I P10,000.00 P1,401.50 I, II, III, IV, Claim disallowed.
and V. Errors held to be well taken.
II 8,000.00 6,375.00 VI, VII, VIII, Claim allowed.
and IX. Errors held not to be well taken.
III 20,000.00 18,372.19 I, II, III, IV, Claim disallowed.
and V. Errors held to be well taken.
IV 16,700.39 16,700.39 X, XI, and XII. Claim disallowed.
Errors held to be well taken.
_________________________________________________________
Total 54,700.39 42,849.08 P6,375 allowed.
DISPUTED FACTS
Coming now to the disputed points, we resolve them in order.
First and third causes of action, in relation with errors I, II, III, IV, and V. — At this point, it is well to recall that presumably the estate lost over P19,000 during the time when it was administered by Go Chiong Lee, and that on the first and third causes of action the trial judge found with the plaintiff in approximately an amount which covered the losses. The basis for this finding was, first, the lack of authority on the part of Go Chiong Lee as administrator to run the two stores belonging to the estate of the deceased, and second, the failure of Go Chiong Lee to render the monthly reports made a condition of his appointment as administrator.
The permission to operate the stores was granted to Go Chiong Lee on the same date when he was relieved as special administrator and appointed "administrator definitivo" of the estate. He proceeded to act under such authority for over a year without being challenged by anyone. It would now be preposterous to suppose that the power to run the stores actually granted by the trial judge continued merely for an infinitesimal moment of time on May 25, 1920, between the precise moment when Go Chiong Lee acted under it a special administrator, and the succeeding moment when he became the administrator. The only reasonable deduction is that the powers of the special administrator having ceased, and that at the same time that they ceased permission was given to operate the stores, this authority was intended for the administrator, of if intended for the special administrator, was transmitted to the general administrator as soon as he was appointed.
That the attorney of the defendant Go Chiong Lee had knowledge of the addition to the order of the court naming Go Chiong Lee administrator, by which latter was bound to render written monthly reports of his administration, is established, but that subsequently the court tacitly modified its order, is likewise disclosed by the record. The administrator was repeatedly enjoined to submit accounts without specifying monthly accounts. On three occasions the administrator rendered his accounts without protest from any source.
That monthly reports would have possessed any particular virtue over the reports actually submitted, to place the court on its guard and thus to protect the estate from losses, is hardly plausible. On the contrary, that the losses sustained by the estate resulted from the risk necessarily attending the operation of the two stores, is a much more reasonable assumption. At least the only testimony refuting that of the former administrator comes from one Vidal Reynes, a tailor by profession, and is not at all impressive.
The standard of responsibility of the administrator is best measured as in essence the responsibility of a bailee. Like any bailee, he must pursue his discretion honestly and in good faith, or he will become personally liable, to those who are interested in the estate, for waste, conversion, or embezzlement. But where an administrator, entrusted with the carrying on of an estate, acts in good faith and in accordance with the usual rules and methods obtaining in such business, he will not be held liable for losses incurred. (Schouler on Wills, Executors and Administrators, Chapter III; Allen and Hill v. Shanks [1891], 90 Tenn., 359.)
We find that the personal responsibility of the former administrator and the sureties on his bond for losses incurred by the estate during his administration, has not been proved.
Second cause of action, in relation with errors VI, VII, VIII, and IX. — On this cause of action, the plaintiff sought to recover the value of 850 sacks of corn which Go Chiong Lee, it is said, failed to inventory. Related to the point, are legal provisions providing that the administrator who has qualified shall, within three months after his appointment, return to the court a true inventory of the real estate and of the goods, chattels, rights, and credits of the deceased, which come into his possession or knowledge, and that the administrator shall be chargeable in his account with the goods, chattels, rights, and credits of the deceased, which come into his possession. (Code of Civil Procedure, secs. 661, 662, 668, 673.) The administrator is accountable on his bond along with the sureties for the performance of these legal obligations.
The issue is squarely one of fact, and as is customary in such cases, we follow the findings of the trial court if proof to substantiate such findings appears in the record. Here, such proof exists, which means that the judgment appealed from must be affirmed in this respect.
Fourth cause of action, in relation with errors X, XI, and XII. — The law provides how the debts of the estate shall be paid, and how subsequent to the return of the report of the committee on claims, the court shall order the payment of the debts and the distribution of the assets. (Code of Civil Procedure, Chapter XXXVIII, especially sec. 739.) The committee on claims did in this case make such a report, showing the debts to come to P69,099.91. The court did decree payment of the debts in the order which is hereinbefore quoted. And the defendant did attempt to comply with the order as appears from his report likewise hereinbefore quoted in part. The anomaly, however, is that, while some of the creditors have been paid entirely and others partially, some of them received absolutely nothing on account of the hit and miss method followed by the administrator.
The general rule is that a personal representative will be protected in the payment of a claim which has been duly allowed or ordered paid by the court, although it should not have been paid in full, unless it is made to appear that such allowance of the claim, or order for the payment thereof, was obtained through his collusion or bad faith. (24 C. J., 452; Hancock v. Chapman [1916], 170 Ky., 99; Thomson v. Taylor [1877], 71 N. Y., 217.)
Keeping the conceded facts and the legal principle in mind, we have read many times the order of the trial court relating to the distribution of the assets among the creditors and are still left with the impression that the administrator, although wisely, attempted to follow the order to the best of his ability. Moreover, it is not at all certain but that the estate will finally show enough on the profit side of the ledger either to pay all of the creditors to the full extent of their claims, or to give the most of the creditors who have not been paid a proportion similar to that of the creditors who have been paid. In these same proceedings, the administratrix on her own motion. or the creditors at their initiative, may recover the excess imprudently paid out to certain creditors. (2 Schouler on Wills, Executors, and Administrators, pp. 1511-1512.)
For all the foregoing, the judgment is modified to the extent that the plaintiff shall only have and recover from the defendants jointly and severally the amount of P6,375, with legal interest from the date when the complaint was presented. Without costs. So ordered.
Johnson, Street, Avanceña, Villamor, Ostrand, and Romualdez, JJ., concur.