G.R. No. 182431: November 17, 2010
Land Bank of the Philippines, Petitioner v. ESTHER ANSON RIVERA, ANTONIO G. ANSON AND CESAR G. ANSONRespondents
Perez, J.:
Respondents are co-owners of a parcel of land under the coverage of Operation Land Transfer pursuant to Presidential Decree No. 27 in 1972.Only 18.8704 hectares of the total are of 20.5254 hectares were subject of the coverage. The Land Bank of the Philippines directed payment, and the Respondents instituted a suit to determine the value of the property. They computed that it was P2,668,302.00 for the entire landholding of 20.5254 hectares.
The RTC declared that Land Bank should only pay Php1,297,710.63. Petitioner filed a petition for Review at the CA, which held that Land Bank should only pay P823,957.23, plus interest of 12% per annum on the amount ofP515,777.57. Land Bank disagrees with the 12% interest and appeals to the Supreme Court.
1. Whether the 12% interest is justified.
Constitutional Law: Expropriation
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.
However, as regards the costs of suit, Land Bank is exempt. 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 coursebut 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 thePhilippines unless otherwise provided by law.
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

Petition Granted. But Land Bank is exempt from costs of suit.