Antonio G. Anson and Cesar G. Anson, Respondents.: Topic: Consequential Damages

FIRST DIVISION
[G.R. No. 182431. November 17, 2010.]

LAND BANK OF THE PHILIPPINES, petitioner, vs. ESTHER ANSON RIVERA,
ANTONIO G. ANSON AND CESAR G. ANSON, respondents.
PEREZ, J p:
TOPIC: CONSEQUENTIAL DAMAGES
Since LBP is performing a governmental 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.
Rule 142
Costs
Section 1.Costs ordinarily follow results of suit. — Unless otherwise provided in
these rules, costs shall be allowed to the prevailing party as a matter of course but the court
shall have power, for special reasons adjudge that either party shall pay the costs of an
action, or that the same be divided, as may be equitable. No costs shall be allowed
against the Republic of the Philippines unless otherwise provided by law.
FACTS:
1. The respondents are the co-owners of a parcel of agricultural land that was placed under the
coverage of Operation Land Transfer pursuant to Presidential Decree No. 27 in 1972. Only
18.8704 hectares of the total area of 20.5254 hectares were subject of the coverage.
2. After the Department of Agrarian Reform (DAR) directed payment, LBP approved the
payment of P265,494.20, exclusive of the advance payments made in the form of lease 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.
3. The respondents instituted Civil Case No. 94-03 for determination and payment of just
compensation.
4. The Court of Appeals rendered a decision ordering petitioner LAND BANK OF THE
PHILIPPINES to pay respondents just compensation and interest in favor of
respondents and at the same time directed LBP to pay the costs of suit.
5. LBP disagreed with the imposition of 12% interest and its liability to pay the costs of suit.
ISSUE: WON it is valid or lawful to adjudge petitioner LBP, which is performing a

governmental function, liable for costs of suit?
PETITIONER’S CONTENTION: According to LBP, it performs a governmental function when it
disburses the Agrarian Reform Fund to satisfy awards of just compensation. Hence, it cannot be
made to pay costs in eminent domain proceedings.
RULING: Yes. Since, LBP is performing a governmental 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.
Rule 142
Costs
Section 1.Costs ordinarily follow results of suit. — Unless otherwise provided in
these rules, costs shall be allowed to the prevailing party as a matter of course but
the court shall have power, for special reasons adjudge that either party shall pay the costs
of an action, or that the same be divided, as may be equitable. No costs shall be allowed
against the Republic of the Philippines unless otherwise provided by law.
In Heirs of Vidad v. Land Bank of the Philippines, this Court extensively discussed
the role of LBP in the implementation of the agrarian reform program.
LBP is an agency created primarily to provide financial support 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 and compensation of covered landholdings to carry out the full
implementation of the Agrarian Reform Program. It may agree with the DAR and
the land owner as to the amount of just compensation to be paid to the latter and may also
disagree with them and bring the matter to court for judicial determination.
xxx xxx xxx
The Court had already recognized in Sharp International Marketing v. Court of Appeals that
the LBP plays a significant role under the CARL and in the implementation of the CARP,
thus:
As may be gleaned very clearly from EO 229, the LBP is an essential part of
the government sector with regard to the payment of compensation to the landowner.
It is, after all, the instrumentality that is charged with the disbursement of public
funds for purposes of agrarian reform. It is therefore part, an indispensable cog, in
the governmental machinery that fixes and determines the amount compensable to
the landowner. Were LBP to be excluded from that intricate, if not sensitive, function of
establishing the compensable amount, there would be no amount "to be established by the
government" as required in Sec. 6, EO 229. This is precisely why the law requires the [Deed
of Absolute Sale (DAS)], even if already approved and signed by the DAR Secretary, to
be transmitted still to the LBP for its review, evaluation and approval.
xxx xxx xxx
Even more explicit is R.A. 6657 with respect to the indispensable role of LBP in the
determination of the amount to be compensated to the landowner. Under Sec. 18 thereof,
"the LBP shall compensate the landowner in such amount as may be agreed upon by the
landowner and the DAR and LBP, in accordance with the criteria provided in Secs. 16 and
17, and other pertinent provisions hereof, or as may be finally determined by the court, as
the just compensation for the land."
xxx xxx xxx
It must be observed that once an expropriation proceeding for the acquisition of
private agricultural lands is commenced by the DAR, the indispensable role
of Land Bank begins.
xxx xxx xxx
It is evident from the afore-quoted jurisprudence that the role of LBP in the CARP is more
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 valuation and
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
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 governmental
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.
WHEREFORE, premises considered, the petition is GRANTED. The decision of the
Court of Appeals in CA G.R. SP No. 87463 dated 9 October 2007 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.
SO ORDERED.

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FIRST DIVISION

[G.R. No. 182431. November 17, 2010.]

ISSUE: WON it is valid or lawful to adjudge petitioner LBP, which is performing a

RULING: Yes. Since, LBP is performing a governmental function in agrarian reform

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