September 3, 1997

DAR OPINION NO. 103-97

Atty. Jorge B. Vargas

Quezon Capitol Bldg.

Lucena City 4301

Dear Atty. Vargas:

This has reference to your query whether or not the DAR, thru the PARO, could set aside at will the thrust of Section 16 of R.A. No. 6657 (as implemented by Sec. 5 of E.O. No. 229), pursuant to DAR A.O. No. 1, Series of 1993. According to you, the PARO of Gumaca, to whom your letter was referred for comment, replied that "based on said policy the DAR can take possession of private property even before just compensation thereof could be determined in an administrative proceeding to be conducted by the DARAB". However, with the advent of the Supreme Court decision on the Yap case, you are of the belief that "no taking of private property by the DAR can be done on the basis of the establishment of trust account by the LBP and even before the just compensation could be established via the conduct of the administrative summary proceeding". In this regard, you now wish that your property be restored to you considering that the taking of the same by the DAR is in violation of Section 16 of R.A. No. 6657. Hence, your request for clarification.

Section 16 paragraph (e) of R.A. No. 6657 expressly provides, quote:

"(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. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries." (Emphasis supplied)

Pursuant to the aforecited mandate, the DAR issued Administrative Order No. 1, Series of 1993 (An Order Amending Certain Provisions of Administrative Order No. 9, Series of 1990, Entitled, "Revised Rules and Procedures Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. No. 6657"). In said issuance, the DAR allowed the opening of trust account in the name of the landowner as payment. However, the Supreme Court nullified the aforesaid issuances and declared that payment to the landowner shall only be made in cash or in LBP bonds to justify the taking of the land under the compulsory acquisition scheme of the CARP.

As to the issue whether the PARO can immediately take the property subject of compulsory acquisition prior to the determination of just compensation in an administrative proceeding, we wish to inform you that under the above-quoted law, "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 (R.A. No. 6657), the DAR shall take immediate possession of the land". Very clear is the import of said law as affirmed in the decision in the Pedro Yap case that the taking can immediately be effected after deposit is made in cash or in LBP bonds. In your case it appears that no deposit yet was made but instead only a trust account was established in your name. Be that as it may, we nonetheless cannot grant your request that the subject property shall be restored back to you pending determination of just compensation in an administrative proceeding to be conducted by the DARAB. Under Administrative Order No. 2, Series of 1998, otherwise known as the "Revised Rules and Procedures Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to Republic Act No. 6657" which was issued in compliance with the Supreme Court Resolution dated 5 July 1996 in the cases of Land Bank of the Philippines (LBP) versus Court of Appeals (CA), Pedro L. Yap, et al. (G.R. No. 118712) and Department of Agrarian Reform (DAR) versus CA, Pedro Yap, et al. (G.R. No. 118745), it provides in its transitory provision the following, to wit: "all trust accounts issued pursuant to Administrative Order No. 1, Series of 1993 covering landholdings not yet transferred in the name of the Republic of the Philippines as of July 5, 1996 shall immediately be converted to deposit accounts in the name of the landowners concerned. All PAROs and Regional Directors are directed to immediately inventory the claim folders . . . and request the LBP to establish the requisite deposit under this Administrative Order and to issue new certification to that effect. The original Certificate of Trust Deposit previously issued should be attached to the request of the DAR in order that the same may be replaced with a new one". From the aforequoted, the subject requisite deposit in cash or LBP bonds shall therefore be considered necessarily complied with, thus DAR may forthwith take possession of the land in issue in accordance with the provision of Section 16 (e) of R.A. No. 6657.

As regards your other concerns mentioned in your letter dated 18 October 1995 (i.e., question of retention and shares from the sale of the proceeds of the copra), please refer them to our Field Offices concerned for they are in a better position to act accordingly on the same.

Thank you for communicating with us and we hope to have clarified the matters with you.

Very truly yours,

(SGD.) ARTEMIO A. ADASA, JR.

Undersecretary for Legal Affairs, and Policy and Planning

Copy furnished:

The Regional Director

DAR Region IV

Capitol Compound, Pasig City

PARO Durante L. Ubeda

DAR Gumaca, Quezon

Lourdes H. Artillaga

Maranan Apartment No. 3

Arcadia St., Capitol Homesite

Cotta, Lucena City