649 Phil. 575
PEREZ, J.:
ACCORDINGLY, the just compensation of the land partly covered 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 and Antonio 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.[9]
WHEREFORE, 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.
In computing the just compensation of the property, pursuant to Executive Order No. 228, Sec. 2 thereof, the formula is -
LV = AGP x 2.5 x GSP x A
(LV is Land Valuation; AGP is Average Gross Production; GSP is Government Support Price and A is the Area of the Land)
WHERE: AGP = 99.36 cavans per hectareGSP = Php 35.00 per cavan
A = 18.8704 hectares
COMPUTATION:LV = (99.36 x2.5 x 35.00) 18.8704
LV = 8,694 x 18.8704
LV = Php 164,059.26
With increment of 6% interest per annum compounded annually beginning October 21, 1972 until October 21, 1994 and immediately after said date with 12% interest per annum until the value is fully paid in accordance with extant jurisprudence, computed as follows:
To be compounded annually at 6% per annum from October 21, 1972 up to October 24, 1994. The formula is -CA = P(1+R)n
(CA is Compounded Amount; P is Principal; R is Rate; and n is the number of years)
WHERE: P = Php 164,059.26R = 6% per annum
N = 22 years
COMPUTATION:CA = 164,059.26 x (1+06) 22
CA = 164,059.26 x (1.06) 22
CA = 164,059.26 x 3.60353741
CA = Php 591,193.68
Plus simple interest of 12% per annum from October 22, 1994 up to October 21, 2003, the formula of which is:I = P x R x T
(I is the Interest; P is the Principal; R is the Rate and T is the time)
WHERE: P = Php591,193.68R = 12% per annum
T = 9 years
COMPUTATION:I = 591,193.68 x 12 x 9
I = 70,943.24 x 9
I = Php638,489.18
(Plus interest of 12% per annum from October 22, 2003 up to October 6, 2004 or a period of 350 days)
COMPUTATION:I = (591,193.68 x .12) x 350
350
I = 194.3605 x 350
I = Php68,027.77
Total Interest Php 706,516.95
RECAPITULATION:
Compounded Amount Php 591,193.68
Total Interest 706,516.95
TOTAL AMOUNT Php 1,297,710.63
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. Beyond October 21, 1994, only the simple rate of 6% per annum interest is imposable 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. Only the simple rate of 6% is applicable up to then because the obligation to pay was not founded on a written agreement that stipulated a different rate of 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 of a forbearance in money.[13]
We DENY the petitioner's motion for partial reconsideration for the following reasons, to wit:
1. Anent the first ground, the decision of October 9, 2007 has explained in detail why the obligation of the petitioner should be charged 12% interest. Considering that the motion fails to persuasively show that a modification of the decision thereon would be justified, we reject such ground for lack of merit.
2. Regarding costs of suit, they are allowed to the prevailing party as a matter of course, unless there be special reasons for the court to decree otherwise (Sec. 1, Rule 43, Rules of Court). In appeals, the Court has the power to render judgment for costs as justice may require (Sec. 2, Rule 142, Rules of Court).
In view of the foregoing, the award of costs to the respondents was warranted under the circumstances.[14]
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?
II. Is it valid or lawful to adjudge petitioner LBP, which is performing a governmental function, liable for costs of suit?[15]
x x x [I]f just compensation is not settled prior to the passage of Republic Act No. 6657, it should be computed in accordance with the said law, although the property was acquired under Presidential Decree No. 27. The fixing of just compensation should therefore be based on the parameters set out in Republic Act No. 6657, with Presidential Decree No. 27 and Executive Order No. 228 having only suppletory effect.
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 the computation for just compensation. As a matter of fact, the factors enumerated therein had already been translated into a basic formula by the DAR pursuant to its rule-making power under Section 49 of Republic Act No. 6657. The formula outlines in DAR Administrative Order No. 5, series of 1998 should be applied in computing just compensation, thus:LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land ValueCNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, if fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interest on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred.
The Bulacan trial court, in its 1979 decision, was correct in imposing interest on the zonal value of the property to be computed from the time petitioner instituted condemnation proceedings and "took" the property in September 1969. This allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time.[20]
On the other hand, the NHA contends that it is exempt from paying all kinds of fees and charges, because it performs governmental functions. It cites Public Estates Authority v. Yujuico, which holds that the Public Estates Authority (PEA), a government-owned and controlled corporation, is exempt from paying docket fees whenever it files a suit in relation to its governmental functions.
We agree. People's Homesite and Housing Corporation v. Court of Industrial Relations declares that the provision of mass housing is a governmental function:
Coming now to the case at bar, We note that since 1941 when the National Housing Commission (predecessor of PHHC, which is now known as the National Housing Authority [NHA] was created, the Philippine government has pursued a mass housing and resettlement program to meet the needs of Filipinos for decent housing. The agency tasked with implementing such governmental program was the PHHC.
These can be gleaned from the provisions of Commonwealth Act 648, the charter of said agency.
We rule that the PHHC is a governmental institution performing governmental functions.
This is not the first time We are ruling on the proper characterization of housing as an activity of the government. In the 1985 case of National Housing Corporation v. Juco and the NLRC (No. L-64313, January 17, 1985, 134 SCRA 172), We ruled that housing is a governmental function.
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 promote social 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."[30]
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.
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.
x x x x
To the contrary, 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.
It needs no exceptional intelligence to understand the implications of this transmittal. It simply means that if LBP agrees on the amount stated in the DAS, after its review and evaluation, it becomes its duty to sign the deed. But not until then. For, it is only in that event that the amount to be compensated shall have been "established" according to law. Inversely, if the LBP, after review and evaluation, refuses to sign, it is because as a party to the contract it does not give its consent thereto. This necessarily implies the exercise of judgment on the part of LBP, which is not supposed to be a mere rubber stamp in the exercise. Obviously, were it not so, LBP could not have been made a distinct member of [Presidential Agrarian Reform Council (PARC)], the super body responsible for the successful implementation of the CARP. Neither would it have been given the power to review and evaluate the DAS already signed by the DAR Secretary. If the function of the LBP in this regard is merely to sign the DAS without the concomitant power of review and evaluation, its duty to "review/evaluate" mandated in Adm. Order No. 5 would have been a mere surplus age, meaningless, and a useless ceremony.
x x x x
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."
x x x x
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.
x x x x
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.[32]