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[JOSE CARLOS CHUNG MUY CO'S ADMINISTRATOR v. LIM QUIOC ET AL.](https://www.lawyerly.ph/juris/view/c9fb?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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23 Phil. 518

[ G.R. No. 5675, November 26, 1912 ]

JOSE CARLOS CHUNG MUY CO'S ADMINISTRATOR, PETITIONER AND APPELLEE, VS. LIM QUIOC ET AL., RESPONDENTS AND APPELLANTS.

D E C I S I O N

TRENT, J.:

This  is  an appeal from an order of the Court of  First Instance of the of Manila, dated May 7,1909, approving with certain modifications the account of the administrator.

Counsel for the appellants insists that the court erred in allowing the administrator the sum of P4,396.22 for his services.

The bill is made up of the following items:

For the  first eleven months  excluding Sundays and holidays ........................
P1,144.00
For the  next twenty-five  months, excluding Sundays and holidays...................
1,300.00
For the prosecution of  a suit  for the recovery of money belonging to the estate..........................................................................................................

1,000.00
For extraordinary services performed in connection with the interest of the estate in an oil store....................................................................................................

500.00
For unusual services performed in connection with the settlement of two claims of the estate.......................................................................................................

250.00
For commissions on the amounts disbursed.................................................
202.22
  Total..........................................................................................
4,396.22

The court found as a fact that the administrator actually and necessarily employed during the first eleven months two hundred and eighty-six days his time, and in the twenty-five months following, three hundred and twenty-five  days. In view of the fact that the testimony taken on the hearing this  report has. not been  brought  to  this court,  these findings of cannot be disturbed.   There is no objection to the item of P202.22 commission on the amount disbursed.

With reference to the other items, the court said: 

"There was allowed the administrator in connection with the prosecution action by him for the recovery of money supposed to be due the estate the sum of one thousand pesos.

"I am aware that extraordinary services were performed by the administrator in connection with an interest which the estate had in an oil store, and the daily compensation allowed by law is not a reasonable compensation f the services  performed, and I allow for such services the sum of five hundred pesos.

"I am also aware that unusual services were performed in connection with settlement of two claims of the estate which were  after much labor adjusted by the administrator, and I am of opinion that an extra allowance should be made for these  services, which I fix at P250."

Section 680 of the Code  of Civil Procedure reads:

"Sec.  680. How allowed for services. - The executor or administrator be allowed necessary expenses in the care, management, and settlement of the estate,  and for his services,  two dollars per day for the time act and necessarily employed, and  a commission  of three per cent upon all sums disbursed in the payment,of debts, expenses, and distributive share the amount of such disbursements does not exceed one thousand dollars. the amount exceeds one thousand dollars and does not exceed  five thousand dollars, then three per cent upon the first one thousand dollar one and one-half per cent upon the excess, if the whole amount  does not exceed five  thousand  dollars. If the total disbursements exceed five thousand dollars, then the percentage as above provided, and one per cent on the excess  above five  thousand dollars.  But in any special case, w the estate is large, and the settlement has  been attended with  great difficulty, and has required  a  high degree of capacity on the part of executor or administrator,  a greater sum may be allowed.  But if object to the fees allowed be taken, the allowance may be reexamined' by the Supreme Court on appeal.

"When the administrator or executor is a  lawyer, he shall not be allowed charge against the estate any professional fees, as Such, for services rendered by himself.  When the deceased by will makes some other provision for compensation to his executor, that provision shall be  a full satisfaction his services, unless  by a written instrument filed in the court he renounces claim to the compensation provided by the will."

It will be noted that this section accurately fixes the compensation of executor or administrator, except in special cases where (1) the estate large, (2)  where the settlement has been attended with great  difficulty and  (3)  where a high degree of capacity has been required.

The law scrutinizes with a jealous eye the acts of executors and administrators to see that the accumulations of a life-time are properly distributed.  To accomplish these objects, it recognizes the necessity o securing persons of high character and  standing  in  the  community.  I recognizes  the fact that only by fair compensation for the services required can such men be expected to divert their time and attention and labor fr their own affairs to the management of estates,  the resources of which they must ascertain and administer, possibly with more or less hindrance unmerited distrust on the part of interested parties.   Again, in order reduce the rate  of compensation of  executors and administrators as nea as possible to a fixed standard, and thereby prevent  unnecessary lawsuit on  questions which have for their only basis  a difference of opinion, thus accelerate  the settlement of  such  estates, it has been found adv to specify beforehand what that compensation shall be, except in special cases, which, in the complexity of  human affairs, are bound  to arise The rate of  compensation  thus determined  with a  fair degree of accuracy, a person appointed to  the office may determine whether or not he can afford to undertake  to discharge its duties.  If he does not con the remuneration sufficient, he is not compelled to accept the trust.  N the fact that the incumbent of the office is a lawyer or other person especially qualified to deal with intricate and difficult matters of law business of itself a reason for increasing the compensation.   An execute administrator is expected to employ in the discharge of his duties ordinary business ability and careful, economical management.   His appointment i is based  upon such considerations.   The supreme court of  Michigan thus states the rule:

"The administrator is required to exercise  the  ordinary prudence, care judgment of men  doing the kind of business the deceased was engaged in at the time of his death.  It  is not the highest degree of skill  or  c the best  management and judgment, that the  law  requires. This would b requiring too much, as will be  readily seen, for that would require cap and ability  which would insure success, and is  not possessed by more t one-tenth of  the persons who  engage in business generally.  It is the prudence, and judgment which the man of fair average  capacity and ability brings to  bear in the transaction of his  own  business  that furnishes standard by which the administrator in the performance of his trust duties must  be governed."  (Loomis, vs.  Armstrong,  63 Mich., 355, 362; 29 N. 870; quoted with approval in Dundas vs.  Chrisman, 25 Neb., 495.)

The compensation allowed in ordinary cases is not for the mere  execution documents and the keeping of  accounts in order that the records may  be kept straight.   It also includes  those .services which require discretion ordinary degree of business ability in their execution.  Those services arise in the course of administration and which  require  the  aid of special skill are good examples of extraordinary services.

And where compensation for extraordinary services is claimed  (although statute does not  expressly provide for it),  the  better practice certain to  itemize the account and explain fully in what particular the  service extraordinary  or unusual,  keeping in mind  that the mere designation o service performed is not sufficient, as its performance may have been rendered easy 6r difficult by the circumstances of the particular With such detailed information the court may know precisely for what services the extra compensation is asked and the heir, creditor,  or other  person interested  in  the estate may  be informed so as to know what items, if any, they may desire to contest.   (Steel vs. Holladay, 20 Ore., Sloan vs. Duffy, 117 Wis.,  480.)

In  order to justify the allowance of  extra compensation in accordance the provisions of section 680, supra, the estate must have been large, the settlement attended with great difficulty, and  a high degree of capacity required on the part of the administrator.   All three of these requirements must  have been  present.  If the administrator  is required to use only ordinary business ability, the case does not fall within the rule.   It of  executors and administrators to use their best  efforts to discover collect outstanding claims and unless some peculiar circumstances or  co render their discovery and collection unusually difficult and require a degree of capacity, the compensation provided of  P4 per  day for the time employed and the commissions  on the  amounts disbursed, together with actual expenses, must be considered sufficient remuneration.

One thousand  pesos was allowed the administrator for the prosecution of an action for the recovery of money supposed to be due the estate. Wit reference to this item the administrator says that that suit  "was  brought and prosecuted  to a  conclusion in  the Supreme Court of the Philippine Islands, but was unsuccessful.  The total expense of maintaining said suit amounted to the sum of Pl,172.30." The court said that the  P1,000 was allowed  the administrator for the prosecution of that suit,  while the administrator says that  that amount was a part of the expense. If this Pl,000 was actually paid  out of the funds of the estate by the administrator as  a  part of the expenses of that  suit, the  administrator would no doubt have  been authorized to charge that amount in his final account, as the court  authorized  the bringing of the suit. On examine the administrator's  accounts we find  that there was paid the clerk of court  and the sheriff P22.36; costs paid the clerk of the Supreme  Court P58; the translator P50; another  item of costs paid the clerk of the co P41.94; making  a total of  Pl72.30.   According: to  the account, no o expenses were paid  on account of this suit, and in view  of the fact that the  court says the Pl,006 was allowed  the administrator, we  must conclude  that this amount was allowed him for  the work performed by him in connection with this suit.  There is nothing in the record to show services were rendered by the administrator for which he was allowed the Pl,000, except, it is stated, that he was allowed this amount in connect with the prosecution of that  suit. If this amount were allowed for the actually employed by him in the prosecution of that suit, that time has already been paid for by the per diem allowance.  If  it were  allowed a an  attorney's fee (and the administrator in this case  is an attorney a law) this was  in conflict  with the express provision of  section 680, which prohibits such an allowance.  When the services of a  lawyer are necessary in the settlement of an estate, it is to the  interest of the that the  administrator secure the best talent possible on the most favorable terms. If he be an attorney  and allowed to undertake such services, it his own interest  to perform the services himself and to secure an allow for his fees.  This, in effect, allows the administrator to make contract himself, and violates the familiar principle that one acting in a fiduciary capacity  must not place himself in such a position that his own  interest become antagonistic with those of his principal.  If the only service performed by the administrator was  the  employment of counsel for  the purposes of the suit,  such a service cannot be considered as above the ability of an ordinary  business man.   This  item, in  either case, mus disallowed.

As to the sale of the  oil store, the administrator states; 

"A great deal of trouble was taken and time consumed by your administrator in investigating this matter."

Again he says: - 

"That in addition to the services above mentioned your administrator performed  special and  difficult  services  in realizing u interest which the  deceased had in  an oil store conducted by one  Uy To Qua on Calle Jaboneros. That there was nothing in the inventory made by previous administrators regarding  this oil store and no information regarding it  was furnished your  administrator  by any parties  interested."

It is  difficult  to determine, in fact it  is  impossible  to point out, two claims the  court  had in mind when it allowed the administrator P250 for their settlement. Neither does  the  administrator nor the  court state just what two claims were under consideration.   The only information  before upon this point is the statement of the court that it was aware that unusual services had been performed  in connection with the settlement  of two cl of the estate.   The court does not specifically state that the P500 allowed the administrator for his work  in connection with the oil store and the allowed for his services  in connection  with the settlement of the two c were additional compensation over and above the per diem allowance. But taking into consideration the  fact that  the administrator  was allowed the first  eleven  months  P4 for every day during that time (exclusive o Sundays and holidays) and  for the next twenty-five months was. allowed P per  day for one-half  of that time' (exclusive of Sundays and holidays), logical conclusion  is that the items of P500 and P250 were additional allowances; or, in other words,  the  administrator was  allowed P4  per for every day  he was engaged  in  investigating the  interest that  the estate had in the oil store and in the settlement of the two  claims, and the extra amounts of P500 and  P250.   There is nothing in the record to show that a high  degree of capacity was required in the settlement of the two matters.  On the contrary,  it appears from an examination of the affairs of the whole estate as shown in the administrator's report, that estate was  one  of the ordinary kind.  The administrator carried on no business  for  the estate which  required  skill or  capacity to meet competition.   In fact  he carried on no  business at all except to dispose the property belonging to the estate. We think it  is clear that the court erred in allowing these two items.

For  the foregoing reasons,  the order appealed from is modified by disallowing  the administrator the P1,000 for his services in connection prosecution of the civil suit; the additional amounts of P500, allowed for services in connection with the oil store; and of P250,  allowed in connect with the settlement of the two claims.  In all other respects, the order affirmed without costs.

Arellano, C. J., Torres, Mapa, Carson, and Moreland, JJ.,concur.


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