[J]ust compensation in expropriation cases is defined "as the full and fair equivalent of the property taken from its owner by the expropriator.

The Court, in Republic v. Spouses Tomas C. Legaspi and Ruperta V. Esquito,^[16] has defined just compensation as:

x x x [J]ust compensation in expropriation cases is defined "as the full and fair equivalent of the property taken from its owner by the expropriator. The Court repeatedly stressed that the true measure is not the taker's gain but the owner's loss. The word 'just' is used to modify the meaning of the word 'compensation' to convey the idea that the equivalent to be given for the property to be taken shall be real, substantial, full and ample." (Citation omitted)

The determination of just compensation is principally a judicial function.^[17] For guidance of the courts, Section 17 of RA No. 6657 provides:

Sec. 17. Determination of Just Compensation. — In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation.

Relevant also is DAR AO No. 5 which provides for a formula for the valuation of lands covered by voluntary offer to sell or compulsory acquisition, to wit:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

 Where: LV = Land Value
            CNI = Capitalized Net Income
            CS = Comparable Sales
            MV = Market Value per Tax Declaration^[18]

Although ushered by the foregoing standards, courts are not confined to rigorously and faithfully comply with the same. To do so would deprive the courts of their judicial prerogatives and reduce them to the bureaucratic function of inputting data and arriving at the valuation.^[19] The courts may relax the application of the DAR formula, if warranted by the circumstances of the case and provided the RTC explains its deviation from the factors or formula above-mentioned.^[20] Thus, the "justness" of the enumeration of valuation factors in Section 17, the "justness" of using a basic DAR formula, and the "justness" of the components (and their weights) that flow into such formula, are all matters for the courts to decide.^[21]

It is clear that the circumstances of each case would determine as to whether the RTC would deviate from the guidelines set forth; and reasons for the same must be clearly set forth. In the case of Department of Agrarian Reform v. Galle,^[22] this Court refused to strictly apply the formula found in DAR AO No. 5 because to do so would go against the fundamental principle in eminent domain that just compensation shall be determined as of the time of taking.

In this case, the RTC veered away from the guidelines. It based its valuation on the following: (a) valuations of the Agrarian Reforms Operations Center, Region 10 which pegged the price at P1.40 per square meter on coco land and P0.50 on rice land; (b) Cuervo Appraisers, Inc, which based its valuation on the Bank Appraiser of the Rural Bank of Oroquieta City, which valued the subject land at P10.00 per square meter and the Bureau of Internal Revenue, which set the value at P9.00 per square meter; and (c) local real estate brokers, which made a valuation of P7.00 to P8.00 per square meter. After which, the RTC proceeded to set the amount of just compensation to P4.00 per square meter as it was determined to be just, reasonable, and fair.

In setting the valuation at P4.00 per square meter, it bears stressing that the RTC merely made an estimate as these valuations were based in the prevailing prices in 2006, whereas the subject land was taken in 2000.

Moreover, there was neither explanation as to why the RTC opted to deviate from the rules nor stated circumstances which would warrant the same. All the RTC did was to consider the rules and concluded that just compensation should be the value above-stated.

Jurisprudence is replete with cases emphasizing the duty of the RTC to explain the reasons for departing from the formula created by DAR. In the case of Spouses Mercado v. Land Bank of the Philippines, this Court reiterated that if the RTC finds these guidelines inapplicable, it must clearly explain the reasons for deviating therefrom and for using other factors or formula in arriving at the reasonable just compensation for the property expropriated.^[23] So too is the case of Alfonso v. Land Bank of the Philippines,^[24] wherein this Court reminded that a reasoned explanation from the SAC to justify its deviation from the guidelines is indispensable and Land Bank of the Philippines v. Rural Bank of Hermosa (Bataan), Inc.,^[25] which deemed improper the complete disregard of the DAR formula and Section 17 of RA 6657 without stating their inapplicability in the case.

While the RTC, acting as Special Agrarian Courts, exercises judicial prerogative in determining and fixing just compensation, the duty to abide by the rules, especially so when the same are enacted to comply with the objectives of agrarian reform, cannot simply be disregarded. The case of Alfonso illuminates in this wise:

x x x The factors listed under Section 17of RA 6657 and its resulting formulas provide a uniform framework or structure for the computation of just compensation which ensures that the amounts to be paid to affected landowners are not arbitrary, absurd or even contradictory to the objectives of agrarian reform. Until and unless declared invalid in a proper case, the DAR formulas partake of the nature of statutes, which under the 2009 amendment became law itself, and thus have in their favor the presumption of legality, such that courts shall consider, and not disregard, these formulas in the determination of just compensation for properties covered by the CARP. When faced with situations which do not warrant the formula's strict application, courts may, in the exercise of their judicial discretion, relax the formula's application to fit the factual situations before them, subject only to the condition that they clearly explain in their Decision their reasons (as borne by the evidence on record) for the deviation undertaken. x x x^[26]

As the RTC failed to comply with the foregoing pronouncement, the remand of the case is deemed proper. More so, when both parties failed to present satisfactory evidence of the value of the property as of the time of its taking; and that this Court, as we are not a trier of facts, cannot receive new evidence for prompt disposition of the case.