G.R. No. 46198 ; October 10, 1938
In re Intestate of the deceased Roman Lazo. JACOBE LAZO, administratrix-appellee, vs. MAURO LAZO, special administrator-appellant.

FACTS

Roman Lazo died intestate. The Court of First Instance initially appointed his nephew, Mauro Lazo, as administrator but later reconsidered and appointed the widow, Jacobe Lazo, as administratrix. Due to administrative difficulties, Mauro Lazo was later appointed as special administrator. Both administrators incurred expenses in their official capacities. Their respective accounts were submitted for approval. The estate was insolvent, with the realized proceeds from the sale of its properties being insufficient to cover even the total expenses of administration. The lower court declared the claim of the administratrix, Jacobe Lazo, as preferential over that of the special administrator, Mauro Lazo, based on the earlier approval of her account.

ISSUE

Which claim for expenses of administration—that of the regular administratrix or that of the special administrator—is entitled to preference in payment from the insolvent estate?

RULING

The claims for necessary expenses of administration are on the same level and entitled to the same priority of payment. The Court modified the lower court’s order. It held that Section 735 of the Code of Civil Procedure, as amended, grants necessary expenses of administration preference over the debts of the estate but does not establish any preference among different administration expenses themselves. Therefore, the proceeds from the estate should be divided pro rata between the administratrix and the special administrator in proportion to their respective approved claims (P3,933 for Jacobe Lazo and P738.07 for Mauro Lazo).

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