The defendant, Federico Hidalgo, in his answer to the third amended complaint, sets forth: That he

admits the second, third, and fourth allegations contained in the first, second, third, and fourth
causes of action, and denies generally and specifically each one and all of the allegations contained
in the complaint, with the exception of those expressly admitted in his answer; that, as a special
defense against the first cause of action, he, the defendant, alleges that on November 18, 1887, by
virtue of the powers conferred upon him by Peña y Gomiz, he took charge of the administration of
the latter's property and administered the same until December 31, 1893, when for reasons of health
he ceased to discharge the duties of said position; that during the years 1889, 1890, 1891, and
1892, the defendant continually by letter requested Peña y Gomiz, his principal, to appoint a person
to substitute him in the administration of the latter's property, inasmuch as the defendant, for reasons
of health, was unable to continue in his trust; that, on March 22, 1894, the defendant Federico
Hidalgo, because of serious illness, was absolutely obliged to leave these Islands and embarked on
the steamer Isla de Luzon for Sapin, on which date the defendant notified his principal that, for the
reason aforestated, he had renounced his powers and turned over the administration of his property
to Antonio Hidalgo, to whom he should transmit a power of attorney for the fulfillment, in due form, of
the trust that the defendant had been discharging since January 1, 1894, or else execute a power of
attorney in favor of such other person as he might deem proper;

That prior to the said date of March 22, the defendant came, rendered accounts to his principal, and
on the date when he embarked for Spain rendered the accounts pertaining to the years 1892 and
1893, which were those that yet remained to be forwarded, and transmitted to him a general
statement of accounts embracing the period from November 18, 1887, to December 31, 1893, with a
balance of 6,774.50 pesos in favor of Peña y Gomiz, which remained in the control of the acting
administrator, Antonio Hidalgo; that from the 22nd of March, 1894, when the defendant left these
Islands, to the date of his answer to the said complaint, he has not again intervened nor taken any
part directly or indirectly in the administration of the property of Peña y Gomiz, the latter's
administrator by express authorization having been Antonio Hidalgo, from January 1, 1894, to
October, 1902, who, on this latter date, delegated his powers to Francisco Hidalgo, who in turn
administered the said property until January 7, 1904; that the defendant, notwithstanding his having
rendered, in 1894, all his accounts to Jose Peña y Gomiz, again rendered to the plaintiff in 1904
those pertaining to the period from 1887 to December 31, 1893, which accounts the plaintiff
approved without any protest whatever and received to his entire satisfaction the balance due and
the vouchers and documents and documents relating to the property of the deceased Peña y Gomiz
and issued to the defendant the proper acquaintance therefor.

As a special defense to the second cause of action, the defendant alleged that, on December 9,
1886, Jose de la Peña y Gomiz himself deposited in the caja general de depositos (General Deposit
Bank) the sum of 6,000 pesos, at 6 per cent interest for the term of one year, in two deposit receipts
of 3,000 pesos each, which two deposit receipts, with the interest accrued thereon, amounted to
6,360 pesos, ad were collected by Gonzalo Tuason, through indorsement by Peña y Gomiz, on
December 9, 1887, and on this same date Tuason, in the name of Peña y Gomiz, again deposited
the said sum of 6,360 pesos in the General Deposit Bank, at the same rate of interest, for the term of
one year and in two deposit receipts of 3,180 pesos each, registered under Nos. 1336 and 1337;
that, on December 20, 1888, father Ramon Caviedas, a Franciscan friar, delivered to the defendant,
Federico Hidalgo, by order of De la Peña y Gomiz, the said two deposit receipts with the request to
collect the interest due thereon viz., 741.60 pesos an to remit it by draft on London, drawn in favor of
De la Peña y Gomiz, to deposit again the 6,000 pesos in the said General Deposit Bank, for one
year, in a single deposit, and in the latter's name, and to deliver to him, the said Father Caviedas,
the corresponding deposit receipt and the draft on London for their transmittal to Peña y Gomiz: all
of which was performed by the defendant who acquired the said draft in favor of De la Peña y Gomiz
from the Chartered Bank of India, Australia and China, on December 20, 1888, and delivered the
draft, together with the receipt from the General Deposit Bank, to Father Caviedas, and on the same
date, by letter, notified Peña y Gomiz of the transactions executed; that on December 20, 1889, the
said Father Hidalgo, by order of Peña y Gomiz, the aforesaid deposit receipt from the General
Deposit Bank, with the request to remit, in favor of his constituent, the interest thereon, amounting to
360 pesos, besides 500 pesos of the capital, that is 860 pesos in all, and to again deposit the rest,
5,500 pesos, in the General Deposit Bank for another year in Peña y Gomiz's own name, and to
deliver to Father Caviedas the deposit receipt and the draft on London, for their transmittal to his
constituent; all of which the defendant did; he again deposited the rest of the capital, 5,500 pesos, in
the General Deposit Bank, in the name of Peña y Gomiz, for one year at 5 per cent interest, under
registry number 3,320, and obtained from the house of J. M. Tuason and Co. a draft on London for
860 pesos in favor of Peña y Gomiz, on December 21, 1889, and thereupon delivered the said
receipt and draft to Father Caviedas, of which acts, when performed, the defendant advised Peña y
Gomiz by letter of December 24, 1889' and that, on December 20, 1890, the said Father Ramon
Caviedas delivered to the defendant, by order of Peña y Gomiz, the said deposit receipt for 5,500
pesos with the request that he withdraw from the General Deposit Bank the capital and accrued
interest, which amounted all together to 5,775 pesos, and that he deliver this amount to Father
Caviedas, which he did, in order that it might be remitted to Peña y Gomiz.

The defendant denied each of the allegations contained in the third cause of action, and avers that
they are all false and calumnious.

He likewise makes a general and specific denial of all the allegations of the fourth cause of action.

As a counterclaim the defendant alleges that Jose Peña y Gomiz owed and had not paid the
defendant, up to the date of his death, the sum of 4,000 pesos with interest at 6 per cent per annum,
and 3,600 pesos, and on the plaintiff's being presented with the receipt subscribed by his father,
Peña y Gomiz, on the said date of January 15th, and evidencing his debt, plaintiff freely and
voluntarily offered to exchange for the said receipt another document executed by him, and
transcribed in the complaint. Defendant further alleges that, up to the date of his counterclaim, the
plaintiff has not paid him the said sum, with the exception of 2,000 pesos. Wherefore the defendant
prays the court to render judgment absolving him from the complaint with the costs against the
plaintiff, and to adjudge that the latter shall pay to the defendant the sum 9,000 pesos, which he still
owes defendant, with legal interest thereon from the date of the counterclaim, to wit, May 21, 1907,
and to grant such other and further relief as may be just and equitable.

On the 25th of September, 1908, and subsequent dates, the new trial was held; oral testimony was
adduced by both parties, and the documentary evidence was attached to the record of the
proceedings, which show that the defendant objected and took exception to the introduction of
certain oral and documentary evidence produced by the plaintiff. On February 26, 1909, the court in
deciding the case found that the defendant, Federico Hidalgo, as administrator of the estate of the
deceased Peña y Gomiz, actually owed by the plaintiff, on the date of the filing of the complaint, the
sum of P37,084.93; that the plaintiff was not entitled to recover any sum whatever from the
defendant for the alleged second, third, and fourth causes of action; that the plaintiff actually owed
the defendant, on the filing of the complaint, the sum of P10,155, which the defendant was entitled to
deduct from the sum owing by him to the plaintiff. Judgment was therefore entered against the
defendant, Federico Hidalgo, for the payment of P26,629.93, with interest thereon at the rate of 6
per cent per annum from May 23, 1906, and the costs of the trial.

Both parties filed written exceptions to this judgment and asked, separately, for its annulment and
that a new trial be ordered, on the grounds that the findings of fact contained in the judgment were
not supported nor justified by the evidence produced, and because the said judgment was contrary
to law, the defendant stating in writing that his exception and motion for a new trial referred
exclusively to that part of the judgment that was condemnatory to him. By order of the 10th of April,
1909, the motions made by both parties were denied, to which they excepted and announced their
intention to file their respective bills of exceptions.

By written motions of the 24th of March, 1909, the plaintiff prayed for the execution of the said
judgment, and the defendant being informed thereof solicited a suspension of the issuance of the
corresponding writ of execution until his motion for a new trial should be decided or his bill of
exceptions for the appeal be approved, binding himself to give such bond as the court might fix. The
court, therefore, by order of the 25th of the same month, granted the suspension asked for,
conditioned upon the defendants giving a bond, fixed at P34,000 by another order of the same date,
to guarantee compliance with the judgment rendered should it be affirmed, or with any other decision
that might be rendered in the case by the Supreme Court. This bond was furnished by the defendant
on the 26th of the same month.

On April 16 and May 4, 1909, the defendant and the plaintiff filed their respective bills of exceptions,
which were certified to and approved by order of May 8th and forwarded to the clerk of this court.

Before proceeding to examine the disputed facts to make such legal findings as follows from a
consideration of the same and of the questions of law to which such facts give rise, and for the
purpose of avoiding confusion and obtaining the greatest clearness and an easy comprehension of
this decision, it is indispensable to premise: First, that as before related, the original and first
complaint filed by the plaintiff was drawn against Federico Hidalgo, Antonio Hidalgo, and Francisco
Hidalgo, the three persons who had successively administered the property of Jose de la Peña y
Gomiz, now deceased; but afterwards the action was directed solely against Federico Hidalgo, to the
exclusion of the other defendants, Antonio and Francisco Hidalgo, in the second and third amended
complaints, the latter of the date of August 10, 1908, after the issuance by the court of the order of
April 4th of the same year, granting the new trial solicited by the defendant on his being notified of
the ruling of the 24th of the previous month of March; second, that the administration of the property
mentioned, from the time its owner left these Islands and returned to Spain, lasted from November
18, 1887, to January 7, 1904; and third that, the administration of the said Federico, Antonio, and
Francisco Hidalgo, having lasted so long, it is necessary to divide it into three periods in order to fix
the time during which they respectively administered De la Peña's property: During the first period,
from November 18, 1887, to December 31, 1893, the property of the absent Jose de la Peña y
Gomiz was administered by his agent, Federico Hidalgo, under power of attorney; during the second
period, from January 1, 1894, to September, 1902, Antonio Hidalgo administered the said property,
and during the third period, from October, 1902, to January 7, 1904, Francisco Hidalgo was its
administrator.

Before Jose de la Peña y Gomiz embarked for Spain, on November 12, 1887, he executed before a
notary a power of attorney in favor of Federico Hidalgo, Antonio L. Rocha, Francisco Roxas and
Isidro Llado, so that, as his agents, they might represent him and administer, in the order in which
they were appointed, various properties he owned and possessed in Manila. The first agent,
Federico Hidalgo, took charge of the administration of the said property on the 18th of November,
1887.