G.R. No. L-6622 July 31, 1957.
Intestate Estate of the deceased MARCELO DE BORJA. CRISANTO DE BORJA, administrator-appellant, vs. JUAN DE BORJA, ET AL., oppositors-appellees.

FACTS

Marcelo de Borja died intestate in 1924 or 1925, leaving four legitimate children: Quintin, Francisco, Crisanta, and Juliana. Quintin initially administered the estate. Upon Quintin’s death in 1938, Crisanto de Borja (son of Francisco) was appointed administrator. On February 16, 1940, the heirs submitted an agreement (Exh. A) approved by the court, which stipulated the approval of all accounts submitted up to that point, the inclusion of certain properties and sums into the estate mass, and the terms for final partition. The estate administration was interrupted by the war. After reconstitution of the lost records in 1945, administrator Crisanto de Borja filed statements of accounts for the post-war periods. The heirs of Quintin de Borja (Juan de Borja et al.) and heir Juliana de Borja opposed these accounts, alleging they were inadequate, general, and that reported income was less than actual while expenses were exaggerated. They moved for a detailed examination and the appointment of an auditor. Francisco de Borja and the heir of Crisanta de Borja agreed to relieve the administrator from accounting for the Japanese occupation and had no objection to the post-war accounts. The lower court appointed an auditor, whose report found the administrator liable for a net amount of P83,337.31. The court approved this report and ordered the administrator to pay this sum to the estate. The administrator appealed.

ISSUE

Whether the lower court erred in holding the administrator, Crisanto de Borja, liable for the amount of P83,337.31 based on the auditor’s report.

RULING

The Supreme Court modified the lower court’s decision. It found that the auditor’s report contained errors and unjustified disallowances. Specifically, the Court held that: (1) The administrator should not be held liable for the P12,000 advanced by Crisanta and Juliana de Borja for land and machinery, as this sum was to be reimbursed to them from the estate mass per the 1940 agreement, and was not part of the estate funds he administered. (2) The sum of P25,000, representing the value of jewelry and personal effects retained by Juliana de Borja, should not be charged against the administrator, as these items were never in his possession or under his administration. (3) Certain disallowed expenses (e.g., for repairs, irrigation, travel, donations) totaling P46,210.78 were actually legitimate expenses for the benefit of the estate and should be allowed. Consequently, the administrator’s liability was reduced from P83,337.31 to P46,210.78, plus legal interest from the date of the lower court’s decision. The decision was affirmed in all other respects.