G.R. No.

L-4777 November 11, 1908

SUILIONG & CO., as liquidators of The Yek Tong Lim Fire, Marine, and Insurance Co.,
Ltd., plaintiffs-appellees,
vs.
SILVINA CHIO-TAYSAN, defendant-FRANCISCA JOSE, intervener-appellant.

FACTS:

Avelina Caballero owned a property in Manila, duly registered under her name. She borrowed
P1,000 Mexican currency from Francisca Jose and as a security for the loan, she turned over
the title of the said property to Jose. The transaction was not inscribed in the title.

Caballero died and Silvina Chio-Taysan instituted a petition for the declaration of heirship. The
CFI Manila found her to be the daughter of Jose Chio-Taysan and Caballero, granted the
petition and declared her as the only and exclusive heir of Caballero. An inscription to the effect
that Silvina Chio-Taysan is the owner of the property at issue was made in the Registry of Deed.
Silvina borrowed money from Fire and Marine Insurance and Loan Co. and mortgaged the said
land as security for the loan. Suiliong & Co. is the appointed liquidator of Fire and
Marine Insurance and Loan Co.

The husband of Chio-Taysan instituted special proceedings for the administration of the estate
of Caballero, of which he was appointed as the administrator. He submitted an inventory of the
properties of the estate, which included the subject land. Francesca Jose submitted her claim
against the estate as a creditor of the deceased.Suiliong instituted a case against the estate and
sought to foreclose on its mortgage. The court permitted Jose to intervene. Jose asked that the
mortgage executed between Suiliong and Chio-Taysan be rescinded and declared no effect.
The lower court ruled in favor of Suiliong.

ISSUE:

WON THE TRIAL COURT ERRED IN DENYING THE RELIEF TO JOSE? YES

WON THE JUDICIAL DECLARATION OF HEIRSHIP IN FAVOR OF ONE OR MORE HEIRS

FURNISH A BASIS FOR ABSOLUTE OWNERSHIP OF THE PROPERTY? NO

HELD:

The trial court in ruling against Jose, held that, she abandoned whatever lien she has on the
property when she submitted a claim against the estate of Caballero. SC held that all Jose
asked in the petition is merely for rescission and annulment of the mortgage executed between
Suiliong and Chio-Taysan and of the inscription in the title of the property, and a declaration that
as a creditor of the estate she has a superior right to that of the plaintiff company in the
proceeds of any sale of the land in question. She does not seek to enforce her claim and
recover her debt in this proceeding, but merely to prevent the plaintiff from securing a judgment
in this action which would take out of the estate property which she believes to be subject to her
claim set up in the administration proceedings.

According to the Civil Code, a sole and exclusive heir became the owner of the property, and
was charged with the obligations of the deceased at the moment of his death, upon precisely
the same terms and conditions as the property was held and as the obligations had been
incurred by the deceased prior to his death, save only that when he accepted the inheritance,
"with benefit of an inventory" he was not held liable for the debts and obligations of the
deceased beyond the value of the property which came into his hands.

However, the New Civil code, which was applicable to the case at bar, provides a machinery for
the enforcement of the debts and other obligations of the deceased, not as debts or obligations
of the heir, but as debts or obligations of the deceased, to the payment of which the property of
the deceased may be subjected wherever it be found. ​It is evident, therefore, that a judgment
in an action for the declaration of heirship in favor of one or more heirs could not entitle
such persons to be recognized as the owner or owners of the property of the deceased
on the same terms as such property was held by the deceased, for it passes to the heir, under
the new code, burdened with all the debts of the deceased his death having created a lien
thereon for the benefit of creditor.

SC held that it is evident that Caballero’s death created a lien upon her property in favor of
Jose, for the payment of the debt contracted by her during her lifetime, and that this ought to
have and has priority to any lien created upon this property by the heir of the deceased; that the
judicial declaration of heirship in favor of Silvina Chio-Taysan, could not and did not
furnish a basis for an entry in the land registry of the name of Silvina Chio-Taysan as the
absolute owner of the property of Avelina Caballero;​ that such entry, improperly made,
could not and did not prejudice, the lien of Jose, for the debt due her by the deceased and that
the mortgage of the property of the deceased by her heir, Silvina Chio-Taysan, was subject to
the prior lien of Jose, for the payment of her debt.