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Sagrada Orden v.

National Coconut Corporation (1952)

SUMMARY: NACOCO is being sued for rentals for its occupation of warehouse by the owner, Sagrada
Orden. Sagrada Orden was registered owner before WW2. However, the property was acquired by a
Japanese Corporation during the Occupation. NACOCO gained possession of the property from the Alien
Property Custodian, which took control of properties belonging to enemy nationals after the war. The
Supreme Court held that NACOCO could not be liable therefor, the alleged obligation to pay rentals not
being hinged on law, contract, quasi-contract, crime, or negligence.


Sagrada Orden owns a piece of land in Pandacan and the warehouse which stands on it. Title to the
property was registered in its name before WW2.

During the Japanese occupation, the land was acquired by Taiwan Tekkosho, a Japanese corporation,
for P140,000. As such, title was issued in its name.

After liberation, the Alien Property Custodian of the USA took possession, control, and custody of
the property, on the strength of the Trading with the Enemy Act, on the ground that the property
belonged to an enemy national.

Under a custodianship agreement with the Alien Property Custodian, the property was later
occupied by Copra Export Management Company, and then by the National Coconut Corporation.

Sagrada Orden made a claim to the property before the Alien Property Custodian, but this was

So, Sagrada Orden brought an action against the Alien Property Custodian to annul the sale of
property to Taiwan Tekkosho, and recover its possession. The court rendered judgment releasing the
Alien Property Custodian and Philippine Government from liability, and entitling Sagrada Orden the
recovery of reasonable rentals from NACOCO.

The present action is an action to recover such rentals covering the time NACOCO occupied the

NACOCO argued that it occupied the property in good faith, and under no obligation to pay rentals
for the use and occupation of the warehouse.

However, the court rendered judgment ordering NACOCO to pay Sagrada Orden rentals, in the sum
of P3000/ month. It ratiocinated that Sagrada Orden has always been the owner of the property, as
the sale to Taiwan Tekkosho was void.

ISSUE: WON NACOCO is liable for rentals to Sagrada Orden NO

If NACOCO is liable, its obligation must arise from any of the sources of obligations: law, contract, quasicontract, crime, or negligence.

Law The Court has tried in vain to find a law or provision thereof upon which the claim can be

Contract There was no privity of contract between the Alien Property Custodian and Taiwan
Tekkosho, such that the Alien Property Custodian or its permittee may be held responsible for the
supposed illegality of the occupation of the property. Also, there was no agreement, not even
implied, between the Alien Property Custodian and NACOCO for the latter to pay rentals on the
property. The Copra Export Management Company, which preceded NACOCO, does not appear to
have paid rentals therefor. There was no provision in the custodianship agreement for the payment
of rentals.

Quasi-contract The Court has tried in vain to find a principle in quasi-contracts or equity upon
which the claim can be supported.

Crime NACOCO is not guilty of any offense at all. It entered the premises and occupied the
property with the permission of the Alien Property Custodian.

Negligence There was no negligence on NACOCOs part.

As NACOCO entered into possession of the property without any expectation for such use and occupation,
it cannot be held liable therefor.

DISPOSITIVE: Lower courts ruling is reversed. NACOCO is not liable for rentals to Sagrada Orden.

Alyanna Apacible B2015