Land Bank v. Heirs of Sanchez
REITERATIONFacts
The Antecedents: The Department of Agrarian Reform (DAR) placed a 42.046-hectare land owned by the Heirs of Bartolome J. Sanchez under the Comprehensive Agrarian Reform Law. The Heirs of Sanchez found the DAR's valuation of P623,725.35 unreasonable and, in 2002, filed a complaint with the Regional Trial Court (RTC) acting as a Special Agrarian Court (SAC) to determine just compensation. During pre-trial, the parties agreed to appoint commissioners for the property's valuation, who subsequently requested P120,000.00 for their fees. Procedural History: The SAC, in an Order dated December 15, 2009, directed the deposit of P120,000.00 for the commissioners' fees, which was later denied reconsideration by a Resolution dated September 9, 2010. The Land Bank of the Philippines (LBP) then filed a petition for certiorari with the Court of Appeals (CA). The CA, in its Decision dated September 16, 2014, denied the petition, sustaining the award of commissioners' fees but directing the SAC to compute them based on time actually and necessarily employed by each commissioner. The Petition: The LBP filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's decision. LBP argues that it is exempt from paying legal fees, including commissioners' fees, due to its governmental functions in agrarian reform. Alternatively, LBP contends that the P120,000.00 imposition is without factual and legal justification, as the case is still in the trial stage and no determination of just compensation has been made. The Heirs of Sanchez, in their Comment, assert that LBP is not exempt and that the P120,000.00 is a fair amount given the scope of the commissioners' work.
Issue(s)
Whether LBP, exercising governmental functions as agrarian reform financial intermediary, is exempt from paying commissioners' fees. Assuming liability, whether P120,000.00 is legally justified.
Ruling
The Decision dated September 16, 2014 of the Court of Appeals in CA-G.R. SP No. 03926-MIN pertaining to the liability of petitioner Land Bank of the Philippines to pay commissioners' fees is SET ASIDE. Respondents Heirs of Bartolome Sanchez are DECLARED liable to pay commissioners' fees. The case is REMANDED to the Regional Trial Court of Butuan City, Branch 5, 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 Issue 1: Petitioner LBP is exempt from paying commissioners' fees because its role transcends ministerial disbursement; it is primarily tasked with valuation and determination of just compensation in agrarian reform, wielding public funds as a governmental instrumentality. This exemption stems from Section 1, Rule 142 of the Rules of Court, exempting the Republic and its instrumentalities from suit costs when performing governmental functions, as affirmed in LBP v. Gonzales (711 Phil. 98, 2013), LBP v. Ibarra (747 Phil. 691, 2014), and recently LBP v. Baldoza (G.R. No. 221571, July 29, 2019), where the Court held commissioners' fees as part of suit costs. The CA erred in deeming DAR/LBP the 'plaintiff' under Section 12, Rule 67; in landowner-initiated cases like this—filed after rejecting DAR valuation under voluntary offer to sell (DAR A.O. No. 03, s. 1989)—the Heirs of Sanchez are the plaintiffs seeking valuation, not the Republic asserting eminent domain propriety. Baldoza clarifies that such proceedings resolve valuation disputes post-coverage, with landowners bearing costs unless they prevail on appeal. Thus, even applying Rule 67, Sec. 12 literally, LBP incurs no liability, preserving Agrarian Reform Fund integrity. On Issue 2: It is premature to justify P120,000.00 as no actual/necessary performance occurred; trial pending, commissioners un-oathed, no report submitted. Section 16, Rule 141 mandates fees of at least P300/day based on 'time actually and necessarily employed in the performance of their duties and in making their report,' requiring evidentiary reception by SAC. While CA correctly directed detailed computation, it wrongly imposed it on LBP; remand to SAC ensures Heirs—as plaintiffs—pay per Rule 67, Sec. 12, post-performance. Prematurity avoids speculation, aligning with due process and fiscal prudence in agrarian cases.
Main Doctrine
Land Bank of the Philippines (LBP), acting as the financial intermediary and valuation arm in agrarian reform under RA 6657, performs a governmental function and is thus exempt from payment of costs of suit, including commissioners' fees, pursuant to Section 1, Rule 142 of the Rules of Court, as reiterated in precedents like LBP v. Baldoza, LBP v. Gonzales, and LBP v. Ibarra. In cases where landowners file complaints for determination of just compensation after rejecting DAR/LBP valuations, the landowners are the 'plaintiffs' under Section 12, Rule 67, bearing the costs including commissioners' fees, unlike Republic-initiated eminent domain where the State shoulders them. This distinction arises because such proceedings stem from voluntary offers to sell (VOS) under DAR A.O. No. 03, s. 1989, focusing on valuation disputes rather than propriety of expropriation. Commissioners' fees must be computed based on time actually and necessarily employed in performing duties and submitting reports, per Section 16, Rule 141, rendering premature awards without evidence invalid. The Supreme Court may remand to SACs for detailed computation to ensure fairness and compliance with procedural rules.