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LAND BANK OF PHILIPPINES v. SPS. MILU

FACTS:

Respondents, Spouses Milu and Rosalina De Jesus, filed a complaint for annulment of real estate mortgage, promissory note, foreclosure sale, and damages against petitioner Land Bank of the Philippines. They sought the declaration of nullity of the subject mortgages and promissory notes and the foreclosure proceedings initiated by Land Bank. They also sought a temporary restraining order and/or a writ of preliminary injunction to prevent Land Bank from consolidating its ownership over the properties. The Regional Trial Court (RTC) set a hearing for the application for temporary restraining order, but the spouses De Jesus withdrew their motion for TRO after Land Bank's counsel committed not to consolidate during the hearing for the preliminary injunction. The hearing for the preliminary injunction was reset multiple times, and the spouses De Jesus eventually moved to set the main case for pre-trial. The RTC denied their motion for a status quo order and their motion for reconsideration, prompting them to file a petition for certiorari before the Court of Appeals (CA). The CA found that the RTC committed grave abuse of discretion in denying the motion for a status quo order and remanded the case for the hearing on the application for preliminary injunction. Land Bank filed a motion for reconsideration, but the CA denied it. Hence, this petition before the Supreme Court.

ISSUES:

  1. Whether the trial court committed grave abuse of discretion in denying the spouses De Jesus' motion for issuance of a status quo order and in no longer conducting the hearing on their application for preliminary injunction.

  2. Whether there is a legal impediment to prevent Land Bank from consolidating its ownership over the properties.

  3. Whether or not Land Bank's commitment not to proceed with consolidation was only for the duration of the hearing on the application for preliminary injunction.

  4. Whether or not the spouses De Jesus abandoned their application for preliminary injunction by moving to set the main case for pre-trial.

  5. Whether the trial court violated the spouses De Jesus' right to due process by not conducting a hearing on their application for preliminary injunction.

  6. Whether the CA erred in remanding the case to the RTC for the hearing on the application for preliminary injunction.

RULING:

  1. The trial court did not commit any grave abuse of discretion when it denied the spouses De Jesus' motion for a status quo order and when it no longer conducted the hearing on their application for preliminary injunction. The court acted within its jurisdiction and in accordance with the law.

  2. There is no legal impediment to prevent Land Bank from consolidating its ownership over the properties. Upon the expiration of the redemption period without the mortgagor or his/her successor-in-interest redeeming the property, the title over the property consolidates in the purchaser. The consolidation confirms the purchaser as the owner entitled to possession of the property without the need for further procedures or requirements.

  3. The commitment of Land Bank not to proceed with consolidation was only for the duration of the hearing on the application for preliminary injunction. The commitment was limited and not for the entire duration of the main case. Therefore, the withdrawal of the motion for the issuance of a Temporary Restraining Order (TRO) was based on the limited commitment of Land Bank. If the commitment was for the duration of the main case, there would be no need for a hearing on the application for preliminary injunction.

  4. The spouses De Jesus abandoned their application for preliminary injunction by moving to set the main case for pre-trial. By doing so, they disregarded the limited commitment of Land Bank and failed to comply with the order of the trial court to present their evidence for the application for preliminary injunction. The granting of injunctive relief requires an urgent or pressing necessity, and the spouses De Jesus' act of abandoning the application goes against the preservative nature of preliminary injunction.

  5. No, there was no violation of the spouses De Jesus' right to due process. The trial court was not duty-bound to conduct a hearing on their application for preliminary injunction as it construed their motion to set the main case for pre-trial as an abandonment of their application. Furthermore, even if the trial court's August 22, 2012 Order may be construed as a denial of the application for preliminary injunction, a separate hearing is not required for the denial of the application.

  6. The remand of the case to the RTC for the hearing on the application for preliminary injunction has become moot and academic. Land Bank had already consolidated its ownership over the properties in question even before the spouses De Jesus filed their Petition for Certiorari before the CA. Therefore, the remedy of injunction to prevent consolidation could no longer be entertained by the appellate court.

PRINCIPLES:

  • Grave abuse of discretion exists when an act is done contrary to the Constitution, the law or jurisprudence or executed whimsically, capriciously or arbitrarily, out of malice, ill will, or personal bias.

  • 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 which preceded the controversy.

  • Upon the expiration of the redemption period without redemption by the mortgagor or successor-in-interest, consolidation of ownership becomes a matter of right for the buyer of the foreclosed property.

  • Commitments not to consolidate during the hearing on an application for preliminary injunction cease to be effective when the applicants abandon their application and significantly delay the conduct of the hearing.

  • A preliminary injunction is a preservative remedy for the protection of substantive rights or interests, granted when there is a pressing necessity to avoid injurious consequences that cannot be redressed under any standard of compensation.

  • The commitment of a party not to proceed with a certain action is limited to the duration specified and does not extend to the entire duration of a case.

  • Abandonment of an application for preliminary injunction occurs when a party disregards the limited commitment of the opposing party and fails to comply with court orders related to the application.

  • Courts should avoid granting injunctive reliefs that dispose of the main case without trial to avoid prejudgment and a reversal of the burden of proof.

  • A hearing is not required for the denial of an application for preliminary injunction.

  • An application for preliminary injunction may be denied even without a separate hearing if the summary hearing for the issuance of a temporary restraining order has already been conducted.

  • A status quo order tantamount to an injunction order cannot be granted without a hearing and prior notice to the party sought to be enjoined.

  • The remedy of injunction becomes moot and academic when the act sought to be enjoined has already been accomplished.