G.R. No. 161834; August 11, 2010
LAND BANK OF THE PHILIPPINES, Petitioner, vs. HEIR OF TRINIDAD S. VDA. DE ARIETA, represented by the sole and only heir, ALICIA ARIETA TAN, Respondent.

FACTS

Respondent, through a Voluntary Offer to Sell (VOS) under the Comprehensive Agrarian Reform Program (CARP), offered a 14.999-hectare property at ₱2,000,000 per hectare. Petitioner Land Bank of the Philippines (LBP) valued it at ₱1,145,806.06 (₱76,387.57/ha), which the respondent rejected. Pursuant to Section 16(e) of RA 6657, LBP deposited this amount as provisional compensation. The Department of Agrarian Reform Adjudication Board (DARAB), in a summary administrative proceeding, subsequently fixed just compensation at ₱10,294,721.00.
Respondent then filed a petition for judicial determination of just compensation before the Regional Trial Court sitting as a Special Agrarian Court (SAC). During the pendency of this judicial proceeding, respondent filed a Motion for Delivery of the Initial Valuation, praying that LBP be ordered to deposit the higher DARAB-determined amount. The SAC granted the motion and ordered LBP to deposit ₱10,294,721.00. LBP moved for reconsideration, arguing it had already satisfied the legal requirement by depositing its initial valuation.

ISSUE

Whether the Special Agrarian Court correctly ordered the Land Bank of the Philippines to deposit the just compensation amount as determined by the DARAB, rather than LBP’s initial valuation, pending final judicial determination.

RULING

Yes. The Supreme Court affirmed the orders of the SAC and the Court of Appeals. The legal logic hinges on the proper interpretation of Section 16 of RA 6657, particularly the sequence of deposits required for prompt payment. The Court clarified that the deposit under Section 16(e) is distinct from the provisional compensation deposited after the landowner rejects the LBP’s initial offer. Section 16(e) explicitly states that after the DAR’s administrative adjudication (in this case, the DARAB decision), the just compensation as determined shall be deposited “in cash or in bonds” for the landowner’s withdrawal.
The deposit mandated after the DARAB decision is not merely a reiteration of the initial provisional deposit. It is a new deposit based on the administrative determination, which remains preliminary until final judicial approval. This interpretation ensures that the landowner is not deprived of the provisional use of a compensation figure arrived at after a more formal administrative proceeding, pending the SAC’s final verdict. The SAC’s order did not constitute an execution of the DARAB decision or a prejudgment of the case, as the judicial determination of just compensation remains independent and conclusive. The deposit mechanism is designed to ensure prompt payment at various stages, and the SAC’s order was a valid interlocutory directive to comply with the statutory scheme for deposit following an administrative determination.