Sagrada Orden vs. Nacoco 91 Phil.

503 (1952) Facts: During the Japanese occupation, Taiwan Tekkosho (Japanese corporation) acquired the plaintiffs propertya land with warehouse in Pandacan, Manila for Php140K. After the liberation, the US took control and custody of the aforementioned enemys land under Sect 12 of the Trading with the Enemy Act. In the same year, the Copra Export Management Company occupied the property under custodianship agreement with the United States Alien Property Custodian. When the Copra Export Management Co. vacated the property, the National Coconut Corporation (NACOCO), the defendant, occupied it next. Petitioner Sagrada Orden files claims on the property with the Court of First Instance of Manila against the Philippine Alien Property Administrator. Petitioner prayed that the sale of the property to Taiwan Tekkosho be declared null and void as it was executed under duress, that the interest of the Alien Property Custodian be cancelled, and that NACOCO be given until February 28, 1949 to recover its equipment form the property and vacate the premise. Issue: Is the defendant is liable to pay rent for occupying the property in question?

Ruling: Judgment was rendered by the CFI for the plaintiff to recover from the defendant the sum of P3,000 a month, as reasonable rentals, from August, 1946, to the date the defendant vacates the premises. The judgment declared that plaintiff has always been the owner, as the sale of Japanese purchaser was void ab initio; that the Alien Property Administration never acquired any right to the property, but that it held the same in trust until the determination as to whether or not the owner is an enemy citizen. The trial court further declared that defendant cannot claim any better rights than its predecessor, the Alien Property Administration, and that as defendant has used the property and had subleased portion thereof, it must pay reasonable rentals for its occupation. The Supreme Court reversed the CFIs decision that the defendant should pay rent from August 1946 to February 28, 1949.Obligations can only arise from four sources: law, contracts or quasicontracts, crime, or negligence (Art 1089, Spanish Civil Code). There were no laws or express agreement between the defendant and the Alien Property Custodian with the plaintiff regarding payment of rent. The property was acquired by the Alien Property Administrator through law (Trading with the Enemy Act) and not as a successor to the interests of the latter. There was no contract of rental between them and Taiwan Takkesho. NACOCO entered possession of the property from the Alien Property Custodian without any expectation of liability for its use. NACOCO did not commit any negligence or offense, and there was no contract, implied or otherwise, entered into, that can be used as basis for claiming rent on the property before the plaintiff obtained the judgment annulling the sale to Taiwan Takkesho. The plaintiff had no right to claim rent from NACOCO.