HILL v. HILL (1943)

This is an appeal from a judgment in favor of defendant in an action brought to recover a balance alleged to have been due under a property settlement executed while plaintiff and defendant were still husband and wife.

The trial court found that:

“It is true and the court expressly finds that the execution and delivery of that said agreement made and entered into on the 14th day of August, 1928, was at that time and date conditioned upon and in contemplation of, and for the purpose of promoting an immediate and forthwith dissolution of the marriage existing between the plaintiff, Zola V. Hill, and the defendant, Jack C. Hill.”

Following the foregoing finding the trial court drew the conclusion that the contract was against public policy and void and entered judgment for defendant.

But two questions raised by plaintiff need consideration here. They are: (1) That the evidence fails to support the foregoing finding, and, (2) That as the contract was approved in the divorce action that judgment became res judicata and consequently the contract cannot be attacked here.

A casual reading of plaintiff's opening brief where the evidence is summarized leads to the conclusion that the finding has ample evidentiary support. Statements in substance like the following are repeated:

“The respondent stated to Mr. Haas that he was willing to pay a monthly sum to Mrs. Hill on condition that she get a divorce immediately or permit him to get one but that he would not pay $250.00 a month that was being asked by Mrs. Hill. Finally the respondent stated he would pay Mrs. Hill $200 per month for ten years on condition that the divorce was had and Mr. Haas suggested that the respondent agree to the payment of $50.00 per month after the 10–year period. After further discussion, the respondent agreed that he would pay the additional amount, but only on condition that Mrs. Hill either proceed to get a divorce, or that he be permitted to get one.”

An examination of the record shows that these statements were fully justified.

After negotiations between defendant and his attorney, who does not appear here, and Mr. Haas was was representing plaintiff, the then attorney for defendant prepared a property settlement agreement which was mailed to Mr. Haas. It contained the following:

“Now, Therefore, by way of property settlement, it is hereby agreed between both parties hereto that in the event the party of the second part does obtain an interlocutory decree of divorce, and thereafter obtains a final decree of divorce, that the following agreement is made as a full and complete property settlement between said two parties, and full and complete settlement for the support and maintenance of the said party of the second part and the said two minor children.”

Mr. Haas objected to this provision appearing in the contract and had it rewritten with the paragraph omitted. When the attorney for the defendant received the amended contract he had a telephone conversation with Mr. Haas which is summarized in the record as follows:

“I told him that the agreement was in accordance with my understanding and the conversation we had had that the agreement was not to be effective unless the decree of divorce was obtained by one or the other of the parties and that I would not send the property settlement agreement back, signed by Dr. Hill, unless it was specifically understood it was not to be used and that the $100.00 which Mr. Haas was asking for attorneys fees was not to be paid except and until and upon condition that the divorce be obtained by one of the parties. He (Mr. Haas) said ‘Well he did not want it in the contract, but that was the understanding.’ ”

The contract was signed by defendant and sent to Mr. Haas with a letter in which the following appears:

“I am sending you these contracts, together with the checks in question, the same to be held by you and not delivered or used except in the event of an action being filed by Mrs. Hill for divorce against Dr. Hill and the obtaining of the decree of divorce by one or the other of the parties.

“On the basis of this understanding and in line with our telephone conversation of today, I will appreciate your getting the complaint prepared, signed, filed and served as soon as possible, and I will then put in an appearance and advise you.”

The divorce action was filed by plaintiff on August 17, 1928. The complaint alleged that there was no community property and set forth the settlement of the property rights of the parties by an agreement dated August 14, 1928. It prayed that the court approve the property settlement.

The answer of defendant admitted the allegations of the complaint and prayed that defendant's obligation for support of Mrs. Hill and the two children of the parties be limited to the terms of the agreement.

The divorce case was heard by stipulation on September 7, 1928, and an interlocutory decree was rendered on that day. The following appears in the decree:

“And it appearing that a full and complete property settlement had been entered into by and between plaintiff and defendant and that said property settlement is satisfactory to the plaintiff herein the said property settlement is hereby approved.”

The final decree of divorce was rendered on September 17, 1929. The property settlement agreement was delivered to the attorney for defendant on September 7, 1928.

It is trite to observe that the challenged finding is amply supported by the evidence. No other finding on that subject could have been made.

While the reasoning of plaintiff on this question is somewhat obscure we believe the thought back of the argument that the finding is contrary to the evidence, is the fact that plaintiff was represented by an attorney, was dealing at arm's length with her husband and actually was not present during any of the negotiations.

This may be all true but it does not relieve her from responsibility. Mr. Haas was her attorney, selected by her to represent her in the matter of the property settlement as well as the divorce. He was acting as her agent within the scope of his employment and she is charged with his knowledge and is bound by his acts. She accepted the benefits of the fraud and was paid $17,200 under the contract.

It has long been the rule that a property settlement agreement between husband and wife, conditioned upon and made in contemplation of one of the parties securing a dissolution of the marriage by divorce, is against public policy and void. Brown v. Brown, 8 Cal.App.2d 364, 47 P.2d 352; Beard v. Beard, 65 Cal. 354, 4 P.2d 229; Senter v. Senter, 70 Cal. 619, 11 P. 782; Loveren v. Loveren, 106 Cal. 509, 39 P. 801; Newman v. Freitas, 129 Cal. 283, 61 P. 907, 50 L.R.A. 548; Pereira v. Pereira, 156 Cal. 1, 103 P. 488, 23 L.R.A.,N.S., 880, 134 Am.St.Rep. 107; Lanktree v. Lanktree, 42 Cal.App. 648, 183 P. 954; Whiting v. Whiting, 62 Cal.App. 157, 216 P. 92.

It is a general rule that when a property settlement is valid and its execution is free from fraud and not against public policy it may not be thereafter attacked if it is presented to the court and approved in a divorce action. Baxter v. Baxter, 3 Cal.App.2d 676, 40 P.2d 536.

It is also true that the doctrine of res judicata may not be applied where the judgment is based on collusion and fraud. The rule is thus stated in 30 Am.Jur. 941: “In stating the doctrine of res judicata, the courts frequently refer to the fact that the judgment sought to be used as a basis for the application of the doctrine was rendered without fraud or collusion, since it is generally held that the principles of res judicata may not be invoked to sustain fraud, and that a judgment obtained by fraud or collusion may not be used as a basis for the application of the doctrine of res judicata.”

See Milekovich v. Quinn, 40 Cal.App. 537, 181 P. 256; Boullester v. Superior Court, 137 Cal.App. 193, 30 P.2d 59. Nor can a party be estopped by such a contract. Ryder v. Ryder, 2 Cal.App.2d 426, 37 P.2d 1069.

The judgment is affirmed.

MARKS, Justice.

BARNARD, P. J., and GRIFFIN, J., concurred.