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 under Transfer Certificate of Title No. T-14292, originating from a decree in a cadastral proceeding. Respondents annotated an affidavit of adverse claim on this title. Consequently, petitioners filed a complaint to quiet title under Article 476 of the Civil Code, seeking to remove this cloud. In their answer, respondents interposed a counterclaim seeking the nullification of petitioners’ title, reconveyance of the lot, and attorney’s fees. They asserted ownership, tracing their rights to the late Antonio Maguinsawan, and alleged that the cadastral decree in favor of Feliciano Carreon was fraudulently secured, as the lot was contested and the alleged court orders leading to the decree were fabricated.
The trial court ruled in favor of respondents, declaring them the owners and ordering petitioners to reconvey the lot. The Court of Appeals affirmed this decision. Petitioners elevated the case to the Supreme Court, raising several assignments of error, including the sufficiency of the counterclaim, jurisdiction, and the propriety of reconveyance.

ISSUE

The core issue is whether the counterclaim stated a cause of action for reconveyance and whether reconveyance was proper given the evidence of respondents’ ownership and the alleged fraud in the issuance of the title.

RULING

The Supreme Court denied the petition and affirmed the appellate decision. On the first issue, the Court held that the counterclaim sufficiently alleged a cause of action for reconveyance based on ownership and fraud. The absence of the literal words “ownership” or “fraud” is not fatal; the allegations in the counterclaim, when read as a whole, clearly asserted respondents’ claim of ownership and implicitly charged fraud by detailing the questionable circumstances surrounding the issuance of the cadastral decree, including the fabrication of court orders for a supposedly contested lot.
Substantively, the Court found reconveyance proper. The evidence established that respondents’ predecessor, Antonio Maguinsawan, acquired the lot in 1936. Crucially, in survey notification cards (Exhibits “7” and “7-A”) prepared by Feliciano Carreon himself, he admitted that the disputed Lot No. 2642 belonged to the heirs of Antonio Maguinsawan. This constituted a declaration against interest, a recognized exception to the hearsay rule, and was compelling evidence of respondents’ superior claim. Furthermore, the Supreme Court had previously adjudicated the same lot in favor of respondents in a related recovery case (G.R. No. L-28332). Petitioners, deriving rights from Feliciano Carreon, who in turn derived his claim from his brother Pantaleon (the alleged seller to Maguinsawan), could not assert a better right than their predecessor, who had already acknowledged the Maguinsawan ownership. The action to quiet title therefore failed, as petitioners’ title was indeed clouded by respondents’ valid adverse claim.