G.R. No. L-54133 November 16, 1984
TEOFILO ADRISOLA, petitioner, vs. THE HONORABLE COURT OF APPEALS, FELICIANO SALAMANQUE and SEGUNDO SABIO, respondents.

FACTS

Petitioner Teofilo Adrisola filed a complaint for reinstatement before the Court of Agrarian Relations (CAR). He alleged that mortgagee Amando Pinoy instituted him as a tenant on respondent Feliciano Salamanque’s riceland in 1973 under a sharing arrangement, which was later converted into a registered leasehold contract in 1976. Adrisola claimed that in September 1976, Salamanque, having redeemed the land from Pinoy, forcibly dispossessed him and installed respondent Segundo Sabio as the new tenant. The CAR ruled in Adrisola’s favor, declaring him a bona fide agricultural lessee.
Private respondents Salamanque and Sabio appealed. They contended that the 1975 deed of mortgage between Salamanque and Pinoy explicitly stipulated that Pinoy “is the one to transplant and benefit from the produce” on the land, which they argued prohibited Pinoy from instituting a tenant. They further asserted that Pinoy’s institution of Adrisola as a lessee in August 1976 was done in bad faith, as it occurred after Salamanque had already notified Pinoy of his intention to redeem the property.

ISSUE

Whether Pinoy, as mortgagee in possession, validly instituted Adrisola as an agricultural lessee on the landholding, thereby creating a leasehold relation that survived Salamanque’s redemption of the property.

RULING

The Supreme Court affirmed the Court of Appeals’ reversal of the CAR decision and dismissed Adrisola’s complaint. The Court’s ruling hinged on the interpretation of the mortgage contract. The stipulation that the mortgagee Pinoy “is the one to transplant” was construed as a clear prohibition against installing a tenant, meaning Pinoy was obligated to cultivate the land personally.
Since the mortgage contract forbade the institution of a tenant, Pinoy could not legally become an “agricultural lessor” as defined under the Code of Agrarian Reforms. Consequently, his act of installing Adrisola was void for violating the contractual prohibition and was done in apparent bad faith to preempt the impending redemption. With Pinoy not being a valid agricultural lessor, the protective provisions on the continuity of leasehold relations and the subrogation of the landowner to the lessor’s obligations upon redemption did not apply. Therefore, Salamanque, upon validly redeeming his property, had the right to choose his tenant, and his institution of Sabio was lawful. Adrisola acquired no rights from his void installation by Pinoy.