Court Opinion

ID: 9657612
Source: CourtListenerOpinion
Date Created: 2023-08-23 20:31:49.747684+00
Date Added: 2024-06-11T15:05:52.191555
License: Public Domain

MADDOX, Justice
(concurring specially).
I concur that the trial court had before it sufficient evidence upon which to find the Sterling Agreement was invalid and unenforceable because it was vague and uncertain. Therefore, I concur fully in this portion of the opinion. Nevertheless, I also think that the court’s finding that the agreement was invalid and unenforceable could be sustained on the ground that Sterling was guilty of “unclean hands.”
Implicit, if not explicit, in the final decree of the court is a determination that Sterling was guilty of “unclean hands” both prior to the execution of the Sterling Agreement and after the execution of the Sterling Agreement. I think there is sufficient evidence to support this finding.
“Clean hands” refers to willful misconduct. Equity will consider the conduct of the adversary, the requirements of public policy and the relation of the conduct to the subject matter of the suit. Weaver v. Pool, 249 Ala. 644, 32 So.2d 765 (1947).
Sterling’s principal argument is that it entered into a joint venture with Chamberlain to acquire the Gulf properties. If Sterling was a joint adventurer with Chamberlain and Jett in the Gulf acquisition — as it argues it was — the general rule is that joint adventurers owe one another the duty to observe the utmost good faith in all that relates to their common interest, from the beginning of the negotiations for the formation of the enterprise to its termination. See Van Heuvel v. Roberts, 221 Ala. 83, 127 So. 506 (1930); Saunders v. McDonough, 191 Ala. 119, 67 So. 591 (1914); 48 C.J.S. Joint Adventures § 5, p. 824.
The trial court could have found from the evidence that Sterling failed to exercise good faith, when in April, 1959, Sterling, after having failed to secure the financing for the Gulf acquisition and being aware that Gulf would not sell if Sterling held an operating interest, threatened to “blow the deal” by contacting the financiers from which Chamberlain had commitments. There was substantial evidence that Sterling participated in litigation against Chamberlain, which litigation, if successful, would have diminished Sterling’s profits in the properties in which it now claims an interest. Sterling contends that its failure to carry out its obligations would not terminate its right to share in the profits of the joint venture, citing Saunders v. McDonough, 191 Ala. 119, 67 So. 591 (1914). Assuming Sterling correctly construes Saunders, its argument would be applicable only if the court had refused to give Sterling anything for its contribution to the joint adventure. The trial court gave Sterling a finder’s fee and its expenses, plus interest. I cannot say that the amount awarded is plainly and palpably wrong. In fact, I think there was sufficient evidence for the trial court to conclude that at the time of the Gulf acquisition, Sterling had contributed its services as a finder, and as a guarantor of the $1,500,000 Waldron obligation (Sterling never became obligated), and other services in connection with the negotiations leading up to the acquisition. The decree attempts to make Sterling whole for this contribution, in my opinion.
Consequently, I concur in the affirmance of the judgment on the cross-appeal and reject the cross-appellants’ arguments that Sterling should get nothing because the court found it to have “unclean hands,” since I believe the “clean hands” doctrine has its limitations.
In Weaver v. Pool, supra, this Court commented on the limitation of the “unclean hands” doctrine, as follows:
“The maxim also has its limitations, and will not be allowed to work injustice *752and wrong, nor be applied contrary to the rules of equity jurisprudence. 30 C. J.S. Equity § 98. This court recognized such limitation in Harris v. Harris, 208 Ala. 20, 93 So. 841, where is found an extensive quotation from the Wisconsin court in Clemens v. Clemens, 28 Wis. 637, 9 Am.Rep. 520, and as appropriate here is that part of the quotation which reads as follows:
“ ‘Though guilty of a wrong or transgression of the law in one particular, a party does not become an outlaw, or forfeit his right to legal protection in all others, nor lay himself open to the frauds and machinations of others to be practiced and perpetrated against him with impunity.’ ”
I also concur in the result which reverses the judgment of the trial court awarding Jett $140,000 against Sterling.