UMALI, MILLCEN O.

BSLM- LM1A

CASE DIGEST
SAGRADA ORDEN DE PREDICADORES DEL SANTISMO ROSARIO DE
FILIPINAS, plaintiff-appellee, vs. NATIONAL COCONUT CORPORATION,
defendant-appellant
G.R. No. L-3756, June 30, 1952

FACTS:
The plaintiff, Sagrada Orden de Predicadores del Santisimo Rosario de Filipinas,
owns a piece of property in Pandacan, Manila. The property was acquired by Taiwan
Tekkosho, a Japanese corporation, during World War II. After the war, the United States
Alien Property Custodian took control of the property due to it being enemy property.
The property was later occupied by Copra Export Management Company and then by
National Coconut Corporation (defendant). There was an agreement reached between the
plaintiff and defendant, facilitated by the court, which set conditions for the defendant's
use of the property, including vacating the premises by a certain date and payment to the
Philippine Alien Property Administration.

ISSUE:
1. Whether or not the defendant, National Coconut Corporation, liable to pay
reasonable rentals for the period of its occupation of the property prior to the
specified date in the agreement

RULING:
1. No. The court points out that the defendant occupied the property with the
permission of the Alien Property Custodian of the United States. The court relies
on Article 1089 of the Spanish Civil Code, which states that obligations may arise
from law, contract or quasi-contract, crime, or negligence. None of these sources
establish liability for the defendant's rental payments prior to the specified date.
The defendant entered the property in good faith and under the authority of the
Alien Property Custodian, which had legal control over the property.
The Alien Property Administration, as a trustee of the United States Government,
controlled the property and had the power to dispose of it. The defendant's
possession was authorized by the Alien Property Custodian and, therefore, did not
create a contractual obligation to pay rent.
UMALI, MILLCEN O.
BSLM- LM1A

The circumstances do not suggest any implied agreement for rental payments
between the Alien Property Custodian and the defendant. Previous occupiers did
not pay rent, and the nature of the agreement did not indicate a rental obligation.
The court also refers to the Alien Property Custodian's legal authority over the
property, the absence of any contractual privity between the Alien Property
Custodian and the defendant, and the lack of evidence for an implied agreement
for rental payments.