G.R. No. 100635 February 13, 1995
SPOUSES RAMON TARNATE and ERLINDA TARNATE, petitioners, vs. HONORABLE COURT OF APPEALS, HON. JUDGE REGIONAL TRIAL COURT BATANGAS and IBAAN RURAL BANK, INC., respondents.

FACTS

Petitioners Spouses Ramon and Erlinda Tarnate, along with Vicente Templo and Manuel Villacorte, executed real estate mortgages over different parcels of land to secure various loans from respondent Ibaan Rural Bank, Inc. Upon the loans’ maturity and non-payment, the bank extrajudicially foreclosed the mortgaged properties under Act No. 3135. The bank emerged as the highest bidder at the auction sale, and certificates of sale were issued on October 7, 1981. The bank then filed an action to recover the deficiency balances from the loans, alleging that the auction prices for each property were less than the corresponding loan amounts. In their answer, the defendants questioned the validity of the foreclosure and argued the action was premature as the redemption period had not expired. After a pre-trial, the bank filed a motion for summary judgment. A copy was sent by registered mail to defendants’ counsel but was “returned unclaimed.” The defendants later sought to admit a supplemental answer, noting the bank had consolidated ownership over the foreclosed properties during the case’s pendency. After a hearing where neither party appeared, the trial court considered the motion submitted. On June 19, 1986, the trial court rendered a summary judgment in favor of the bank, ordering the defendants to pay the deficiency amounts with interest and attorney’s fees. The Court of Appeals affirmed this decision.

ISSUE

1. Whether the trial court erred in not giving the defendants an opportunity to file their opposition to the motion for summary judgment.
2. Whether the trial court erred in rendering judgment based on the pleadings.
3. Whether the trial court erred in granting the motion for summary judgment.
4. Whether the trial court erred in denying the defendants’ motion to admit supplemental answer with counterclaim.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision.
1. The petitioners’ claim of being denied an opportunity to oppose the motion for summary judgment was not true. The bank served a copy via registered mail (though returned unclaimed), and the court set the motion for hearing. When neither party appeared, the court considered it submitted for resolution. Petitioners took no further action during the subsequent lengthy period before judgment was rendered.
2. & 3. Summary judgment was proper. Under Rule 34, summary judgment is appropriate when, except for damages, there is no genuine issue as to any material fact. Here, the existence of the loans, mortgage deeds, and default were not disputed. The bank had a right to foreclose and to recover any deficiency from the foreclosure sale. The action for deficiency could be filed even during the redemption period. Petitioners’ claim that the loans were understood to be long-term was contradicted by the loan documents and did not create a genuine issue. Their allegations of an extremely low auction price and irregularities in the foreclosure sale (lack of notice and publication) were belied by the records.
4. The bank’s consolidation of ownership over the foreclosed property during the case’s pendency was a matter of right upon the defendants’ failure to redeem. The award of attorney’s fees was not questioned in the appeal to the Court of Appeals and could not be raised for the first time before the Supreme Court.