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Development Bank of the Philippines (DBP) vs. Guarina Agricultural and Realty Development Corporation

DEVELOPMENT BANK OF THE PHILIPPINES, Petitioner, vs. GUARINA AGRICULTURAL AND REALTY DEVELOPMENT CORPORATION, Respondent.

G.R. No. 160758 | 2014-01-15

FIRST DIVISION
DECISION
 
BERSAMIN, J.:
 
The foreclosure of a mortgage prior to the mortgagor's default on the principal obligation is premature, and should be undone for being void and ineffectual. The mortgagee who has been meanwhile given possession of the mortgaged property by virtue of a writ of possession issued to it as the purchaser at the foreclosure sale may be required to restore the possession of the property to the mortgagor and to pay reasonable rent for the use of the property during the intervening period.
 
The Case
 
In this appeal, Development Bank of the Philippines (DBP) seeks the reversal of the...