GR 118712; (July, 1996) (Digest)
G.R. No. 118712 & G.R. No. 118745. July 5, 1996.
LAND BANK OF THE PHILIPPINES and DEPARTMENT OF AGRARIAN REFORM, petitioners, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, and AGRICULTURAL MANAGEMENT & DEVELOPMENT CORPORATION, respondents.
FACTS
These consolidated cases arose from the denial of the petitioners’ motions for reconsideration of a prior Supreme Court decision. Petitioners, the Department of Agrarian Reform (DAR) and Land Bank of the Philippines (LBP), argued that the opening of “trust accounts” for landowners who rejected the government’s compensation offer for their acquired lands constituted sufficient compliance with Section 16(e) of Republic Act No. 6657 (Comprehensive Agrarian Reform Law). They contended that the deposit mandated by law could be in any form known in law. Furthermore, they opposed the immediate release of these deposited funds to the rejecting landowners, citing risks such as a potential future government decision to abandon the acquisition or the impact of force majeure events like lahar flows, which could necessitate difficult recovery actions.
ISSUE
Whether the opening of a trust account, instead of a cash deposit or LBP bonds, complies with Section 16(e) of R.A. 6657 for compensating rejecting landowners; and whether the government can withhold the release of such compensation pending final determination of just compensation.
RULING
The Supreme Court denied the motions for reconsideration, ruling against the petitioners on both points. On the first issue, the Court held that Section 16(e) is clear and unambiguous, specifying deposit only in “cash” or in “LBP bonds.” The term “deposit” cannot be expansively construed to include the opening of “trust accounts,” as this would amend the statutory requirement. Administrative regulations must always harmonize with the law, and any discrepancy is resolved in favor of the statute.
On the second issue, the Court ruled that withholding payment while depriving the landowner of possession penalizes them for exercising their right to contest the valuation and seek just compensation. Just compensation requires not only correct valuation but also payment within a reasonable time. Delaying payment renders the compensation unjust. The Court noted that LBP’s own policy allowing partial withdrawal acknowledged the landowners’ need for immediate access to funds. The government’s speculative fears of future abandonment or force majeure were insufficient to justify withholding payment, as doing so would constitute an oppressive exercise of eminent domain. The taking of property must be accompanied by prompt compensation to be considered fair and constitutional.