.

(2)Sharesofstockingovernmentownedorcontrolledcorporations,LBPpreferredshares,physical
assetsorotherqualifiedinvestmentsinaccordancewithguidelinessetbythePARC;
(3)Taxcreditswhichcanbeusedagainstanytaxliability;
(4)LBPbonds,whichshallhavethefollowingfeatures:

15

(a)Marketinterestratesalignedwith91daytreasurybillrates.Tenpercent(10%)ofthefacevalueof
thebondsshallmatureeveryyearfromthedateofissuanceuntilthetenth(10th)year:provided,that
shouldthelandownerchoosetoforegothecashportion,whetherinfullorinpart,heshallbepaid
correspondinglyinLBPbonds;
(b)Transferabilityandnegotiability.SuchLBPbondsmaybeusedbythelandowner,hissuccessors
ininterestorhisassigns,uptotheamountoftheirfacevalue,foranyofthefollowing:
(i)Acquisitionoflandorotherrealpropertiesofthegovernment,includingassetsundertheAsset
PrivatizationProgramandotherassetsforeclosedbygovernmentfinancialinstitutionsinthesame
provinceorregionwherethelandsforwhichthebondswerepaidaresituated;
(ii)Acquisitionofsharesofstockofgovernmentownedorcontrolledcorporationsorsharesof
stocksownedbythegovernmentinprivatecorporations;
(iii)Substitutionforsuretyorbailbondsfortheprovisionalreleaseofaccusedpersons,or
performancebonds;
(iv)Securityforloanswithanygovernmentfinancialinstitution,providedtheproceedsoftheloans
shallbeinvestedinaneconomicenterprise,preferablyinasmallandmediumscaleindustry,inthe
sameprovinceorregionasthelandforwhichthebondsarepaid;
(v)Paymentforvarioustaxesandfeestogovernment;provided,thattheuseofthesebondsforthese
purposeswillbelimitedtoacertainpercentageoftheoutstandingbalanceofthefinancialinstruments:
provided,further,thatthePARCshalldeterminethepercentagementionedabove;
(vi)Paymentfortuitionfeesoftheimmediatefamilyoftheoriginalbondholderingovernment
universities,colleges,tradeschools,andotherinstitutions;
(vii)Paymentforfeesoftheimmediatefamilyoftheoriginalbondholderingovernmenthospitals;
and
(viii)SuchotherusesasthePARCmayfromtimetotimeallow.
Incaseofextraordinaryinflation,thePARCshalltakeappropriatemeasurestoprotecttheeconomy.
5.ProcedureforAcquisitionofPrivateLandsinCaseofLandownersRejectionorFailuretoReply
Sec.16(d)ofRA6657
Section16.ProcedureforAcquisitionofPrivateLands.Forpurposesofacquisitionofprivate
lands,thefollowingproceduresshallbefollowed:
Xxx;
(d)Incaseofrejectionorfailuretoreply,theDARshallconductsummaryadministrativeproceedings
todeterminethecompensationforthelandrequiringthelandowner,theLBPandotherinterested
partiestosubmitevidenceastothejustcompensationfortheland,withinfifteen(15)daysfromthe
receiptofthenotice.Aftertheexpirationoftheaboveperiod,thematterisdeemedsubmittedfor
decision.TheDARshalldecidethecasewithinthirty(30)daysafteritissubmittedfordecision.
Xxx;
6.LandValuationandLandownerCompensation,Sec.IVDofDARAO2,S.2009
D.LandValuationandLandownerCompensation
1.ThecompensationforlandscoveredunderR.A.No.9700shallbe:a)theamountdeterminedin
accordancewiththecriteriaprovidedforinSection7ofthesaidlawandexistingguidelinesonland
valuation;orb)thevaluebasedontheorderoftheDARAdjudicationBoard(DARAB)ortheregular
court,whichhasbecomefinalandexecutory.
ThebasicformulaforthevaluationoflandscoveredbyVOSorCAshallbe:
LV=(CNIx0.60)+(CSx0.30)+(MVx0.10)
Where:LV=LandValue
CNI=CapitalizedNetIncome(basedonlanduseandproductivity)
CS=ComparableSales(basedonfairmarketvalueequivalentto70%ofBIRZonal
Value)
MV=MarketValueperTaxDeclaration(basedonGovernmentassessment)
1.1IfthreefactorsarepresentATcEDS
WhentheCNI,CSandMVarepresent,theformulashallbe:
LV=(CNIx0.60)+(CSx0.30)+(MVx0.10)

16

1.2Iftwofactorsarepresent
1.2.1WhentheCSfactorisnotpresentandCNIandMVareapplicable,theformulashallbe:
LV=(CNIx0.90)+(MVx0.10)
1.2.2WhentheCNIfactorisnotpresent,andCSandMVareapplicable,theformulashallbe:
LV=(CSx0.90)+(MVx0.10)
1.3Ifonlyonefactorispresent
WhenboththeCSandCNIarenotpresentandonlyMVisapplicable,theformulashallbe:
LV=MVx2
Innocaseshallthevalueofidlelandusingtheformula(MVx2)exceedthelowestvalueof
landwithinthesameestateunderconsiderationorwithinthesamebarangay,municipalityorprovince
(inthatorder)approvedbyLBPwithinone(1)yearfromreceiptofClaimFolder(CF.)
Thespecificguidelinesgoverningthevaluationoflandsundervoluntaryoffertosell(VOS)or
compulsoryacquisition(CA)pursuanttoR.A.No.6657,asamendedbyR.A.No.9700areprovidedin
CARPLADAnnexAofthisOrder.
2.Allpreviouslyacquiredlandswhereinvaluationissubjecttochallengebylandownersshallbe
completedandfinallyresolvedpursuanttoSection17ofR.A.No.6657,asamended.
Inlikemanner,claimsovertenantedriceandcornlandsunderP.D.No.27andExecutiveOrder
(E.O.)No.228whethersubmittedornottotheLandBankofthePhilippines(LBP)andnotyet
approvedforpaymentshallbevaluedunderR.A.No.6657,asamended.
LandholdingscoveredbyP.D.No.27andfallingunderPhaseIofR.A.No.9700shallbe
valuedunderR.A.No.9700.
3.Incasesofrejection,landownersmaywithdrawtheoriginalvalueofthelandholdingas
determinedbytheDepartmentofAgrarianReform(DAR)andLandBankofthePhilippines(LBP)per
MemorandumofValuation(MOV)andsubsequentlydepositedintheirnames,subjecttotheir
submissionoftherequirementsforpayment.ATESCc
WhentheLOlateracceptstheoriginalvalueorasrecomputedbytheLBPbasedonexisting
valuationguidelines,merefilingofamanifestationbytheLOasregardstheacceptanceoftheoriginal
valueorajointmanifestationbytheLOandtheLBPontherecomputedvaluewiththeDAR
AdjudicationBoard(DARAB)shallautomaticallyterminatethejustcompensationcasepending
thereat.
4.Landowners,otherthanbanksandfinancialinstitutions,whovoluntarilyoffertheirlandsfor
sale,shallbeentitledtoanadditionalfivepercent(5%)cashpayment.
5.ForlandholdingswhichwereconveyedaftertheeffectivityofR.A.No.6657,theLBPshall
considerthetransferorasthepayee.
However,paymentmustbereleasedtotheLOtransfereeiftheLOtransferorissuesaSpecial
PowerofAttorney(SPA)orDeedofAssignmentinfavoroftheformer.
6.InthedeterminationoftheAnnualGrossProduction(AGP),SellingPrice(SP)andCostof
Operation(CO)tobeusedinthelandvaluation,theauditedfinancialstatementfiledwiththeBureau
ofInternalRevenue(BIR)shallbeobtainedbytheDARMOfromtheLOfifteen(15)dayspriortothe
dateoffieldinvestigation.Ifthelandownerfailstosubmitthesame,theDARandLBPmayadopt
applicableindustrydataor,intheabsencethereof,conductanindustrystudyonthespecificcrop.
7.Smallportionsorpatcheswithinthecoveredlandholdingswhicharedeterminedtobeless
productivethanthebiggerportionduringtheconductofjointfieldinvestigationshallbevaluedbased
onthecurrentuseoftheadjacentportions,providedthatsaidsmallportionsorpatchesshallnotexceed
10%oftheproductivearea.
Likewise,smallportionsorpatchesoflandholdingsabove18percentslope,undevelopedand
ofnousetothelandownershallbevaluedasidleprovideditshallnotexceed10%ofthecovered
landholding.

17