Sylvia Lichauco de Leon v. The Hon. Court of Appeals

Summary

Supreme Court affirmed nullification of Letter-Agreement between estranged spouses and mother-in-law providing for property transfer as consideration for peaceful marital separation. Court ruled agreement had illegal consideration violating public policy since marriage is inviolable social institution under Civil Code Article 52, not subject to contractual stipulations for termination of marital relations. Despite both parties' wrongdoing, Court applied Article 1414 exception to pari delicto rule, allowing recovery of P380,000 paid for illegal purpose when contract repudiated before accomplishment. Case establishes precedent that agreements facilitating marital dissolution violate public policy and are void, but innocent parties may recover property delivered for illegal purposes under specific circumstances.