FACTS:
Walter Toehl was the manager of Behn, Meyer & Co and also its chemist. He
was also the owner of a parcel of land located in Sta. Ana, Manila. Toehl
contracted Antholtz to manage the land as oil mill. The two agreed that
Antholtz would conduct the business in his own name. Meanwhile, Antholtz was
the owner of A. Murray & Co. Toehl assumed possession of the corporation
with a view to reviving it using the assets of the oil mill. After Toehl’s
death, it was found that he was short in his account with Behn to the extent of
P150 Million. A claim was made against the estate of Toehl. Marschall was
appointed administrator of the estate, and the present action was institute to
recover possession of the oil mill property and hold Antholtz personally
liable. Behn presupposes that Toehl and Antholtz were in collusion to put the
money in the oil mill.
ISSUE:
WON Antholtz is liable.
RULING:
YES. In section 711 of the Code of
Civil Procedure it is declared that if any person, before the granting of
letters testamentary or of administration on the estate of a deceased person,
embezzles, or alienates, any of the effects of such deceased person, such
person shall be liable to an action in favor of the executor or administrator
of such estate for double the value of the property sold, embezzled, or alienated,
to be recovered for the benefit of the estate. But this provision has reference
primarily to funds that are lost by embezzlement or alienation, and it cannot
be understood as making the manager of a going concern liable for proceeds of
sales applied by him to the proper uses of the business, as occurred in this
case. The proof shows that the personal property other than the products of the
mill, sold by Antholtz in the manner mentioned, was sold with the consent of
the manager of Behn, Meyer & Co., H. Mij., and with the consent of the
administrator of Walter Toehl, and the proceeds of these sales, as well as the
proceeds of the products of the mill, were applied by Antholtz to the
obligations incurred by him in running the business, without the improper
diversion of a single cent
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