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394 Phil. 365


[ G.R. No. 137431, September 07, 2000 ]




The Comprehensive Agrarian Reform Law (RA 6657) provides that just compensation to landowners shall be paid in cash and bonds. Hence, a trial court decision directing the payment of such compensation "in the manner provided by R.A. 6657" is not illegally amended but is merely clarified by an order, issued during the execution proceedings, that such amount shall be paid in cash and bonds.

The Case

Before the Court is a Petition for Review on Certiorari of the December 8, 1998 Decision[1]  and the February 2, 1999 Resolution[2]  of the Court of Appeals (CA)[3]  in CA-GR SP No. 48517, which had respectively dismissed the Petition for Certiorari and Mandamus, filed by petitioner, and denied reconsideration.

The decretal part of the assailed Decision reads:
"WHEREFORE, the petition is DISMISSED. The Order of April 24, 1998 is AFFIRMED."[4]
The Facts

The antecedents of the case are adequately summarized in the assailed Decision, as follows:
"It appears that petitioner Edgardo Santos is the plaintiff in Agrarian Case No. RTC 94-3206 for the determination of just compensation regarding properties which were taken by DAR under P.D. No. 27 in 1972. On August 12, 1997, the Regional Trial Court, sitting as an Agrarian Court rendered judgment, the dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered (1) fixing the amount of P49,241,876.00 to be the just compensation for the irrigated and unirrigated ricelands with areas of 36.4152 and 40.7874 hectares, respectively, and situated at Pinit, Ocampo, Camarines Sur which are portions of the agricultural lands covered by Transfer Certificates of Title Nos. 2883 and 2884 in the name of the [p]laintiff, and which were taken by the government pursuant to Land Reform Program as provided in Presidential Decree No. 27; and (2) ordering Defendant Land Bank of the Philippines to pay [p]laintiff the amount of FORTY-FIVE MILLION SIX HUNDRED NINE-EIGHT THOUSAND EIGHT HUNDRED FIVE AND 34/100 (P45,698,805.34) PESOS, Philippine [c]urrency, in the manner provided by R.A. 6657, by way of full payment of the said just compensation. No pronouncement as to costs."
"A preliminary valuation in the amount of P3,543,070.66 had in fact been previously released by the Land Bank in cash and bond; thus deducting it from the total amount adjudged, the balance unpaid amount[ed] to P45,698,805.34 which was ordered by the Regional Trial Court to be paid in accordance with RA 6657.

"The Land Bank elevated the matter to the Supreme Court, which eventually dismissed the appeal in its Resolution dated December 17, 1997. Accordingly, a writ of execution was issued by the Regional Trial Court on December 4, 1997 and a notice of garnishment was served on the Land Bank on December 17, 1997.

"On December 22, 1997, the Regional Trial Court issued an Order declaring that the Land Bank had complied with the writ of execution and ordered the same to release the amount of P44,749,947.82 to petitioner and the amount of P948,857.52 to the Clerk of Court as commission fees for execution of judgment.

"The Land Bank remitted the amount of P948,857.52 to the Clerk of Court on December 24, 1997 and released the amount of P3,621,023.01 in cash and Land Bank Bond No. AR-0002206 in the amount of P41,128,024.81 to the petitioner.

"Petitioner filed a motion for the issuance of an alias writ of execution before the Regional Trial Court, praying that the payment of the compensation be in proportion of P8,629,179.36 in bonds and P32,499,745 in cash, alleging that the cash portion should include the amounts in the Decision representing the interest payments.

"Before the motion could be resolved by the Regional Trial Court, petitioner moved to withdraw the same and instead filed a motion for release of the balance of the garnished amount. He claimed that the payment of P41,128,024.81 in Land Bank Bonds was not acceptable to him and that the said amount should be paid in cash or certified check. The respondent Land Bank, on the other hand, opposed the motion, contending that the judgment amount had already been satisfied on December 24, 1997.

"The Regional Trial Court issued an Order on March 20, 1998 for the Land Bank to release the balance of P41,128,024.81 from the garnished amount in cash or certified check.

"The Land Bank moved for a reconsideration of the said Order, maintaining that the payment was properly made in Land Bank Bonds.

"On March 25, 1998, petitioner filed a motion to hold the Land Bank in contempt for its refusal to release the balance of the garnished amount in cash or certified check.

"Respondent Regional Trial Court presided over by a new judge, resolved the two motions on April 24, 1998. It held that the payment of just compensation must be computed in the manner provided for in Section 18, Republic Act No. 6657. Thus, it ruled that:
"To summarize, the very issue to be resolved in the instant case is to determine how much should be paid in cash and how much also should be paid in bonds, to fully satisfy the judgment herein rendered in the amount of P49,241,876.00, the computation of which is as follows:

Total land value per judgment
Amount payable in bonds:
  70% (50 has)
  75% (excess)
Amount payable in cash:
  30% (50 has)
  35% (excess)
Preliminary valuation:
Commissioner's Fee:
Payment to plaintiff on
P 8,112,951.19
P 5,792,084.37
"Consequently, not only must the Order of March 20, 1997 be reconsidered, but by implication, the Order of this Court dated December 22, 1997 is likewise deemed reconsidered. It goes without saying that the payment of just compensation must be made in accordance with Sec. 18, Republic Act No. 6657 in relation to Section 9, Rule 39 of the 1997 Rules of Civil Procedure insofar as it does not contravene x x x the former.

"On the basis of the foregoing discussion, this Court finds no merit [i]n the motion to cite in contempt of court the Land Bank of the Philippines.

"Be it also noted that Defendant Land Bank, through counsel, has submitted a re-computation of the compensation in accordance with her manifestation on oral argument [with] which this court begs to disagree.

"WHEREFORE, Defendant Land Bank of the Philippines is hereby ordered to pay the [p]laintiff the [c]ash [b]alance of FIVE MILLION SEVEN HUNDRED NINETY TWO THOUSAND EIGHTY-FOUR and 37/100 (P5,792,084.37), Philippine [c]urrency and the amount of THIRTY FIVE MILLION, THREE HUNDRED THIRTY SIX THOUSAND EIGHT HUNDRED FORTY and 16/100 (P35,336,840.16) PESOS in government instruments or bonds to fully satisfy the Judgment herein in the amount of forty-nine million two hundred forty one thousand eight hundred seventy six (P49,241,876.00) pesos, Philippine [c]urrency as just compensation due the [p]laintiff.

"Thus, the Order of this Court dated March 20, 1998 is hereby reconsidered and SET ASIDE and by implication, the Order dated December 22, 1997 is hereby deemed reconsidered and MODIFIED accordingly.

"The Motion to Cite in Contempt of Court the Land Bank of the Philippines is hereby DENIED.

"Petitioner's motion to reconsider the above-mentioned Order was denied on June 17, 1998[;] hence, this petition."[5]
The CA Ruling

The CA upheld the questioned April 24, 1998 Order of the trial court. The appellate court opined that the Order merely ascertained the mode of compensation for petitioner's expropriated properties, as decreed in the final judgment, and was issued pursuant to the court a quo's general supervisory control over the process of execution. Said the CA:
"RA 6657 is clear and leaves no doubt as to its interpretation regarding the manner of payment of just compensation. The provision allows the landowner to choose the manner of payment from the list provided therein, but since plaintiff had obviously wanted payment to be made in cash, then the trial court, through the new presiding judge, Judge Villegas-Llaguno, had only to apply Section 18 of R.A. 6657 which provides for the payment of a percentage thereon in cash and the balance in bond, in the exercise of her ministerial duty to execute the decision which ha[d] become final and executory. Nevertheless, in the exercise of her supervisory powers over the execution of a final and executory judgment, Judge Villegas-Llaguno found it necessary to modify the order of Judge Naval dated December 22, 1997 as regards the order of execution since it had erroneously applied Section 9, Article 39 of the Rules of Court regarding satisfaction of money judgments in the manner of payment even as to the portion required to be paid in bonds, and thus, had completely disregarded the portion in the final and executory decision of August 12, 1997 which makes direct reference to RA 6657.

"The garnishment, on the other hand, of the amount of P45,698,805.34 from the Land Bank of the Philippines does not affect the execution of the judgment in the case. As above-expounded, the judgment was to be fully executed in accordance with the provisions of R.A. 6657 which allows the landowner to have the compensation be paid in cash and in bond, but not fully in cash, as herein petitioner would like to maintain. Technically, the garnishment which was made in this case pursuant to the order of execution by Judge Naval shall extend only to the cash portion of the judgment amount. On the other hand, with respect to the amount to be issued in bonds, the only jurisdiction of the trial court is to order the Land Bank of the Philippines to issue the corresponding bonds and deliver the same to herein petitioners.
Hence, this Petition.[6]


In his Memorandum,[7]  petitioner submits the following issues for resolution:
"1. Did respondent judge act without jurisdiction when she issued the Order dated 24 April 1998 amending the final Judgment dated 12 August 1997?

"2. Is it a ministerial duty of the respondent judge to order the release and of the Land Bank to release the garnished amount under Section 9 (c) of Rule 39 of the Rules of Court?

"3. May respondent Land Bank question the legality of its own compliance with the Writ of Execution?

"4. Are the respondent judge and the respondent Land Bank and its officials liable for damages under Section 3 of Rule 65 of the Rules of Court?"[8]
In short, the main issue is whether the April 24, 1998 Order of Judge Llaguno was proper.

The Court's Ruling

We find no merit in this Petition.

Main Issue:
Propriety and Efficacy of the
April 24, 1998 RTC Order

Petitioner insists that the April 24, 1998 Order of Judge Llaguno was issued without jurisdiction. That is, it allegedly amended the August 12, 1997 judgment of the Special Agrarian Court by requiring the payment of compensation in cash and bonds.

Assailed Order Not an
Amendment, But an Iteration
of Final Judgment

The argument is not persuasive. The April 24, 1998 Order was not an illegal amendment of the August 12, 1997 judgment which had become final and executory. The reason is that the Order did not revise, correct, or alter the Decision. Rather, the Order iterated and made clear the essence of the final judgment.

The August 12, 1997 judgment mandated compensation to the petitioner "in the manner provided by R.A. 6657."[9]  There is certitude with regard to this assertion. The confusion in the present case, which required the issuance of the assailed Order, arose from petitioner's belief that the Land Bank had obligated itself to pay in cash the compensation due him. This fact can allegedly be gleaned from its compliance with the December 4, 1997 Writ of Execution and December 19, 1997 Notice of Garnishment.

Compensation Due Petitioner
to Be Paid Pursuant to RA 6657

However, it is clear from the August 12, 1997 judgment that the compensation was to be paid "in the manner provided by RA 6657."[10]  Pursuant to Section 18 of the same law, payment was to be in cash and bonds, as indicated below:
"Section 18. Valuation and Mode of Compensation. -- The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and LBP, in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land.

"The compensation shall be paid in one of the following modes, at the option of the landowner:

(1) Cash payment, under the following terms and conditions
(a) For lands above fifty(50) hectares, insofar as the excess hectarage is concerned.
Twenty-five percent (25%) cash, the balance to be paid in government financial instruments negotiable at any time
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares
Thirty-percent (30%) cash, the balance to be paid in government financial instruments negotiable at anytime."
Be that as it may, petitioner contends that the bank is estopped from questioning its alleged undertaking to pay him in cash. This contention was purportedly manifested in its letter-compliance with the Writ of Execution and the Notice of Garnishment. In the letter, respondent said that it was segregating a specified amount from the Agrarian Reform Fund, in order to pay him. He insists that such amount was garnished in accordance with Section 1, Rule 39 of the Rules of Court, and should have been delivered to him pursuant to Section 9 of the same Rule.

We disagree. Respondent bank was obliged to follow the mandate of the August 12, 1997 judgment. Hence, its compliance with the Writ of Execution and the Notice of Garnishment[11]  ought to have been construed as an agreement to pay petitioner in the manner set forth in Republic Act No. 6657. Its compliance was not an undertaking to pay in cash because such act would have been a deviation from the dictum of the final judgment, to which execution must conform.[12]  Paying in cash, as petitioner demands, is not compatible with such judgment.

Misplaced is petitioner's reliance on Section 9, Rule 39 of the Rules of Court, because the final judgment decrees payment in cash and bonds. Indeed, this provision must be taken in conjunction with RA 6657. Since respondent bank had already given petitioner the entire adjudged amount in the required proportion of cash and bonds, it must be deemed to have complied with its duty under Rule 39.

We understand petitioner's desire to be paid in cash; after all, his compensation was long overdue. However, we cannot grant his Petition because it is not sustained by the law. In this regard, we recall the Court's explanation in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform:[13]
"It cannot be denied from these cases that the traditional method for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation.

x x x                    x x x                    x x x

"With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore-quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest our people to see the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades. We are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmer's hopes even as they approach realization and resurrecting the specter of discontent and dissent in the restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall decree today.

"Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the government financial instruments making up the balance of the payment are 'negotiable at any time.' The other modes, which are likewise available to be landowner at his option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation.

"Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are of the need for their forbearance and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail."
All told, we hold that the appellate court was correct in sustaining the propriety and the efficacy of the April 24, 1998 Order of Judge Llaguno. In the exercise of her supervisory powers over the execution of a final and executory judgment,[14]  such as her August 12, 1997 Decision, special circumstances attending its execution impelled her to issue the Order clarifying the terms thereof.

Petitioner's claim for damages against the bank must likewise be denied because, as already explained, it was well within its rights in resisting the former's claim.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioner.


Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

[1]  Rollo, pp. 28-37.

[2]  Ibid., p. 38.

[3]  Seventh Division composed of Justices Salome A. Montoya, chairman and ponente; and Ruben T. Reyes and Eloy R. Bello, members, both concurring.

[4]  CA Decision, p. 10; rollo, p. 37.

[5]  CA Decision, pp. 1-5; rollo, pp. 28-32.

[6]  The case was deemed submitted for decision on October 29, 1999, upon receipt by this Court of the respondents' Memorandum, signed by Atty. Augusto M. Aquino of Gonzales Aquino & Associates. Petitioner's Memorandum, signed by Atty. Fernando A. Santiago, was received on October 20, 1999.

[7]  Rollo, pp. 199-214.

[8]  Ibid., pp. 204-205. The issue of whether bonds constitute "just compensation" within the constitutional provision could not be taken up by the Court because it was not raised by the parties.

[9] 9 Rollo, p. 45.

[10]  Entitled "An Act Instituting A Comprehensive Agrarian Reform Program To Promote Social Justice And Industrialization, Providing The Mechanism For Its Implementation, And For Other Purposes."

[11]  Through the December 19, 1997 letter of Augusto M. Aquino, LBP vice president, Agrarian Legal Office; rollo, p. 50. The pertinent portion of the letter reads:
"Relative to the above-subject, please be informed that Land Bank has segregated from the National Government's Agrarian Reform Fund (ARF) in the Bank's custody the amount of P45,698,805.34 to satisfy the RTC x x x determined compensation for plaintiff's parcels of land placed by the Department of Agrarian Reform (DAR) under Operation Land Transfer pursuant to Presidential Decree No. 27, to be delivered to plaintiff only upon final release order of the court. The amount shall be taken from the ARF which answers for the payment of lands covered by the Government's agrarian reform program, not from Land Bank's corporate funds which are separate from the ARF."
[12]  Because execution which varies the tenor of the judgment or exceeds the terms thereof is a nullity. Equatorial Realty Development, Inc. v. Mayfair Theater, GR No. 136221, May 12, 2000; Philippine Bank of Communications v. Court of Appeals, 279 SCRA 364, September 23, 1997; Matuguina Integrated Wood Products, Inc. v. Court of Appeals, 263 SCRA 490, October 24, 1996; Ex-Bataan Veterans Security Agency, Inc. v. National Labor Relations Commission, 250 SCRA 418, November 29, 1995.

[13]  175 SCRA 343, July 14, 1989, per Cruz, J.

[14]  The rule is that the court which rendered the decision has a general supervisory control over the process of execution. Panado et al. v Court of Appeals, 298 SCRA 110, October 14, 1998; Balais v. Velasco, 252 SCRA 707, January 31, 1996.

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