**Facts:**
1. Spouses Ramon and Erlinda Tarnate obtained various loans from Ibaan Rural Bank, Inc. To secure these loans, they, along with Vicente Templo and Manuel Villacorte, executed real estate mortgages over different parcels of land situated in Mataas na Lupa, Lipa City.
2. When the loans matured and were not repaid, the bank foreclosed on the properties extrajudicially under Act No. 3135. The bank emerged as the highest bidder at the auction and was issued certificates of sale on 07 October 1981.
3. On 03 May 1982, the bank initiated an action to recover the remaining loan deficiencies. It alleged various deficiencies based on the auction sale amounts vis-a-vis the loan amounts:
– Loan secured by TCT No. 37203: Deficiency of P52,678.97.
– Loan secured by TCT No. 37204: Deficiency of P99,989.38.
– Loan secured by TCT No. 37202: Deficiency of P54,103.16.
– Loan secured by TCT No. 37751: Deficiency of P71,072.63.
4. Defendants argued the foreclosure was invalid and premature as the redemption period had not expired at the time.
5. A pre-trial conference was held, and the bank moved for summary judgment, which the court allowed, granting both parties ten days to file their respective motions and oppositions.
6. The bank filed for summary judgment on 13 October 1983. Despite service to defendants’ counsel, the motion was returned unclaimed. The bank requested that the defendants be deemed to have waived their right to oppose.
7. Defendants filed for a supplemental answer with a counterclaim, claiming the bank was consolidating ownership during the case’s pendency.
8. The trial court scheduled a hearing for 10 January 1984, but neither party appeared. It considered the motion submitted for resolution.
9. On 19 June 1986, the trial court rendered a judgment in favor of the bank, ordering the defendants to pay various amounts covering the deficiencies and associated costs.
10. Defendants appealed to the Court of Appeals, which affirmed the trial court’s ruling and declined their motion for reconsideration.
**Issues:**
1. Whether the lower court erred in not allowing the defendants to file their opposition to the summary judgment motion.
2. Whether the lower court erred in rendering summary judgment in favor of the plaintiff.
3. Whether the court erred in allowing the summary judgment.
4. Whether the court erred in denying the defendants’ motion to admit a supplemental answer with a counterclaim.
**Court’s Decision:**
1. **Filing Opportunity for Opposition**: The Supreme Court held that the defendants did have the opportunity to oppose the motion for summary judgment. The attempt to serve the motion, the court’s setting of a hearing, and the subsequent proceedings without any follow-up steps by the defendants indicated the procedural fairness provided to them.
2. **Rendering Summary Judgment**: The Court upheld that summary judgment was appropriate. The essential facts about the loans, mortgages, and the defaults were not contested by the defendants. Thus, the plaintiff was entitled to summary judgment by law.
3. **Granting of Summary Judgment**: The lower court’s decision to grant summary judgment was correct. There were no genuine issues of material fact apart from the amount of damages, and the bank’s foreclosure rights and deficiencies were legally justified.
4. **Motion to Admit Supplemental Answer**: Denied. The consolidation of ownership by the bank after the failure to redeem the property was a legal right of the auction buyer, and there was no shown irregularity in the foreclosure sale process.
**Doctrine:**
The Court reiterated that in foreclosure proceedings, the mortgagee may seek deficiency judgments even before the expiration of the redemption period. It emphasized that a summary judgment is appropriate when there is no genuine issue of material fact except for the amount of damages.
**Class Notes:**
1. **Summary Judgment**: Can be granted where there’s no genuine dispute of material fact excluding damages.
2. **Foreclosure Deficiency Judgment**: Allows mortgagees to recover any remaining debt after foreclosure auction sales.
3. **Redemption Right**: Failure to exercise this right means the mortgagee can consolidate ownership.
4. **Legal Proceedings**: Proper service of motions, even if unclaimed by the opposing party, followed by due hearings, amounts to adequate procedural fairness under Rule 34 and Rule 13 of the Rules of Court.
**Historical Background**:
This case occurred in the context of post-martial law Philippines, a period characterized by financial instability and banking issues. The foreclosure laws and the rights of creditors and debtors were particularly significant as the country navigated economic challenges and reforms. This decision helped elucidate the judicial interpretation of summary judgments and deficiency recoveries in mortgage law.
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