G.R. No. L-22183 August 30, 1968
THE RECEIVER FOR NORTH NEGROS SUGAR COMPANY, INC., petitioner, vs. PEDRO V. YBAÑEZ ET AL., respondents.

FACTS

On August 31, 1937, a collision between a car and a train owned by North Negros Sugar Company, Inc. resulted in the death of Cesar V. Ybañez. The car’s driver and the train’s operator and brakeman were criminally prosecuted but acquitted. On May 15, 1940, the deceased’s siblings, Pedro V. Ybañez and Rosario V. Ybañez, filed a civil action for damages based on culpa aquiliana against the company and its employees. The trial court dismissed the case, but the Supreme Court remanded it for further proceedings. During the pendency, Rosario died, leaving Pedro as the sole heir, and the company was dissolved and substituted by its receiver. After receiving additional evidence, the trial court again dismissed the case. The Court of Appeals reversed the trial court, holding the company liable and awarding damages, including P5,000 as moral damages for mental anguish and P5,000 as attorney’s fees. The company’s receiver filed this petition for review, contesting only the awards for moral damages and attorney’s fees.

ISSUE

1. Whether the Court of Appeals erred in awarding moral damages to the brother and sister of the deceased.
2. Whether the Court of Appeals erred in awarding attorney’s fees.

RULING

1. Yes. The Supreme Court ruled that the old Civil Code applied because the act and filing of the case occurred before the new Civil Code’s effectivity. While Article 1902 of the old Civil Code on culpa aquiliana did not specify who could recover moral damages, the Court found no jurisprudence awarding such damages to siblings of the deceased under the old law. The transitional provision of the new Civil Code (Article 2263) allowed for its suppletory application. Applying Article 2206(3) of the new Civil Code by analogy, which limits those entitled to moral damages for death to the spouse, descendants, and ascendants, the siblings (brother and sister) were not entitled. The award of P5,000 for moral damages was eliminated.
2. Yes. The Supreme Court ruled that attorney’s fees are not recoverable as damages in the absence of a stipulation or statute, except when the defendant’s act or omission compelled the plaintiff to incur expenses to protect his interest. The Court found no such compelling circumstance in this case, as the defendant’s exercise of its right to defend itself in court did not constitute a vexatious act warranting an award of attorney’s fees. The award of P5,000 for attorney’s fees was eliminated. The decision of the Court of Appeals was modified by deleting these two awards.