G.R. No. 181912 & 183347 - Separate Opinion

G.R. No. 181912, November 29, 2016,
♦ Decision, Jardeleza, [J]
♦ Separate Concurring Opinion, Sereno, [CJ], Carpio [J],
♦ Dissenting Opinion, Velasco, Jr., [J]
♦ Concurring Opinion, Leonen, [J]

I fully agree with the majority’s view that courts have a legal duty to consider the factors provided in Section 17 of Republic Act (R.A.) No. 6657, as amended. I also agree that deviation therefrom is authorized, provided it is explained and is supported by the evidence on record. I only write this opinion to make a clarification.

To my mind, there should be no conflict between the duty to consider the factors laid down by Section 17, as amended, and the established rule that the determination of just compensation is a judicial function.

R.A. No. 9700 amended Section 17 of R.A. No. 6657 to make the consideration of the factors enumerated therein mandatory. Using the word "shall," the amended provision now reads:

With the amendment, courts are now bound to consider the enumerated factors in the determination of just compensation.1 For reasons to be discussed below, this does not straitjacket them and thereby unduly restrain their power to determine just compensation, which has been established to be exclusively a judicial function.2

Section 17 does not tread on dangerous grounds. All that it requires is the consideration by the courts of the enumerated factors. The provision does not mandate that they use those factors exclusively for the determination of just compensation. Congress even circumscribed the consideration of the factors with the clause, "subject to the final decision of the proper court." They are, at most, guidelines to assist the courts in the determination of just compensation. Therefore, Section 17 does not take away, much less limit, the power of the courts to inquire into what EPZA v. Dulay termed the "justness" of the compensation.3

We should give effect to the legislatively mandated mode of valuation as prescribed in Section 17, following the default rule in the interpretation of statutes:

R.A. No. 6657 was designed to breathe life to the constitutional mandate for land reform5 In particular, the valuation method under Section 17 reflects the wisdom of Congress in prescribing the manner of implementing the constitutional mandate. I see no reason why we should not accord the provision the presumption of constitutionality that it fairly deserves.6 We must consequently avoid an interpretation whereby the constitutional directive for land reform would be rendered ineffective.

Accordingly, I vote to GRANT the Petition and REMAND the case to the Special Agrarian Court for a proper determination of the just compensation.1âwphi1

The application of DAO 11, s. of 1994, as amended by DAO 5, s. of 1998, is not mandatory on Special Agrarian Courts in the determination of just compensation. I submit this Separate Concurring Opinion to clarify further the first paragraph of Section 18 of Republic Act No. 6657 (RA 6657) or the Comprehensive Agrarian Reform Law of 1988.

This provision on valuation of just compensation consists of two parts. The first part refers to the amount of just compensation "as may be agreed upon by the landowner and the DAR and the LBP" while the second part pertains to the amount of just compensation "as may be finally determined by the court." In other words, the amount of just compensation may either be (1) by an agreement among the parties concerned; or (2) by a judicial determination thereof.

In the first case, there must be an agreement on the amount of just compensation between the landowner and the DAR. Such agreement must be in accordance with the criteria under Sections 16 and 17 of RA 6657.1 Section 16 outlines the procedure for acquiring private lands while Section 17 provides for the factors to be considered in determining just compensation. To translate such factors, the DAR devised a formula, which is presently embodied in DAO No. 5.2 The DAR, using the formula in DAO No. 5, will make an initial determination of the value of the land and thereafter offer such amount to the landowner. If the landowner accepts the DAR's offer, he shall be paid the amount of just compensation as computed by the DAR. If the landowner rejects the DAR's offer, he may opt to file an action before the courts to finally determine the proper amount of just compensation.3 Clearly, the DAR cannot mandate the value of the land because Section 18 expressly states that the landowner shall be paid the amount of just compensation "as may be agreed upon" by the parties. In other words, the DAR's valuation of the land is not final and conclusive upon the landowner. Simply put, the DAR's computation of just compensation is not binding on the landowner.

Since the landowner is not bound to accept the DAR's computation of just compensation, with more reason are courts not bound by DAR's valuation of the land. To mandate the courts to adhere to the DAR's valuation, and thus require the courts to impose such valuation on the landowner, is contrary to the first paragraph of Section 18 which states that the DAR's valuation is not binding on the landowner. If the law intended courts to be bound by DAR's valuation, and to impose such valuation on the landowner, then Section 18 should have simply directly stated that the landowner is bound by DAR's valuation. To hold that courts are bound by DAR's valuation makes resort to the courts an empty exercise. To avoid violating Section 18, courts must be given the discretion to accept, modify, or reject the DAR's valuation.

The law itself vests in the Regional Trial Courts, sitting as Special Agrarian Courts (SAC), the original and exclusive jurisdiction over actions for the determination of just compensation. Section 57 of RA 6657 reads:

In Land Bank of the Philippines v. Montalvan,4 the Court reiterated the exclusive jurisdiction of the SAC to determine just compensation, to wit:

It is settled that the determination of just compensation is essentially a judicial function. The judicial determination of just compensation is what the second part of the first paragraph of Section 18 of RA 6657 comprehends, as it states that "The LBP shall compensate the landowner in such amounts x x x as may be finally determined by the court, as the just compensation for the land." In Land Bank of the Philippines v. Escandor,5 the Court held:

Considering that the SACs exercise exclusive jurisdiction over petitions for determination of just compensation, the valuation by the DAR, presented before the agrarian courts, should only be regarded as initial or preliminary. As such, the DAR's computation of just compensation is not binding on the courts. In Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines,6 the Court held:

That the DAR valuation, based on the formula in DAO No. 5, is not controlling on the courts is likewise enunciated in Apo Fruits Corporation v. Court of Appeals,7 to wit:

Suffice it to state that no administrative order can deprive the courts of the power to review with finality the DAR's determination of just compensation in the exercise of what is admittedly a judicial function.8 What the DAR is empowered to do is only to determine in a preliminary manner the amount of just compensation, leaving to the courts the ultimate power to decide this issue.9

Further, to adhere to the formula in DAO No. 5, in every instance, constitutes an undue restriction of the power of the courts to determine just compensation. This is clear from the case of Land Bank of the Philippines v. Heirs of Puyat10which stated:

To repeat, under the first paragraph of Section 18 of RA 6657, the amount of just compensation may be determined by (1) agreement between the landowner and the DAR; or (2) judicial decision. In either case, the computation by the DAR of just compensation, using the formula in DAO No. 5, is merely initial or preliminary. As such, the DAR valuation of just compensation is not binding or mandatory on the landowner or the courts.

Significantly, RA 9700, which took effect on 1 July 2009, amended Section 17 of RA 6657 by adding other factors to be considered and clarifying that:

The clause "a basic formula by the DAR shall be considered, subject to the final decision of the proper court" means that the law requires the courts to consider the DAR formula in determining just compensation, but the courts are not bound by the DAR formula since the determination of just compensation is essentially a judicial function. This amendment recognizes that the DAR adopted a formula under DAO No. 5. However, the amendment also recognizes that any DAR formula is always subject, in the appropriate case, to the final decision of the proper court.

The phrase "subject to the final decision of the proper court" does not appear in the old Section 17. Congress, in amending Section 17 of RA 6657 and adding such phrase, recognizes and, in fact, emphasizes that the final determination of just compensation rests exclusively with the proper court, which is the SAC in this case. In short, while the courts are statutorily required to consider the DAR formula, the courts are definitely not mandated to adopt such formula in determining just compensation. With the amendment of Section 17 of RA 6657, there can no longer be any doubt whatsoever that the DAR valuation of just compensation is not binding or mandatory on the courts.

Accordingly, I vote to GRANT the petition and to REMAND the case to the Special Agrarian Court for proper determination of the just compensation.

The instant case involves Department of Agrarian Reform (DAR) Department Administrative Order No. 05-s.1998 (DAO No.5), which provides for a formula in the computation for just compensation that is due to a landowner. The core issue is whether or not the DAR-crafted formula is mandatory on the Regional Trial Court (R TC), acting as a Special Agrarian Court (SAC). While jurisprudence on the matter is not consistent, the pre-dominant holding has been that the application of the formula is mandatory. However, this dictum should now be revisited, in consonance with the postulate that the determination of just compensation is basically a judicial function.

The case started when the government, through the DAR, sought to expropriate two (2) parcels of land in San Juan, Sorsogon City under RA 6657,1 otherwise known as the Comprehensive Agrarian Reform Law (CARL). The land was originally registered in the name of Cynthia Palomar (Palomar) under Transfer Certificate of Title (TCT) Nos. T-21136 and T-23180 consisting of 1.6350 and 26.2284 hectares, respectively.

Palomar rejected the initial valuation of PhP36,066.27 and PhP792,869.06, respectively, made by the DAR and the Land Bank of the Philippines (LBP) in accordance with Sec. 17 of RA 6657 and DAO 11, s. of 1994, as amended by DAO No. 5. She appealed the valuations thus made to the Provincial Adjudication Board of the DAR in Sorsogon (PARAD), docketed as Land Valuation Case No. 68-01 for TCT No. T-21136 and Land Valuation Case No. 70-01 for TCT No. T-23180. On April 16, 2001, Palomar sold the subject lots to petitioner Ramon Alfonso (Alfonso).

In separate decisions both dated June 20, 2002,2 the P ARAD made a valuation of the parcels of land of PhP103,955.66 and PhP2,314,115.73, respectively, applying this formula: Land Value = (Capitalized Net Income multiplied by 0.9) plus (Market Value per tax declaration multiplied by 0.1).

From the PARAD decisions, both parties initiated complaints with the RTC of Sorsogon City, Branch 52, SAC, the first docketed as Civil Case No. 2002-7090 filed by Palomar and Alfonso, and the other, Civil Case No. 2002-7073, filed by the LBP.

For their part, Palomar and Alfonso claim that the PARAD valuation did not take into account the following: (a) actual number of trees planted therein, i.e., coconut and other fruit and non-fruit bearing trees; (b) other improvements that were introduced on the properties; and (c) their proximity to the commercial centers and establishments, roads and other value enhancing structures and facilities.

The LBP, on the other hand, insisted on the correctness of its valuation in light of the provisions of DAO No. 11, s. of 1994, as amended by DAO No. 5, s. of 1998.

The court-appointed commissioner tasked to render a report on the just compensation for the covered parcels used both a Market Data Approach (MDA) and Capitalized Income Approach (CIA) in determining the correct value for the subject lands. In the MDA, the valuation is primarily based on sales and listing of comparable properties in the neighborhood adjusted for time of sale, locations and general characteristics of the properties. The CIA, on the other hand, is based on the potential net benefit that may be derived from the ownership of the property.

Thereafter, the SAC rendered a consolidated decision dated May 13, 20053 fixing the valuation of the properties at PhP442,830.00 for the land covered by TCT No. T-21136 and PhP5,650,680.00 for the lot covered by TCT No. T-23180. In arriving at such valuation, the SAC, stressing that the matter of valuation is a judicial function, wrote:4

Therefrom, the LBP and the DAR appealed to the Court of Appeals (CA), which, by Decision dated July 19, 20075 found for the appellants, thus:6

The issue posed in the instant petition is whether the SAC erred in assigning to the expropriated lots values under a formula not strictly following that set forth in DAO No. 5. The ponencia would deny the petition and affirm the appealed ruling of the CA, remanding the case to the SAC for the proper determination of just compensation in accordance with the formula provided by DAO No. 5.

The jurisdiction of the SACs to
determine just compensation is
original and exclusive under Sec. 57
of the CARL7

The jurisdiction bestowed by Congress to the SACs to entertain petitions for the determination of just compensation for property taken pursuant to the CARL is characterized as "original and exclusive." This could not be any clearer from the language of Sec. 57 of the law, to wit:

The fundamental tenet is that jurisdiction can only be granted through legislative enactments,8 and once conferred cannot be diminished by the executive branch. It can neither be expanded nor restricted by executive issuances in the guise of law enforcement. Thus, although the DAR has the authority to promulgate its own rules of procedure,9 it cannot modify the "original and exclusive jurisdiction" to settle the issue of just compensation accorded the SACs. Stated in the alternative, the DAR is precluded from vesting upon itself the power to determine the amount of just compensation a landowner is entitled to, notwithstanding the quasi-judicial powers granted the DAR under Sec. 50 of the CARL, to wit:

We clarified in LBP v. Belista10 that further excepted from the coverage of the DAR's jurisdiction, aside from those specifically mentioned in Sec. 50, are petitions for the determination of just compensation to landowners and the prosecution of all criminal offenses under RA 6657, which are within the jurisdiction of the SACs pursuant to Sec. 57 of the law. As held:

Corollary to the above-quoted pronouncement, the rule-making power of the DAR cannot then extend to the determination of just compensation by the SACs. The DAR cannot promulgate rules to cover matters outside of its jurisdiction. At best, it can only serve to govern the internal workings of the administrative agency, but definitely cannot control the court proceedings before the SACs.

The original and exclusive jurisdiction of the SACs to determine just compensation is further strengthened by the fact that even without completing the process outlined in Sec. 16 of the CARL, the landowner affected by the taking could immediately seek court action to determine the amount he is entitled to.

In effecting the CARP, the government, through the LBP, makes an initial valuation of the property being taken, which constitutes the initial government offer. Should the landowner reject this offer or otherwise fail to reply, a summary proceeding would ensue. In this proceeding conducted by the DAR, the parties involved, i.e., the landowner and the LBP, submit evidence to justify their claim of the agricultural land's proper valuation. The DAR has thirty (30) days from the date the matter is submitted for decision within which to render a decision. This framework is outlined under Sec. 16 of the CARP.11 Its final paragraph reads: "Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. "12

Thus, from the DAR ruling, the landowner has the option of whether or not to accept or reject the recalibrated offer. Should the landowner refuse the offer still, he or she may file the necessary petition for determination of just compensation with the R TC acting as a SAC that has jurisdiction over the property being taken. But as earlier discussed, the administrative procedure before the DAR can be bypassed by the landowner by invoking the original and exclusive jurisdiction of the SACs. The Court has applied this holding in numerous cases summarized in Heirs of Vidad v. LBP, to wit:[[l3]]

In the cited cases, the Court invariably upheld the original and exclusive jurisdiction of the SACs over petitions for the determination of just compensation, notwithstanding the seeming failure to exhaust administrative remedies before the DAR.18

More recently, in LBP v. Montalvan,19 therein petitioner argued that the landowner's filing with the SAC of a separate Complaint for the determination of just compensation was premature because the revaluation proceedings in the DAR were still pending. The Court ruled, however, that the pendency of the DAR proceedings could not have ousted the SAC from its original and exclusive jurisdiction over the petition for judicial determination of just compensation since "the function of fixing the award of just compensation is properly lodged with the trial court and is not an administrative undertaking. "20

Thus, even though the landowner was not able to undergo the complete administrative process before the DAR pursuant to Sec. 16 of the CARL, he is not precluded from immediately and directly filing a complaint for just compensation before the SAC. More than being the prevailing interpretation of Sec. 57 of the CARL, this is also in line with the oft-cited ruling that the valuation of property or determination of just compensation in eminent domain proceedings is essentially a judicial function which is vested with the courts and not with administrative agencies.21

The administrative proceeding before
the DAR is merely preliminary and
cannot prevail over the judicial
determination of just compensation22

In contradistinction with the original and exclusive jurisdiction of the SACs under Sec. 57 of the CARL, the valuation process undertaken by DAR under Sec. 16 of the same law is merely preliminary in character. We said as much in LBP v. Listana:23

The preliminary valuation conducted by the DAR serves very limited purposes, the first of which is the recalibration of the offer to the landowner. The proceeding before the DAR is not for making a binding determination of rights between the parties. Rather, it must be understood as a venue for negotiations between the government and the landowner, allowing the latter to present his counter-offer to the proposed sale, and providing the parties involved with the opportunity to agree on the amount of just compensation.

The other more significant purpose of the valuation is compliance with the deposit requirement to be granted entry into the property. Significantly, the amount deposited should not be confused with the just compensation to be received by the landowner. It merely serves as an assurance to the landowner that he will receive compensation since the deposit, in a way, can be construed as earnest money for the involuntary sale. It is a form of security that payment of just compensation would actually be made thereafter upon court judgment.25 As explained during the Constitutional Commission deliberations:26

A deposit is likewise required for the government to gain entry in properties expropriated under Rule 67 of the Rules of Court. Sec. 2 of the rule provides that the amount equivalent to the assessed value of the property is deposited, and only from then would the right of the government take possession of the property would commence. The amount deposited, however, is merely an advance to the value of just compensation, which is yet to be determined by the trial court at the second stage of the expropriation proceeding.27 As such, the amount deposited is not necessarily the amount of just compensation that the law requires. In the exercise of their judicial functions, the courts still have the final say on what the amount of just compensation will be.28

The same holds true for the taking of private property under RA 6657. In these instances, the government proceeds to take possession of the property subject of the taking, despite the pendency of the just compensation case before the SACs, upon depositing the value of the property as computed by the DAR. Verily, the administrative proceeding before the SACs is a precondition to possess the property but is not necessarily the just compensation contemplated by the Constitution.

To further highlight the preliminary character of the DAR proceeding, it is noteworthy that DAO No. 5 was not the original issuance on the matter of valuation of expropriated land under RA 6657. The administrative order traces its roots to DAO 6, s. of 1989, or the Rules and Procedures on Land Valuation and Just Compensation. DAO 6 relevantly states in its Statement of Policy portion that:

Although DAO 6 had already been repealed, it bears to reiterate that the land valuation formula presented by the DAR was never intended to control the determination of just compensation by the courts. Recapitulating our pronouncement in Republic v. Court of Appeals:29 "[w ]hat adjudicators are empowered to do is only to determine in a preliminary manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to decide this question. " The determination of just compensation is, therefore, as it were, a judicial function that cannot be usurped by any other branch of government. And insofar as agrarian reform cases are concerned, the original and exclusive jurisdiction to determine of just compensation is properly lodged before the SACs, not with the DAR.

There should be no fixed formula in
computing for just compensation
under the CARL, just as in other
forms of expropriation

As a guide to the SACs, Sec. 17 of the CARL enumerates the factors to consider in approximating the amount of just compensation for private agricultural property taken by the government. It reads:

It is conceded that the SACs are bound to consider the above-enumerated factors embodied in Sec. 17 in determining just compensation.1âwphi1 Nevertheless, it would be a stretch, if not downright erroneous, to claim that its formulaic translation by the DAR is just as binding on the SACs.

To elucidate, ''just compensation" is a constitutional limitation to all modalities of the government's exercise of its right of eminent domain, not just in agrarian reform cases.30 Despite making numerous appearances in various provisions of the fundamental law, however, it was the understanding among the members of the Constitutional Commission that the concept of just compensation would, nevertheless, bear the same meaning all throughout the document, and to apply the same rules for all types of expropriation, whether commenced under the CARL or not.31 This intent of the framers is evident from the records of, the deliberations specifically bearing on agrarian reform:32

Clearly then, the framers intended that the concept of just compensation in the country's agrarian reform programs be the same as those in other cases of eminent domain. No special definition for "just compensation" for properties to be expropriated under the country's land reform program was reached by the Commission.33 As settled by jurisprudence, the term ''just compensation" refers to the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain, but the owner's loss. The word "just" is used to qualify the meaning of the word "compensation" and to convey thereby the idea that the amount to be tendered for the property to be taken shall be real, substantial, full and ample.34

There is then neither rhyme nor reason to treat agrarian reform cases differently insofar as the determination of just compensation is concerned. In all instances, the measure is not the taker's gain, but the owner's loss.35 The amount of just compensation does not depend on the purpose of expropriation, for compensation should be ''just" irrespective of the nobility or loftiness of the public aim sought to be achieved. And as in other cases of eminent domain, "any valuation for just compensation laid down in the statutes may serve only as a guiding principle or one of the factors in determining just compensation but it may not substitute the court's own judgment as to what amount should be awarded and how to arrive at such amount. "36 In all cases of eminent domain proceedings, there should be no mandatory formula for the courts to apply in determining the amount of just compensation to be paid.

To claim that the courts should apply the DAR formula and should rely on the administrative agency tasked to implement the CARL is to undermine the judicial power of the courts. It is incorrect to claim that the SACs do not have the same expertise the DAR has when it comes to calculating just compensation for agricultural lands. For if an agricultural land is expropriated under Rule 67 of the Rules of Court instead of the CARL, the courts could still compute the just compensation the landowner is entitled to and need not refer the issue to the DAR.

Consider a parcel of agricultural land subjected to CARL expropriated instead under Rule 67 of the Rules of Court. In either situation, the landowner will be entitled to "just compensation" as understood in its jurisprudentially-settled meaning. However, let us assume that the trial court will apply the DAR formula in the former, while it would exercise a wider latitude of discretion in the latter. Thus, for the same parcel of agricultural land, the compensation fixed by the trial court under Rule 67 may be totally far off from what would have been considered "just" using the DAR formula. Since it is allowed to adopt its own valuation method, not constrained to make use of the weighted averages accorded to the various factors for consideration, the discrepancy between two valuations could prove to be significant but this does not necessarily make the valuation by the court, without applying the DAR formula, "unjust."

There are limitless approaches towards approximating what would constitute just compensation and there are endless criteria for determining what is ''just." As the DAR itself emphatically declares:. "Land valuation is not an exact science but an exercise fraught with inexact estimates requiring integrity, conscientiousness and prudence on the part of those responsible for it. What is important ultimately is that the land value approximates, as closely as possible, what is broadly considered to be just. "37 Thus, while Sec. 17 enumerates the factors to consider in determining just compensation, no mandatory fixed weights should be accorded to them. It is the prerogative of the courts to assess the significance of these factors in each individual case, and in the process, assign them weights in determining just compensation. It lies within the discretion of the SACs to determine which valuation method to select.

To recall, the concept of just compensation is uniform in all forms of government taking. On this point, it must be borne in mind that Rule 67 of the Rules of Court on Eminent Domain never prescribed any formula for the valuation of taken property. This undeniable fact only goes to show that the trial courts, with the assistance of its appointed commissioners,38 are competent enough to ascertain the amount of just compensation that the landowner is entitled to without rigidly applying any set formula. There is then no reason to mandatorily apply a valuation formula for one exercise of eminent domain, but not on the other forms.

Associate Justice Arturo D. Brion is correct in pointing out that the appointment of commissioners is not mandatory on the SACs.1âwphi1 Pertinently, Sec. 58 of the CARL provides:

This could, however, only serve to strengthen the position that the SACs are not bound to apply DAO No. 5. Notwithstanding the prior ruling of the DAR, what is being resolved by the SAC in the exercise of its original and exclusive jurisdiction is a de novo complaint. Therefore, the SACs may, in the exercise of its discretion, disregard the valuations by the DAR and proceed with its own examination, investigation, and valuation of the subject property through its appointed commissioners. Plainly, the SACs are not barred from disregarding the prior findings of the DAR and substituting their own valuation in its stead.

Nowhere in the law can it be seen that the court-appointed commissioners are precluded from utilizing their own valuation methods. All RA 6657 requires is that the factors in Sec. 17 be considered, but not in any specific way. This was the teaching in the landmark case of Export Processing Zone Authority v. Dulay (Dulay)39 wherein the Court held that:

Dulay involved an expropriation case for the establishment of an export processing zone. There, the Court declared provisions of Presidential Decree Nos. 76, 464, 794, and 1533 as unconstitutional for encroaching on the prerogative of the judiciary to determine the amount of just compensation the affected landowners were entitled to. The Court further held that, at the most, the valuation in the decrees may only serve as guiding principles or factors in determining just compensation, but it may not substitute the court's own judgment as to what amount should be awarded and how to arrive at such amount.40

The seminal case of Dulay paved the way for similar Court pronouncements in other expropriation proceedings.1âwphi1 Thus, in National Power Corporation v. Zabala,41 the Court refused to apply Sec. 3-A of Republic Act No. 6395, as amended,42 in determining the amount of just compensation that the landowner therein was entitled to. As held:

This holding in Zabala is not novel and has in fact been repeatedly upheld by the Court in the catena of cases that preceded it. As discussed in National Power Corporation v. Bagui:43

The very same edict in Bagui was reiterated in the cases of National Power Corporation v. Tuazon,44 National Power Corporation v. Saludares,45 and Republic v. Lubinao,46 and remains to be the controlling doctrine in expropriation cases, including those concerning agrarian reform.

In contrast, the Court in LBP v. Gonzalez47 echoed the ruling for the SAC to adhere to the formula provided in DAO No. 5, explaining:

The cases of LBP v. Honeycomb Farms Corporation,48 LBP v. Celada49 and LBP v. Lim50 were of the same tenor.

In light of the case dispositions in Honeycomb Farms, Celada and Lim, the question is begged: what discretion is left to the courts in determining just compensation in agrarian cases given the formula provided in DAO No. 5? Apparently, none. Our rulings therein have veritably rendered hollow and ineffective the maxim that the determination of just compensation is a judicial function. For DAO No. 5 has effectively relegated the SAC to perform the mechanical duty of plugging in the different variables in the formula.

Precisely, this is an undue restriction on the power of the SAC to judicially determine just compensation. For this reason, the formula provided under DAO No. 5 should no longer be made mandatory on, or tie the hands of the SACs in determining just compensation. The courts of justice cannot be stripped of their authority to review with finality the said determination in the exercise of what is admittedly a judicial function, consistent with the Court's roles as the guardian of the fundamental rights guaranteed by the due process and equal protection clauses, and as the final arbiter over transgressions committed against constitutional rights.51 Strict adherence to the formula provided in DAO No. 5 must now be abandoned.

Only upon the enactment of RA 9 700
were the SA Cs mandated to
"consider" the DAR formula

A cursory examination of Sec. 17 of RA 6657, as amended by RA 9700, easily leads to the inescapable conclusion that the law never intended that the DAR shall formulate an inflexible norm in determining the value of agricultural lands for purposes of just compensation, one that is binding on courts. A comparison of the former and current versions of Sec. 17 evinces that it was only upon the enactment of RA 970052 that the courts were mandated by law to "consider" the DAR formula in determining just compensation. There was no such requirement under RA 6657. Prior to RA 9700's enactment, there was then even lesser statutory basis, if not none at all, for the mandatory imposition of the DAR formula.

Sec. 7 of RA 9700, which was approved on August 7, 2009, amended Sec. 17 of the CARL to read:

The non-retroactivity of RA 9-700' s amendment to Sec. 17, and its inapplicability in the current case, is expressed under Sec. 5 thereof, which provides:

In the consolidated cases of DAR v. Beriña and LBP v. Beriña,53 the Court held that for pending just compensation cases during RA 9700's enactment, the evidence of land valuation must conform to Section 17 of RA 6657 prior to its amendment by RA 9700. The Court categorically stated therein that the law should not be retroactively applied to pending claims, and held that:

The amendments introduced RA 9700, which was enacted after the taking of the subject properties was commenced, cannot then be invoked in this case. At the time of taking, there was no statutory mandate for the SAC's to consider the DAR formula in determining the proper amount of just compensation.

It was only upon the effectivity of RA 9700 were the SACs required to take into consideration the basic formula of the DAR. But despite such requirement, it must still be borne in mind that the language of the law does not even treat the formula and its resultant valuations as binding on the SACs; for though they shall be "considered," the valuations are still subject to the final decision of the proper court. It is merely an additional variable to consider, but not a controlling formula for the courts to apply.

During the Bicameral Conference Committee deliberations on RA 9700, Congress even confirmed that the valuation process before the DAR is only preliminary, and, more significantly, that the SACs can adjust the preliminary valuation based on the best discretion of the courts. As discussed: 54

The clear intention of the lawmakers was then to grant the courts discretion to determine for itself the final amount of just compensation, taking into account the factors enumerated under Sec. 17. As the lawmakers admitted, the 70% zonal value to be included in the valuation is actually an arbitrary figure, which is not a cause for alarm since, in any case, the courts can modify the valuation afterwards, consistent with their best discretion. Evidently, the phrase "subject to the final determination of the proper court" is a license for the SACs to adjust the valuation by the DAR as they deem fit.

There would always be extraneous circumstances for the courts to take into account, which were never expressed by the DAR in mathematical terms. This was readily admitted by Congress when RA 9700 expressly included the subject property's zonal value in the enumeration under Sec. 17 of RA 6657, an apparent omission in RA 6657. Even the "social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property" as well as the "nonpayment of taxes or loans secured from any government financing institution on the said land" were never given their formulaic equivalents in DAO No. 5. The phrase only appears after the DAR' s mandate to translate the other factors into a basic formula. If the SAC would then opt to include these factors and even those unaccounted for under Sec. 17, then they may deviate from the formula upon reasoned explanation and as supported by evidence on record, as suggested by the ponencia.

A direct attack on the validity of
DAO No. 5 is not necessary to
reverse the Court's doctrine

Associate Justices Arturo D. Brion and Francis H. Jardeleza highlight that the case at bar is one for just compensation, and that none of the parties is challenging the constitutionality of Sec. 17 of RA 6657 nor of DAO No. 5. They then argue that it would be premature for the Court to resolve the constitutional questions since they are not the lis mota of the case at hand. To pursue the line of thought advanced, according to them, would be premature, and would deprive the State, through the OSG, of the right to defend the constitutionality of Sec. 17 of RA 6657 and DAR No.5.

It is conceded that the Court herein is not faced with questions on the constitutionality or validity of administrative issuances. What is merely being called for here is a revisit of existing doctrines, more specifically the mandatory application of the DAR formula by the SACs.

The Court is not being asked to declare DAO No. 5 as null and void. Rather, it is the postulation that DAO No. 5 should not be made mandatory on the courts. The formula is, as it remains to be, valid, but its application ought to be limited to making an initial government offer to the landowner and recalibrating the same thereafter as per Sec. 16 of the CARL. The Court cannot interfere with the DAR's policy decision to adopt the direct capitalization method of the market value in determining just compensation in the same way that the DAR cannot likewise prevent the courts from adopting its own method of valuation.

All told, there is no need to declare either Sec. 17 of the CARL or DAO No. 5 as unconstitutional. To emphasize, what is being revisited here is the Court's prior holdings in Honeycomb, Celada, Lim, and LBP v. Yatco55 that the DAR formula is mandatory on the Courts. As explained, it is not the intention of CARL that the DAR shall peremptorily determine just compensation or set guidelines and formula for the SAC to follow in determining just compensation. RA 6657 merely authorizes the DAR to make an initial valuation of the subject land based on Sec. 17 of the law for purposes of making an offer to the landowner unless accepted by the landowner and other stakeholders. The determination made by DAR is only preliminary, meaning courts of justice will still have the right to review with finality the said determination in the exercise of what admittedly is a judicial function, without being straitjacketed by the DAR formula. Otherwise, the SACs will be relegated to an appellate court, in direct conflict with the express mandate of Sec. 57 of RA 6657 that grants them original and exclusive jurisdiction over the just compensation of lots covered by agrarian reform.

Applying the foregoing in the case at bar, the CA is, therefore, incorrect in requiring the SAC to observe and comply with the procedure provided in DAO No. 5 and the guidelines therein.

The determination of just compensation is, as it always has been, a judicial function. Ergo, if the parties to the expropriation do not agree on the amount of just compensation, it shall be subject to the final determination of the courts as provided under Sec. 18 of RA 6657:

It is not mandatory but discretionary on the SAC to apply the DAR formula in determining the amount of just compensation. While the SAC shall consider applying the DAR-crafted formula, it may, nevertheless, disregard the same with reasons and proceed with its own determination of just compensation and make use of any accepted valuation method, a variation of the DAR formula, or a combination thereof in assigning weights to the factors enumerated under Sec. 17 of the CARL.

The SACs only became legally bound to apply the DAR formula after RA 9700 took effect on August 7, 2009. This does not, however, diminish the discretionary power of the courts because deviation from the strict application of the DAR basic formula is still allowed upon justifiable grounds and based on evidence on record. Sec. 17, as amended by RA 9700, is clear that the determination of just compensation shall be "subject to the final decision of the proper court," referring to the SACs.

Furthermore, the DAR basic formula does not capture all the factors for consideration in determining just compensation under Sec. 17 of the CARL. Guilty of reiteration, the pertinent provision reads:

"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, " having been placed after the DAR mandate to translate the earlier enumerated factors into a basic formula, are then excluded in the DAR valuation method. Thus, the SACs may deviate from the DAR formula in order to take these additional factors into account.

In view of the foregoing disquisitions, the doctrine echoed in Honeycomb, Celada, Lim, and Yatco requiring the mandatory application of the DAR formula must be abandoned.

I, therefore, vote to GRANT the petition. The July 19, 2007 Decision and the March 4, 2008 Resolution of the Court of Appeals in CA-G.R. SP Nos. 90615 and 90643, as well as the May 13, 2005 Decision of the Regional Trial Court, Branch 52 in Sorsogon City, acting as a Special Agrarian Court, in Civil Case Nos. 2002-7090 and 2002-7073, must be SET ASIDE, and the consolidated cases REMANDED to the Regional Trial Court, Branch 52 in Sorsogon City for the proper determination of just compensation.

The Court should have further held that, for the guidance of the bench and bar, the following guidelines for determining just compensation in agrarian reform cases must be observed:

In my view, petitioner Nicolas S. Matudan (Nicolas) sufficiently proved that respondent Marilyn B. Matudan (Marilyn) is psychologically incapacitated to comply with her essential marital obligations to him. To deny his Petition is a cruel interpretation of the provisions of existing law.

I disagree that the testimony of the parties' daughter Maricel was not "of help"2 in this case. Marilyn left the conjugal home in 1985 when her children were still minors. She never kept in touch with her family. When her children needed her most, Marilyn failed to keep them in her company, to love and support them, all of which are essential obligations under the law. The Petition for Review on Certiorari must be granted.

Nicolas' evidence consisted mainly of his testimony and that of their daughter, Marice!. This the ponencia found insufficient because Marilyn did not participate in the proceedings. Further, the ponencia found Dr. Nedy L. Tayag's (Dr. Tayag) psychological evaluation deficient because she diagnosed Marilyn with having a narcissistic personality based on the sole account of Nicolas.3

A psychological evaluation should not be discounted if based on sources other than the patient. In psychiatry, it is accepted practice to base a person's psychiatric history on collateral information. Ideally, the psychiatric history should "be based [on] the patient's own words from his or her point on view,"4 the psychiatric history being a "record of [a] patient's life[.]"5 However, if the patient is not available, as in this case, information from other sources may be utilized.

Dr. Tayag found that Marilyn was suffering from Narcissistic Personality Disorder with Antisocial Traits. The illness is marked by "negativistic attitude, passive resistance, [lack of] ability to assert [one's] opinions, and ... difficulty expressing [one's] feelings."6 In its January 31, 2012 Decision, the Court of Appeals stated:

Dr. Tayag's expert testimony is consistent with the undisputed fact that Marilyn left the conjugal home and has not contacted her family since 1985. Thirty-one years of no contact with loved ones, to my mind, shows a grave and incurable illness, a psychological incapacity warranting the dissolution of Marilyn's marriage with Nicolas.

Apart from failing to cohabit with her husband, Marilyn left while her children were still minors. Marilyn failed to comply with her essential obligations under the Family Code:

The totality of evidence presented here is more than sufficient to prove Marilyn's psychological incapacity. Nicolas and Marilyn's marriage is void under Article 368 of the Family Code.

Santos v. Court of Appeals9and Republic v. Court of Appeals and Molina10outline the history of Article 36 of the Family Code. Santos recounts how the Family Code Revision Committee deliberately refused to define the term "psychological incapacity" "to allow some resiliency in [the] application" 11 of the provision. No examples of psychological incapacity were given in the law so as not to "limit the applicability of the provision under the principle of ejusdem generis."12

Article 36 of the Family Code was taken from Canon 109513 of the New Code of Canon Law of the Catholic Church.14 Citing the work of a former judge of the Metropolitan Marriage Tribunal of the Catholic Archdiocese of Manila, this Court in Santos stated that psychological incapacity "must be characterized by (a) gravity, (b) juridical antecedence, and (c) incurability." 15

Molina is known for the eight (8) guidelines in interpreting and applying Article 36 of the Family Code:

Contrary to the purported fluidity of the meaning of "psychological incapacity," Santos and Molina provided guidelines comparable to a "strait-jacket" 17 into which the facts of psychological incapacity cases are forced to fit. This Court observed in Ngo-Te v. Yu-Te: 18

The latest case where this Court voided the marriage due to psychological incapacity is Kalaw v. Fernandez,20which was decided on reconsideration in 2015. In Kalaw:

Ka/aw is only the fifth22 case since Ngo-Te's promulgation in 2009 where the Court voided the parties' marriage due to psychological incapacity. Again, this reflects the State's interpretation of its constitutional mandate to protect marriages, the foundation of the family,23 by contesting all Article 36 petitions until they reach this Court.24

The effect of applying the rigid Article 36 guidelines does not negate the compassion that some of the Members of this Court may have for the parties. Still, it is time that this Court operate within the sphere of reality. The law is an instrument to provide succor. It is not a burden that unreasonably interferes with individual choices of intimate arrangements.

The choice to stay in or leave a marriage is not for this Court, or the State, to make. The choice is given to the partners, with the Constitution providing that "[t]he right of spouses to found a family in accordance with their religious convictions and demands of responsible parenthood[.]"25 Counterintuitively, the State protects marriages if it allows those found to have psychological illnesses that render them incapable of complying with their marital obligations to leave the marriage.26 To force partners to stay in a loveless marriage, or a spouseless marriage as in this case, only erodes the foundation of the family.

The Family Code Revision Committee originally intended a provision on absolute or no-fault divorce.27 Instead, the Committee drafted Article 36 of the Family Code, which it derived from Canon Law so as not to offend the Catholic religion to which the majority of Filipinos belong. 28

It is strange that in drafting Article 36, the Family Code Revision Committee had to consider the sensibilities of a particular religion. None of our laws should be based on any religious law, doctrine, or teaching; otherwise, the separation of church and State will be violated. 29

We had absolute divorce laws in the past. Act No. 2710, 30 enacted in 1917, allowed the filing of a petition for divorce on the ground of adultery on the part of the wife, or concubinage on the part of the husband.31

During the Japanese occupation, Executive Order No. 141 32 provided for 11 grounds for divorce, including "intentional or unjustified desertion continuously for at least one year prior to the filing of a [petition] for divorce" and "slander by deed or gross insult by one spouse against the other to such an extent as to make further living impracticable."33

After the Japanese left, the laws enacted during the Japanese occupation were declared void.34 Act No. 2710 again took effect until the Civil Code's enactment in 1950. Since then, absolute divorce has been prohibited in our jurisdiction.

Laws on absolute divorce allegedly violate the Constitution, specifically, on the Filipino family being the foundation of the nation35 and the inviolability of marriage.36 I do not agree.

The Constitution describes the family as "the basic autonomous social institution."37 To my mind, the Constitution protects the solidarity of the family regardless of its structure. Parties should not be forced to stay in unhappy or otherwise broken marriages in the guise of protecting the family. This avoids the reality that people fall out of love. There is always the possibility that human love is not forever.

The Philippines remains to be the only country in the world with no absolute divorce law available to its citizens regardless of religion. 38 Our country needs a law that recognizes the validity of marriage at the time of its celebration but nonetheless allows parties to dissociate without destroying the human dignity39 of their former partners by pathologizing them with a psychological disorder.

There is no marriage to protect in this case. Whatever possibility to fix the marriage is obviously absent or, at best, improbable. To deny the Petition of Nicolas is to require him to be condemned to a world that is not his. It is to ensure that he will live a life without the joy that marriage truly brings. It is to treat him as a ward.

To deny the Petition of Nicolas is, thus, pure and simple cruelty. ACCORDINGLY, I vote to GRANT the Petition.