G.R. No. 106837 - Macion vs. Guiani

Go Checo, a Chinaman, died in Saigon, Indo China, on February 19, 1914, leaving real and personal properties in the Philippines.
His first marriage to Ong So produced six children, with ages ranging from 8 to 26 years at the time of the judicial proceedings; his second marriage to Yu Ui resulted in two children, one of whom was 20 months old.
The estate was appraised by commissioners at a value of P44,017.00, with each child’s share amounting to approximately P3,995.56.

On March 7, 1914, Paulino Gocheco, one of the children, instituted judicial proceedings for the distribution of the intestate estate in the Court of First Instance of Manila.
A project of partition was executed—with Joaquin A. Go Cuay acting as the guardian ad litem for the minors—and was approved by the court on May 11, 1916.
Subsequently, Paulino Gocheco instituted guardianship proceedings for his minor siblings, being appointed guardian on May 20, 1916, and continuing until the wards attained majority in September 15, 1931.

Paulino Gocheco died on April 24, 1943, and on January 10, 1944, his eldest son instituted intestate proceedings for the settlement of his estate, which terminated on March 23, 1947.
The present action was filed on July 31, 1948, by plaintiffs Go Chi Gun and Go Away, challenging the 1916 project of partition and claiming an alleged fraud.

Plaintiffs claimed they were kept completely uninformed about the intestate proceedings and the appointment of the guardian ad litem meant to protect their interests.
They accused Paulino Gocheco of masterminding:

The appointment of Joaquin A. Go Cuay as both commissioner on claims/appraisals and as guardian ad litem, allegedly without proper communication.
Manipulation of documents and the assignment of an artificially low age for Go Chi Gun.
Conspiring to assess the real properties at their assessed (tax) value instead of market value to defraud the plaintiffs.

Additional allegations involved Go Away’s entry into the Philippines under an assumed name (Lim Koc) to mislead her about the existence of their father’s properties, and her continued ignorance of her right to inheritance even after reaching majority.
Plaintiffs contended that such fraudulent conduct by Paulino Gocheco and his accomplice resulted in the wrongful adjudication of properties, which should instead be deemed as the common property shared equally among the plaintiffs and the deceased Paulino Gocheco.

Defendants responded by moving to dismiss the amended complaint on two grounds: statute of limitations and the absence of a cause of action.
In their answer, they:

Specifically denied every allegation of fraud.
Asserted special defenses citing the statute of limitations, the statute of non-claims, and acquisition by prescription through public, notorious, and adverse possession.
Filed a counterclaim for incurred expenses (including P50,000 in counsel’s fees) and punitive damages.

Intervenors (Gocheco Brothers, Inc. and Go Tecson) joined the proceedings, echoing similar defenses and denials concerning alleged fraud.

During the trial, plaintiffs offered testimony regarding an alleged statement by the deceased Paulino Gocheco that their common father had left no properties.
Defendants objected to such testimony under Section 26(c) of Rule 123 of the Rules of Court, arguing that plaintiffs were incompetent to testify on matters preceding the death of the decedent.
The trial court overruled the objection, allowing the testimony, and ultimately found the plaintiffs’ allegations of fraud, collusion, and connivance to be established by a preponderance of the evidence, thereby annulling the partition and ordering a detailed accounting of the properties.

Whether the plaintiffs, as parties or persons concerning a deceased’s estate, were competent to testify about alleged statements made by the deceased Paulino Gocheco regarding the existence or nonexistence of properties.
The applicability of Section 26(c) of Rule 123 of the Rules of Court regarding testimonies on facts prior to a decedent’s death.

Whether the evidence sufficiently demonstrated that fraud, collusion, and connivance were committed by Paulino Gocheco and his accomplice, thus invalidating the project of partition.
Whether the assessment of real properties at tax value, and other circumstances, constituted clear evidence of fraudulent intent.

Whether the plaintiffs’ action is barred by the statute of limitations given the long lapse of time (more than 32 years from partition and 27 years since termination of guardianship proceedings).
Whether the defense of laches is applicable, considering the plaintiffs’ delay in asserting their rights and acquiring knowledge of the judicial proceedings.

Whether the defendants were sued in their personal capacity or as representatives of the deceased’s estate, and the implications thereof on the admissibility of testimony under the rule invoked.