Land Bank v. Orilla
REITERATIONFacts
The Antecedents: Respondents Spouses Placido and Clara Orilla were owners of a parcel of land. The Department of Agrarian Reform (DAR) initiated compulsory acquisition of a portion of their landholding under Republic Act No. 6657 (Comprehensive Agrarian Reform Law) and offered ₱371,154.99 as compensation based on petitioner Land Bank of the Philippines' (LBP) valuation. Respondents rejected the valuation, and the Provincial DARAB affirmed LBP's valuation. Procedural History: Respondents filed an action for determination of just compensation before the Special Agrarian Court (SAC). The SAC fixed the just compensation at ₱7.00 per square meter, totaling ₱1,479,023.00, and ordered LBP to pay attorney's and contract fees. LBP appealed, while respondents filed a Motion for Execution Pending Appeal. The SAC granted the motion, ordering LBP to deposit the amount and allowing respondents to withdraw it upon posting a bond. LBP's motion for reconsideration was denied. The Court of Appeals (CA) dismissed LBP's petition for certiorari, affirming the SAC's order for execution pending appeal. This Court, in G.R. No. 157206, affirmed the CA's decision. Subsequently, in CA-G.R. CV No. 70071, the CA set aside the SAC's decision on valuation and remanded the case for proper determination of just compensation. The CA noted that if the recomputed value was less than the amount already paid pursuant to the execution pending appeal, the respondents should return the excess. The Petition: LBP filed a petition for review on certiorari assailing the CA's Decision and Resolution, arguing that the trial court's decision, having been annulled and set aside, could no longer be the subject of execution pending appeal.
Issue(s)
Whether the trial court's decision, having been annulled and set aside by the Court of Appeals, can still be the subject of execution pending appeal. Whether the initial offer of compensation by the Land Bank of the Philippines can be released to the respondents pending the final determination of just compensation.
Ruling
The petition is without merit. The Supreme Court affirmed the Decision and Resolution of the Court of Appeals. The Court ordered the Land Bank of the Philippines to release the amount of ₱371,154.99 to respondents, without prejudice to the recomputation of the just compensation for the subject land by the Regional Trial Court.
Ratio Decidendi
On the issue of execution pending appeal of a void judgment: The Supreme Court reiterated the principle that a void judgment or order has no legal and binding effect, force, or efficacy for any purpose and is considered non-existent. Such a judgment cannot be the source of any right nor of any obligation, and all acts performed pursuant to it are without legal effect. Therefore, a void judgment can never be validly executed. The Court clarified that while its previous ruling in G.R. No. 157206 upheld the propriety of the SAC Judge allowing execution pending appeal, it did not finally resolve the propriety of the determination of just compensation itself. The CA's subsequent annulment of the SAC's valuation for lack of sufficient legal basis rendered the SAC's decision void, and consequently, any writ of execution based on it is also void and cannot be properly implemented. The Court noted that the CA's pronouncement regarding the return of excess payment was conditioned on the writ having already been enforced, which appeared not to be the case at the time the CA rendered its decision annulling the valuation. On the release of the initial offer of compensation: The Supreme Court held that the amount of ₱371,154.99, representing the compensation offered by the petitioner for the land taken, can still be properly awarded to respondents. Citing Land Bank of the Philippines v. Court of Appeals, the Court reiterated that the release of the offered compensation to the landowner pending the determination of the final valuation is allowed. Withholding the release of the offered compensation, despite depriving the landowner of the possession and use of their property, would penalize the landowner for simply exercising their right to seek just compensation. This is without prejudice to the outcome of the case remanded to the SAC for recomputation, where any excess paid should be returned by the respondents, or any difference should be paid by the petitioner if a higher valuation is determined.
Main Doctrine
A void judgment, being non-existent in contemplation of law, cannot be the subject of execution pending appeal. However, the initial offer of compensation by the Land Bank of the Philippines may still be released to the landowners pending the final determination of just compensation.