The Supreme Court ruled that a compromise agreement focusing solely on the division of conjugal property cannot validate or invalidate a marriage. This decision clarifies that while parties can agree on property matters, the validity of their marriage itself is a matter of public interest and law, not to be decided by private settlement. The ruling underscores the state’s role in protecting the institution of marriage and ensures that marital status is determined through proper legal processes, not through property deals.

Property Deals vs. Marital Ties: Can a Settlement Decide a Marriage’s Fate?

This case revolves around Dana S. Santos and Leodegario R. Santos, whose marriage was declared null and void by the trial court due to Dana’s psychological incapacity. After the decision, Dana filed a Petition for Relief from Judgment, but later, both parties entered into a compromise agreement regarding their conjugal properties. The Court of Appeals (CA) subsequently closed the case, deeming the compromise agreement sufficient. However, Dana argued that the compromise agreement should not determine the validity of her marriage, sparking a legal debate about the extent to which private agreements can affect marital status.

The central legal question is whether a compromise agreement, primarily concerning property rights, can effectively settle the issue of marital validity, particularly in cases involving psychological incapacity. This question brings into focus the interplay between contractual freedom and the state’s interest in preserving the sanctity of marriage. According to Article 2035(2) of the New Civil Code, “No compromise upon…the validity of a marriage or a legal separation” shall be valid. This provision highlights the public policy concern that certain fundamental aspects of marital status should not be subject to private bargaining.

The Supreme Court emphasized that while parties are free to enter into agreements regarding their property, the validity of a marriage is a matter of public concern and governed by law. Therefore, any agreement that implicitly or explicitly attempts to determine the validity of a marriage is void. The court stated:

ART. 2035. No compromise upon the following questions shall be valid:

(2) The validity of a marriage or a legal separation;

Building on this principle, the Court clarified that the compromise agreement between Dana and Leodegario, which primarily addressed their property relations, could not validate or invalidate their marriage. The appellate court’s decision to terminate the case based on this agreement was, therefore, erroneous to the extent that it implied a settlement of the marital status. The Supreme Court distinguished between the settlement of property disputes and the determination of marital status, underscoring that the latter requires judicial determination based on substantive and procedural laws.

The Court delved into the procedural aspects of the case, particularly the effect of Dana’s Petition for Relief from Judgment. The Court acknowledged that the petition was a valid legal remedy, but it also reiterated that the trial court’s decision had already attained finality. This distinction is crucial because while a Petition for Relief from Judgment does not automatically reopen the case, it allows the appellate court to review the trial court’s decision for grave abuse of discretion. The Supreme Court referenced Samia v. Medina, 56 Phil. 613 (1932) stating:

There is a great deal of similarity between an order granting a motion for a new trial based upon “accident or surprise which ordinary prudence could not have guarded against” under section 145 of the Code of Civil Procedure, and an order granting a motion for a new trial based upon “mistake, inadvertence, surprise, or excusable neglect,” under section 113 of the Code of Civil Procedure, as both set aside the judgment, order, or proceeding complained of; both call for a new trial, and in both the injured party may question the order granting the motion for the new trial upon appeal from the new judgment rendered upon the merits of the case. The only fundamental difference lies in this, that while the judgment, order, or proceeding coming under section 145 of the Code of Civil Procedure is not final, that coming under section 113 is final. But this does not alter the nature or effect of the order granting the new trial, for this order does not put an end to the litigation in the sense that the party injured thereby has no other remedy short of appeal; he may question the propriety of the new trial on appeal from an adverse judgment rendered after such trial.

The Supreme Court also discussed the concept of extrinsic fraud as a ground for a Petition for Relief from Judgment. Extrinsic fraud refers to fraudulent acts that prevent a party from fully and fairly presenting their case. In this case, Dana argued that her counsel’s negligence prevented her from presenting her evidence. However, the Court found that Dana’s allegations did not meet the threshold for extrinsic fraud, as she did not accuse her counsel of any wrongdoing or collusion. The Court noted that:

[Dana], by these assertions does not accuse her previous counsel [of] any wrongdoing or neglect, or any other parties probably in cahoots with her said counsel. But it certainly had caused some harm to and, in fact, defrauded this [h]onorable [c]ourt which was led into believing that [Dana] was not interested in presenting her evidence.

Therefore, the general rule that a client is bound by the negligence of their counsel applied. Despite finding that the appellate court erred in dismissing the case based on the compromise agreement, the Supreme Court ultimately upheld the decision because the trial court’s denial of Dana’s Petition for Relief from Judgment did not constitute grave abuse of discretion. The Court emphasized that the allegations in Dana’s petition were insufficient to establish extrinsic fraud.

Moreover, the court reiterated the importance of judgments upon compromise, stating that:

When a compromise agreement is given judicial approval, it becomes more than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and effect of a judgment. It is immediately executory and not appealable, except for vices of consent or forgery. The nonfulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an instance, execution becomes a ministerial duty of the court.

However, the court clarified that a judgment upon compromise is not absolute and is void if it is contrary to law, citing Article 5 of the New Civil Code which states that “Acts executed against the provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity”.

In analyzing this case, the Court balanced several competing interests. On one hand, there is the principle of contractual freedom, which allows parties to enter into agreements that best suit their needs. On the other hand, there is the state’s interest in protecting the institution of marriage and ensuring that marital status is determined through proper legal processes. The Court also considered the procedural rules governing Petitions for Relief from Judgment and the concept of extrinsic fraud. The ultimate decision reflects a careful balancing of these competing interests, with a clear emphasis on the primacy of legal and public policy considerations over private agreements when it comes to marital status.

FAQs

What was the key issue in this case?	The key issue was whether a compromise agreement regarding conjugal property can determine the validity of a marriage, particularly in cases involving psychological incapacity.
What did the Supreme Court rule?	The Supreme Court ruled that a compromise agreement concerning property rights cannot validate or invalidate a marriage. Marital status must be determined through proper legal processes.
What is a Petition for Relief from Judgment?	A Petition for Relief from Judgment is a legal remedy to set aside a final judgment based on grounds like fraud, accident, mistake, or excusable negligence. It aims to give a party another chance to present their case.
What is extrinsic fraud?	Extrinsic fraud refers to fraudulent acts that prevent a party from fully and fairly presenting their case. This includes situations where a lawyer colludes to defeat their client’s interests.
Why was the Petition for Relief denied in this case?	The Petition for Relief was denied because Dana’s allegations of negligence by her counsel did not amount to extrinsic fraud. She did not accuse her counsel of any wrongdoing or collusion.
What is the effect of Article 2035 of the Civil Code?	Article 2035 of the Civil Code prohibits compromising on the validity of a marriage or legal separation. This means private agreements cannot determine marital status.
What happens when a compromise agreement is approved by the court?	When a compromise agreement is approved by the court, it becomes a judgment that is immediately executory. It has the force and effect of a court order.
What is the significance of the Samia v. Medina case?	Samia v. Medina clarifies the effect of an order granting a new trial after a final judgment. It explains that the injured party can question the propriety of the new trial on appeal.
Can property settlements be separated from marital status determinations?	Yes, property settlements can be separated from marital status determinations. Agreements regarding property do not automatically determine the validity of a marriage.

In conclusion, the Supreme Court’s decision in Santos v. Santos reaffirms the principle that the validity of a marriage cannot be determined by private compromise agreements, particularly those focused on property rights. This ruling underscores the state’s interest in preserving the institution of marriage and ensures that marital status is determined through proper legal channels. While parties are free to enter into agreements regarding their property, the validity of their marriage remains a matter of public concern, subject to legal and judicial scrutiny.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Dana S. Santos v. Leodegario R. Santos, G.R. No. 214593, July 17, 2019