Francisco Caponong died owing money to Lizarraga Hermanos. His widow Abada was appointed administratrix of his estate. Commissioners determined Caponong's estate owed Lizarraga P12,783.74. However, Lizarraga claimed Abada personally and as administratrix received over P68,000 from them, which should be treated as an administration expense. The Supreme Court disagreed, finding the P68,000 could not be claimed against the estate beyond the P12,783.74 already determined. Administration expenses must be reasonable costs of managing the estate, not additional loans to the administratrix.
Francisco Caponong died owing money to Lizarraga Hermanos. His widow Abada was appointed administratrix of his estate. Commissioners determined Caponong's estate owed Lizarraga P12,783.74. However, Lizarraga claimed Abada personally and as administratrix received over P68,000 from them, which should be treated as an administration expense. The Supreme Court disagreed, finding the P68,000 could not be claimed against the estate beyond the P12,783.74 already determined. Administration expenses must be reasonable costs of managing the estate, not additional loans to the administratrix.
Francisco Caponong died owing money to Lizarraga Hermanos. His widow Abada was appointed administratrix of his estate. Commissioners determined Caponong's estate owed Lizarraga P12,783.74. However, Lizarraga claimed Abada personally and as administratrix received over P68,000 from them, which should be treated as an administration expense. The Supreme Court disagreed, finding the P68,000 could not be claimed against the estate beyond the P12,783.74 already determined. Administration expenses must be reasonable costs of managing the estate, not additional loans to the administratrix.
Lizarraga Hermanos v. Abada September 17, 1919 Moir, J. Francis G. Francisco
SUMMARY: Caponong died. His widow, Abada, was
appointed administratrix. The Commissioners allowed only P12,783 claim of Lizarraga. Lizarraga alleges that it gave Abada, personally and as administratrix, a sum of money which amounted to P68,000, with interest, which should be treated as administration expenses that may be claimed against the estate of Caponong. SC did not allow the P68,000 to be claimed against the estate. DOCTRINE: The administration expense would be the necessary expenses of handling the property, of protecting it against destruction or deterioration, and possibly producing a crop. If Lizarraga, holding a claim originally for less than P13,000 against the estate, let the administratrix have money and effects till their claim grew to P68,000 they cannot be permitted to charge this amount as expense of administration. They might be allowed to charge it against the current revenue from the hacienda or the net proceeds of the "exploitation of the hacienda" for which it was obtained and used, as Lizarraga alleges, but it cannot relate back to the presenting of their claim to the commissioners, and be a charge against the inheritance of the heirs, or even a claim to prorate with other creditors' claims allowed by the commissioners. By expense of administration we understand to be the reasonable and necessary expense of caring for the property and managing it till the debts are paid, as provided by law, and of dividing it, if necessary, so as to partition it and deliver to the heirs.
FACTS: Francisco Caponong died owing the plaintiffs,
Sociedad de Lizarraga Hermanos. His widow, Felicisima Abada, was appointed administratrix of the estate.
Commissioners to appraise the estate and to pass on the
claims against the estate were duly appointed. Lizarraga presented its claim which was allowed by the commissioners in the sum of P12,783.74. 7 years after the death of Caponong, Lizarraga filed a suit in the CFI of Negros Occidental against Abada personally and as administratrix, alleging that Caponong owed Lizarraga P12,783.74, and that Abada in her own name and as administratrix, had been receiving from Lizarraga money and effects from 1908 to 1912 which money and effects were used by Abada in "the expense of cultivation and the exploitation of the Hacienda 'Coronacion,' and the account of Abada showed a balance in favor of Lizarraga of P62,437.15. The guardian of the minor children of Caponong intervened and denied the claim under oath, and alleged that the estate of Caponong did not owe Lizarraga anything. The parties, including the guardian, presented a motion in court stating that they had made an amicable settlement of the litigation, and prayed the court to dismiss the action, which was done. The settlement provided that the Abadas, including the guardian, "recognized that the deceased Caponong's estate was indebted to Lizarraga for P68,611.01, to be paid with 10 % interest in seven equal annual instalments and to secure this debt, Abadas agreed to give Lizarraga a first mortgage on all the property of Caponong, except the growing sugar cane, and on all the property belonging exclusively to Felicisima Abada, and Abadas agreed to secure judicial approval of the settlement. In this action, Lizarraga alleges in the complaint that defendants defaulted on two instalments. The court attached one parcel of land, the growing crops, certain products of the soil, and various animals.
SPIT | B2015 CASE DIGESTS
The receiver took charge of the property and Abadas were
ousted from the house they had beenoccupying on the premises. All the mortgaged property was then placed under receivership. Abadas filed an amended answer in which they alleged that the claim of Lizarraga against the intestate proceedings of Caponong had been allowed in the sum of P12,783.74 by the commissioners. The CFI judge largely sustained the Abadas claim, and declared that Lizarraga should pay damages. Lizarraga appealed alleging that the major part of the debt of P68,000 is administration expenses, and as such is chargeable against the assets of the estate. ISSUES: WON the P68,000 is administration expenses - NO RATIO: No reason is given why the expense of administration should be so great, and the evidence fails to sustain this position. The claim of Lizarraga against the estate of Caponong had been fixed by the commissioners. The amount so determined was all the estate owed Lizarraga. The law declares that commissioners shall pass upon all claims against the estate. They had done so in this case. The law fixed the limit of the estate's liability. The administratrix could only charge the estate with the reasonable and proper expenses of administration. The administration expense would be the necessary expenses of handling the property, of protecting it against destruction or deterioration, and possibly producing a crop. If Lizarraga, holding a claim originally for less than P13,000 against the estate, let the administratrix have money and effects till their claim grew to P68,000 they cannot be permitted to charge this amount as expense of administration. They might be allowed to charge it against
the current revenue from the hacienda or the net proceeds
of the "exploitation of the hacienda" for which it was obtained and used, as Lizarraga alleges, but it cannot relate back to the presenting of their claim to the commissioners, and be a charge against the inheritance of the heirs, or even a claim to prorate with other creditors' claims allowed by the commissioners. By expense of administration we understand to be the reasonable and necessary expense of caring for the property and managing it till the debts are paid, as provided by law, and of dividing it, if necessary, so as to partition it and deliver to the heirs. That the mortgage given at the same time and as a result of the agreement was without legal warrant is equally clear. No mortgage can be placed by an administrator on the estate of a descendant, unless it is specifically authorized by statute. There is no statute in the Philippine Islands authorizing it. DISPOSITIVE: Judgment AFFIRMED. The estate is not liable for the P68,000.