GR 142958; (April, 2002) (Digest)
G.R. No. 142958 . April 24, 2002
SPS. FELINO S. SAMATRA and CHARLITA ISIDRO, petitioners, vs. RITA S. VDA. DE PARIÑAS, respondent.
FACTS
The case involves agricultural lots and a homelot in Sto. Domingo, Nueva Ecija, originally owned by spouses Donato Samatra and Macaria Sana. Petitioners Felino Samatra and respondent Rita S. Vda. de Pariñas are their legitimate children. The spouses mortgaged the lots to the Rural Bank of Sto. Domingo to secure loans. While the mortgages were subsisting, Donato Samatra executed a “Kasunduang Buwisan sa Sakahan” on January 3, 1975, constituting respondent as the agricultural lessee over the mortgaged lots without the bank’s consent. Upon the spouses’ failure to pay the loans, the bank extrajudicially foreclosed the mortgages, bought the lots at auction, and consolidated ownership after the redemption period. Respondent remained in possession. The bank initially offered the heirs, including respondent, priority to repurchase. Respondent and her son made deposits but later withdrew them and ceased communications, leading the bank to construe disinterest. In December 1983, petitioner Felino Samatra expressed intent to repurchase, and the bank sold the lots to petitioners on July 17, 1984. Upon learning of the sale, respondent filed an agrarian case seeking annulment of the sale, reconveyance based on her right of pre-emption or legal redemption as an agricultural tenant, and damages. The Regional Trial Court dismissed the complaint, declaring the tenancy contract fraudulent and the sale to petitioners valid, and ordered respondent to vacate and pay damages. The Court of Appeals modified the decision, declaring respondent a bona fide agricultural lessee but denying her right of pre-emption and redemption for failure to exercise them timely, and deleted the awards for damages and attorney’s fees.
ISSUE
1. Whether the tenancy contract entered into during the effectivity of the mortgage was valid.
2. Whether respondent is a bona fide agricultural lessee of the disputed landholdings.
3. Whether petitioners are entitled to unrealized income, attorney’s fees, and litigation expenses.
RULING
1. On the validity of the tenancy contract: The Supreme Court upheld the Court of Appeals, applying Article 2130 of the Civil Code. A real estate mortgage does not extinguish the debtor’s title or the right to dispose of the mortgaged property. Thus, the mortgagor-spouses were within their rights to constitute respondent as an agricultural lessee, and the leasehold contract was not invalid on this ground.
2. On whether respondent is a bona fide agricultural lessee: The Supreme Court reversed the Court of Appeals and reinstated the trial court’s finding. After scrutinizing the evidence, the Court found that respondent failed to prove personal cultivation of the land, an essential element of an agricultural leasehold relationship. The Certification from the Ministry of Agrarian Reform and the Affidavit from the Malaya Samahang Nayon President were insufficient to establish personal cultivation, as they were based on respondent’s self-serving claims and did not corroborate actual farming activities. The Court emphasized that personal cultivation requires direct contribution of labor and management, which respondent did not demonstrate. Therefore, respondent was not a bona fide agricultural lessee and had no right of pre-emption or legal redemption.
3. On the awards of unrealized income, attorney’s fees, and litigation expenses: The Supreme Court reinstated the trial court’s award of actual damages for unrealized income from 1984 to 1994, as respondent’s possession deprived petitioners of harvests. However, the awards for attorney’s fees and litigation expenses were deleted, as there was no stipulation or evidence to justify them under Article 2208 of the Civil Code.
DISPOSITIVE PORTION:
The Decision of the Court of Appeals is SET ASIDE. The Decision of the Regional Trial Court is REINSTATED with modifications: the awards of attorney’s fees and litigation expenses to petitioners are deleted. The case is remanded to the trial court for recomputation of the proper amount of actual damages.