Restitution after reversal of executed judgment

Restitution is sanctioned by the rules. Section 5, Rule 39 of the Rules of Court specifically provides that:

SEC. 5. Effect of reversal of executed judgment. Where the executed judgment is reversed totally or partially, or annulled, on appeal or otherwise, the trial court may, on motion, issue such orders of restitution or reparation of damages as equity and justice may warrant under the circumstances. (Emphasis ours)

The Rules of Court provides for restitution according to equity, in case the executed judgment is reversed on appeal.[1] When the executed decision is reversed, the premature execution is considered to have lost its legal bases.[2] The situation necessarily requires equitable restitution to the party prejudiced thereby.[3] The phrase "on appeal or otherwise" in Section 5 of Rule 39 specifically permits the application of restitution or reparation in cases where a judgment is reversed or annulled, not only on appeal but also through some other appropriate action filed for that purpose.

Nevertheless, the Supreme Court stressed in the early case of Po Pauco v. Tan Junco[4] that in a restitution case, a party who received by means of a judgment cannot be treated as a wrong-doer for causing execution to issue. The judgment protects him while it remains in force. It may seem a hardship to the claimant in such a judgment that under it, his property may be sold for greatly less than its value, and his right of restitution be limited to what came into the hands of the defendant. But such hardship, when it occurs, will generally, if not always, be the result of his own acts. If, by failing to appeal, or to obtain a supersedeas on an appeal, he permits the judgment to remain in force and enforceable, he can hardly complain that the other party proceeds to enforce it.[5]

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[1] Legaspi v. Spouses Ong, 498 Phil. 167, 189 (2005).

[2] Urban Bank, Inc. v. Peña, 675 Phil. 474 578 (2011)

[3] Id.

[4] 49 Phil. 349 (1926).

[5] Id. at 357.