land bank of the philippines v. rivera

7/28/2019 Land Bank of the Philippines v. Rivera

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Land bank v. Rivera

Exemption of Legal Requirements

Sean

SUMMARY: LBP, performing govt function is not liable for the cost of the suit.

PETITION: Petition for review on certiorari by Petitioner Land Bank of the Philippines (LBP)

assailing the Decision of the Court of Appeals ordering the payment by LBP of just

compensation and interest in favor of respondents Esther Anson Rivera et al

FACTS:- Rivera are the co-owners of a parcel of agricultural land and later transferred in their

names under Transfer Certificate of Title that was placed under the coverage of

Operation Land Transfer pursuant to Presidential Decree No. 27.

- After the Department of Agrarian Reform (DAR) directed payment, LBP approved thepayment of P265,494.20, exclusive of the advance payments made in the form oflease rental amounting to P75,415.88 but inclusive of 6% increment of P191,876.99

pursuant to DAR Administrative Order No. 13, series of 1994.

- Rivera instituted Civil Case No. 94-03 FOR DETERMINATION AND PAYMENT OF JUSTCOMPENSATION BEFORE THE REGIONAL TRIAL COURT (RTC), claiming that the

landholding involved was irrigated with two cropping seasons a year with an average

gross production per season of 100 cavans of 50 kilos/hectare, equivalent of 200

cavans/year/hectare; and that the fair market value of the property was not less that

P130,000.00/hectare, or P2,668,302.00 for the entire landholding of 20.5254 hectares.

- LBP filed its answer, stating that rice and corn lands placed under the coverage ofPresidential Decree No. 27 were governed and valued in accordance with the

provisions of Executive Order No. 228 etc.

- The RTC rendered its decision, holding: THE JUST COMPENSATION OF THE LAND PARTLYCOVERED BY TCT NO. T-95690 IS FIXED AT PHP1,297,710.63 .

- Land Bank of the Philippines is hereby ordered to pay Esther Anson, Cesar Anson andAntonio Anson the aforesaid value of the land, plus interest of 12% per annum or

Php194.36 per day effective October 7, 2004, until the value is fully paid, in cash or in

bond or in any other mode of payment at the option of the landowners in

accordance with Sec. 18, RA 6657.

- LBP filed MRDENIED- LBP next filed a petition for Review to the Court of Appeals then the DECISION DATED

OCTOBER 6, 2004 is MODIFIED, ordering petitioner LAND BANK OF THE PHILIPPINES to

pay to the respondents just compensation (inclusive of interests as of October 6, 2004)in the amount of P823,957.23, plus interest of 12% per annum on the amount of

P515,777.57, or P61,893.30 per annum, beginning October 7, 2004 until the just

compensation is fully paid in accordance with this decision.

- The Court of Appeals pointed out that:o Pursuant to AO 13, considering that the landholding involved herein was

tenanted prior to October 21, 1972, the rate of 6% per annum is imposed,

compounded annually from October 21, 1972 until October 21, 1994, the date

of the effectivity of AO 13.

o Beyond October 21, 1994, only the simple rate of 6% per annum interest isimposable until October 6, 2004 (the date of the rendition of the decision of

the RTC) on the total value (that is, P164,059.26 plus the compounded

increments up to October 21, 1994) but minus the lease rentals of P75,415.88.

o Only the simple rate of 6% is applicable up to then because the obligation topay was not founded on a written agreement that stipulated a different rateof interest. From October 7, 2004 until the full payment, the simple interest rate

is raised to 12% per annum.

- The reason is that the amount thus determined had by then acquired the character ofa forbearance in money.

- LBP DISAGREED WITH THE IMPOSITION OF 12% INTEREST AND ITS LIABILITY TO PAY THECOSTS OF SUIT. IT FILED A MOTION FOR RECONSIDERATION WHICH WAS DENIED IN THE

COURT OF APPEALS RESOLUTION DATED 18 MARCH 2008.

- Thus this petition.ISSUES:

I. Is it valid or lawful to award 12% rate of interest per annum in favor of respondents

notwithstanding the 6% rate of interest per annum compounded annually prescribed

under DAR A.O. No. 13, series of 1994, DAR A.O. No. 02, series of 2004, and DAR A.O.No. 06, series of 2008, "xxx from November 1994 up to the time of actual payment?

(RELEVANT TO THE CASE)


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Land bank v. Rivera


Sean

II. IS IT VALID OR LAWFUL TO ADJUDGE PETITIONER LBP, WHICH IS PERFORMING A

GOVERNMENTAL FUNCTION, LIABLE FOR COSTS OF SUIT?

HELD: the petition is GRANTED. (LBP performing GOVT function IS EXEMPTED from cost of suit)

The decision of the Court of Appeals is AFFIRMED with the MODIFICATION that LBP is hereby

held exempted from the payment of costs of suit. In all other respects, the Decision of the Court

of Appeals is AFFIRMED. No costs.

RATIO:

FIRST ISSUE

- At the outset, the Court notes that the parcels of land subject matter of this case wereacquired under In the instant case, while the subject lands were acquired under

Presidential Decree No. 27, the complaint for just compensation was only lodged

before the court on 23 November 2000 or long after the passage of Republic Act No.

6657 in 1998.

- Therefore, Section 17 of Republic Act No. 6657 should be the principal basis of thecomputation for just compensation.

- Conformably with the foregoing resolution, this Court rules that a 12% interest perannum on just compensation, due to the respondents, from the finality of this decision

until its satisfaction, is proper.

SECOND ISSUE:IMPORTANT!

WHETHER OR NOT THE COURT OF APPEALS CORRECTLY ADJUDGED LBP LIABLE TO PAY THE COST

OF SUIT.

LBPs argument

- According to LBP, it performs a governmental function when it disburses the AgrarianReform Fund to satisfy awards of just compensation. Hence, it cannot be made to pay

costs in eminent domain proceedings.

NHAs argument

- the NHA contends that it is exempt from paying all kinds of fees and charges, becauseit performs governmental functions.

COURTs DECISION

- COURT AGREESDO NOT NEED TO PAY COSTPERFORMING GOVT FUNCTIONS- While it has not always been easy to distinguish governmental from proprietary

functions, the Court's declaration in the Decision quoted above is not without basis.

Indeed, the characterization of governmental functions has veered away from the

traditional constituent-ministrant classification that has become unrealistic, if not

obsolete.

- Justice Isagani A. Cruz avers: "[I]t is now obligatory upon the State itself to promotesocial justice, to provide adequate social services to promote a rising standard of

living, to afford protection to labor to formulate and implement urban and agrarian

reform programs, and to adopt other measures intended to ensure the dignity, welfare

and security of its citizens.....These functions, while traditionally regarded as merely

ministrant and optional, have been made compulsory by the Constitution."

- The relevant provision of the Rules of Court states: RULE 142, No costs shall be allowedagainst the Republic of the Philippines unless otherwise provided by law.

- Based from jurisprudence, LBP is an agency created primarily to provide financialsupport in all phases of agrarian reform pursuant to Section 74 of Republic Act (RA) No.

3844 and Section 64 of RA No. 6657.

- It is vested with the primary responsibility and authority in the valuation andcompensation of covered landholdings to carry out the full implementation of the

Agrarian Reform Program.

- It is evident from the afore-quoted jurisprudence that the role of LBP in the CARP ismore than just the ministerial duty of keeping and disbursing the Agrarian Reform

Funds.

- As the Court had previously declared, the LBP is primarily responsible for the valuationand determination of compensation for all private lands. It has the discretion to

approve or reject the land valuation and just compensation for a private agricultural

land placed under the CARP. In case the LBP disagrees with the valuation of land and

determination of just compensation by a party, the DAR, or even the courts, the LBPnot only has the right, but the duty, to challenge the same, by appeal to the Court of

Appeals or to this Court, if appropriate.


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Land bank v. Rivera


Sean

- IT IS CLEAR FROM THE ABOVE DISCUSSIONS THAT SINCE LBP IS PERFORMING AGOVERNMENTAL FUNCTION IN AGRARIAN REFORM PROCEEDING, IT IS EXEMPT FROM THE

PAYMENT OF COSTS OF SUIT AS PROVIDED UNDER RULE 142, SECTION 1 OF THE RULES OF

COURT.

- Thus, since LBP is performing a govt function, it is thus exempted from paying the costof suit.

-In case the LBP disagrees with the valuation of land and determination of justcompensation by a party, the DAR, or even the courts, the LBP not only has the right,

but the duty, to challenge the same, by appeal to the Court of Appeals or to this

Court, if appropriate.

- It is clear from the above discussions that since LBP is performing a governmentalfunction in agrarian reform proceeding, it is exempt from the payment of costs of suit

as provided under Rule 142, Section 1 of the Rules of Court.

land bank of the philippines v. rivera

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