Manaloto V Veloso III

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ERMELINDA C. MANALOTO, et. al., Petitioners, vs.

ISMAEL VELOSO
III, Respondent.
G.R. No. 171365 Oct. 6, 2010, J. Leonardo-De Castro

This case is an off-shoot of an unlawful detainer case filed by herein petitioners


against herein respondent. In said complaint for unlawful detainer, it was alleged
that they are the lessors of a residential house in Quezon City which was leased to
respondent at a monthly rental of P17,000.00. The action was instituted on the
ground of respondent's failure to pay rentals from May 23, 1997 to December 22,
1998 despite repeated demands. Respondent denied the non-payment of rentals
and alleged that he made an advance payment of P825,000.00 when he paid for the
repairs done on the leased property.

After trial, the MeTC decided in favor of petitioners by ordering respondent to (a)
vacate the premises; (b) pay the sum of P306,000.00 corresponding to the rentals
due from May 23, 1997 to November 22, 1998, and the sum of P17,000.00 a month
thereafter until respondent vacates the premises; and (c) pay petitioners the sum
of P5,000.00 as attorney's fees.

Whilst respondent's appeal of the MeTC judgment was pending before the RTCBranch 88, respondent filed before the RTC-Branch 227 a Complaint for Breach of
Contract and Damages against the petitioners. The said complaint alleged two
causes of action. The first cause of action was for damages because the respondent
supposedly suffered embarrassment and humiliation when petitioners distributed
copies of the MeTC decision to the homeowners of Horseshoe Village while appeal
was still pending before RTC-Branch 88. The second cause of action was for breach
of contract since petitioners, as lessors, failed to make continuing repairs on the
subject property to preserve and keep it tenantable. Thus, respondent sought the
following from the court a quo:
a) P1,500,000.00 as moral damages and consequential damages;
b) P500,000.00 as exemplary damages;
c) P425,000.00 representing the difference of the expenses of the
improvements of P825,000.00 andP400,000.00 pursuant to Art. 1678 of the
Civil Code;

d) P594,000.00 representing interest for three (3) years from 1998 to 2000
on the P825,000.00 advanced by the respondent at the rate of 24% per
annum;
e) P250,000.00 as compensation for the respondent's labor and efforts in
overseeing and attending the needs of contractors the repair/renovation of
the leased premises;
f) P250,000.00, plus 20% of all recoveries from petitioners and P2,500.00
per hearing as attorney's fees;
g) Cost of suit.

Petitioners argued that respondent had no cause of action against them because
the MeTC decision in the unlawful detainer case was a matter of public record and
its disclosure to the public violated no law or any legal right of the respondent.
Moreover, petitioners averred that the respondent's present Complaint for Breach
of Contract and Damages was barred by prior judgment since it was a mere
replication of respondent's Answer with Compulsory Counterclaim in the unlawful
detainer case before the MeTC. The said unlawful detainer case was already
judicially decided with finality.

The RTC-Branch 227 dismissed respondent's complaint for violating the rule
against splitting of cause of action, lack of jurisdiction, and failure to disclose the
pendency of a related case.

The CA, on appeal, fully agreed with the RTC-Branch 227 in dismissing
respondent's second cause of action (i.e., breach of contract). It, however, held that
RTC-Branch 227 should have proceeded with the trial on the merits of the first
cause of action (i.e., damages), because although respondent may have stated the
same factual antecedents that transpired in the unlawful detainer case, such
allegations were necessary to give an overview of the facts leading to the
institution of another case between the parties before the RTC acting in its original
jurisdiction. The Court of Appeals then went on to find that petitioners were indeed
liable to respondent for damages: an award of P30,000.00 moral damages
circumstances and P10,000.00 exemplary damages.

Issue:

May disclosure of a court decision, which is part of public record, cause any leal
and compensable injury to respondent?

Held:
Yes. Petitioners are obliged to respect respondent's good name even though they
are opposing parties in the unlawful detainer case. As Article 19 of the Civil Code
requires, "every person must, in the exercise of his rights and in the performance
of his duties, act with justice, give everyone his due, and observe honesty and good
faith." A violation of such principle constitutes an abuse of rights, a tortuous
conduct.
While Article 19 may have been intended as a mere declaration of principle, the
"cardinal law on human conduct" expressed in said article has given rise to certain
rules, e.g. that where a person exercises his rights but does so arbitrarily or
unjustly or performs his duties in a manner that is not in keeping with honesty and
good faith, he opens himself to liability. The elements of an abuse of rights under
Article 19 are: (1) there is a legal right or duty; (2) which is exercised in bad faith;
(3) for the sole intent of prejudicing or injuring another.
Petitioners are also expected to respect respondent's "dignity, personality, privacy
and peace of mind" under Article 26 of the Civil Code, which provides:
Thus, Article 2219(10) of the Civil Code allows the recovery of moral damages for
acts and actions referred to in Article 26, among other provisions, of the Civil
Code.
It is already settled that the public has a right to see and copy judicial records and
documents. However, this is not a case of the public seeking and being denied
access to judicial records and documents. The controversy is rooted in the
dissemination by petitioners of the MeTC judgment against respondent to
Horseshoe Village homeowners, who were not involved at all in the unlawful
detainer case, thus, purportedly affecting negatively respondent's good name and
reputation among said homeowners. The unlawful detainer case was a private
dispute between petitioners and respondent, and the MeTC decision against
respondent was then still pending appeal before the RTC-Branch 88, rendering
suspect petitioners' intentions for distributing copies of said MeTC decision to nonparties in the case. While petitioners were free to copy and distribute such copies
of the MeTC judgment to the public, the question is whether they did so with the
intent of humiliating respondent and destroying the latter's good name and
reputation in the community.
Nevertheless, the CA erred in already awarding moral and exemplary damages in
respondent's favor when the parties have not yet had the chance to present any
evidence before the RTC-Branch 227. In civil cases, he who alleges a fact has the
burden of proving it by a preponderance of evidence. It is incumbent upon the
party claiming affirmative relief from the court to convincingly prove its claim.

Bare allegations, unsubstantiated by evidence are not equivalent to proof under


our Rules. In short, mere allegations are not evidence.
At this point, the finding of the Court of Appeals of bad faith and malice on the part
of petitioners has no factual basis. Good faith is presumed and he who alleges bad
faith has the duty to prove the same.
The award of moral and exemplary damages made by the Court of Appeals in favor
of respondent Ismael Veloso III is DELETED. The complaint of respondent Ismael
Veloso III is hereby REINSTATED before Branch 227 of the Regional Trial Court of
Quezon City only in so far as the first cause of action is concerned.

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