G.R. No. 221571 . July 29, 2019.
LAND BANK OF THE PHILIPPINES, PETITIONER, VS. ORLANDO R. BALDOZA AND HEIRS OF SPOUSES JAIME R. BALDOZA AND VIOLETA BALDOZA, RESPONDENTS.

FACTS

Respondents voluntarily offered their agricultural lands for coverage under the Comprehensive Agrarian Reform Program (CARP). The Land Bank of the Philippines (LBP) fixed the total valuation at P4,850,700.22. Dissatisfied, respondents rejected the offer and sought a higher valuation. The DAR Adjudication Board (DARAB) affirmed LBP’s valuation. Respondents then filed a petition for determination of just compensation before the Regional Trial Court sitting as a Special Agrarian Court (RTC-SAC). The RTC-SAC, with the parties’ agreement, appointed commissioners who recommended a valuation of P6,852,695.86. The court adopted this, ordered LBP to pay the balance with 12% interest, and directed both parties to pay commissioners’ fees. The Court of Appeals (CA) reversed the RTC-SAC, reinstating the DARAB valuation, deleting the interest, and remanding the issue of commissioners’ fees for determination. LBP filed this Petition, contesting its liability to pay commissioners’ fees.

ISSUE

Whether the Land Bank of the Philippines, in an agrarian expropriation proceeding, is liable to pay commissioners’ fees.

RULING

No. The Land Bank of the Philippines is not liable to pay commissioners’ fees. The Court ruled that commissioners’ fees are considered costs of suit. Under Section 1, Rule 142 of the Rules of Court, costs are generally not awarded against the Republic of the Philippines unless provided by law. The LBP, in determining just compensation for CARP-covered lands, performs a governmental function as an agent of the State. This function is integral to the sovereign power of eminent domain. Consequently, the LBP shares the State’s immunity from costs. The Court cited precedents, including Land Bank of the Philippines v. Honeycomb Farms Corporation, which established that the government is exempt from paying costs in agrarian reform cases where it exercises its expropriation power. The statutory mandate for the LBP to finance agrarian reform does not constitute a legal provision expressly making it liable for such costs. Therefore, the RTC-SAC’s order for LBP to pay commissioners’ fees was erroneous. The CA’s decision to remand the issue for determination of the fee amount was likewise incorrect, as the liability should not exist in the first place. The case was remanded solely for the proper computation of just compensation.