SPIT | B2015

CASE DIGESTS

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.