G.R. No. 221133 - Land Bank of the Philippines vs. Spouses De Jesus

On September 17, 2009, the spouses Milu and Rosalina De Jesus filed a complaint before the RTC of Malolos, Bulacan seeking annulment of the real estate mortgage, promissory note, foreclosure sale, and damages against Land Bank of the Philippines.
They also sought the issuance of a Temporary Restraining Order (TRO) and/or a writ of preliminary injunction to prevent Land Bank from consolidating its ownership over the properties, arguing that such consolidation was imminent after the issuance and registration of a Certificate of Sale.

On September 23, 2009, during the hearing on the TRO application, the spouses presented their first witness.
Following the witness presentation, they withdrew their motion for a TRO after Land Bank’s counsel, Atty. Napoleon Latosa, committed in open court not to consolidate the ownership until the hearing on the preliminary injunction, thereby temporarily preserving status quo.

The RTC initially set the hearing for the TRO on September 23, 2009, and later reset the preliminary injunction hearing for October 28, 2009.
Subsequently, the spouses moved to reset the preliminary injunction hearing to December 9, 2009.
On November 25, 2009, they also moved to set the main case for pre-trial, prompting a reorganization of scheduling, which blurred the distinct urgency typically required for an injunction.

Developments on the Application for Preliminary Injunction and Consolidation

Although the RTC ordered the setting of a pre-trial conference and scheduled evidence presentation for July 19, 2011, and later dates in 2012 for the spouses’ injunction application, the proceedings became complicated:

On May 22, 2012, Land Bank, through its new counsel, filed an Entry of Appearance, asserting its right to consolidate ownership as the one-year redemption period had lapsed without redemption by the spouses.
On June 5, 2012, the spouses filed a counter-manifestation and motion contending that the bank’s right to consolidate was bound by Atty. Latosa’s earlier commitment not to consolidate during the hearing on the preliminary injunction, and that, given this, consolidation should be halted pending a ruling.

In its Order on August 22, 2012, the RTC denied the spouses’ motion for a status quo order, holding that consolidation became a matter of right after the expiration of the one‐year redemption period.
The RTC also denied the spouses’ subsequent motion for reconsideration in its November 29, 2012 Order.
The court reasoned that a status quo order amounted to an injunction order requiring a proper hearing, which was not warranted without the urgent necessity present in the case.

The CA reversed the RTC Orders, holding that the RTC committed grave abuse of discretion by denying a hearing on the spouses’ application for a preliminary injunction and misconstrued the spouses’ motion to set the case for pre-trial as abandonment of their injunction application.
The CA remanded the case to the RTC for a hearing on the preliminary injunction, asserting that the spouses should be heard before Land Bank’s consolidation.
Land Bank moved for reconsideration, arguing that the spouses’ actions — namely, moving the case for pre-trial and delaying the hearing for two years — clearly indicated abandonment of their application for injunctive relief.

During the TRO proceedings, Atty. Latosa’s commitment not to consolidate was explicitly made for the duration of that hearing on the preliminary injunction.
The spouses’ reliance on this commitment led them to withdraw their TRO application, even though they pursued the issuance of a preliminary injunction.
However, their subsequent actions, including opting for a pre-trial on the main case and the protracted delay in moving for a hearing on the injunction, were interpreted by the court as an abandonment of their injunctive relief claim.

Whether the CA erred in reversing the RTC’s August 22, 2012 and November 29, 2012 Orders on the ground that the RTC’s denial of the spouses’ application for a status quo order (and preliminary injunction) amounted to a grave abuse of discretion or else a lack or excess of jurisdiction.
Whether the conduct of the spouses De Jesus—particularly their withdrawal of the TRO application after Land Bank’s commitment and their subsequent move for pre-trial—constituted an abandonment of their application for a preliminary injunction.
Whether the issuance of a status quo order, in lieu of a hearing for the preliminary injunction, would have violated the due process rights of Land Bank by effectively granting injunctive relief without prior notice and hearing.