G.R. No. 182758 ; May 30, 2011
LAND BANK OF THE PHILIPPINES, Petitioner, vs. HEIRS OF SEVERINO LISTANA, Respondents.

FACTS

Severino Listana voluntarily sold his 246.0561-hectare land to the government under the Comprehensive Agrarian Reform Law. The DARAB set just compensation at P10,956,963.25 and ordered petitioner Land Bank of the Philippines (LBP) to pay. LBP refused, leading Listana to file a motion for contempt against LBP manager Alex A. Lorayes before the PARAD. The PARAD cited Lorayes for indirect contempt and ordered his imprisonment. Meanwhile, LBP filed a petition with the Special Agrarian Court (SAC) to judicially determine just compensation at a lower amount. The SAC dismissed LBP’s petition. LBP then filed a petition for injunction with the RTC to enjoin the PARAD from implementing the warrant of arrest against Lorayes. The RTC granted a preliminary injunction upon LBP’s posting of a P5,644,773.02 cash bond, pending the final determination of just compensation. In a prior case ( G.R. No. 152611 ), the Supreme Court declared the contempt proceedings and the arrest orders null and void, and reinstated the RTC’s injunction order. After this Supreme Court decision became final, LBP filed a motion with the RTC to withdraw the cash bond. The RTC denied the motion, holding that the bond was intended to secure any damages to Listana due to the injunction and its release depended on the final termination of the just compensation case, which was still pending. The Court of Appeals affirmed the RTC’s denial. LBP elevated the case via petition for review.

ISSUE

Whether the RTC and the Court of Appeals erred in denying LBP’s motion to withdraw the cash bond posted for the issuance of the preliminary injunction.

RULING

The Supreme Court DENIED the petition and AFFIRMED the assailed Court of Appeals Decision and Resolution. The cash bond posted by LBP was a prerequisite for the injunctive relief and was intended to answer for any damages Listana might suffer if it were later adjudged that the injunction was wrongfully issued. The Supreme Court’s prior decision in G.R. No. 152611 , which declared the contempt proceedings void, did not automatically render the bond functus officio or order its release. The purpose of the bond remained because the injunction order was conditioned on the final termination of the main just compensation case. Since the just compensation case was still pending, the bond must remain with the court. The release of the bond is contingent upon the final outcome of the principal action for which it was posted. Therefore, the RTC correctly held that the bond could not be withdrawn until the just compensation case is finally resolved.