G.R. No.

144735
CASE TITLE: YU BUN GUAN VS. ELVIRA ONG
OCTOBER 18, 2001

FACTS:
Elvira Ong, who is married to Yu Bun Guan under Chinese rights, executed a
deed of sale of one of their properties in favor of her husband but on the promise that
the property would be constructed for a commercial purpose for the benefit of their
children. The said property will be registered under the name of Yu Bun Guan only.
The consideration for the 'simulated sale' was that, after its execution in which he
would represent himself as single, a DAeed of Absolute Sale would be executed in favor
of the three children and that he would pay the Allied Bank, Inc. the loan he obtained.
The spouses who have three children separated because Ong found out that his
husband is promiscuous, short-tempered and had vices.
Yu Bun Guan broke his promise and his wife is insisting him to deliver the copy
of the title of the land. Thereafter, she decided to execute an Affidavit of Adverse Claim
she also wrote Allied Bank a letter of withdrawal of her authority for his husband to
apply for additional loans.
Yu Bun Guan, on the other hand, filed with the Makati RTC a 'Petition for
Replacement' of an owner's duplicate title due to misplacement or loss of the owners
copy of title but it was fictitious. The court granted the petition and a new title was
issued. Ong discovered the fraud committed by his husband and immediately filed an
Affidavit of Adverse Claim. She also asked the court to declare the sale as null and void.
Yu Bun Guan said that he just used Ong as dummy to purchase the said property
because he cant but it due to citizenship problems but the money paid came from him.
He also added Yu Bun Guan also stated that his wife cant buy the property because of
financial incapacities but he has at that time. Ong was in pari delicto being privy to the
simulated sale.
ISSUE:
The main issue in this case is whether or not the sale made by the wife to her
husband is valid.


DECISION:
Based on the foregoing disquisition, it is quite obvious that the Court of Appeals
did not err in ordering the cancellation of the sale, because the Deed of Absolute Sale
transferring ownership to petitioner was completely simulated, void and without effect.
In fact, there was no legal basis for the issuance of the certificate itself.
Wherefore, the petition is hereby denied and the assailed. Decision affirmed.
Costs will be against petitioner.
LAW:
The court used as basis Art. 1490 of the Civil Code which provides the husband
and the wife cannot sell property to each other, except:
(1) When a separation of property was agreed upon in the marriage settlements; or
(2) When there has been a judicial separation or property under Article 191.