G.R. No. L-33360, April 25, 1977
MAXIMINO CARANTES (Substituted by Engracia Mabanta Carantes), petitioner, vs. COURT OF APPEALS, BILAD CARANTES, LAURO CARANTES, EDUARDO CARANTES and MICHAEL TUMPAO, respondents.

FACTS

Mateo Carantes died in 1913, survived by his widow and six children, leaving a parcel of land covered by Original Certificate of Title No. 3. In 1939, during settlement proceedings where his son Maximino acted as judicial administrator, four of Mateo’s children and the heirs of a predeceased child executed a deed titled “Assignment of Right to Inheritance” in favor of Maximino for a nominal sum. The deed contained a recital that the lot, by verbal agreement of all heirs, rightfully and exclusively belonged to Maximino, who had been in exclusive possession for over ten years. Following this, the original title was cancelled, and a new title was issued in the names of all heirs as co-owners. Upon registration of the assignment deed, this title was cancelled, and Transfer Certificate of Title No. 2540 was issued solely in Maximino’s name. Acting as exclusive owner, Maximino subsequently sold portions of the land to the government and mortgaged another portion.
In 1958, nearly two decades later, other heirs filed a complaint seeking to annul the 1939 assignment deed. They alleged they were made to believe it merely authorized Maximino to facilitate the government sale on their behalf and that they only discovered its true import in 1958. They argued the deed created an implied trust in their favor, which had not prescribed. The trial court ruled for the plaintiffs, declaring the deed void and ordering partition. The Court of Appeals affirmed, holding that an implied trust existed and the action had not prescribed because the trust was repudiated only upon the filing of the complaint.

ISSUE

The core issue is whether the action to annul the deed of assignment and recover shares of the inheritance is barred by prescription or laches.

RULING

The Supreme Court reversed the Court of Appeals and dismissed the complaint. The Court held the action was barred by prescription and laches. The legal logic proceeds from the nature of the transaction and Maximino’s subsequent acts. The 1939 deed was an absolute assignment, not a mere authorization for a sale. Upon its registration in 1940, title was consolidated in Maximino’s name alone, constituting a clear and unequivocal act of repudiation of any trust. The issuance of a Torrens title in his sole name served as constructive notice to the world, including his co-heirs. The prescriptive period for an action to enforce an implied trust is ten years from the date of repudiation.
The heirs’ cause of action accrued in 1940 when the title was issued to Maximino, or at the latest in 1947 when new titles were issued further confirming his exclusive ownership. Their filing in 1958 was beyond the ten-year prescriptive period. Furthermore, the Court emphasized the doctrine of laches. Maximino’s open, exclusive, and notorious acts of ownership—selling portions to the government, mortgaging the property, and paying taxes in his name—over many years, unreasonably remained unchallenged. The heirs’ prolonged inaction, despite the means to discover the true state of the title, precludes them from seeking equitable relief. The claim of recent discovery in 1958 was deemed unconvincing against the backdrop of these public and unequivocal acts of dominion.