G.R. No. L-10120; July 22, 1916
A. H. HENRY, plaintiff-appellee, vs. JOSE VELASCO, ET AL., defendants-appellants.

FACTS:
Jose Velasco, as the administrator of the estate of Mariano Velasco, entered into a contract with plaintiff A. H. Henry. The contract authorized Henry to sell and lease a livery business and its premises belonging to the estate. Henry was to receive any amount over P8,000 obtained for the business, provided the buyer rented the premises for P250 per month. After Henry began negotiations, Velasco briefly suspended his authority but soon after directed him to proceed. Henry produced a buyer willing to pay P9,000 for the business but only P200 per month for the premises. Velasco ultimately accepted this buyer’s offer, completed the sale himself, and then attempted to cancel his contract with Henry. The trial court held that the contract was abrogated but awarded Henry P500 as compensation for services rendered. Velasco appealed.

ISSUE:
1. Whether the action for compensation under the contract should have been brought against Jose Velasco personally or against the estate he administered.

RULING:
1. On the first issue: The Court ruled that the action was properly brought against Jose Velasco in his personal capacity. The contract, although made for the benefit of the estate, was entered into by the administrator without prior court sanction. Following established doctrine, such a contract is considered the personal obligation of the administrator. The creditor may sue the administrator individually. If the administrator pays, he may later seek reimbursement from the estate as an administrative expense, subject to court approval and notice to interested parties. The estate itself is not directly liable under the contract.

DISPOSITIVE PORTION:
The judgment of the trial court is AFFIRMED, with costs against the appellant Jose Velasco.