[ SPECIAL PROCEEDINGS | ATTY.
TANTUICO ] 1
67. Lizarraga Hermanos v. Abada
G.R. No. 12345, January 1, 2019
Digest by: DIMLABS
TOPIC: Claims Against the Estate
DOCTRINE: 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.
RECIT-READY 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.
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.
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
ISSUE/S: WON the P68,000 is administration expenses – NO
(GO2) 2018 - 2019
 [ SPECIAL PROCEEDINGS | ATTY. TANTUICO ] 2

HELD: DISPOSITIVE PORTION / RULING: Judgment AFFIRMED. The estate is not

liable for the P68,000.
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.

(GO2) 2018 - 2019