G.R. No. 51207 October 19, 1989
CATALINA VDA. DE CARREON, ET AL., petitioners, vs. HERMILA CARTAGENA and SALVACION MAGUINSAWAN LUNAY, respondents.

FACTS

Petitioners, the heirs of Feliciano Carreon, are the registered owners of Lot No. 2642, Mati Cadastre, under Transfer Certificate of Title No. T-14292. They filed a complaint to quiet title under Article 476 of the Civil Code, seeking to remove an affidavit of adverse claim annotated on their title by the respondents. The respondents, in their answer, interposed a counterclaim seeking the nullification of the petitioners’ title and reconveyance of the property to them. They asserted ownership, tracing their rights from Antonio Maguinsawan who allegedly acquired the lot in 1936. They contended that the petitioners’ title was fraudulently obtained, as the lot was a contested lot in a pending cadastral case, and the orders leading to its registration in Feliciano Carreon’s name were fabricated.
The trial court ruled in favor of the respondents, declaring them the owners and ordering the petitioners to reconvey the lot. The Court of Appeals affirmed this decision. The petitioners elevated the case to the Supreme Court, raising several alleged errors, including the sufficiency of the counterclaim, jurisdiction due to non-payment of docket fees, and the admissibility and weight of certain evidence.

ISSUE

The core issue is whether the respondents have a superior right to ownership of Lot No. 2642, warranting the reconveyance of the property from the registered owners, the petitioners.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The legal logic centered on the principle that a Torrens title does not furnish a shield for fraud. The Court found that the respondents’ counterclaim sufficiently alleged ownership and fraud, as it detailed the questionable circumstances surrounding the issuance of the petitioners’ title, including the claim that the cadastral court orders were spurious and that the lot was adjudicated as uncontested despite being claimed by multiple parties.
Crucially, the Court gave weight to survey notification cards (Exhibits “7” and “7-A”) prepared by the petitioners’ predecessor, Feliciano Carreon. In these cards, Carreon admitted that Lot No. 2642 was identified as belonging to the heirs of Antonio Maguinsawan, the respondents’ predecessor. This was a declaration against interest, a recognized exception to the hearsay rule, which substantiated the respondents’ claim of prior ownership. Furthermore, the Court noted that Feliciano Carreon’s own answer in the cadastral case traced the lot’s origin to his brother, who had sold it to Antonio Maguinsawan. Therefore, the petitioners, as Carreon’s heirs, could assert no better right than their predecessor, who had acknowledged the Maguinsawan claim. Consequently, the action to quiet title failed, as the petitioners’ title was indeed clouded by the respondents’ superior equitable ownership, justifying the order for reconveyance.