Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-3756 June 30, 1952
SAGRADA ORDEN DE PREDCADORES DEL SANTSMO ROSARO DE
!LPNAS, plaintiff-appellee,
vs.
NATONAL COCONUT CORPORATON, defendant-appellant.
First Assistant Corporate Counsel Federico C. Alikpala and Assistant
Attorney Augusto Kalaw for appellant.
Ramirez and Ortigas for appellee.
LA"RADOR, J.#
This is an action to recover the possession of a piece of real property land
and !arehouses" situated in Pandacan Manila, and the rentals for its
occupation and use. The land belon#s to the plaintiff, in !hose na$e the
title !as re#istered before the !ar. %n &anuary ', ()'*, durin# the
&apanese $ilitary occupation, the land !as ac+uired by a &apanese
corporation by the na$e of Tai!an Te,,osho for the su$ of P('-,--, and
thereupon title thereto issued in its na$e transfer certificate of title No.
.'**-, Re#ister of /eeds, Manila". After liberation, $ore specifically on
April ', ()'., the Alien Property Custodian of the 0nited 1tates of A$erica
too, possession, control, and custody thereof under section (2 of the
Tradin# !ith the Ene$y Act, '- 1tat., '((, for the reason that it belon#ed to
an ene$y national. /urin# the year ()'. the property !as occupied by the
Copra E3port Mana#e$ent Co$pany under a custodianship a#ree$ent
!ith 0nited 1tates Alien Property Custodian E3hibit 4", and !hen it
vacated the property it !as occupied by the defendant herein. The
Philippine 4overn$ent $ade representations !ith the %ffice Alien Property
Custodian for the use of property by the 4overn$ent see E3hibits 2, 2-A,
2-B, and (". %n March *(, ()'5, the defendant !as authori6ed to repair the
!arehouse on the land, and actually spent thereon the repairs the su$ of
P2.,7)7.25. 8n ()'7, defendant leased one-third of the !arehouse to one
/ioscoro 1arile at a $onthly rental of P9--, !hich !as later raised to
P(,--- a $onth. 1arile did not pay the rents, so action !as brou#ht a#ainst
hi$. 8t is not sho!n, ho!ever, if the :ud#$ent !as ever e3ecuted.
Plaintiff $ade clai$ to the property before the Alien Property Custodian of
the 0nited 1tates, but as this !as denied, it brou#ht an action in court
Court of ;irst 8nstance of Manila, civil case No. 9--5, entitled <=a 1a#rada
%rden Predicadores de la Provinicia del 1antisi$o Rosario de ;ilipinas,<
vs. Philippine Alien Property Ad$inistrator, defendant, Republic of the
Philippines, intervenor" to annul the sale of property of Tai!an Te,,osho,
and recover its possession. The Republic of the Philippines !as allo!ed to
intervene in the action. The case did not co$e for trial because the parties
presented a :oint petition in !hich it is clai$ed by plaintiff that the sale in
favor of the Tai!an Te,,osho !as null and void because it !as e3ecuted
under threats, duress, and inti$idation, and it !as a#reed that the title
issued in the na$e of the Tai!an Te,,osho be cancelled and the ori#inal
title of plaintiff re-issued> that the clai$s, ri#hts, title, and interest of the
Alien Property Custodian be cancelled and held for nau#ht> that the
occupant National Coconut Corporation has until ;ebruary 27, ()'), to
recover its e+uip$ent fro$ the property and vacate the pre$ises> that
plaintiff, upon entry of :ud#$ent, pay to the Philippine Alien Property
Ad$inistration the su$ of P('-,---> and that the Philippine Alien Property
Ad$inistration be free fro$ responsibility or liability for any act of the
National Coconut Corporation, etc. Pursuant to the a#ree$ent the court
rendered :ud#$ent releasin# the defendant and the intervenor fro$ liability,
but reversin# to the plaintiff the ri#ht to recover fro$ the National Coconut
Corporation reasonable rentals for the use and occupation of the pre$ises.
E3hibit A-(."
The present action is to recover the reasonable rentals fro$ Au#ust, ()'.,
the date !hen the defendant be#an to occupy the pre$ises, to the date it
vacated it. The defendant does not contest its liability for the rentals at the
rate of P*,--- per $onth fro$ ;ebruary 27, ()') the date specified in the
:ud#$ent in civil case No. 9--5", but resists the clai$ therefor prior to this
date. 8t interposes the defense that it occupied the property in #ood faith,
under no obli#ation !hatsoever to pay rentals for the use and occupation of
the !arehouse. &ud#$ent !as rendered for the plaintiff to recover fro$ the
defendant the su$ of P*,--- a $onth, as reasonable rentals, fro$ Au#ust,
()'., to the date the defendant vacates the pre$ises. The :ud#$ent
declares that plaintiff has al!ays been the o!ner, as the sale of &apanese
purchaser !as void ab initio> that the Alien Property Ad$inistration never
ac+uired any ri#ht to the property, but that it held the sa$e in trust until the
deter$ination as to !hether or not the o!ner is an ene$y citi6en. The trial
court further declares that defendant can not clai$ any better ri#hts than its
predecessor, the Alien Property Ad$inistration, and that as defendant has
used the property and had subleased portion thereof, it $ust pay
reasonable rentals for its occupation.
A#ainst this :ud#$ent this appeal has been interposed, the follo!in#
assi#n$ent of error havin# been $ade on defendant-appellant?s behalf@
The trial court erred in holdin# the defendant liable for rentals or
co$pensation for the use and occupation of the property fro$ the
$iddle of Au#ust, ()'., to /ece$ber (', ()'7.
(. Aant to <o!nership ri#hts< of the Philippine Alien Property
Ad$inistration did not render ille#al or invalidate its #rant to the
defendant of the free use of property.
2. the decision of the Court of ;irst 8nstance of Manila declarin# the
sale by the plaintiff to the &apanese purchaser null and void ab initio
and that the plaintiff !as and has re$ained as the le#al o!ner of the
property, !ithout le#al interruption, is not conclusive.
*. Reservation to the plaintiff of the ri#ht to recover fro$ the
defendant corporation not bindin# on the later>
'. 0se of the property for co$$ercial purposes in itself alone does
not :ustify pay$ent of rentals.
9. /efendant?s possession !as in #ood faith.
.. /efendant?s possession in the nature of usufruct.
8n reply, plaintiff-appellee?s counsel contends that the Philippine Allien
Property Ad$inistration PAPA" !as a $ere ad$inistrator of the o!ner
!ho ulti$ately !as decided to be plaintiff", and that as defendant has used
it for co$$ercial purposes and has leased portion of it, it should be
responsible therefore to the o!ner, !ho had been deprived of the
possession for so $any years. Appellee?s brief, pp. 2-, 2*."
Ae can not understand ho! the trial court, fro$ the $ere fact that plaintiff-
appellee !as the o!ner of the property and the defendant-appellant the
occupant, !hich used for its o!n benefit but by the e3press per$ission of
the Alien Property Custodian of the 0nited 1tates, so easily :u$ped to the
conclusion that the occupant is liable for the value of such use and
occupation. 8f defendant-appellant is liable at all, its obli#ations, $ust arise
fro$ any of the four sources of obli#ations, na$ley, la!, contract or +uasi-
contract, cri$e, or ne#li#ence. Article (-7), 1panish Civil Code."
/efendant-appellant is not #uilty of any offense at all, because it entered
the pre$ises and occupied it !ith the per$ission of the entity !hich had
the le#al control and ad$inistration thereof, the Allien Property
Ad$inistration. Neither !as there any ne#li#ence on its part. There !as
also no privity of contract or obli#ation" bet!een the Alien Property
Custodian and the Tai!an Te,,osho, !hich had secured the possession of
the property fro$ the plaintiff-appellee by the use of duress, such that the
Alien Property Custodian or its per$ittee defendant-appellant" $ay be
held responsible for the supposed ille#ality of the occupation of the
property by the said Tai!an Te,,osho. The Allien Property Ad$inistration
had the control and ad$inistration of the property not as successor to the
interests of the ene$y holder of the title, the Tai!an Te,,osho, but by
e3press provision of la! Tradin# !ith the Ene$y Act of the 0nited 1tates,
'- 1tat., '((> 9- 0.1.C.A., (7)". Neither is it a trustee of the for$er o!ner,
the plaintiff-appellee herein, but a trustee of then 4overn$ent of the 0nited
1tates *2 %p. Atty. 4en. 2')> 9- 0.1.C.A. 27*", in its o!n ri#ht, to the
e3clusion of, and a#ainst the clai$ or title of, the ene$y o!ner.
Bou#hioheny C %hio Coal Co. vs. =asevich D()2-E, (5) N.A., *99> (5(
Ais., *'5> 0.1.C.A., 272-27*." ;ro$ Au#ust, ()'., !hen defendant-
appellant too, possession, to the late of :ud#$ent on ;ebruary 27, ()'7,
Allien Property Ad$inistration had the absolute control of the property as
trustee of the 4overn$ent of the 0nited 1tates, !ith po!er to dispose of it
by sale or other!ise, as thou#h it !ere the absolute o!ner. 0.1 vs.
Che$ical ;oundation DC.C.A. /el. ()29E, 9 ;. D2dE, ()(> 9- 0.1.C.A., 27*."
Therefore, even if defendant-appellant !ere liable to the Allien Property
Ad$inistration for rentals, these !ould not accrue to the benefit of the
plaintiff-appellee, the o!ner, but to the 0nited 1tates 4overn$ent.
But there is another #round !hy the clai$ or rentals can not be $ade
a#ainst defendant-appellant. There !as no a#ree$ent bet!een the Alien
Property Custodian and the defendant-appellant for the latter to pay rentals
on the property. The e3istence of an i$plied a#ree$ent to that effect is
contrary to the circu$stances. The copra E3port Mana#e$ent Co$pany,
!hich preceded the defendant-appellant, in the possession and use of the
property, does not appear to have paid rentals therefor, as it occupied it by
!hat the parties deno$inated a <custodianship a#ree$ent,< and there is no
provision therein for the pay$ent of rentals or of any co$pensation for its
custody and or occupation and the use. The Tradin# !ith the Ene$y Act,
as ori#inally enacted, !as purely a $easure of conversation, hence, it is
very unli,ely that rentals !ere de$anded for the use of the property. Ahen
the National coconut Corporation succeeded the Copra E3port
Mana#e$ent Co$pany in the possession and use of the property, it $ust
have been also free fro$ pay$ent of rentals, especially as it !as
4overn$ent corporation, and steps !here then bein# ta,en by the
Philippine 4overn$ent to secure the property for the National Coconut
Corporation. 1o that the circu$stances do not :ustify the findin# that there
!as an i$plied a#ree$ent that the defendant-appellant !as to pay for the
use and occupation of the pre$ises at all.
The above considerations sho! that plaintiff-appellee?s clai$ for rentals
before it obtained the :ud#$ent annullin# the sale of the Tai!an Te,,osho
$ay not be predicated on any ne#li#ence or offense of the defendant-
appellant, or any contract, e3press or i$plied, because the Allien Property
Ad$inistration !as neither a trustee of plaintiff-appellee, nor a privy to the
obli#ations of the Tai!an Te,,osho, its title bein# based by le#al provision
of the sei6ure of ene$y property. Ae have also tried in vain to find a la! or
provision thereof, or any principle in +uasi contracts or e+uity, upon !hich
the clai$ can be supported. %n the contrary, as defendant-appellant
entered into possession !ithout any e3pectation of liability for such use and
occupation, it is only fair and :ust that it $ay not be held liable therefor. And
as to the rents it collected fro$ its lessee, the sa$e should accrue to it as a
possessor in #ood faith, as this Court has already e3pressly held.
Resolution, National Coconut Corporation vs. 4eroni$o, 7* Phil. '.5."
=astly, the reservation of this action $ay not be considered as vestin# a
ne! ri#ht> if no ri#ht to clai$ for rentals e3isted at the ti$e of the
reservation, no ri#hts can arise or accrue fro$ such reservation alone.
Aherefore, the part of the :ud#$ent appealed fro$, !hich sentences
defendant-appellant to pay rentals fro$ Au#ust, ()'., to ;ebruary 27,
()'), is hereby reversed. 8n all other respects the :ud#$ent is affir$ed.
Costs of this appeal shall be a#ainst the plaintiff-appellee.
Paras, C.., Pablo, !engzon, Padilla, "uason, #ontemayor, and !autista
Angelo, , concur.