G.R. No. L-38268 - Empire Insurance Co. vs. Rufino

Vicente A. Rufino died intestate on April 20, 1970, leaving behind his widow, Remedios S. Rufino, and his children: Mercedes Rufino Roxas, Maria Paz Rufino Laurel, Maria Auxilio Rufino Prieto, Maria Socorro Rufino Carpo, Macario S. Rufino, and Carlos S. Rufino.
Respondents initiated intestate proceedings (Special Proceedings No. 59-M, 5934) on May 29, 1970, in the Court of First Instance of Rizal (Branch XV, Makati), which involved the appointment of a notice to creditors with a six-month period for filing claims.

On April 12, 1971, the respondents executed a Partition Agreement that included:

An attached Inventory of Properties and Estate Liabilities and/or Obligations.
Provisions by which it was agreed that the decedent’s liabilities or obligations—especially those incurred during his marriage and benefiting the family—would be borne and paid by the heirs in proportion to their shares in the conjugal partnership properties.
Specific clauses (paragraphs 5(c) and 7(d)) wherein respondents undertook to assume all outstanding liabilities of the decedent as explicitly listed in the attached Inventory.

The Partition Agreement was subsequently approved by the trial court on April 19, 1971.

On May 14, 1971, respondents filed a Petition to Declare the intestate proceedings terminated, asserting that the estate and inheritance taxes had been fully paid and that the heirs had already received their shares.
The trial court, on the same day, declared the proceedings closed and terminated.

On April 17, 1973, petitioner Empire Insurance Company initiated Civil Case No. 17660 against the respondents.

The claim was based on respondents’ undertaking under the Partition Agreement to assume and pay all outstanding liabilities of the decedent.
Petitioner specifically relied on an indemnity agreement involving the late Vicente A. Rufino and his son-in-law, Arsenio Laurel, tied to a surety bond issued in favor of the Republic of the Philippines for Commercial Metals, Inc.

Issued on June 28, 1965, for the sum of P505,816.50.
The bond was based on an indemnity agreement and was connected to circumstances involving the importation of machinery and subsequent customs actions against Commercial Metals, Inc.

The proper forum for the claim was the intestate proceedings since it involved a money claim against the estate.
Petitioner’s claim was time-barred under Section 5, Rule 86 of the Rules of Court, as it was not filed within the creditor’s notice period.

The order also mandated the cancellation of the notice of lis pendens on several Transfer Certificates of Title.
After the trial court’s motion for reconsideration was denied, petitioner elevated the issue through a Petition for Review on Certiorari.

Whether the cause of action, based on the respondents’ undertaking under the Partition Agreement, constitutes a personal claim against the respondents rather than solely a money claim against the decedent’s estate.
Whether the suit was correctly filed as an ordinary action rather than as a contingent claim within the intestate proceedings.

Whether the indemnity agreement (associated with the surety bond) executed by the late Vicente A. Rufino and his son-in-law falls within the liabilities and obligations expressly assumed by the respondents under the Partition Agreement.
Whether the general phrasing “all liabilities or obligations of the decedent” in the Partition Agreement is intended to include liabilities not enumerated in the attached Inventory.

How the principles of contractual construction, specifically “expressio unius est exclusio alterius,” affect the interpretation of the respondents’ undertaking in the agreement.
Whether the general expression of liabilities in the agreement should be limited by the specific enumeration provided in the Inventory.