October 23, 1996
DAR OPINION NO. 95-96
Atty. Rey I. Madroño
OIC-Litigation Division
Philippine Veterans Bank
101 Herrera cor. Dela Rosa Sts.
Legaspi Village, Makati City
Dear Atty. Madroño:
This refers to your letter requesting for clarification whether the Phil. Veterans Bank (PVB) can still exercise its right of retention under CARL considering that, according to you, the cancellation of the Bank's titles aver the subject properties were done with "legal complications".
You stated that the subject properties were registered under the name of the Philippine Veterans Bank. Subsequently, it was compulsorily acquired by DAR under CARP resulting in the cancellation of the Banks titles and the issuance of the corresponding CLOAs in favor of the beneficiaries. You contend that the titles were cancelled despite the loss of ROD's copies of the same and the non-payment of just compensation. In this connection, you now manifest the desire of PVB to exercise its retention right under R.A. 6657.
We note two issues in your letter, first, can the Bank retain properties foreclosed; and second, were the cancellation of the Bank's titles and the subsequent issuance of the corresponding CLOAs valid?
Anent the first issue, Banks cannot exercise the right of retention over their foreclosed agricultural properties. Section 71 of R.A. 6657 mandates that foreclosed assets of private banks are subject to existing laws on compulsory transfer (that is under the General Banking Act) and acquisition under Section 16 of said Act. (see attached M.C. 5, Series of 1996)
With respect to the second issue, we answer it in the affirmative. In this regard, we wish to inform you that since said properties were compulsorily acquired by DAR pursuant to the aforecited laws, it is first imperative to cancel the Bank's titles, prior to the issuance of the CLOAs to the respective beneficiaries.
As to your allegation that there was no payment of just compensation, please submit the Bank's claim for payment of just compensation accompanied by the proper documents to the DAR Office were the property is located so that the claim folder can be forwarded to the Land Valuation Office of LBP, pursuant to Sections 16, 17, 18 of R.A. 6657 and its implementing guidelines.
We hope to have clarified matters with you.
Very truly yours,
(SGD.) LORENZO R. REYES
OIC-Undersecretary
LAFMA
Copy furnished:
Mr. Severino T. Madronio
Asst. Secretary
Field Operations Group DARCO
The Provincial Agrarian Reform Officer
Department of Agrarian Reform
Malolos, Bulacan