FACTS:

Respondents are among the eight children of the late Sps. Gacias, whose riceland and other agricultural lands were placed under the government’s Operation Land Transfer (OLT) Program, pursuant to PD 27 (Tenants Emancipation Decree, as amended).
Prior to the effectivity of PD 27, Sps. Gacias executed individual deeds of sale in favor of their children, and to respondent Meden.
The Gacias Heirs filed a petition for retention of the portions conveyed to them which was favorably granted by the Regional Director of DAR, Region V, except for Meden’s portion.
On appeal, the DAR Secretary upheld the emancipation patents (EPs)/certificates of land transfer (CLTs) issued in the interim in favor of the farmers-beneficiaries thereon. The DAR Secretary ruled that the conveyances made by Sps. Gacias to their children were ineffectual.
The DAR had initially valued the 8-ha. portion of the riceland at ₱77,000.00.
Respondents filed a Complaint for Determination of Just Compensation before the RTC, averring that the initial DAR valuation was unconscionably low, considering that every ha. of riceland has an average produce of 120 sacks of palay every harvest season.
The RTC, in its Decision rejected the DAR valuation and fixed the just compensation of the subject portion at 735,562.05.
Respondents, the DAR, and the LBP filed separate motions for reconsideration which were, however, denied.
Dissatisfied, the parties elevated the matter before the CA.
In a Decision, the CA affirmed the RTC Decision with the modification imposing legal interest at the rate of 12% p.a. on the compensation award upon its finality until full payment.
The MRs filed by the DAR and the LBP were also denied.

ISSUE:

How is just compensation determined?

RULING:

The procedure for the determination of just compensation under RA 6657 commences with the LBP determining the value of the lands under the land reform program.
Using the LBP’s valuation, the DAR makes an offer to the landowner through a notice of coverage and acquisition. If the landowner accepts the offer, the LBP shall pay him the purchase price of the land after he executes and delivers a deed of transfer and surrenders the certificate of title in favor of the government.
In case the landowner rejects the offer, the DAR adjudicator conducts summary administrative proceedings to determine the compensation for the land. A party who disagrees with the decision of the DAR adjudicator may bring the matter to the RTC designated as a Special Agrarian Court (SAC) for final determination of just compensation.
In the present case, the LBP avers that the DAR has not forwarded to it the corresponding claim folder which is purportedly a mandatory requirement in order that the payment for the acquired lands may be disbursed.
It cannot be denied that the subject portion had already been expropriated considering the issuance of EPs and/or CLTs to some of the tenants-beneficiaries, thereby dispossessing the Gacias Heirs of their property without just compensation.
Certainly, the Gacias Heirs’ entitlement to just compensation for the taking of their property cannot be disregarded.
Verily, it is the RTC, sitting as a SAC, that should make the final determination of just Compensation and which has the final say on what the amount of just compensation will be pursuant to the well-settled rule that the determination of just compensation is a judicial function.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. For purposes of determining just compensation, the fair market value of an expropriated property is determined by its character and its price at the time of taking, or the time when the landowner was deprived of the use and benefit of his property, such as when title is transferred in the name of the Republic of the Philippines.