G.R. No. 133366 , August 5, 1999
Unionbank of the Philippines, petitioner, vs. The Court of Appeals and Fermina S. Dario and Reynaldo S. Dario, respondents.

FACTS

Spouses Leopoldo and Jessica Dario executed a real estate mortgage on December 17, 1991, in favor of Unionbank of the Philippines (UNIONBANK) to secure a P3 million loan, covering a Quezon City property under TCT No. 41828 in Leopoldo’s name. Due to non-payment, UNIONBANK extrajudicially foreclosed the property on August 12, 1993, and purchased it at the auction. On October 4, 1994, a week before the redemption period expired, Fermina S. Dario and Reynaldo S. Dario (private respondents) filed a complaint for annulment of sale and real estate mortgage with the RTC of Quezon City, alleging they were the true owners and that Leopoldo had fraudulently reconstituted the title and mortgaged the property without their knowledge. The RTC issued a Temporary Restraining Order (TRO) on October 10, 1994, enjoining redemption and consolidation. On October 17, 1994, the RTC dismissed the complaint for failure to attach a certification of non-forum shopping. Private respondents filed a motion for reconsideration. Meanwhile, on October 24, 1994, without notifying private respondents, UNIONBANK consolidated its title over the property, leading to the cancellation of TCT No. 41828 and issuance of TCT No. 120929 in its name. The RTC later allowed private respondents to amend their complaint to comply with procedural requirements. UNIONBANK argued the case was moot due to the consolidation. The RTC denied private respondents’ application for a preliminary injunction, declaring it moot. The Court of Appeals reversed the RTC, nullifying the consolidation for violating due process and ordering the cancellation of UNIONBANK’s title. UNIONBANK appealed to the Supreme Court.

ISSUE

1. Whether the consolidation of title by UNIONBANK was proper.
2. Whether the dismissal of the application for a preliminary prohibitory injunction was valid.

RULING

1. Yes, the consolidation of title by UNIONBANK was proper, though precipitate. The Supreme Court held that the TRO issued on October 10, 1994, was automatically dissolved upon the dismissal of the main complaint on October 17, 1994, as a TRO is an ancillary order that cannot exist independently. Therefore, UNIONBANK did not violate any standing court order when it consolidated its title on October 24, 1994. The consolidation was legally permissible after the expiration of the redemption period with no redemption made.
2. Yes, the dismissal of the application for a preliminary prohibitory injunction was valid. The Supreme Court ruled that the act sought to be enjoined—the consolidation of title—had already been accomplished. An injunction is a preventive remedy, not a corrective one, and cannot undo an act already performed. Thus, the application for a prohibitory injunction was rendered moot and academic. The proper remedy for private respondents would be to seek a mandatory injunction or pursue the main action for annulment on its merits.
The Supreme Court reversed the Court of Appeals’ decision, reinstated the RTC order declaring the prayer for a preliminary injunction moot, and remanded the case for trial on the merits.