One Network Bank v. Baric
REITERATIONFacts
The Antecedents: Respondent Danilo G. Baric (Baric) was a lessee of a commercial space owned by Jaime Palado (Palado). Palado sent Baric a notice to vacate. Baric filed a complaint with the Lupong Tagapamayapa but failed to attend the conciliation hearings, leading to a Certificate to Bar Action. Subsequently, the building was demolished. Baric filed a case for forcible entry with prayer for injunctive relief against Palado and petitioner One Network Rural Bank, Inc. (Network Bank), alleging he was excluded from the premises by force, violence, and threat. Network Bank later purchased the property from Palado. Procedural History: The Municipal Trial Court in Cities (MTCC) dismissed Baric's complaint, finding that Baric voluntarily vacated the premises. The Regional Trial Court (RTC) affirmed the MTCC's decision. The Court of Appeals (CA) reversed the lower courts, holding Palado guilty of forcible entry and awarding Baric ₱50,000.00 in nominal damages, finding Network Bank solidarily liable as it merely stepped into the shoes of Palado. The Petition: Network Bank filed a Petition for Review on Certiorari, seeking to set aside the CA's decision, arguing it should not be held liable as it was a buyer in good faith after the notice of lis pendens was cancelled and it was not privy to the dispute between Baric and Palado.
Issue(s)
Whether a buyer of real property after the cancellation of a notice of lis pendens is considered a transferee pendente lite. Whether the determination of good faith on the part of the petitioner (Network Bank) is material in a forcible entry case, whether the appellate court disregarded the findings of fact of the lower courts, and whether Baric's claim for reinstatement and damages should be granted. Whether Network Bank may be held solidarily liable with Palado for nominal damages.
Ruling
The Supreme Court granted the Petition, modifying the Court of Appeals' decision by absolving petitioner One Network Rural Bank, Inc. from liability. The Court held that Network Bank did not violate any of Baric's rights and could not be implicated in the illegal acts committed by Palado, as it was merely a purchaser of the property and did not participate in the ouster of Baric.
Ratio Decidendi
There was no ratio provided for the issue of whether a buyer of real property after the cancellation of a notice of lis pendens is considered a transferee pendente lite. On the issue of the materiality of Network Bank's good faith, the appellate court's findings, and Baric's claim for reinstatement and damages: The Court ruled that Baric could not be reinstated to the premises and awarded damages because he did not question the CA ruling in an appropriate Petition before the Supreme Court. It is well-settled that a party who has not appealed from a decision cannot seek any relief other than what is provided in the judgment appealed from. An appellee who has himself not appealed may not obtain from the appellate court any affirmative relief other than the ones granted in the decision of the court below. On the issue of Network Bank's liability for nominal damages: The Court held that nominal damages are recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind, or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. Under Article 2221 of the Civil Code, nominal damages may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for indemnifying the plaintiff for any loss suffered. In this case, Network Bank did not violate any of Baric's rights; it was merely a purchaser or transferee of the property. It is not prohibited from acquiring the property even while the forcible entry case was pending, as Palado, the registered owner, could transfer his title at any time, and the lease merely follows the property as a lien or encumbrance. Any invasion or violation of Baric's rights as lessee was committed solely by Palado, and Network Bank may not be implicated or found guilty unless it actually took part in the commission of illegal acts, which does not appear to be so from the evidence on record. On the contrary, it appears that Baric was ousted through Palado's acts even before Network Bank acquired the subject property or came into the picture. Thus, it was error to hold the bank liable for nominal damages.
Main Doctrine
A third party who did not commit a violation or invasion of the plaintiff's rights may not be held liable for nominal damages, as nominal damages are for the vindication of a right violated, not for indemnification of loss suffered.