Sagrada Orden vs. NACOCO 91 Phil.

503 (1952)

FACTS
- Jan 1942, during the Japanese occupation, Taiwan Tekkosho (Japanese corporation) acquired the plaintiff Sagrada Ordens property (land with
warehouse in Pandacan, Manila) for Php140K
- April 1946, after the liberation, the US took control and custody of the property 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
- August 1946, when the Copra Export Management Co. vacated the property, the National Coconut Corporation (NACOCO), the defendant,
occupied it next for government use. Then, leased 1/3 of warehouse to someone.

- Sagrada Orden (plaintiff) files claims on the property with CFI Manila and against the Philippine Alien Property Administrator, with Republic
of Phils as intervenor.
- Orden petitions that the sale of property to Taiwan Tekkosho should be declared null and void as it was executed under threats, duress, and
intimidation, that the interest of the Alien Property Custodian be cancelled, and that NACOCO vacate the property.

- CFI: the Df (Philippine Alien Property Administrator) and the intervenor (RP) are released from any liability but Orden may reserve the right to
recover from NACOCO reasonable rentals for the use and occupation of premises
- Sale of property to the Taiwan Takkesho was declared null and void and Orden was given the right to recover Php3,000/month as reasonable
rental from August 1946 (date when NACOCO occupied property) to the date NACOCO vacates the premises; since pinarentahan din nila sa iba.
- NACOCO does not contest liability for rentals from Feb 1949, but contests the rentals prior to this as it avers it entered the property in good
faith.

ISSUE: WON the defendant is liable or has obligation to pay rent for occupying the property in question.

RULING: NO.
The CFIs decision that the defendant should pay rent from August 1946 to February 28, 1949 was reversed.

Obligations can only arise from four sources: law, contracts or quasi-contracts, crime, or negligence (Art 1089, Spanish Civil Code).

There were no laws or an express agreement between the defendant or 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) on the seizure of alien property and
not as a successor to the interests of the latter. There was no contract of rental b/w them and Taiwan Takkesho. NACOCO entered possession of
the property from the Alien Property Custodian without any expectation of liability for its use. It entered property in good faith since it was
allowed by the Alien Property Custodian of US, Copra Mngt Co which was predecessor occupant did not pay rentals. Also, 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. Therefore, the plaintiff has no right to claim rent from
NACOCO.

NOTES:

Article 1157 of the New Civil Code states that there are 5 sources of obligations: laws, contracts, quasi-contracts, felonies (acts or omissions
punished by law), and quasi-delicts.