Case Name: HODLER v. HODLER
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1919-11-12
Citations: 95 Or. 180
Docket Number: 
Parties: HODLER v. HODLER.
Judges: Bennett, J., dissents.
Reporter: Oregon Reports
Volume: 95
Pages: 180–224

Head Matter:
Argued September 23,
affirmed November 12, 1919,
modified as to costs and rehearing denied February 19, 1920.
HODLER v. HODLER.
(185 Pac. 241; 187 Pac. 604.)
Contracts—Contract for Divorce.
1. Where husband and wife made property agreements “in anticipation of a divorce about to be procured,” and where husband facilitated trial of wife’s divorce suit by making trip for special purpose of being served, did not appear in suit, and permitted wife to obtain divorce on grounds which he knew to be false, the transaction held an agreement by which wife should procure divorce, and as such void as against publie policy.
[As to the validity of contracts intended to facilitate procuring divorce, see notes in 11 Ann. Cas. 377; Ann. Cas. 1915A, 811; Ann. Cas. 1918E, 902.]
Pleading — Admissions — Cancellation of Note Executed Pursuant to Collusive Agreement.
2. In divorced wife’s action to cancel her note and mortgage to husband upon ground that they were void and without consideration, because executed pursuant to collusive divorce agreement, husband, after asserting validity of agreement and after alleging that in reliance thereon he did not appear or defend divorce suit though he had a valid defense, cannot question court’s jurisdiction to render decree of cancellation upon ground that parties are in pari delicto.
Contracts — Return of Money Paid Under Collusive Agreement.
3. Court, in canceling divorced wife’s note and mortgage to husband on ground that they were executed pursuant to collusive divorce agreement, will not decree return of money actually paid thereon; the contract, os to money paid over, being an executed contract, and wife being without a remedy in regard thereto.
Cancellation of Instruments — Collusive Divorce Agreement — Cancellation of Note and Mortgage.
4. In divorced wife’s suit to have note and mortgage to husband canceled upon ground that they were void and without consideration because executed pursuant to collusive divorce agreement, wife held entitled to cancellation as against objection that, if note and mortgage were against publie policy, no relief should be granted, since wife could successfully defend in suit to foreclose mortgage upon ground that it was void and without consideration.
ON PETITION FOB REHEARING.
Equity — Jurisdiction Dependent on Facts Existing at Time of Complaint.
5. Jurisdiction of equity must depend on the actual facts as they exist at the time the complaint was filed and the relief which is sought to be obtained by both the plaintiff and the defendant as' evidenced by the pleadings.
Cancellation of Instruments — Party to Void Note and Mortgage Though in Pari Delicto, may Sue to Cancel Obligation Before Maturity.
6. Conceding that parties to an agreement, void because a collusive divoree agreement, were in pari delicto, equity has jurisdiction to cancel note and mortgage, given pursuant thereto, when suit is brought before the maturity of the obligation; the maker of the note not being sufficiently protected by defense which she might make on the note and mortgage if they were sued on by an innoeent purchaser for value.
Costs — Of Transcript Properly Divided Where Plaintiff had Benefit of Transcript Filed by Defendant.
7. Where both parties appealed, and plaintiff had the benefit of the transcript filed by defendant, the costs of the transcript would be divided.
From Multnomah.: George W. Stapleton, Judge.
In Banc.
The plaintiff and the defendant Lonis Hodler were intermarried in 1898 and lived together as husband and. wife until about January 1,1915. They have two sons, one about sixteen years old and the other about eleven.
In 1903 the plaintiff inherited from her mother 187.5 acres of land near Beaverton in Washington County, Oregon, together with some property in the City of Portland and about $25,000 in money. The plaintiff alleges that although the defendant Hodler was a strong, healthy man, after she received this legacy he led a life of ease and idleness and was fed and clothed out of the income from her property; that he manifested toward her a cruel, overbearing and vicious disposition and insisted upon managing her property, collecting the rents and controlling the expenditures.
The complaint narrates that prior to 1914 the Hodlers became acquainted with A. B. P. Orr; that after the death of Orr’s wife Plodler agreed with Orr that •the latter should become a boarder in the Hodler household; that Orr invited the plaintiff and her husband to take a trip east with him, which they did at his expense; that upon their return the plaintiff informed Orr that she did not want him to remain in her home, but Hodler insisted that he should continue to reside there. The plaintiff avers that some time in the summer of 1914 she first learned that Hodler had a child in the east, by a former marriage, and at that time Hodler’s cruel treatment of her became aggravated; that he accused her of prying into his affairs and insisted that she should pay him $40,000, threatening that he would not leave without a settlement; that he told the children their mother was unchaste and had been guilty of immoral relations with Orr on the trip; that as a re- suit of his treatment and such charges the plaintiff became almost a wreck, mentally and physically, and in' the fall of 1914 she asked Hodler to leave her house, where he had been living, and that he refused to go and schemed to compel her to pay him at least $20,000, with threats that unless she did so he would publish in the “Morning Oregonian” a statement of her alleged meretricious conduct.
It is further stated in the complaint that upon the failure of Hodler to leave, the plaintiff left her own home; that through duress, on account of her children and to save her good name she agreed to pay Hodler $20,000; that pursuant to such agreement the parties met at the office of Attorney MacMahon in Portland on January 8, 1915, and entered into the following contract :
‘ ‘ This agreement, made and entered into this eighth day óf Januarv, 1915, by and between Mr. Louis Hodler and Mrs. Delia Hodler, at present husband and wife, both of the State of Oregon, witnesseth:
“That whereas the parties hereto are the owners in fee simple of realty situate in the County of Washington, State of Oregon, and in the County of Multnomah, State of Oregon, and also personalty;
“And whereas, certain estrangements have arisen between them and disagreements during the past years which appear to be inevitable and irreconcilable;
“And whereas, they have not for many years lived together as husband and wife, and are not now living in said marital relations;
“And whereas, there have been born to the parties hereto two minor male children, Albert, of the age of 16 years, and Joseph, of the age of 13 years, both now under the care and custody of the parties hereto;
“And whereas, it is desired by the parties hereto that they should save the cost of litigation and the expense incurred by anticipated litigation in the division of said property for the benefit of their said minor children as well as for their own benefit;
“Therefore, in anticipation of a divorce about to be procured by one of the parties hereto on the merits to be set forth in said complaint, upon which this agreement has no bearing whatever, now, therefore, we, the said Louis Hodler and the said Delia Hodler hereby agree to divide our property and to settle our property rights completely in the following manner, to wit:
“First.- Mrs. Delia Hodler hereby agrees to sign, set over and deliver to said Louis Hodler a certain promissory note and mortgage properly secured on property situate in the city of Portland, State of Oregon, in the sum of three thousand dollars ($3,000.00) executed by Joseph J. Tierney to said Delia Hodler;
“Second: Said Delia Hodler further agrees that when these papers are taken from escrow to pay to said Louis Hodler the sum of one thousand dollars ($1,000.00) in gold coin of the United States of America;
“Third: Mrs. Delia Hodler further agrees that upon the delivery of said papers to make, execute and deliver to said Louis Hodler her certain promissory note, secured by a mortgage payable on or before, three years from date hereof, drawing interest at the rate of seven (7%) per cent per annum, said note to be secured by a mortgage upon her property consisting of one hundred and eighty-seven and one half (187%A.) acres formerly owned by Patrick Forrester, situate in the Lassen Donation Land Claim in the County of Washington, State of Oregon; interest on said mortgage to be paid annually; said note and mortgage to be made in the sum of sixteen thousand dollars ($16,000.00);
“In consideration of the foregoing gifts and mortgage notes and moneys above set forth, said Louis Hodler hereby agrees that when these papers are taken from escrow, to make, execute and deliver in return for said twenty thousand dollars ($20,000.00) aforementioned, his quitclaim deeds to all property owned by the said Mrs. Delia Hodler and said Louis Hodler in the County of Washington, State of Oregon, and also in the County of Multnomah, State of Oregon;
‘ ‘And it is hereby agreed by and between the parties hereto that this agreement shall be final and shall be a complete settlement of all their property rights owned by and between the parties hereto;
“And it is further agreed that these papers shall be executed in duplicate and the same shall be placed in escrow in the bank of Ladd & Tilton in the city of Portland, Oregon, signed by the parties hereto, and that said escrow shall not be removed from said bank without the consent of Delia Hodler, Louis Hodler and their attorney, M. J. MacMahon, ensemble; that is, when the three aforementioned persons appear at the bank and ask for them together;
“It is further agreed by and between the parties hereto and thoroughly understood that after the decree of divorce shall have been entered between the parties hereto dissolving forever the bonds of matrimony existing between them, that the execution of said deeds and the payment of said money and the execution of said mortgage note shall be executed and delivered to the respective parties hereto within a reasonable time after the entrance of said decree of divorce, to wit, five or ten days.
“This agreement is made, executed and placed in escrow by and between the parties hereto in duplicate on this eighth day of January, 1915.
“Louis Hodler.
“Delia Hodler.
“Witnesses:
“M. J. MacMahon.
“L. B. Hague.'’'’
On January 30th next the foregoing agreement was modified as follows:
“Know all men by these presents: That whereas heretofore, on January 8, 1915, the parties hereto, Mr. Louis Hodler and Delia Hodler, entered into an agreement regarding the division of their property, and whereas said agreement has been placed in escrow in Ladd & Tilton Bank, Portland, Oregon, and whereas said agreement recites that the parties have not for ‘many years’ lived together as husband and wife, and whereas Louis Hodler makes objection to the statement that they have not lived together ‘many years’ and whereas the estrangement mentioned in said agreement has existed for a period of a little over one year prior to January 8, 1915; it is therefore agreed that said statement of facts in said agreement be, and the same is hereby corrected and amended, so that the sentence reciting said facts shall read as follow's: ‘and whereas they have not for a year last past lived together as husband and wife, and are not now living in said marital relation. ’
“It is further agreed between the parties hereto that the said Delia Hodler shall, at her own cost and expense, suitably support and educate and maintain the two minor children of the parties hereto during the minority of such children and during the minority of the younger thereof. It is further agreed that the said Delia Hodler will protect and save harmless the said Louis Hodler from any liability arising out of and because of the signing of any notes or other evidence of indebtedness by the said Louis Hodler, in connection with the purchase of any real estate now standing in the name of the said Delia Hodler.
“In witness whereof, parties have hereunto set their hands this 30th day of January, 1915.
“Delia Hodler.
“Louis Hodler.
“Witnesses:
“M. J. MacMahon.
‘ ‘ Prank S chlegel. ’ ’
Pursuant to the original agreement, the plaintiff commenced a suit for divorce against the defendant Louis Hodler in the Circuit Court of Clatsop County, on the ground of cruel and inhuman treatment. A copy of the complaint and summons was duly served on the defendant in Multnomah County. Thereafter Attorney MacMahon drafted a letter to the sheriff of Clatsop County and gave it to Hodler, who personally delivered it to that officer, by whom he was again served with another copy of the summons and complaint in that county. The defendant did not appear in the divorce suit. After a default was taken a reference was made and the testimony in the Clatsop County suit was taken by the court reporter of that county, in the office of Attorney MacMahon in Portland. The plaintiff and Clara Wenger, a niece of the defendant Hodler, gave strong evidence of facts and circumstances tending to prove the allegations of the complaint, to the effect that the plaintiff had a just ground of complaint against the defendant upon the charge of cruel and inhuman treatment. Based thereon a decree of divorce was rendered by the Circuit Court of Clatsop County in favor of the plaintiff as prayed'for in her complaint.
After the decree was entered, pursuant to the escrow agreement the parties met and with Attorney MacMahon went to the Portland bank, where $1,000 in cash was actually paid over to Hodler and an assignment of the Tierney note and mortgage for $3,000 was duly made to him by the plaintiff. She then executed in his favor her promissory note for $16,000 dated February 1, 1915, payable on or before three years from date, with interest at 7 per cent per annum, together with a mortgage upon the 187.5 acre tract of land to secure the payment thereof. Soon afterward Hodler indorsed the $16,000 note and mortgage and assigned them to the defendant Eliza Stone, to whom the plaintiff made certain payments of interest thereon during the first year after execution, to the amount of $1,120. The Tierney note was collected and the proceeds thereof, together with the $1,000 cash, were turned over to the defendant Elizabeth "Wenger by the defendant Louis Hodler. The complaint states that there was no consideration for the assignment of the $16,000 note and mortgage to the defendant Eliza Stone, but that at the time the plaintiff made .her payments of interest thereon she did not have any knowledge of that fact and assumed that the defendant Stone was the owner and holder thereof for value. It is also alleged that the defendant Elizabeth Wenger now holds the $3,000 and the proceeds of the Tierney note and mortgage in trust for the use and benefit of the defendant Louis Hodler, who is the owner thereof.
The plaintiff contends that the $4,000 evidenced by the cash payment, the Tierney note and mortgage, and the $16,000 note and mortgage were wrongfully and unlawfully obtained from her by duress, under threats as stated and by means of cruel and inhuman treatment, and that the whole transaction is void and without consideration. She avers that after the money, notes and mortgages were obtained the defendant. Hodler commenced an action against Orr for alienation of the affections of his former wife, the plaintiff Delia Hodler, in which he made the threatened charges and caused them to be published.
It is further alleged that at the time the plaintiff and this defendant were married Hodler had a wife and child whom he had deserted in the east, and he had never been divorced from that wife.
There are three separate causes of suit and the plaintiff asks for a decree rescinding the original agreement and the modification thereof; that the $16,000 note and mortgage be canceled; that the defendant Hodler be required to return the $4,000, which he received, and that the defendant Stone be ordered to return the $1,120.00 paid her as interest by the plaintiff.
For answer Louis Hodler admits that he and the plaintiff were intermarried in 1898, and lived together as husband and wife until January 30, 1915; that on J anuary 10,1915, plaintiff instituted a suit for divorce against him in Clatsop County, Oregon, and that on J anuary 30,1915, the court rendered a decree of divorce in favor of plaintiff. He admits the execution of the contracts and affirmatively alleges that the plaintiff was not acting under any duress, undue influence, fraud or deceit of the defendant; that she was acting upon her own volition, and under the advice of her attorney; that she realized and understood that the agreements provided for a full settlement and division of the property and property rights between herself and this defendant to avoid litigation of such property rights, and the divorce proceedings; and that Frank Schlegel, who is now one of the attorneys for the plaintiff in this suit, appeared for and represented this defendant in the consummation of the agreements and the execution of the mortgage. He also admits that he did not appear in the divorce suit in Clatsop County; that in February, 1915, he filed a suit in Multnomah County, Oregon, against Orr for the alienation of plaintiff’s affections, and that in February, 1917, he instituted another suit for the same purpose at Vancouver, in the State of Washington.
This defendant further admits that he assigned the note and mortgage to the defendant Eliza Stone, his ownership thereof, and the payment of $1,120 thereon as interest.
The answer admits that Louis Hodler was legally married to Emma Eoe on October 1, 1885, in Jones County in the State of Iowa, and that a daughter was born as the issue of such marriage. It is affirmatively alleged that on November 21,1888, his then wife, Emma Hodler, was duly and legally divorced from him by a valid decree rendered in a suit in which she was plaintiff in the State of Iowa; that on January 13, 1896, he instituted a suit for divorce in the Circuit Court of the State of Oregon for Yamhill County against the said Emma Hodler; that findings of fact and conclusions of law were rendered therein and that based thereon, a decree of divorce was rendered in his favor against Emma Hodler.
Louis Hodler contends that the contracts between the plaintiff and himself were duly and legally carried out and acquiesced in by both parties until this suit was commenced, and that he has at all times and in all respects complied with and performed his part of the contracts, which he claims were fair and reasonable. He admits the execution of the supplemental agreement of January 30, 1915, and alleges that the notes and mortgage were executed pursuant to the terms of that contract and were founded upon a sufficient consideration, but denies all other material allegations.
1 As an affirmative defense, it is alleged that Louis Hodler frequently protested to the plaintiff against the presence of Orr in the family home, demanding that he should leave, and many times ordering him away, but that the plaintiff insisted that Orr should remain, and that Orr did remain until a short time before the divorce of plaintiff and defendant. He then alleges certain conduct between Orr and the plaintiff which led to the estrangement of plaintiff and defendant, and that the plaintiff determined to secure a separation from this defendant although it was against his wish and protest.
Hodler avers that on account of her relations and conduct with Orr, the plaintiff lost her love and respect for the defendant; their domestic affairs became strained, and it was impossible for them any longer to live together as husband and wife; that by reason thereof, a division of property and property rights became necessary and to settle and adjust such rights so that a divorce suit could be instituted and prosecuted without the necessity of litigating property rights, she proposed a final settlement of such property rights; that pursuant thereto the agreement marked “Exhibit ‘A’ ” was executed, which was thereafter modified by the supplemental agreement known as “Exhibit ‘B’ ”; and that on January 30, 1915, the plaintiff secured the divorce in question.
The defendant Hodler further alleges that the conduct of plaintiff and Orr caused him humiliation and disgrace, and afforded him sufficient grounds to institute and maintain a suit for divorce against the plaintiff, specifically alleging such grounds. He also alleges that after plaintiff demanded a separation and division of the property, and after he had been advised by her that they could not live together any longer, he went to the office of her attorney where the contracts were drawn, and employed Frank Schlegel, now one of the attorneys for plaintiff, “to look over the agreements and protect his interests therein, and paid him a fee of $100 for said services.” The answer further alleges:
“That at the time of the execution of said agreement, immediate divorce proceedings were contemplated by these parties and that thereafter, to wit, upon the tenth day of January, 1915, this plaintiff, then a resident of Multnomah County, Oregon, filed and instituted in the Circuit Court of the State of Oreg’on, for Clatsop County, a suit for divorce against this defendant and that thereafter, to wit, on January 30, 1915, the court heard evidence in said case and filed his findings of fact and conclusions of law and entered a decree therein divorcing this plaintiff and this defendant. ’ ’
In the divorce suit, according to the defendant, it was understood that all property rights had been settled out of court,
"and this defendant entered no appearance therein and believed that the agreements hereinbefore referred to in reference to the division of the property and the property rights were valid, binding and conclusive. * * ”
Upon the execution of the documents and contracts they were placed in escrow in a Portland bank, where they remained until the divorce decree was rendered, after which they were delivered to the respective parties.
It is further alleged:
"That the actions and associations between this plaintiff and the said Orr afforded abundant grounds for a decree of divorce in favor of the defendant and that at that time the plaintiff was possessed of property real and personal in her own right of the probable value of $75,000.
"That this defendant entered no appearance in said suit and allowed a default to be taken against him relying and believing that the agreements hereinbefore referred to in reference to the division of the property and the settlement of the property rights were valid, binding and conclusive and could and would never be assailed by this plaintiff but that she would in all respects abide by, live up to and conform to the terms of said contracts.
"That if he had any reason to believe or did believe or suspicion that said agreements marked Exhibits ‘A’ and ‘B’ were not final and conclusive and were not, in fact, a complete and final settlement of all property and property rights between plaintiff and the defendant, he would have appeared and filed an answer in said divorce suit and filed a cross-complaint alleging grounds hereinbefore mentioned and others for the purpose of securing a divorce, for the purpose of adjusting the property rights and for the purpose of securing the advantage of any property rights authorized under the laws of the State of Oregon.”
Facts are then alleged tending to show that the plaintiff accepted and ratified the terms and conditions of such contract and undertook in good faith to carry them out; that for more than two years she has recognized them as valid and binding, and has not placed or offered to place the defendant in statu quo.
Further, the defendant alleges the commencement of the divorce suit in Clatsop County, and the rendering of decree therein, and prays for a decree:
“That the contracts and mortgages hereinabove alleged and alleged in plaintiff’s complaint be held and decreed to be valid and binding and that this suit be dismissed and that this defendant recover his costs and disbursements in this suit from this plaintiff and for such other and further relief as may appear to the court to be equitable in the premises.”
Answers were filed by the defendants Eliza Stone and Elizabeth Wenger denying all material allegations of the complaint.
The plaintiff replied, denying all the new matter alleged in defendant Hodler’s further and separate answer, and alleging certain other matters by way of defense. All the testimony was taken in open court before the judge, who made exhaustive findings of fact and conclusions of law, upon which he rendered a decree setting aside as null and void the $16,000 note and mortgage, and the assignment thereof, refusing the plaintiff a decree for the money which she had already paid under the contracts, and ordering that each party should pay his or her own costs.
The plaintiff appealed, claiming that she was entitled to a decree for the $5,120 which she had actually paid, and the defendant Hodler appealed on the ground that the court erred in refusing to quash the service of summons ; that his demurrer to the complaint should have been sustained; that the suit was not commenced within the time limited by the Code; that the complaint does not state facts sufficient to constitute a cause of suit; that it appears that the plaintiff has ratified the contracts, note and mortgage and waived the alleged duress, and that the court did not have jurisdiction of He subject matter of the suit; that it erred in refusing to decree that the $16,000 note and mortgage were valid and binding and that plaintiff ought to be estopped from claiming or asserting that the contracts were executed under duress or were void; and that the plaintiff should have no decree whatever.
Affirmed.
For appellant there was a brief with oral arguments by Mr. Thomas Mannix, Mr. Guy L. Wallace and Mr. Frank Schlegel.
For cross-appellant there was a brief with oral arguments by Mr. E. B. Tongue and Mr. Thomas II. Tongue.

Opinion:
JOHNS, J.
This has been a bitterly contested suit, and the record is full of crimination and recrimination, but as we read it neither of the Hodlers could qualify to cast the first stone. The defendant admits that he was married in Jones County, Iowa, to Emma Roe on October 1, 1885; that they lived there as husband and wife, and that a daughter was born to them; that in about one year he left his family and came to Beaver-ton, Washington County, in this state, and that he has never since seen that wife and child. He alleges that Emma Roe Hodler obtained a divorce from Mm in Iowa on November 21,1888, and it appears that soon thereafter she married his brother. He also alleges that on January 13, 1896, he instituted a suit for divorce against her in the Circuit,Court of the State of Oregon for Yamhill County, in which findings of fact were made and a decree was rendered in that court on April 14, 1896, divorcing him from his former wife, Emma Hodler.
The plaintiff and the defendant Louis Hodler were married at Vancouver, Washington, in 1898. At that time Hodler claims that she knew and plaintiff denies that she had any knowledge of his former marriage, or that he had a daughter. It is significant that while he was then a resident of Beaverton in Washington County he filed his complaint and obtained his divorce in Yamhill County.
At the time of their marriage, the plaintiff and defendant were without substantial means, and both were hard-working people and made their home in the country. In 1903, through her mother, the plaintiff became the exclusive owner, of the Washington County farm of 187.5 acres, together with some property in Portland, Oregon, and a substantial amount of money known as the "Pat. Forester estate," and in a short time they both moved to Portland, where they continued to reside. Up to 1913, their domestic relations were fairly pleasant and they were reasonably happy.
Upon the death of his wife, A. B. F. Orr became a boarder in the Hodler household, and invited the husband and wife to take an eastern trip which it was understood would be at his expense. It was upon that trip that their domestic trouble commenced, with Orr as the storm center. On their return, he continued to reside with them and their domestic troubles increased from time to time until they finally culminated in the execution of the agreements and the filing of the divorce suit in Clatsop County by the plaintiff upon the grounds of cruel and inhuman treatment. The plaintiff vigorously contends that she did not want Orr in the home, and frequently notified him to leave, but that her husband objected to his leaving and insisted that he should stay. The defendant as vigorously contends that he did not want Orr around the house and several times notified him to leave, and that his wife insisted that he should remain. In either event it is apparent that Orr was largely responsible for the domestic trouble between the Hodlers. By mutual consent, the plaintiff and the defendant Louis Hodler together went to the office of Attorney MacMahon in the City of Portland, where the agreement known as "Exhibit 'A' " was prepared and executed on January 8, 1915. Following the execution of that agreement, the plaintiff went to Astoria in Clatsop County and filed her complaint in the divorce suit. The complaint and summons were first served upon Louis Hodler by the sheriff of Multnomah County, following which Attorney MacMahon drafted a letter to the sheriff of Clatsop County, which he delivered to Louis Hodler, who .was then in Portland, and who personally went to Astoria and delivered the MacMahon letter to the sheriff of Clatsop County, by whom Louis Hodler was again duly served in the office of that sheriff with another copy of the complaint and summons in the divorce suit.
Hodler did not appear in the divorce suit and a default was entered against him. It is apparent that his purpose in going to Astoria and the making of the second service was to facilitate the trial of the case and the obtaining of the decree of divorce.
After the default was taken, both parties returned to Portland where tlie testimony was taken in MacMahon's office before the reporter of the Circuit Court of Clatsop County as referee, with the plaintiff and Clara Wenger, a niece of the defendant, as the only witnesses, and each of them gave strong testimony tending to show that'the defendant had committed numerous acts of cruel and inhuman treatment towards plaintiff and that she had been a dutiful and faithful wife. Based thereon, the Circuit Court of Clatsop County, rendered a decree in favor of the plaintiff. After its rendition and by mutual consent, the plaintiff and defendant with Attorney MacMahon went to the bank where the papers were placed in escrow pending the suit, and the deeds from the. defendant to the plaintiff were duly executed and delivered, and plaintiff then paid the defendant $1,000 in cash and assigned the Tierney note and mortgage of $3,000, and executed the $16,000 note with a mortgage on the Washington County land to secure its payment, all of which were delivered to the defendant, and the whole transaction was apparently closed until about the time this suit was commenced. At its maturity, the plaintiff was notified by the attorney for Mrs. Stone to pay the annual interest of $1,120 on the $16,000 note. After some delay, the plaintiff paid that interest to Mrs. Stone under the alleged belief that she was the actual owner and holder of that note and mortgage. But-it is admitted in the pleadings and appears from the evidence that the defendant Louis Hodler was then and is now the true owner and that Mrs. Stone held the assignment thereof in trust for him.
While we agree with the trial court that there is much perjured testimony in the record, there is no dispute as to the execution of any of the instruments or why they were executed, or as to the obtaining of the divorce, the grounds and the reason for it or the manner in which it was obtained. Hodler claims that the contract of J anuary 8, 1915, as modified by the parties on J anuary 30th of that year, was a separation agreement only, and as such was valid. The plaintiff now contends that it was procured 'by duress, was conditioned on the obtaining of the divorce, was intended to promote and facilitate the divorce and is void as against public policy. That is the vital question in this case. In 9 R. C. L., page 252, it is said:
' ' Marriage is a relation in which the public is deeply interested and is subject to proper regulation and control by the state or sovereignty in which it is assumed or exists. The public policy relating to marriage is to foster and protect it, to make it a permanent and public institution, to encourage the parties to live together, and to prevent separation."
Under the earlier decisions even separation agreements between husband and wife were held to be void as against public policy, but under the modern decisions, when fair and reasonable such agreements are now sustained. As we analyze it, the whole transaction between the plaintiff and Louis Hodler was an agreement between them by which the plaintiff should procure a divorce.
The defendant Hodler alleges in his answer that ' ' at the time of the execution of said agreement immediate divorce proceedings were contemplated by these parties,." and the divorce suit was filed on January 10, 1915. To facilitate the trial Louis Hodler went from Portland to the sheriff's office at Astoria for the express purpose of being served with a copy of the summons and complaint in Clatsop County, and did not enter any appearance in the suit. His own niece, who for a number of years had lived with the litigants in their family home, was an important witness for the plaintiff and testified as to specific acts of cruel and inhuman treatment of the plaintiff by the defendant Hodler, on the strength of which the decree was granted. This defendant further alleges that he "entered no appearance therein and believed that the agreements hereinbefore referred to in reference to the division of the property and the property rights were valid, binding and conclusive," and that if he had "had any reason to believe or did believe or suspicion that said agreements, 'Exhibits "A" and "B," were not final and conclusive and were not in fact a final settlement of property and property rights between plaintiff and the defendant, he would have appeared and filed an answer in said divorce suit and filed a cross-complaint alleging grounds hereinbefore mentioned, and others, for the purpose of securing a divorce." The statement as to "grounds hereinbefore mentioned" has reference to the alleged adulterous acts and meretricious conduct between the plaintiff and Orr, and the alleged cruel and inhuman treatment of the defendant by the plaintiff. Hodler now contends and it appears from his own evidence in this suit that he was a kind, faithful and loving husband, and that he never abused or mistreated the plaintiff. He declares that she never had any grounds for a divorce on account of cruel and inhuman treatment or otherwise, and his niece testifies in the pending case that she committed-perjury in all her testimony in the divorce suit as to the grounds upon which the decree was obtained. In other words, assuming that the evidence and contentions of the defendant in the pending case are true, the plaintiff never had any ground for divorce, but Hodler had abundant cause for a divorce from her, both on account of cruel and inhuman treatment and because of her meretricious relations with Orr. • Yet with knowledge of such facts and in consideration of the $20,000 which he expected to secure, he permitted the plaintiff to obtain a divorce from him on grounds which he knew to be false.
The rule is well stated in 9 R. C. L., page 254, that:
"A husband and wife cannot enter into a lawful agreement for a divorce, and the courts unhesitatingly declare illegal as contrary to public policy any contract intended to facilitate or promote the procurement of a divorce. Hence a contract whereby a wife who has resolved to leave her husband agrees for a stated consideration to relinquish all claims on him as wife provided a divorce is granted to him on or before a fixed date is void and no bar of her right to a year's support and dower after his death. Nor can an agreement to withdraw opposition to or not to contest divorce proceedings form a valid consideration for a contract to pay money. - Similarly a contract between a husband and wife is invalid where its direct tendency is to interest the husband in procuring a divorce or in foregoing resistance to an effort by his wife directed to that end."
Qreenhood on Public Policy, page 490, lays down the rule thus:
" 'It is quite settled,' said the court, in Case I, 'that contracts between husband and wife, so framed as to have effect only on condition that a divorce should be granted, are contrary to public policy, and will not be enforced by the courts. Their tendency is to interest the parties to be benefited in procuring or permitting a divorce; and, though chancery will recognize and enforce some liabilities between husband and wife growing out of implied trusts, and even some growing out of express contracts, yet the courts will never lend themselves to the enforcement o'f a contract intended to promote the dissolution of marriage. * # Such an agreement is regarded in law as a fraud upon the court and upon the administration of justice, and no action will lie upon it. ' "
And on page 491 it is said:
" 'The object of the agreement,' said the court, in Case III, 'was to bring about a dissolution of the marriage contract, and to put an end to the various duties and relations resulting from it. Any contract, having any such purpose, object, and tendency, cannot be in law sustained, but must be regarded as being against sound public policy, and consequently illegal and void.' "
In Phillips v. Thorp, 10 Or. 494, the syllabus holds that:
"The authorities are uniform in holding that any agreement between the parties having for its object the dissolution of the marriage contract, or facilitating that result, such as an agreement by the defendant in a pending action for divorce, to withdraw his, or her opposition, and make no defense, is void, as contra bonos m,ores.
"Such agreements are a fraud upon the law which favors marriage, and will not give its sanction nor lend its aid to uphold or enforce the terms of any contract, nor countenance any contrivance which is designed to promote its dissolution. ' '
The opinion there, by Mr. Justice Lord, cites and quotes from the early case of Adams v. Adams, 25 Minn. 72, 79, in which it is said:
"The authorities are uniform in holding that any contract between the parties, having for its object the dissolution of the marriage contract, or facilitating that result, such as an agreement by the defendant in a pending action for divorce, to withdraw his or her opposition, and to make no defense, is void, as contra bonos mores, and that any note executed in consideration and pursuance of any such agreement, is without valid consideration, and void."
The Adams case was a suit to recover upon:
"One of several negotiable promissory notes which were given by the defendant to the plaintiff, at the same time, and upon one and the same entire consideration. They all originated in the same transaction, having been given in pursuance of an alleged illegal agreement, entered into between the parties while they were husband and wife, for the purpose of procuring a divorce between themselves, in an action then commenced by the plaintiff against said defendant. The defense interposed and relied on in this action is this alleged illegality in the consideration of the note, it being claimed that said agreement was void as against public policy."
The plaintiff there contended that the defendant was precluded from impeaching the validity of the note sued upon by showing that it was given in pursuance of a void agreement, because he was a party standing in pari delicto. It was there conceded that—
' ' The note in question was given in pursuance of the written agreement, and to carry out its provisions. It was, in fact, a part of the agreement, resting wholly upon its validity for support, and the plaintiff now asks the aid of the court in enforcing it. The point is not well taken."
The opinion further says:
"Testing the agreement in question by these principles, it was clearly illegal and void as against public policy, and the decision of the court in regard to its validity was right. At the time the agreement was entered into, the parties .were still husband and wife. It contemplated the fact that divorce proceedings had already been or were about to be instituted by the plaintiff against the defendant, for the purpose of procuring a dissolution of their marriage relations. By its terms, defendant agreed to pay her one thousand dollars down, to execute his four promissory notes, for $1,000 each, with security, and to place the same, to gether with other property, in the hands of a third party, to be delivered to her upon the happening of the event therein provided, as hereinafter stated. The agreement expressly provides that said notes and other property so placed in escrow are 'to be delivered to her when she shall have obtained a decree of divorce ' from her said husband, the defendant, and not before."
The case of Muckenburg v. Holler, 29 Ind. 140 (92 Am. Dec. 345), discussing a similar contract, said:
"Its direct tendency was to interest the present plaintiff in procuring a divorce, or in foregoing resistance to an effort by his wife directed to that end. _ The marriage relation is not thus to be tampered with, and the courts, by contract of the parties, converted into mere registers of their agreements for separation from the bonds of matrimony. The law favors marriage, and cannot therefore sanction contracts intended to promote its dissolution by lending itself to their enforcement."
Palmer v. Palmer, 26 Utah, 31 (72 Pac. 3, 99 Am. St. Rep. 820, 61 L. R. A. 641), is an exhaustive case, in which the court there said:
"Moreover, where, as appears in this instance, the parties agree that the one shall bring a suit to dissolve the marriage, and that the other will make no defense, or a mere nominal defense, which is indicated by the context, the agreement becomes collusive and fraudulent, and is without validity. A contract of this character may be regarded as a fraud upon the court, and it comes within the reason of the maxim, ' ex turpi causa non oritur actio. ' The welfare of humanity, the intelligence and progress of the human race, high moral and social ethics, alike demand this. Any other method or device by which the contracting parties attempt to sever or to facilitate the severing of the bonds of matrimony, in the eye of the law, contravenes public policy, is regarded as contra bonos mores, and is void and ineffectual. Therefore a contract which is designed to facilitate the procurement of a divorce, to put an end to the marriage status, and absolve parties from all their marital obligations, imposed upon them by the law of matrimony, cannot be enforced. ' '
Numerous authorities are cited in the opinion, to the effect that—
"Courts will not enforce any contract which is the price of consent by one party to the marriage relation to a procurement of a divorce by the other. ' '
In 9 Cyc., page 519, we find the following:
"If the object of a contract is to divorce man and wife the agreement is against public policy and void. To induce a wife to sue for a divorce by a promise on the part of the husband to remunerate her for it, or for a husband and wife to agree that one of them shall bring a suit for a divorce and the other shall not defend, is against the law which recognizes and upholds the sanctity of marriage and is void. ' '
Under such authorities and the facts disclosed by the record, the divorce decree rendered by the Circuit Court of Clatsop County was a fraud upon that court and the contracts between the plaintiff and the defendant were null and void as against public policy.
The trial court found as conclusion of law No. 5:
' ' That the plaintiff and defendant Hodler are in pari delicto, but not in the same degree, Hodler being the more guilty party to the aforesaid contractual transactions and the execution of said note and mortgage."
The testimony was taken in open court and the case was bitterly contested. The trial judge saw the witnesses and in many instances took an active part in their examination. The record is voluminous, covering over thirteen hundred typewritten pages, including numerous exhibits. The question as to the actual blame which should be placed upon each party is largely one of fact, and under all the circumstances we think that the opinion of the trial court is entitled to some weight. While as to all other matters exclusive of the written contracts, "Exhibits 'A' and 'B,' " it may be true that the Hodlers were both in pari delicto, it is not true as to "Exhibit 'B' " in particular. In that contract Hodler was the moving party; he showed a mercenary disposition and undertook to drive a hard bargain, seeking to be relieved of the support and maintenance of the minor children and to thrust that burden upon the mother of his own offspring. Except to purchase a suit of clothes for one of them, it appears from his own evidence that Hodler has not contributed a dollar to the support of his children since the plaintiff procured her divorce. Again, the only interest which Hodler ever had in the real property involved was an inchoate right of curtesy. The plaintiff was the exclusive owner in fee simple of the realty by a conveyance from her mother, and the title was not acquired by their joint efforts. The only claim thereto which Hodler could assert was for the value of his labor and services in the management and improvement thereof while he and the plaintiff were husband and wife. We quote from the opinion of the trial court:
"All she [the plaintiff] has in pursuance of the contract and in accordance with its terms is the quitclaim deed from Hodler to his interest in her lands, which deed conveyed nothing, as he had no interest in her lands."
In the execution of that contract Hodler was more than equally guilty with the plaintiff. "Exhibit 'B' " was executed after they were divorced and that fact strongly supports the contention of the plaintiff that even then she was acting under fear and duress.
Taken as a whole, the complaint states a cause of suit for the cancellation of the $16,000 note and mort gage and a return of the money paid. The first and third grounds are largely founded upon duress, but the allegations are broad enough to sustain a decree that the $16,000 note and mortgage should be canceled upon the ground that they were void and without consideration.
Assuming that the allegations of duress are not sustained by the evidence and that the parties were in pari delicto, the defendant Hodler admits the execution of the respective contracts and that the divorce was obtained pursuant thereto. In addition he pleads affirmative defense tending to show that the agreements were supported by a good and valid consideration ; that they were executed in good faith; that he relied thereon; that the plaintiff acquiesced therein for about two years and paid the annual interest on the $16,000 note, and that she ought now to be estopped to claim or assert that the note and mortgage were null and void. He alleges that he advanced moneys to and performed labor and services for the plaintiff which would constitute a valid consideration for the contracts ; that he had a valid defense to the divorce suit, but that in reliance upon the agreements he did not appear or make any defense. As affirmative relief he prays for a decree that the $16,000 note and mortgage be declared valid and binding and for "such other and further relief as may appear to be equitable in the premises." Since he has made such admissions, pleaded such defenses, asked for such affirmative relief and tried the case on such issues, we are of the opinion that the defendant cannot question the jurisdiction of the court to render a decree of cancellation upon the ground that the parties are in pari delicto.
This is not a snit in which the plaintiff seeks to recover upon or enforce a contract which is void as against public policy. It is brought to cancel a note and mortgage of record alleged to have been procured through fear and duress and to be void and without consideration. Here Hodler as a defense claims and alleges that the note and mortgage are legal and supported by a good consideration, and prays for a decree that they be declared valid and binding. Both parties submit themselves and the subject matter of the suit to the jurisdiction of the court and pray for equitable relief. As said in Leadbetter v. Hawley, 59 Or. 422, 424 (117 Pac. 289, 290):
"The plaintiff is in court, not in favor of his agreement, but in spite of it; not to enforce it, but to be relieved from it. A contract becomes executed when all is done that the terms require to be performed. Until that situation is attained, the contract is executory."
The real essence of the contract was that in consideration of her payment of $20,000 to Hodler the plaintiff should have a divorce from him. In legal effect $4,000 of that amount was paid at the time of the execution of the contract, and the remaining $16,000 was evidenced by a promissory note dated February 1, 1915, to be paid on or before three years after date, with interest. As to the money which was actually paid, it was an executed contract. As to the money which was to be paid as evidenced by the promissory note, it was an executory contract and would not become fully executed until the whole amount of the $16,000 note was actually paid. With regard to all moneys which were paid over by the plaintiff under the terms of the contract, she is without a remedy. To that extent this is an executed contract.
Defendants' counsel contend that if the $16,000 note and mortgage are void as against public policy, the suit should be dismissed, citing and relying upon the case of Horseman v. Horseman, 43 Or. 83 (72 Pac. 698), where the rule is laid down that—
_ Equity "will not enforce a specific performance relative to the conveyance of the homestead, neither will it require a surrender or cancellation of the unpaid note and mortgages, or interfere to relieve against the condition in which the parties have voluntarily placed themselves."
In that case the plaintiffs were the moving parties and sought the specific performance of a contract which the court found was against public policy, and the defendants made a general denial, pleading no affirmative defenses nor asking for a decree that the contract be declared valid and binding.
In the pending suit it must be conceded that the validity of the note and mortgage is the real issue. It is the plaintiff who seeks to have them canceled, and Hodler- who wants them declared valid. In a suit to foreclose the mortgage, the defendants could plead and successfully defend upon ground that it is void and without consideration. This is a suit in equity and the subject matter and all parties in interest are in court.
After a careful consideration of the numerous questions ably presented by distinguished counsel, we hold that the decree of the lower court should be affirmed without costs to either party. Affirmed.
Bennett, J., dissents.