Land Bank of the Philippines vs. Spouses De Jesus

An application for preliminary injunction is deemed abandoned when the applicant moves for the pre-trial of the main case instead of proceeding with the scheduled hearing on the injunction, thereby demonstrating a lack of pressing necessity for the injunctive relief.

Spouses Milu and Rosalina De Jesus obtained loans from Land Bank of the Philippines secured by real estate mortgages over their properties. Upon default, Land Bank extrajudicially foreclosed the mortgages and emerged as the highest bidder at the foreclosure sale, leading to the issuance of a Certificate of Sale in its favor. The dispute centers on whether the bank could consolidate its ownership after the one-year redemption period expired, pending the spouses' challenge to the validity of the mortgages and foreclosure.

On September 17, 2009, Spouses Milu and Rosalina De Jesus filed a complaint for annulment of real estate mortgage, promissory note, and foreclosure sale against Land Bank of the Philippines before the Regional Trial Court (RTC) of Malolos, Bulacan. They sought to nullify the mortgages and foreclosure proceedings and applied for a temporary restraining order (TRO) and/or writ of preliminary injunction to prevent the bank from consolidating its ownership over the properties, as a Certificate of Sale had already been issued and registered.

During the hearing on the TRO application on September 23, 2009, Land Bank's counsel, Atty. Napoleon Latosa, committed that the bank would not consolidate its ownership "up to the next hearing" on the preliminary injunction. In reliance on this commitment, the spouses withdrew their motion for TRO, and the RTC set the continuation of the hearing on the application for preliminary injunction for October 28, 2009. The spouses moved to reset the hearing to December 9, 2009, which the court granted.

However, on November 25, 2009, days before the rescheduled hearing, the spouses moved to set the main case for pre-trial instead. The RTC accordingly ordered the pre-trial conference on December 9, 2009, in lieu of the injunction hearing. The proceedings were further delayed due to the demise of Atty. Latosa, with the preliminary conference only conducted on July 19, 2011, and the presentation of evidence set for June and August 2012.

On May 22, 2012, Land Bank, through new counsel, filed an Entry of Appearance and Manifestation stating its intent to consolidate ownership, as the one-year redemption period had lapsed and the period for the injunction hearing had passed. The spouses countered with a motion for a status quo order, arguing that the bank's commitment not to consolidate was for the duration of the main case. The RTC denied the motion on August 22, 2012, finding that consolidation was a matter of right for the bank and that a status quo order would be tantamount to an injunction without a hearing. The denial was upheld on motion for reconsideration on November 29, 2012. By this time, Land Bank had already consolidated its ownership over the properties.

• Abandonment of Injunction Application: Petitioner argued that respondents should be deemed to have abandoned their application for preliminary injunction when they moved for the pre-trial of the main case instead of proceeding with the scheduled injunction hearing and took two years to move for the hearing.
• Lack of Urgent Necessity: Petitioner maintained that respondents' act of filing a motion to set the case for pre-trial is inconsistent with their application for preliminary injunction, showing the lack of "urgent necessity" essential for the grant of injunctive relief.
• No Grave Abuse of Discretion: Petitioner posited that the RTC did not commit any grave abuse of discretion in refusing to conduct a hearing on the injunction application.
• Violation of Due Process: Petitioner argued that the CA's decision effectively acted as an injunction order without a hearing, thereby violating the bank's right to due process.
• Moot and Academic: Petitioner asserted that the injunction application had become moot and academic due to the ongoing trial on the merits and its subsequent consolidation of ownership.

• No Waiver of Injunction: Respondents argued that their failure to move for the injunction hearing for two years did not constitute a waiver, as it resulted from the bank's commitment not to consolidate pending the main case.
• Basis of TRO Withdrawal: Respondents pointed out that they withdrew their TRO motion based on the bank's commitment not to consolidate for the duration of the main case, not just the injunction hearing.
• Validity of Status Quo Order: Respondents posited that a status quo order, unlike an injunction, can be issued without a hearing, thus there was no violation of the bank's right to due process.

• Abandonment of Preliminary Injunction: Whether respondents abandoned their application for preliminary injunction by moving for the pre-trial of the main case.
• Grave Abuse of Discretion: Whether the RTC committed grave abuse of discretion in denying the motion for a status quo order and not conducting a hearing on the injunction application.
• Mootness: Whether the CA's remand for a hearing on the injunction application became moot and academic.

• Abandonment of Preliminary Injunction: Yes. Respondents abandoned their application for preliminary injunction by moving for the pre-trial of the main case instead of proceeding with the scheduled injunction hearing, demonstrating a lack of pressing necessity.
• Grave Abuse of Discretion: No. The RTC did not commit grave abuse of discretion; it acted within its jurisdiction in denying the status quo order, which would have been tantamount to an injunction without a hearing.
• Mootness: Yes. The CA's remand for a hearing on the injunction application became moot and academic because Land Bank had already consolidated its ownership over the properties.

• Abandonment of Preliminary Injunction: The records clearly showed that Land Bank's commitment not to consolidate was only for the duration of the hearing on the preliminary injunction, not the entire main case. By moving for pre-trial instead of proceeding with the scheduled injunction hearing, respondents revealed a lack of urgency or pressing necessity for injunctive relief. Preliminary injunction requires a pressing necessity to avoid injurious consequences, and courts should avoid granting injunctive reliefs that dispose of the main case without trial. Thus, the bank's commitment ceased to be effective when respondents abandoned their injunction application.
• Grave Abuse of Discretion: The RTC did not act whimsically or capriciously. Consolidation of ownership becomes a matter of right upon the expiration of the redemption period without redemption. A status quo order is in the nature of a cease and desist order; granting it would prevent Land Bank from consolidating, acting as an injunction without a hearing, contrary to Rule 58, Section 5 of the Rules of Court. Furthermore, an application for preliminary injunction may be denied even without a separate hearing, so there was no violation of due process.
• Mootness: Land Bank had already consolidated its ownership before the respondents filed their Petition for Certiorari before the CA. The act sought to be enjoined (consolidation) had already become a fait accompli, rendering the CA's remand for an injunction hearing moot and academic.

• Abandonment of Preliminary Injunction — An application for preliminary injunction may be deemed abandoned when the applicant moves for the pre-trial of the main case instead of proceeding with the scheduled hearing on the injunction. This demonstrates the lack of "pressing necessity" or "urgent necessity" required for injunctive relief.
• Consolidation of Ownership in Foreclosure — If the redemption period expires without the mortgagor or successor-in-interest redeeming the foreclosed property within one year from the registration of the sale, the title over the property consolidates in the purchaser. The consolidation becomes a matter of right, and the purchaser is entitled to possession without filing a bond.
• Status Quo Order vs. Preliminary Injunction — A status quo order is in the nature of a cease and desist order intended to maintain the last, actual, peaceable, and uncontested state of things. If issued to prevent consolidation, it acts as an injunction and cannot be granted without a hearing, as required by Section 5, Rule 58 of the Rules of Court.
• Denial of Injunction Without Hearing — While a hearing is required if a preliminary injunction is granted, an application for preliminary injunction may be denied even without the conduct of a hearing separate from that of the summary hearing of an application for a TRO.

• "By moving for the pre-trial of the main case, instead of proceeding with the hearing on preliminary injunction as originally scheduled, the spouses De Jesus revealed the lack of urgency in obtaining injunctive relief, which is precisely the basis of their prayer therefor." — This passage articulates the ratio decidendi for finding abandonment of the preliminary injunction application.
• "If the redemption period expires without the mortgagor or his successor-in-interest redeeming the foreclosed property within one year from the registration of the sale with the Register of Deeds, the title over the property consolidates in the purchaser." — This defines the rule on consolidation of title in foreclosure sales, which was the underlying substantive right of Land Bank.
• "Inversely stated, an application for preliminary injunction may be denied even without the conduct of a hearing separate from that of the summary hearing of an application for the issuance of a temporary restraining order." — This clarifies the procedural rule on the necessity of hearings for the denial of injunction applications.

• United Coconut Planters Bank vs. Lumbo, 723 Phil. 314-332 (2013) — Cited to support the rule that consolidation of ownership becomes a matter of right upon the expiration of the redemption period without redemption.
• Pahila-Garrido vs. Tortogo, 671 Phil. 320-345 (2011) — Cited to explain the preservative or preventive character of injunction as a remedy requiring a pressing necessity.
• Evy Construction and Development Corp. vs. Valiant Roll Forming Sales Corp., G.R. No. 207938, October 11, 2017 — Cited to support the rule that an application for preliminary injunction may be denied without a separate hearing.

• Rule 58, Section 5, Rules of Court — States that "[n]o preliminary injunction shall be granted without hearing and prior notice to the party or person sought to be enjoined." The Court applied this inversely to hold that an injunction may be denied without a hearing, and a status quo order preventing consolidation cannot be issued without one.
• Section 7, Act No. 3135 — Mentioned in the context that the purchaser is entitled to possession of the foreclosed property without filing a bond upon consolidation of title.

Leonen, (Chairperson), Inting, Delos Santos, and J. Lopez, JJ., concur.