Land Bank of the Philippines v. Baldoza
REITERATIONFacts
The Antecedents: Orlando Baldoza and the Heirs of Spouses Jaime R. Baldoza and Violeta Baldoza (respondents) owned undivided portions of Lot Nos. 42 and 49 in Cabcaban, Manjuyod, Negros Oriental. On September 2, 2005, respondents voluntarily offered their lots for coverage under the Comprehensive Agrarian Reform Program (CARP), which was accepted by the Department of Agrarian Reform (DAR). The Land Bank of the Philippines (petitioner) initially valued Lot No. 42 at P2,832,691.23 and Lot No. 49 at P2,018,008.99. Respondents rejected this valuation, deeming it significantly below just compensation. Procedural History: The respondents first brought their dispute over the valuation to the DAR Adjudication Board (DARAB), which affirmed petitioner's valuation on February 27, 2009, and denied reconsideration on July 3, 2009. Aggrieved, respondents filed a petition for the determination of just compensation before the Regional Trial Court of Dumaguete City, Branch 32, sitting as a Special Agrarian Court (RTC-SAC). The RTC-SAC, utilizing commissioners, ultimately valued the lots at P6,852,695.86, plus a 12% interest, and directed petitioner to pay the remaining balance and its share of the commissioners' fees. Petitioner appealed to the Court of Appeals (CA), which reversed the RTC-SAC decision, affirming the DARAB's valuation and deleting the imposed interest, while remanding the case for determination of commissioners' fees. The CA denied motions for reconsideration from both parties. The Petition: Petitioner Land Bank of the Philippines filed a Petition for Review on Certiorari with the Supreme Court, assailing the CA's decision regarding its liability to pay commissioners' fees. The sole issue presented is whether petitioner, as an entity performing a governmental function in agrarian reform proceedings, is exempt from paying commissioners' fees, which are considered costs of suit. Petitioner argues, citing prior Supreme Court rulings, that it is exempt from such costs due to its governmental role, a position it maintains despite the CA's contrary ruling.
Issue(s)
Whether or not petitioner, an entity performing a governmental function, is liable to pay commissioners' fees in an agrarian expropriation proceeding. Whether the respondents are liable to pay commissioners' fees.
Ruling
The petition is GRANTED. The Decision dated February 18, 2015, and the Resolution dated October 29, 2015, of the Court of Appeals-Cebu City are REVERSED and SET ASIDE concerning the liability of petitioner Land Bank of the Philippines to pay commissioners' fees. Respondents Orlando R. Baldoza and Heirs of Spouses Jaime R. Baldoza and Violeta Baldoza are LIABLE to pay commissioners' fees. The case is REMANDED to the Regional Trial Court of Dumaguete City, Branch 32, sitting as a Special Agrarian Court, for the determination of commissioners' fees strictly in accordance with Section 12, Rule 67 and Section 16, Rule 141 of the Rules of Court.
Ratio Decidendi
On the liability of petitioner Land Bank of the Philippines to pay commissioners' fees: The Court ruled that petitioner, as an entity performing a governmental function in agrarian reform proceedings, is exempt from paying costs of suit, including commissioners' fees. Commissioners' fees are considered part of the costs of proceedings. Section 1, Rule 142 of the Rules of Court provides that no costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. This exemption extends to government instrumentalities performing governmental functions, such as the Land Bank in CARP cases. The Court clarified that while commissioners' fees are generally taxed as costs, and the plaintiff in eminent domain is typically responsible, the specific nature of the Land Bank's role in CARP, which is governmental, exempts it from such costs, as previously held in Land Bank of the Philippines v. Atty. Gonzales and Land Bank of the Philippines v. Ibarra. The Court noted that prior cases ordering the Land Bank to pay commissioners' fees did not delve into the propriety of this liability or were factually distinct. On the liability of respondents to pay commissioners' fees: The Court held that respondents are liable to pay the commissioners' fees. While R.A. No. 6657 does not explicitly state who pays commissioners' fees, Section 57 of the same law mandates the suppletory application of the Rules of Court. Section 12 of Rule 67 of the Rules of Court states that the plaintiff is responsible for the payment of commissioners' fees as part of the costs, unless an appeal is taken by the owner and the judgment is affirmed. In agrarian expropriation cases where the landowner voluntarily offers to sell or rejects the DAR's valuation, the landowner initiates the case before the RTC-SAC for the determination of just compensation. Therefore, the landowner, in this context, is considered the "plaintiff" for the purpose of determining costs, including commissioners' fees. The respondents, having filed the petition for determination of just compensation after disagreeing with the DARAB's valuation, are thus liable for these fees.
Main Doctrine
The Land Bank of the Philippines, performing a governmental function in agrarian reform proceedings, is exempt from paying costs of suit, including commissioners' fees, as these are considered part of such costs.