G.R. No. L-33762 December 29, 1977
POTENCIANA DUQUE, AMADEO DUQUE and ARSENIO DUQUE, petitioners, vs. PAZ DOMINGO, represented by her guardian ad litem, MARCOSA DUQUE-VALENZUELA, Intestate Estate of JULIA DUQUE, in substitution of Julia Duque, and the COURT OF APPEALS, respondents.

FACTS

Julia Duque, for herself and as guardian of her daughter Paz Domingo, filed a complaint for reconveyance against Potenciana, Amadeo, and Arsenio Duque. She alleged that her aunt, Juana Duque, purchased Lot 1083 in 1908 through an agent, Faustino Duque, who took the Sale Certificate in his own name. The property was later transferred to Mariano Duque, Juana’s nephew, with his consent. Julia claimed Juana Duque paid all installments and, in 1927, verbally donated the lot to her. Julia possessed the lot thereafter. Upon Mariano’s death, his children (the defendants) registered the land under their names in 1957 and 1959. Julia argued the defendants held the title in trust for her and demanded reconveyance.
The defendants asserted absolute ownership, tracing it to their father Mariano Duque’s purchase from the government in 1915. They emphasized that Mariano obtained Transfer Certificate of Title No. 7501 in his name in 1931 after full payment. They contended they and their predecessors had possessed the land openly and exclusively for over fifty years. They argued the action was barred by prescription, laches, and the Statute of Frauds, noting Julia’s long silence despite knowledge of the registered titles and subsequent conveyances.

ISSUE

Whether the action for reconveyance based on an implied trust had prescribed.

RULING

Yes, the action had prescribed. The Supreme Court reversed the Court of Appeals and reinstated the trial court’s dismissal of the case. The legal logic centers on the application of prescription to actions based on implied trust. The Court found the evidence insufficient to prove Juana Duque’s ownership or a verbal donation. Critically, it ruled that even assuming an implied trust existed between Juana Duque and Mariano Duque, the action to enforce it had prescribed.
The prescriptive period began to run from the repudiation of the trust. The issuance of Transfer Certificate of Title No. 7501 in the name of Mariano Duque in 1931 constituted a clear, public, and unequivocal act of repudiation. Registration of an instrument in the Register of Deeds serves as constructive notice to the whole world. Therefore, the ten-year prescriptive period for filing an action upon an implied trust commenced in 1931. Julia Duque filed her complaint only in 1966, thirty-five years later, which is far beyond the allowable period. Her long inaction, despite knowledge of the registered title, constitutes laches. The Court emphasized that the Torrens system aims to ensure stability of land titles, and allowing such a stale claim would undermine this principle.