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subsisting between the two parties and arising out of the transaction."
In Talbot v. Independent Order of Owls (1915) 136 C. C. A. 268, 220 Fed. 660, the court said: "Nor does the evidence which is found in this record upon which the defendants rely to defeat the plaintiffs, and to bring this suit under the ban of the principle, He who comes into equity must come with clean hands,' sustain that defense. That principle does not repel all sinners from the precincts of courts of equity, nor does it disqualify any plaintiff from obtaining full relief there who has not done iniquity in the very transaction concerning which he complains. The wrong which may be invoked to defeat him must have an immediate and necessary relation to the equity for the enforcement of which he prays."
In Miller v. Enterprise Canal & Land Co. (1904) 142 Cal. 208, 100 Am. St. Rep. 115, 75 Pac. 770, it was said: "The contention of respondents rests on certain maxims, as that 'No one acquires a right of action from his own wrong,' 'Out of a base transaction a cause of action does not arise,' 'He who comes into equity must come with clean hands,' etc. But these maxims have their limitations, and will not be allowed to work a great injustice and wrong when the alleged unlawful act is entirely unconnected with any transaction between the parties to the suit. Usually these maxims cannot be successfully invoked where the objectionable act in no way affects the equitable relations existing between the parties."
In Carr v. Craig (1908) 138 Iowa, 526, 116 N. W. 720, it was said: "The equitable rule that a plaintiff asking relief must come into equity with clean hands has reference only to the relation between the parties, and arising out of the transaction. 'It does not extend to any misconduct, however gross, which is unconnected with the matter in litigation, and with which the opposite party has no concern.'"
In the application of the principle of this maxim it is not necessary that the general conduct of a litigant should be above reproach to entitle
him to the relief prayed by him in a court of equity, nor is it even essential that in all his dealings with his opponent in the suit he should be without fault. Foster v. Winchester (1890) 92 Ala. 497, 9 So. 83; Western U. Teleg. Co. v. Commercial Pacific Cable Co. (1918) — Cal., 171 Pac. 317; Lyman v. Lyman (1916) 90 Conn. 399, L.R.A. 1916E, 643, 97 Atl. 312; Ansley v. Wilson (1873) 50 Ga. 418; Equitable Gaslight Co. v. Baltimore Coal Tar & Mfg. Co. (1886) 65 Md. 84, 3 Atl. 108; Woodward v. Woodward (1886) 41 N. J. Eq. 224, 4 Atl. 424; Huntzicker v. Crocker (1908) 135 Wis. 38, 115 N. W. 340, 15 Ann. Cas. 444; Dering v. Winchelsea (1787) 1 Cox, Ch. Cas. 318, 29 Eng. Reprint, 1184, 2 Bos. & P. 270, 126 Eng. Reprint, 1276, 21 Eng. Rul. Cas. 617.
Thus, in Lyman v. Lyman (1916) 90 Conn. 399, L.R.A.1916E, 643, 97 Atl. 312, the court said: "The familiar maxim that he who comes into equity must come with clean hands is not used to convey the idea that no person is permitted to invoke the aid of a court of equity whose life and conduct have not been above reproach; nor does it mean, as one of the New Jersey cases cited appears to imply, that a litigant, to obtain relief in equity, must have been without fault in all his dealings with or conduct toward the party against whom the relief is asked."
In Equitable Gaslight Co. v. Baltimore Coal Tar & Mfg. Co. (1886) 65 Md. 84, 3 Atl. 108, it was said: "The maxim that he who comes into a court of equity must come with clean hands is confined to his conduct in the matter before the court, and not to matters aliunde. Courts of equity, as well as courts of law, will not refuse redress to the suitor because his conduct in other matters, not then before them, may not be blameless. It is enough if the suitor shows that he has acted justly, fairly, and legally in the subject-matter of the suit, and not whether in the past he has always done so."
General misconduct of a litigant, therefore, will not prevent the rendition by a court of equity of a decree in his favor if he has not been guilty of inequitable conduct directly con
nected with the matter in controversy. Foster v. Winchester (1890) 92 Ala. 497, 501, 9 So. 83; Ansley v. Wilson (1873) 50 Ga. 418; Weiss v. Herlihy (1897) 23 App. Div. 608, 49 N. Y. Supp. 81; West v. Washburn (1912) 153 App. Div. 460, 138 N. Y. Supp. 230; Kinner v. Lake Shore & M. S. R. Co. (1902) 23 Ohio C. C. 300; Kinner v. Lake Shore & M. S. R. Co. (1904) 69 Ohio St. 344, 69 N. E. 614; Scranton Electric Light & Heat Co. v. Scranton Illuminating Heat & P. Co. (1886) 3 Pa. Co. Ct. 635. Thus, in Ansley v. Wilson (1873) 50 Ga. 418, the court said: "The rule that a complainant must come into equity with clean hands does not go so far as to prohibit a court of equity from giving its aid to a bad or a faithless man. The dirt upon his hands must be his bad conduct in the transaction complained of. All complainants in equity are human beings, full of faults and sin, and I doubt if there is one case in ten in which the complainant is not somewhat to blame. If the complainant does equity himself, or offers to do it (except in those cases where the rule 'in pari delicto,' etc., comes in) his hands are as clean as the court can require. 'He who asks equity must do equity' is the maxim on which the expression as to 'clean hands' is based."
In West v. Washburn (1912) 153 App. Div. 460, 138 N. Y. Supp. 230, it was said: "The action is in equity, and the defendant insists that the plaintiff must come into court with clean hands. If the moving affidavits in a judgment creditor's action are to be taken as true, the present plaintiff would seem quite immoral, and it would be quite impossible to characterize her hands as clean. While equity does not employ itself in settling quarrels amongst rogues, still a rogue may have a clear cause of action, and it is with reference to the cause of action which he produces that the maxim of clean hands applies."
In Kinner v. Lake Shore & M. S. R. Co. (1902) 23 Ohio C. C. 300, it was said: "A court of equity will not shut its doors to the wicked and to those who are guilty of violation of law, simply because of the moral state of the
person, but will confine the maxim to where the wrongdoing has directly affected the particular matter under consideration by the court."
In Trice v. Comstock L.R.A. 176, 57 C. C. A. 646, 121 Fed. 620, it appeared that the plaintiffs, dealers in real estate, adopted the plan of approaching an owner of real estate, procuring him to name a selling price for his property and to give the plaintiffs an option to purchase it at the price named, the owners agreeing that should the plaintiffs procure a purchaser for the property for an amount over and above the price fixed by him, the plaintiffs should be entitled to retain the difference. The plaintiffs employed one of the defendants to procure a purchaser for certain real estate for the purchase of which the former had succeeded in procuring an option from the former agent of the deceased owner after the owner's death. The said defendant, after showing the land to a prospective purchaser, terminated his employment with the plaintiffs. He then purchased an option on the land from the executors of the deceased owner, which he assigned to his brother, also a defendant, without consideration, the latter subsequently purchasing the property. The plaintiffs sought to have the property charged in the hands of the defendants with a trust for their use and benefit. In defense of the suit the defendants contended that the plaintiffs were not in court with "clean hands," for the reason that the plan adopted by them in their dealings with owners of real estate was reprehensible. The court held that the record disclosed nothing in the scheme of the plaintiffs that was inequitable, and furthermore that the acts of the plaintiffs objected to by the defendants "neither conditioned nor affected the equity" which the former was seeking to enforce in the suit.
A fraternal organization which instituted a suit in equity to enjoin a rival organization from using a similar name and emblem as its own has been held to be entitled to the relief
asked, notwithstanding personal delinquencies of an officer of the plaintiff organization in his dealings with that organization and with strangers to both organizations, which delinquencies were pleaded by the defendant to show that the plaintiff was in court with "unclean hands," the court holding that they were in no way connected with the subject-matter of the suit. Talbot v. Independent Order of Owls (1915) 136 C. C. A. 268, 220 Fed. 660.
In Kirby v. Union P. R. Co. (1911) 51 Colo. 509, 119 Pac. 1042, Ann. Cas. 1913B, 461, certain railroad companies sought to enjoin the defendants from prosecuting their railroad-ticket brokerage business. The defendants denied that their business was unlawful, and alleged connivance and acquiescence by the plaintiffs in past acts of the defendants in the prosecution of their business, similar to those sought to be enjoined. The alleged connivance of the plaintiffs seems not to have been established, but the court held that as to the alleged future wrongs to be righted by the injunction, it was "immaterial whether the plaintiff connived at or acquiesced in past wrongful acts of the defendants, even though they may have been of the same general character as those for which redress is now sought," for the reason that they were unconnected with the subjectmatter of the litigation.
The failure of an owner of property to pay the taxes due thereon is not sufficient, under the principle of this maxim, to justify the denial by a court of equity of his suit for an injunction restraining the execution of a sheriff's deed to the property, pursuant to a sale thereof which was not in conformity with the statutory requirements, such failure being unconnected with the transaction of which the complaint was made. Ansley v. Wilson (1873) 50 Ga. 418.
In John Anisfield Co. v. Edward B. Grossman & Co. (1901) 98 Ill. App. 180, the suit was to enjoin the construction of a bay window on premises on a business street, which bay window it was intended should encroach
on the street space. The defendants claimed to have been granted the authority by the city council to construct the window, and as a further defense charged the complainants with being in court with "unclean hands," for the reason that their own adjoining property, which it was alleged would be injuriously affected by the proposed improvement, encroached on the said street space. The court, in granting the relief prayed by the complainants, held that the said authority conferred on the defendants by the city council was beyond the power of that body to grant, and that the inequitable conduct charged to the complainants was so unconnected with the matter in litigation that the principle of "unclean hands" had no application thereto.
One who, as a stockholder of a corporation, sued the officers thereof for an accounting of funds of the corporation alleged to have been lost by such officers in speculating in stocks, has been held not to have been in court with "unclean hands" because of the fact that she at times had speculated "on her own account and in the end lost." Hingston v. Montgomery (1906) 121 Mo. App. 451, 97 S. W. 202.
Where the wrong complained of is coercion, which is not directly connected with the matter in controversy, a court of equity will not apply the principle of this maxim to the case, and deny to the party charged therewith on that account the relief prayed by him. Thus, in Bateman v. Fargason (1880) 2 Flipp. 660, 4 Fed. 32, for the purpose of defeating a conveyance of real estate the grantor pleaded his own reprehensible conduct in resorting to coercion of his wife by threats in order to procure her signature to the deed of conveyance for the purpose of releasing her dower and homestead rights. The grantee demurred to the bill, invoking the aid of the maxim, "He who comes into equity must come with clean hands." In overruling the demurrer the court said: "If it be conceded that the coercion of the wife is evidence of moral turpitude, and certainly no court can, at this day, do less than severely
reprehend such conduct,-still, the plaintiff will not be repelled unless the iniquity complained of in him is connected with and a part of the very transaction as to which he seeks relief. It seems to me plain that, while the coercion of the wife was a method of perfecting the defendant's title to the land, and in that sense connected with the transaction, it is not a part of it. The subject of controversy is the usury in the account, and the other alleged false and fraudulent items as to which there is said to have been an unfair settlement."
Acts of trespass, if not directly connected with the subject-matter of the suit, will not preclude a recovery of the relief sought by the party charged therewith.
Thus, in Miller v. Enterprise Canal & Land Co. (1904) 142 Cal. 208, 100 Am. St. Rep. 115, 75 Pac. 770, one who claimed to be a riparian owner, but failed to prove the claim, sought to enjoin another from diverting water from a stream by means of a dam and ditch. He himself was maintaining a ditch on property along the river for the same purpose, which ditch had been constructed long prior to the construction of the defendant's dam and ditch. In defense of the suit, the defendant pleaded the maxim, "He who comes into equity must come with clean hands." The court held, however, that the wrong of the complainant was against the state, and one of which the state only could properly complain, and was so unconnected with the issue raised in the suit that the defense could not be sustained.
Where the suit instituted was by an owner of land, to enjoin the defendant, also a property owner, from interfering with a road, to the injury of property rights of the plaintiff therein, a similar injury to the defendant, occasioned by the acts of the plaintiff with reference to the same road, has been held to be separate and distinct from the subject-matter of the suit, and not pleadable in defense of the suit, to show that the plaintiff is in court with "unclean hands." Williams v. Beatty (1909) 139 Mo. App. 174, 122 S. W. 323; Peters v. Case (1907) 62 W. Va.
33, 13 L.R.A. (N.S.) 408, 57 S. E. 733.
Perjury unconnected with or only indirectly connected with the subjectmatter of a suit will not defeat the right of a party to the suit to the relief prayed, on the ground that the suitor is in court with "unclean hands." Foster v. Winchester (1890) 92 Ala. 497, 9 So. 83 (in procuring patent for land). So in Delaware Surety Co. v. Layton (1901) Del. Atl. 378.
In a suit by a corporation to restrain a state secretary of state from sending a certificate of incorporation into another state, for use in connection with the prosecution therein of certain officers of the corporation for perjury in swearing to false statements made by them in its certificate of incorporation, it was held that the charges against the said officers which, it was contended, precluded the plaintiff from recovering the relief prayed, under the principle of the maxim, "He who comes into equity must come with clean hands," were not sufficiently connected with the subject-matter of the suit to make the case one for the application of the principle of "unclean hands."
See also the following subdivisions of this note for the application to particular classes of inequitable conduct of the rule that, to preclude equitable relief, the conduct must be directly connected with the matter in litigation.
III. Inequitable conduct affecting
a. In general.
A court of equity, in applying the principle of the maxim that he who comes into equity must come with clean hands, will not lend its aid to compel the specific performance of a contract, or to relieve a party thereto from the obligations incurred by its execution, if the party seeking the relief has been guilty of any reprehensible conduct directly related thereto. Cathcart v. Robinson (1831) 5 Pet. (U. S.) 264, 276, 8 L. ed. 120, 124; Farley v. St. Paul, M. & M. R. Co. (1882) 14 Fed. 117; Harton v. Little (1914) 188 Ala. 640, 65 So. 951; Livingston v.
Cochran (1878) 33 Ark. 294; Indianapolis Northern Traction Co. v. Essington (1912) 54 Ind. App. 286, 99 N. E. 761, rehearing denied in (1912) 54 Ind. App. 300, 100 N. E. 765.
Thus, in Cathcart v. Robinson (U. S.) supra, the court said: "The difference between that degree of unfairness which will induce a court of equity to interfere actively by setting aside a contract, and that which will induce a court to withhold its aid, is well settled. Mortlock V. Buller (1804) 10 Ves. Jr. 292, 32 Eng. Reprint, 857; Day v. Newman (1788) 2 Cox. Ch. Cas. 77, 30 Eng. Reprint, 36, 2 Revised Rep. 1. It is said that the plaintiff must come into court with clean hands; and that a defendant may resist a bill for specific performance by showing that, under the circumstances, the plaintiff is not entitled to the relief he asks. Omission or mistake in the agreement, or that it is unconscientious or unreasonable, or that there has been concealment, misrepresentation, or any unfairness, are enumerated among the causes which will induce the court to refuse its aid. Thompson v. Smith (1815) 1 Madd. Ch. 405, 56 Eng. Reprint, 149. If to any unfairness a great inequality between price and value be added, a court of chancery will not afford its aid."
In Farley v. St. Paul, M. & M. R. Co. (1882) 14 Fed. 117, it was said: "Courts of equity will not recognize as valid, or enforce, any agreement grounded in turpitude. party complaining must come before the court with clean hands."
In Livingston v. Cochran (1878) 33 Ark. 294, it was said: "A party seeking the aid of chancery to compel the specific performance of a contract for the sale of lands must come into court with clean hands, and there must be no fraud or breach of trust in the sale. Bispham, Eq. § 372."
In Harton v. Little (1914) 188 Ala. 640, 65 So. 951, it was held that, in litigation arising out of a partnership agreement, a court of equity will not lend its aid to a partner who, in the formation of the partnership, has been guilty of material misrepresentations
and concealments affecting the partnership or its property. See, to the same effect, Miller v. Kraus (1915) Cal. App. 155 Pac. 834, rehearing denied in (1916) - Cal. 155 Pac.
In Barnes v. Starr (1894) 64 Conn. 154, 28 Atl. 980, it appeared that one of the parties to a contemplated marriage, in order to meet the objections of the relatives and friends of the other party thereto that her object in seeking the marriage was only to acquire some of her intended husband's wealth, entered into at his suggestion what she claimed was an arrangement to deceive such relatives and friends, whereby it was agreed between the intended spouses that they would execute an antenuptial agreement accepting certain sums of money in lieu of their respective shares in the other's estate, which agreement was to be exhibited to the said relatives and then destroyed. It was held that she was not entitled to set up her fraud to defeat the antenuptial agreement, in an action against the beneficiaries under the will of her husband, then deceased, which beneficiaries had acquired and retained possession of the agreement.
In Langford v. Read (1915) 69 Fla. 198, 68 So. 723, which was a suit to foreclose a lien for the balance due on an oral contract for the construction of a building, it was held that the plaintiff, having admitted that he, at the suggestion of the defendants' manager, and unknown to the defendants, had submitted a "sham bid" for the work, in writing, which was considerably lower than the actual contract price, for the recovery of the balance of which he had instituted the suit, was not in court with "clean hands," and was not entitled to the relief prayed.
In Rice v. Findlay Co. (1910) 19 Pa. Dist. R. 601, fraudulent misrepresentations inducing the execution of a contract to purchase real estate from the plaintiff were held to be a defense to a suit for the specific performance. of the contract.
In Trigg v. Read (1845) 5 Humph. (Tenn.) 551, 42 Am. Dec. 447, inad