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In Shotwell v. Stickle (1914) 83 N. J. Eq. 193, 90 Atl. 246, acquiescence by heirs in purchase at an executor's sale of the decedent's estate by the executor was held to preclude them from proceeding to set aside the sale. A court of equity will not aid a tenant who, in connection with the matter in controversy, has been guilty of inequitable conduct toward his landlord, or, in the case of a joint tenancy, toward his cotenant.
Therefore a tenant who had, unknown to his landlady, purchased a judgment for the balance of the purchase price outstanding against the property, and, unknown to her, had levied on the land in execution of the judgment, and bought the property at the execution sale, has been held to be in court with "unclean hands," and not entitled to the relief prayed in suing in equity to recover from the landlady the portion of the selling price of the property paid by him at the sale, and received by her, under a rule against the sheriff for the distribution of the money to her and to certain of her creditors, which money he claimed because of improvements made by him on the property. Sandeford v. Lewis (1882) 68 Ga. 482.
In Anders v. Sandlin (1914) 191 Ala. 158, 67 So. 684, it appeared that the complainant agreed with the ward of the defendant before the relation of guardian and ward was created between the latter and his ward, that he would bid in the mortgaged property of the ward at a foreclosure sale thereof, with liability to pay only the amount of the mortgage debt, notwithstanding his bid should be for a greater amount. In accordance with the terms of the agreement, the complainant was to have the use of the property for the ensuing year in liquidation of the debt so created. The complainant occupied the property during the said year and for several years thereafter, recognizing the relation of landlord and tenant as existing between himself and the defendant's ward, and later the defendant himself as guardian. After refusing to pay any further rent, the complainant interviewed an attorney in
the matter. He then gave his note to the defendant for the rent due for his use of the property for the year current at the institution of the suit, and then sued to have it canceled, claiming that he was the owner of the property, and that the note was therefore without consideration. The court, in refusing the prayer of the complainant, did so on the ground that a tenant may not question his landlord's title during the tenancy, and that the maxim, "He who comes into equity must come with clean hands," had a "bearing" on the matter in contro
In Hardee v. Alexander (1915) Tex. Civ. App., 182 S. W. 57, it appeared that the parties were cotenants of land purchased in their joint names. The plaintiff, by agreement with the defendant, was to make the cash payment required by the vendor, the defendant was to make the first deferred payment, and both were to be liable for the payment of an equal share of the remaining notes representing the balance of the purchase price. The cash payment was made and several of the notes were met by the plaintiff. For the purpose of meeting the outstanding notes, the plaintiff agreed with the defendant that she might sell timber standing on the land, and, in this manner, and by borrowing money on the property, raise sufficient funds with which to pay off the debts represented by the notes. At the time of this agreement the plaintiff had instituted a suit against the defendant of trespass to try the title to the land so purchased, the original agreement between the parties having provided that "in case either party should default in their payments as aforesaid, the party paying would derive all of the benefits from the purchase of the lands." The person who was to purchase the timber from the defendant and to lend the money on the land for the purpose of her meeting the notes refused to make the loan unless the plaintiff would dismiss his suit against the defendant, which the former refused to do. In the instant suit, which was to declare a trust in the interest of the
defendant in the land in favor of the plaintiff, under the clause of the contract between them which provided for a forfeiture of their rights to the other of them in case of a default by either, it was held that because of the plaintiff's refusal to dismiss his previous suit against the defendant, thereby preventing her from procuring the money necessary to perform her part of the agreement to purchase the land, the plaintiff was in court with "unclean hands," and not entitled to the relief prayed.
However, where the wrong of a tenant was not directly connected with the subject-matter of the suit, the case has been held not to be one for the application of the principle involved in this maxim. Cunningham v. Pettigrew (1909) 94 C. C. A. 457, 169 Fed. 335. In that case it appeared that the defendant and others entered into a scheme in connection with the purchase of a mining claim in fraud of the complainant. On discovery of the fraud, the latter repudiated the agreement and the defendant subsequently acquired the interests of his co-conspirators in the property. was held that the complainant and the defendant were not cotenants of the property, the former not having known that the latter had any interest therein, so as to charge the complainant with inequitable conduct towards a supposed cotenant by his relocation of the claim and institution of proceedings asserting a claim to the property adverse to the defendant. It was further held that if such conduct on the part of the complainant was inequitable, it was nected with the original fraud which caused the institution of the instant suit that the case was not one for the application of the principle of "unclean hands" to defeat the complainant's suit.
c. Necessity of injury to adverse party.
The party to a suit complaining of a wrong must have been injured thereby in order to justify the application of the principle of "unclean hands" to the case of his opponent. Lyman v. Lyman (1916) 90 Conn. 406, L.R.A.
1916E, 643, 97 Atl. 312; Chicago v. Union Stock Yards & Transit Co. (1896) 164 III. 238, 35 L.R.A. 281, 45 N. E. 430; John Anisfield Co. v. Edward B. Grossman & Co. (1901) 98 Ill. App. 180; American Asso. v. Innis (1900) 109 Ky. 595, 60 S. W. 388; Beekman V. Marsters (1907) 195 Mass. 214, 11 L.R.A. (N.S.) 201, 122 Am. St. Rep. 232, 80 N. E. 817, 11 Ann. Cas. 332; Halladay v. Faurot (1883) 8 Ohio Dec. Reprint 639; Post v. Campbell (1901) 110 Wis. 386, 85 N. W. 1032.
Thus, in American Asso. v. Innis (1900) 109 Ky. 595, 60 S. W. 388, the court, after stating the maxim, said: "The rule must be understood to refer to some misconduct in regard to the matter in litigation, of which the opposite party can in good conscience complain in a court of equity."
Therefore, where a party to a suit pleads pleads the principle of "unclean hands," it can avail him nothing if he is unable to show that he was injured by the alleged unconscionable acts of his adversary. Bentley v. Tibbals (1915) 138 C. C. A. 489, 223 Fed. 247; First Nat. Bank v. Carter (1918) Md., 103 Atl. 463; Schroeder v. Turpin (1913) 253 Mo. 271, 161 S. W. 716; Galbraith v. Devlin (1915) 85 Wash. 482, 148 Pac. 589.
Thus, in First Nat. Bank v. Carter (1918) Md. 103 Atl. 463, the court said: "As to the appellant's defense that the appellee did not come into court with clean hands, we are of the opinion it has no force, not only for the reason that from the allegations and the testimony we are unable to see that any fraud was practised upon the vendor of Mrs. Callow, but for the further reason that this defense would not be open to the appellant; for, admittedly, there was no fraud practised upon him, the appellant."
In Halladay v. Faurot (1883) 8 Ohio Dec. Reprint, 633, the suit was instituted by a partner against his copartners, the partnership still continuing. An injunction was sought, restraining the defendants from engaging personally and with their capital in an enterprise in the same locality, the purpose and scope of which were claimed to be similar to
and therefore adverse to and at variance with the business and interests of the partnership. It was not claimed by the pleadings or proof that the fact that the plaintiff owned stock in a rival institution (which was offered by the defendants as justifying a refusal of the relief sought by the plaintiff) occasioned any wrong to the defendants or the partnership. The court refused to apply the principle of "unclean hands" to the plaintiff's
In Langdon v. Templeton (1893) 66 Vt. 173, 28 Atl. 866, both parties to the suit claimed the title to the land in controversy, the former under a tax sale to his assignor which was found to be void, and the latter under a quitclaim deed from one who had no title to the property. The entry of the plaintiff on the property had been made only as to a small part of it. The defendant, subsequent to the entry of plaintiff referred to, entered on the land, but not on the parcel on which the plaintiff had entered. The plaintiff forcibly evicted the defendant. In defense of a suit instituted by the plaintiff to restrain the defendant from asserting a title to the entire property in himself, it was pleaded by the latter that the plaintiff was not in court with "clean hands" because of his eviction of the defendant, in violation of a statute against forcible entry and detainer. The court held that the defendant, not having entered on the small parcel on which the plaintiff had previously made entry, could not have been evicted therefrom, and as to that parcel the defendant had suffered no injury from the plaintiff, who could not, therefore, as to it, be said to be in court with "unclean hands."
In Galbraith v. Devlin (1915) 85 Wash. 482, 148 Pac. 589, misrepresentations by complainant to third person, pleaded in defense of suit in equity arising out of fraudulent representations and concealments between partners in connection with sale of coal lands of partnership, were held to work no injury to defendant.
d. Wrong which has been righted.
may not be pleaded against a party to a suit in equity who was guilty of the wrong, on the theory that the party charged therewith is in court with "unclean hands." Therefore one who has asserted the wrongful nature of an act, and recovered damages in a court of law for the injury from the perpetrator thereof, cannot, under the principle of this maxim, set up the wrong in a suit in equity arising out of the transaction in connection with which the wrong was committed. Loy v. Alston (1909) 96 C. C. A. 578, 172 Fed. 90; Lewis's Appeal (1870) 67 Pa. 166. Compare Avery V. Central Bank (1909) 221 Mo. 71, 119 S. W. 1106.
In McNair v. Benson (1912) 63 Or. 66, 126 Pac. 20, the plaintiff was shown to have made false representations concerning the purchase price of certain real estate which plaintiff and defendants desired to purchase, and when the transaction was closed, it was ascertained by the defendants that two of them had paid the entire purchase price of the property while they acquired only a proportionate share thereof with another defendant and the plaintiff, neither of whom paid anything for the property. However, the plaintiff subsequently confessed his inequitable conduct, and a settlement was effected between all of the persons concerned. In the suit, which was to set aside a deed of real estate, to cancel certain promissory notes, to enjoin their transfer, and to restrain a recovery of money, the execution of the deed and notes and the payment of the money by the plaintiff having been procured by threats by the defendants of violence, it was held that the plaintiff, having righted the wrong caused by his false representations as to the purchase price of the property as a result of which the litigation arose, was not in court with "unclean hands” in seeking the relief prayed.
In Huntzicker v. Crocker (1908) 135 Wis. 38, 115 N. W. 340, 15 Ann. Cas. 444, it was held that one who had joined in a conveyance of real estate by her husband to defeat his creditors should not be denied relief on the
ground that she was in court with "unclean hands" because of her complicity in the fraud, in a suit instituted by her against the assignee in bankruptcy of her husband, to have established her inchoate right to dower in the said property, after the deed had been judicially declared to be void in a suit brought for that purpose by the said assignee in bankruptcy.
e. Conduct pending suit or at trial.
If a cause of action in its inception was meritorious, the fact that the complainant in the suit has, during its continuance, been guilty of inequitable conduct, will not prevent his recovery of the relief prayed, provided such conduct "does not go to the cause of action."
Chute v. Wisconsin Chemical Co. (1911) 185 Fed. 115, wherein, after stating the maxim, "He who enters a court of equity must come with clean hands," the court said: "Equity is supposed to guard the portals of her jurisdiction jealously. No cause of action will be proceeded with which has become infected with fraud or other iniquity, it matters not when or how the facts are brought to the attention of the court. The distinction is, however, fundamental that the transgression which falls within this maxim must have infected the cause of action, so that to entertain it would be violative of conscience. It does not reach a case where the cause of action is meritorious, and where, subsequent to suit brought, the complainant had been guilty of reprehensible conduct, but which does not go to the cause of action." In that case the suit was to restrain the infringement of certain patents. It was held that the act of the complainant after the institution of the suit, in directing a licensee of his patents to see that none of its employees "fail to uphold the patents at the expense of their personal vanity" on the occasion of an anticipated visit of the defendant to its plant, did not affect the original cause of action, and was not sufficient, therefore, under the principle of "unclean hands," to preclude his recovery of the relief prayed.
However, in Sullivan v. Chicago Bd. of Trade (1903) 111 III. App. 492, one who had purchased the business of another was held not to have ipso facto acquired the rights of that other under a contract between the latter and a telegraph company by which the telegraph company was to furnish board of trade quotations; and in a suit for an injunction restraining the company from removing its ticker and connecting wires from his office, the ticker having been disconnected, the complainant was held to be in court with "unclean hands" because of hav
ing tapped the wires of the company during the pendency of the suit, and preliminary to the issuance of a temporary injunction which had been asked and granted.
In Little v. Cunningham (1906) 116 Mo. App. 545, 92 S. W. 734, the cutting by a telephone company of an extension wire to the telephone of a subscriber pending the outcome of a suit instituted by the former to enjoin an unauthorized use of the telephone was held to be sufficient to justify the application of the principle of this maxim and the denial of the relief prayed. In Van Voorhis v. Van Voorhis (1892) 94 Mich. 60, 53 suit was for a divorce. ant was found to have
N. W. 964, the The complainbeen guilty of
corrupt practices in procuring evidence to support his suit, and the court said: "The principle of the maxim, 'Falsus in uno, falsus in omnibus,' may be extended to the entire testimony offered in behalf of a liti gant who is shown to have been guilty of corrupt practices in procuring that testimony, or any part of it. A party coming into a court of equity, asking to be released from the bonds of matrimony and its obligations, must come with clean hands, and must keep them clean so far as relates to the procurement of testimony to make out his case."
In applying the principle of the maxim, a court of equity will deny its aid to a suitor guilty of false swearing in connection with the matter of the suit. California Redwood Co. v. Little (1897) 79 Fed. 854; Bacon v. Early (1902) 116 Iowa, 532, 90 N. W. 353
(perjury connected with scheme to traffic in appearance bonds); Roman v. Mali (1875) 42 Md. 561 (perjury connected with scheme of attorney and his client to defraud latter's creditors).
1. Act of agent.
The reprehensible conduct complained of must have been that of the person against whom the principle of the maxim is sought to be invoked, or, if it was that of an agent, to be chargeable to the principal it must have been performed with his knowledge. Associated Press v. International News Service (1917) 240 Fed. 983, modified in other respects in (1917) 2 A.L.R. 317, 157 C. C. A. 436, 245 Fed. 244, affirmed in 248 U. S. 215, 63 L. ed. 211, 2 A.L.R. 293, 39 Sup. Ct. Rep. 68, wherein the court said: "Now the doctrine that he who comes into equity must come in with clean hands does not recognize mere imputations of guilt based upon technical theories of agency. To invoke it a knowledge must exist on the part of the principal of the facts upon which the charge of unconscionable conduct is based, and in the case of a corporation those facts must be brought home to the persons exercising general control over its affairs."
Therefore, if a knowledge of such conduct cannot be charged to the principal, the latter is not precluded from the relief prayed by him in a court of equity on the ground that he is in court with "unclean hands." Vulcan Detinning Co. v. American Can Co. (1906) 72 N. J. Eq. 387, 12 L.R.A. (N.S.) 102, 67 Atl. 339. In that case the suit was to enjoin the defendant corporation and its president, the latter having been one of the original incorporators of the plaintiff company, from using a secret detinning process in the defendant's plant, which process had been purchased from one who had clandestinely obtained the secret of the process from the original discoverers thereof. The latter fact was unknown to the plaintiff corporation or its promoters, but was casually learned by the person who, as agent for the plaintiff, negotiated the pur
chase of the secret process, through correspondence previously had by him The with the original discoverer. court held that the complainant, not having any knowledge of the fraud referred to, perpetrated on the original discoverer, was not in court with "unclean hands" in seeking the relief prayed.
In Todd Protectograph Co. v. Hedman Mfg. Co. (1919) 254 Fed. 829, it was held that a manufacturing corporation was not precluded from relief against unfair competition by the reprehensible methods of some of its salesmen, where the officers of the corporation were not shown to have knowledge thereof.
In Associated Press v. International News Service (Fed.) supra, it was held that the plaintiff, a news agency, was not in court with "unclean hands" because of the appropriation by its agents of news of the defendants, unknown to the plaintiff.
However, in Rice v. Findlay Co. (1908) 19 Pa. Dist. R. 601, a suit for the specific performance of a contract for the purchase by the defendant of real estate of the plaintiff, wherein misrepresentations of an agent of the latter, unknown to him until the institution of the suit, induced the purchase, it was held that the plaintiff, because of such misrepresentations, was in court with "unclean hands" in seeking the specific performance of the contract.
g. Improper motive.
A court of equity will not, under the principle of the maxim that one who seeks equity must come with clean hands, aid a party to a suit who is actuated by a bad motive in instituting the litigation.
Thus, a complainant in a suit in equity whose real object in instituting the proceedings is to defeat or hamper the prosecution of other litigation, while ostensibly seeking the adjudication of alleged rights in the matter involved in the suit brought by him, has been held to be in court with "unclean hands." Peltzer V. Gilbert (1914) 260 Mo. 500, 169 S. W. 257, wherein taxpayers whose object in suing to restrain the county attorney