G.R. No. 18405; September 23, 1922
E. GASKELL & CO., INC., plaintiff-appellant, vs. TAN SIT, administratrix of the estate of Dy Poco, deceased, defendant-appellee.

FACTS

Prior to his bankruptcy, Dy Poco, through his customs broker E. Gaskell & Co., Inc., obtained a surety bond from Philippine Guaranty Co. to secure the release of imported merchandise. Dy Poco defaulted, and the surety paid the obligation. The surety then demanded reimbursement from Gaskell & Co. based on their application. The surety proved its claim against Dy Poco in the insolvency (bankruptcy) proceedings instituted against him. Dy Poco died during the insolvency proceedings, and his widow, Tan Sit, was appointed administratrix of his estate. Gaskell & Co., being contingently liable to the surety, filed its contingent claim against Dy Poco’s estate in the administration proceedings, not in the insolvency proceedings. The claim was disallowed by the commissioners and the trial court.

ISSUE

Whether the contingent claim of Gaskell & Co. against the estate of Dy Poco in the administration proceedings should be allowed, considering that the principal claim had been proved and discharged in the parallel insolvency proceedings.

RULING

No. The claim was properly disallowed. A contingent claim, such as that of a surety (Gaskell & Co.) against its principal (Dy Poco), is provable in insolvency proceedings under Section 56 of the Insolvency Law. The creditor-surety (Philippine Guaranty Co.) had already proved its claim in the insolvency, and any recovery by it would exonerate Gaskell & Co. proportionately. Since the claim was provable in bankruptcy and the insolvency proceedings resulted in a discharge of the debtor’s provable debts, the same claim cannot be asserted against the estate in the administration proceedings. When both insolvency and administration proceedings are conducted over a deceased bankrupt’s estate, claims provable in bankruptcy cannot be proved against the administrator. The judgment disallowing the claim is affirmed.