Phillips v. Phillips

• Decision Date: 09 April 1935
• Citation: 178 A. 265
• Parties: PHILLIPS v. PHILLIPS.
• Court: New Jersey Court of Chancery

178 A. 265

PHILLIPS

v. PHILLIPS.

Court of Chancery of New Jersey.

April 9, 1935.

Syllabus by the Court.

1. The maxim, "He who comes into equity must come with clean hands," is applicable only to the actor, to one who voluntarily comes into court, and not to one who is brought in at the suit of another.

2. The scope of the estoppel of a judgment depends upon whether the subsequent action is upon the same claim or demand, or upon a different claim or demand.

3. A proper test for determining whether the two actions are for the same claim is whether the same evidence which is necessary to sustain the second action would have been sufficient in the first.

4. In a second suit between the same parties for a different cause of action, only those matters within the issues actually litigated and determined in the first suit are res judicata. The estoppel does not cover matters which might have been but were not litigated and determined.

5. A judgment by default does not estop defendant as to matters which he might have affirmatively pleaded.

6. Contracts between husband and wife, if fairly obtained, are enforceable in equity to the extent that they are fair.

7. A wife may recover in equity the amount due and unpaid on her husband's agreement to pay separate maintenance or alimony, provided the agreement was fairly obtained and is fair.

8. The fairness of a contract must be judged according to circumstances as they existed when the contract was made. Hardship or inability to perform, due to a change in the husband's circumstances, is not a valid defense to the wife's suit on the contract.

9. In order for a wife to enforce a contract to pay alimony, it is unnecessary that the contract shall have been approved by the court when made.

10. The court cannot make a contract for the parties or revise their agreement. Contracts arise only from the voluntary acts of the parties.

Suit by Sarah Phillips against Max Phillips, wherein defendant filed counterclaim.

Decree in accordance with opinion.

Isadore Glauberman, of Jersey City, for complainant.

Milton M. Unger, of Newark, for defendant.

BIGELOW, Vice Chancellor.

Complainant sues her former husband on an agreement made between them while they were man and wife, and during the pendency of a divorce suit in this court. For a valuable consideration the defendant agreed, among other things, to pay complainant $10,000 per annum during her life in equal monthly installments beginning with the entry of a final decree in the divorce suit. Complain ant prays specific performance of the agreement and especially that defendant be decreed to pay her the sum of $11,900 which is in arrears. Defendant has answered, and complainant now moves to strike the answer.

The answer consists of a general answer, three separate defenses, and a counterclaim. By the general answer, all the allegations of the bill are admitted except the averment that complainant has performed the terms of the contract on her part and that defendant has failed to make the payments specified in the contract. The affidavits submitted on the motion show that this denial is sham.

The first separate defense is that the agreement was collusively entered into in order to facilitate the procurement by complainant of a decree for divorce. Complainant's affidavit denies collusion, but defendant swears to the contrary and so raises an is sue of fact which can be decided only after final hearing. The defense, if proved, is good. Dennison v. Dennison, 98 N. J. Eq. 230, 130 A. 463, Id., 99 N. J. Eq. 883, 133 A. 919. Complainant, however, urges that it is unavailable, citing Hedges v. Hedges, 112 N. J. Eq. 111, 163 A. 660, in which Vice Chancellor Ingersoll said: "Even if there was collusion in this case, the defendant therein cannot now take advantage of such fact, because the parties are in pari delicto." But the "defendant therein" was the complainant in the suit before Vice Chancellor Ingersoll. The decision is an illustration of the maxim, "He who comes into equity must come with clean hands." The maxim is applicable only to the actor, to one who voluntarily comes into court, and not to one who is brought in at the suit of another. Thomas v. Flanagan, 99 N. J. Eq. 198, 132 A. 305. If there are intimations to the contrary in Stevens v. Wallace, 106 N. J. Eq. 352, 150 A. 835, and Marra v. Marra, 104 N. J. Eq. 18, 144 A. 12, Id., 106 M. J. Eq. 330, 150 A. 919, they should not be followed. Where the parties are equally in the wrong, it is the defendant and not the plaintiff whose position is the stronger. In pari delicto potior est conditio defendentis.

Again, complainant presents on this motion the record of judgments obtained by her in New York on this contract, for earlier installments than those which she now seeks to recover. She contends that defendant is estopped from asserting the defenses which he has pleaded in the present case. According to established practice, to secure the benefit of the judgments, she should have pleaded them. Water Commissioners of City of New Brunswick v. Cramer, 61 N. J. Law, 270, 39 A. 671, 68 Am. St. Rep. 705. But counsel have argued the effect of the judgments as if they had been pleaded, and I will follow their example.

"The scope of the estoppel of a judgment depends upon whether the question arises in a subsequent action between the same parties upon the same claim or demand, or upon a different claim or demand. In the former case a judgment upon the merits is an absolute bar to the subsequent action. In the latter the inquiry is whether the point or question to be determined in the later action is the same as that litigated and determined in the original action." Miller v. Stieglitz, 113 N. J. Law, 40, 172 A. 57, 59. A proper test for determining whether the two actions are for the same claim or demand is "whether the same evidence which is necessary to sustain the second action would have been sufficient to authorize a recovery in the first." Hoffmeier v. Trost, 83 N. J. Law, 358, 85 A. 221, 222; Sarson v. Maccia, 90 N. J. Eq. 433, 108 A. 109; Smith v. Fischer Baking Co., 105 N. J. Law, 567, 147 A. 455. It is plain that the present suit is not brought for the same cause of action as either of the New York actions, but is brought for later installments under the contract. Indeed, if this were not so the complainant, who relies on the New York judgments to bar the defense, would find them a bar to her complaint, since the cause of action would have merged in the judgments.

In a second suit between the same parties for a different cause of action, only those matters within the issues actually litigated and determined in the first suit are res judicata. Nagle v. Conard, 96 N. J. Eq. 61, 125 A. 20. The estoppel does not cover matters which might have been, but were not, litigated and determined. Schilstra v. Van Den Heuvel, 82 N. J. Eq. 612, 90 A. 1056. A forcible illustration is Mercer County Traction Co. v. Canal Co., 64 N. J. Eq. 588, 54 A. 819, in which the petitioners relied in part upon an ordinance which had already been sustained on certiorari. Vice Chancellor Reed held that the judgment in certiorari established the validity of the ordinance only as against the reasons filed in that proceeding, and did not estop the defendant from asserting the invalidity of the ordinance on other grounds.

In one of the New York actions, Mrs. Phillips took judgment by default;. It is sometimes said that a judgment by default is conclusive in a second suit, on another cause of action, as to the material facts well pleaded in the complaint upon which the default judgment was based. Certainly the estoppel is no broader. 34 C. J. 892. A narrower statement of the estoppel is contained in Cromwell v. Sac County, 94 U. S. 351, 350, 24 L. Ed. 195: "A judgment by default only admits for the purpose of the action the legality of the demand or claim in suit: it does not make the allegations of the declaration or complaint evidence in an action upon a different claim." To the same effect is Skinner v. Franklin County, 56 F. 783, 6 C. C. A. 118. A judgment by default does not estop defendant as to matters which he might have affirmatively pleaded.

In the second New York suit, the only issue raised was whether the installment for June, 1932, had fallen due under the contract when the suit was brought; none of the defenses raised in the present suit were pleaded or considered.

Neither New York judgment estops defendant from relying upon his first separate defense or upon his other defenses considered below.

The second defense reads as follows: "The agreement upon which specific performance and the decree of this court for the payment of money is sought, is, in so far as the provisions thereof relate to the payment of $10,000 per year during the life of the complainant, an agreement respecting alimony support and maintenance of the complainant, made during the time when divorce proceedings were pending between them in the State of New Jersey; such agreement was entered into without the consent or approval of this court; the terms and conditions thereof have not been approved by this court; the terms and conditions thereof in so far as they require the payment of $10,000 per year to the complainant during her life are unfair, inequitable and unjust in so far as defendant is concerned. Said terms and conditions were and are also unsuitable and improper for the support of the complainant, were and are greatly in excess of her just needs and demands, and were and are far beyond the power and ability of the defendant to comply therewith. Defendant was and is unable to comply therewith and says that by reason thereof, it is inequitable that said agreement should be enforced or that defendant be decreed...