Spouses Flavio P. Bautista v. Premiere Development Bank

Summary

The Supreme Court denied with finality Premiere Development Bank's motion for reconsideration regarding prescription of its mortgage foreclosure action. The case originated from spouses Bautista's PHP500,000 agricultural loan default and subsequent invalid extrajudicial foreclosure proceedings. The Court held that the bank's foreclosure action prescribed under Article 1142 of the Civil Code, as the flawed 2002 foreclosure sale did not interrupt the prescriptive period due to non-compliance with Act No. 3135's publication and posting requirements. The bank's election of extrajudicial foreclosure also waived its right to pursue separate collection remedies. This decision reinforces the mandatory nature of foreclosure procedural requirements and the consequences of non-compliance, while protecting mortgagors from indefinite exposure to collection actions through strict application of prescription rules.