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Smart Summary

Factual and Procedural Background

Plaintiff, Monroe L. Moss, filed an action against his former wife, Emily M. Moss, seeking declaratory relief to determine his obligations under a property settlement agreement executed in 1928 and its modification in 1932. The parties were married in 1919 and separated around December 24, 1927. At separation, it was agreed that the defendant would obtain a divorce and, in consideration thereof, plaintiff would enter into a property settlement agreement providing for defendant's support until remarriage. The 1928 agreement required plaintiff to pay $250 monthly for life or until defendant remarried. Defendant obtained a divorce finalized in 1929, without reference to the settlement in the divorce decree. The 1932 modification reduced payments to $200 monthly but reinstated $250 if payments were missed. The trial court sustained a demurrer to plaintiff’s complaint without leave to amend, entering judgment for defendant. Plaintiff appealed.

Legal Issues Presented

  1. Whether a property settlement agreement conditioned solely on procuring a divorce is void as against public policy.
  2. Whether plaintiff is entitled to declaratory relief declaring the contract and its modification void.
  3. Whether the trial court abused its discretion in denying declaratory relief despite the alleged invalidity of the agreement.
  4. Whether plaintiff’s claim for cancellation of the agreement is barred by the statute of limitations.

Arguments of the Parties

Appellant's Arguments

  • The property settlement agreement and its modification are void because they are conditioned solely on procuring a divorce, which is against public policy.
  • The trial court improperly sustained the demurrer without allowing amendment or declaratory relief.
  • The doctrine of in pari delicto should not bar declaratory relief because the action is not strictly equitable and plaintiff seeks relief only from the executory portion of the illegal agreement.
  • The statute of limitations and laches do not apply to actions seeking cancellation of agreements void as against public policy.

Respondent's Arguments

  • The property settlement agreement is invalid because it was conditioned on procuring a divorce, violating public policy.
  • The trial court properly exercised discretion to deny declaratory relief, considering the parties were in pari delicto.
  • The complaint’s claim for cancellation is barred by the four-year statute of limitations under Code of Civil Procedure section 343 because the action was brought more than ten years after the original agreement and more than five years after the modification.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Brown v. Brown, 8 Cal.App.2d 364 Property settlements conditioned on procuring divorce are against public policy and invalid. Supported the principle that the 1928 agreement was void due to its consideration being solely procuring a divorce.
Newman v. Freitas, 129 Cal. 283 Same as above: contracts conditioned on divorce procurement are void. Reinforced the public policy doctrine applicable to the case.
Pereira v. Pereira, 156 Cal. 1 Validity of property settlements contingent on divorce. Supported the court's view on invalidity of the contract.
Restatement, Contracts, § 586; 6 Williston, Contracts, § 1743 Legal commentary on contracts promoting divorce being void. Provided authoritative secondary support for invalidity.
Howard v. Adams, 16 Cal.2d 253 Consideration of whether an agreement is promotive or incidental to divorce. The court noted no need to decide this issue on demurrer.
Pacific States Corp. v. Pan-American Bank, 213 Cal. 58 Declaratory relief under Code Civ. Proc., § 1060. Supported the sufficiency of the complaint to state a cause for declaratory relief.
Oldham v. Moodie, 94 Cal.App. 88 Declaratory relief standards. Supported the court's view on declaratory relief sufficiency.
Andrews v. W.K. Company, 35 Cal.App.2d 41 Declaratory relief principles. Reinforced the court's reasoning on declaratory relief.
Communist Party v. Peek Trial court discretion in declaratory relief. Supported the trial court's discretion to refuse declaratory relief.
City of Alturas v. Gloster, 16 Cal.2d 46 Trial court discretion to deny declaratory relief. Affirmed the appropriateness of sustaining demurrer on this basis.
Stenzel v. Kronick, 102 Cal.App. 507 Declaratory relief discretion. Supported trial court's discretionary denial.
Rapaport v. Forer, 20 Cal.App.2d 271 Declaratory relief discretion. Supported trial court's discretion.
A. Hamburger Sons. v. Kice, 129 Cal.App. 68 Declaratory relief discretion. Supported the trial court's ruling on demurrer.
Wassermann v. Sloss, 117 Cal. 425 Doctrine of in pari delicto and executory illegal agreements. Discussed by plaintiff; court acknowledged but held discretion remains.
National Stone Tile Corp. v. Voorheis, 93 Cal.App. 738 Application of in pari delicto to executory illegal agreements. Considered by court in discretionary analysis.
Gore v. Bingaman Nature of declaratory relief as sui generis. Supported court’s view on declaratory relief and discretion.
Piller v. Southern Pac. R.R. Co., 52 Cal. 42 Application of Code Civ. Proc. § 343 statute of limitations to equity suits. Supported court’s holding that cancellation claim is barred by limitations.
Sherman v. S.K.D. Oil Co., 185 Cal. 534 Statute of limitations on equitable actions. Reinforced limitation application to cancellation claim.
Scott v. Symons, 191 Cal. 441 Limitations on actions involving trusts. Contextual support for statute of limitations application.
Wrightson v. Dougherty, 5 Cal.2d 257 Limitations on equitable claims. Supported statute of limitations application.
McArthur v. Blaisdell, 159 Cal. 604 Limitations on accounting actions. Contextual precedent for limitations.
West v. Russell, 74 Cal. 544 Limitations on equitable actions. Supported court's limitation analysis.
Trubody v. Trubody, 137 Cal. 172 Limitations on setting aside deeds for undue influence. Supported application of statute of limitations.
Merguire v. O'Donnell, 139 Cal. 6 Limitations on setting aside judgments. Supported statute of limitations application.
Hynes v. M.J. M.M. Consolidated, 168 Cal. 651 Limitations on equity suits to vacate judgments. Supported bar of cancellation claim by statute of limitations.
City of Petaluma v. Hickey, 90 Cal.App. 616 Limitations on recovery of money paid illegally. Contextual support for limitations bar.
Wenban Estate, Inc. v. Hewlett, 193 Cal. 675 Indication that statute bars actions to cancel void bonds. Supported limitations bar on cancellation claims.
Sechrist v. Rialto Irrigation Dist., 129 Cal. 640 Statute of limitations on equitable actions. Supported court’s limitations ruling.
Bogart v. George K. Porter Co., 193 Cal. 197 Legislative intent on statute of limitations and exceptions. Supported court’s holding that cancellation claim is barred.
Colby v. Title Ins. Trust Co., 160 Cal. 632 Equitable factors in cancellation of void instruments. Distinguished by court; equitable factors do not override statute of limitations.

Court's Reasoning and Analysis

The court first affirmed the well-established principle that property settlement agreements conditioned solely on procuring a divorce are void as against public policy. Because the complaint alleged such a condition as the sole consideration, the agreement was deemed invalid on demurrer without resolving whether it might be incidental to divorce.

Next, the court held that the complaint sufficiently stated a cause of action for declaratory relief under Code of Civil Procedure section 1060. However, declaratory relief is discretionary, and the trial court may deny it if the determination is not necessary or proper. The court found no reversible error in the trial court’s sustaining of the demurrer, which implicitly exercised this discretion.

The court emphasized that the parties were in pari delicto (equally at fault) in entering the illegal agreement, which the trial court could properly consider in refusing declaratory relief. Although declaratory relief is sui generis and not strictly equitable, the in pari delicto doctrine remains a relevant discretionary factor.

Regarding the claim for cancellation of the agreement, the court concluded that the four-year statute of limitations under Code of Civil Procedure section 343 applies to such actions. Since the complaint was filed more than ten years after the original agreement and more than five years after the modification, the claim is barred by the statute of limitations.

Holding and Implications

The judgment of the Superior Court is affirmed.

The direct effect of this decision is that plaintiff’s complaint for declaratory relief was properly dismissed because the trial court did not abuse its discretion in denying relief, particularly considering the parties’ equal fault and the public policy against contracts conditioned on procuring divorce. Additionally, plaintiff’s claim for cancellation of the agreement is barred by the applicable statute of limitations. The court’s decision does not establish new precedent beyond affirming existing principles regarding public policy, the discretion in declaratory relief, and the application of the statute of limitations to cancellation claims.

MONROE L. MOSS, Appellant, v. EMILY M. MOSS, Respondent.

GIBSON, C.J.

Plaintiff brought this action against his former wife for declaratory relief seeking a determination of his obligations under a property settlement agreement executed in 1928 and a modification thereof executed in 1932. The trial court sustained a demurrer to the complaint without leave to amend, and plaintiff appeals from the judgment entered for defendant.

The following allegations of the complaint must be regarded as true for the purposes of this appeal. Plaintiff and defendant, who were married in 1919, separated from one another on or about December 24, 1927. At that time, plaintiff alleges, it was agreed that defendant would obtain the divorce, and that "in consideration of such divorce and for no other consideration whatsoever, [plaintiff] would enter into a property settlement agreement with defendant to settle and determine their respective property rights and to provide for defendant's support and maintenance until she should remarry." In conformity with this plan, plaintiff and defendant entered into a separation agreement on March 21, 1928, by which, among other things, plaintiff was to pay to the defendant, Emily M. Moss, the sum of $250 per month during the period of her natural life until her remarriage. Thereafter the defendant wife brought an action for divorce, which plaintiff did not contest. An interlocutory judgment was entered on March 31, 1928, and a final judgment was entered on April 18, 1929. No reference was made to the separation agreement in either of the decrees. The modification of the agreement, made in October, 1932, reduced the monthly payments to $200 per month, but it provided that plaintiff's failure to meet any payment would result in a reinstatement of the original sum of $250 per month. Plaintiff alleged that an actual controversy exists between the parties as to his duties under these agreements. A judgment was sought declaring that the contract and modification thereof are void as against public policy and that he has no obligations or duties thereunder.

[1] The law is settled that where a property settlement between husband and wife is entered into, conditioned upon an agreement to procure a divorce, the contract is against public policy and is invalid for that reason. ( Brown v. Brown, 8 Cal.App.2d 364 [ 47 P.2d 352]; Newman v. Freitas, 129 Cal. 283 [ 61 P. 907, 50 L.R.A. 548]; Pereira v. Pereira, 156 Cal. 1 [ 103 P. 488, 134 Am. St. Rep. 107, 23 L.R.A. (N.S.) 880]; See Restatement, Contracts, § 586; 6 Williston, Contracts (rev. ed. 1938), § 1743, p. 4933.) Under the allegations of the complaint, which are admitted by defendant's demurrer, the sole consideration for the property settlement here involved was an agreement by the defendant wife to procure a divorce. Since the case arises on demurrer, there is no need upon this appeal to consider whether it ultimately might be found that this agreement could be sustained because not actually promotive of divorce but merely incidental thereto. (Cf. Howard v. Adams, 16 Cal.2d 253 [ 105 P.2d 971, 130 A.L.R. 1003]; Cookinham v. Cookinham, 219 Cal. 723 [ 28 P.2d 1045]; Queen v. Queen, 44 Cal.App.2d 475, 483 [ 112 P.2d 755].) Assuming the property settlement agreement to be invalid, the question is whether plaintiff is entitled to a declaration to that effect.

[2] We are of the opinion that the allegations are sufficient to state a cause of action under the statute and would have justified the trial court in granting a declaratory judgment. (Code Civ. Proc., § 1060; Pacific States Corp. v. Pan-American Bank, 213 Cal. 58, 63 [1 P.2d 4, 981]; Oldham v. Moodie, 94 Cal.App. 88, 89 [ 270 P. 688]; Andrews v. W.K. Company, 35 Cal.App.2d 41, 45 [ 94 P.2d 605].) Declaratory relief, however, may be refused in the discretion of the trial court if it appears that the determination is not necessary or proper at the time and under all the circumstances. (Code Civ. Proc., § 1061) Where facts appear from the face of the complaint which would justify a trial court in concluding that its determination is not necessary or proper, it has been held that the court may sustain a general demurrer to the complaint for declaratory relief. ( Communist Party v. Peek, ante, p. 536 [___ P.2d ___]; City of Alturas v. Gloster, 16 Cal.2d 46 [ 104 P.2d 810]; Stenzel v. Kronick, 102 Cal.App. 507 [ 283 P. 93]; Rapaport v. Forer, 20 Cal.App.2d 271 [ 66 P.2d 1242]; A. Hamburger Sons. v. Kice, 129 Cal.App. 68 [ 18 P.2d 115].) Plaintiff urges that the discretion of the court in refusing to grant the relief sought should not be exercised in ruling upon a general demurrer, but only after sufficient facts are before the court to justify the entry of such a judgment on the merits. (See Miller v. Currie, 208 Wis. 199 [242 N.W. 570]; Bruckman v. Bruckman Co., 60 Ohio App. 361 [ 21 N.E.2d 481]; Anderson, Declaratory Judgments (1940), p. 271.) It is true that an order sustaining a general demurrer to a complaint for declaratory relief does not indicate to the appellate court whether the trial court concluded that relief was inappropriate or that there was failure to state a cause of action. While it might be better practice for the trial court to overrule the demurrer and exercise its discretion in denying declaratory relief by some other procedure, as, for example, upon a motion to dismiss (cf. Cutting v. Bryan, 206 Cal. 254 [ 274 P. 326]), the fact that it did so in ruling upon the general demurrer cannot be held reversible error in view of the decided cases in this state.

[3] Since we have held that this complaint was sufficient to authorize a declaration of plaintiff's obligations under the contract, we must now consider whether the trial court abused its discretion in denying declaratory relief under the circumstances here presented. Plaintiff urges that the trial court abused its discretion and that there is no basis upon which its determination can be sustained. It is not necessary for us to consider each of the various grounds advanced by defendant in support of the trial court's conclusion. The fact that plaintiff was a party to the unlawful bargain of equal fault with defendant and is therefore in pari delicto, is a consideration which could properly have been considered by the trial court as a sufficient reason for declining to grant declaratory relief. It is contended by plaintiff that such an action is not strictly an action in equity and, therefore, that the doctrine of in pari delicto should not be applied. It is also contended that the defense of in pari delicto has no application where the plaintiff is merely seeking to relieve himself from the executory portion of an illegal agreement, citing Wassermann v. Sloss, 117 Cal. 425 [49 P. 566, 59 Am. St. Rep. 209, 38 L.R.A. 176], and National Stone Tile Corp. v. Voorheis, 93 Cal.App. 738 [ 270 P. 286]. It is true that declaratory relief is not strictly legal or equitable, but is suis generis in nature ( Gore v. Bingaman, ante, pp. 118, 120 [ 124 P.2d 17]; see Borchard, Declaratory Judgments (2d ed. 1941), pp. 238, 248, 399, 439) and that in pari delicto is not ordinarily applied to the executory portions of an illegal agreement. (Cases supra, and see 3 Pomeroy, Equity Jurisprudence (5th ed. 1941) sec. 940, pp. 728-733.) Assuming, however, as contended by plaintiff, that the doctrine of in pari delicto should not be treated as an absolute bar to this action, it is nevertheless an element which the trial court in its discretion could consider in deciding whether or not to grant declaratory relief under the circumstances presented here. (Cf. Borchard, supra, pp. 239-240, 304-305.) It cannot be said, therefore, that the trial court abused its discretion, and we find no error in its conclusion that declaratory relief was not proper under the facts of this case.

[4] It is contended that the complaint also alleges facts stating a cause of action for cancellation of the agreement. The defendant, however, specified the statute of limitations as one of the grounds of her demurrer, and although there is no section of the code that expressly limits the time within which an action must be brought for cancellation of an instrument because of its illegality, section 343 of the Code of Civil Procedure provides that "An action for relief not hereinbefore provided for must be commenced within four years after the cause of action shall have accrued." It appears from the face of the complaint that this action was brought more than ten years after the separation agreement was made and more than five years after the modification thereof; thus it is obvious that if section 343 is applicable to an action for cancellation for illegality, plaintiff is precluded thereby.

It is well settled in California that, as stated in Piller v. Southern Pac. R.R. Co., 52 Cal. 42, 44, "the four years' limitation of section 343 applies to all suits in equity not strictly of concurrent cognizance in law and equity." (See, also, Sherman v. S.K.D. Oil Co., 185 Cal. 534, 545 [ 197 P. 799].) This section has been considered applicable, for example, to actions based upon express and constructive trusts ( Scott v. Symons, 191 Cal. 441, 456 [ 216 P. 604]; Wrightson v. Dougherty, 5 Cal.2d 257, 264 [ 54 P.2d 13]), to actions for an accounting ( McArthur v. Blaisdell, 159 Cal. 604 [ 115 P. 52]; West v. Russell, 74 Cal. 544 [16 P. 392]), to an action in the nature of a creditor's bill against holders of watered stock ( Sherman v. S.K.D. Oil Co., supra), to an action to set aside deeds made under undue influence ( Trubody v. Trubody, 137 Cal. 172, 174 [ 69 P. 968]), and to a proceeding under section 708 of the Code of Civil Procedure to set aside a satisfaction and revive a judgment after an execution and sale made thereunder had been found void. ( Merguire v. O'Donnell, 139 Cal. 6, 9 [ 72 P. 337, 96 Am. St. Rep. 91].) In Hynes v. M.J. M.M. Consolidated, 168 Cal. 651 [ 144 P. 144], it was held that the section barred a suit in equity to vacate a judgment for lack of due service of process. It has been held, also, that section 343 bars an action to recover money illegally paid by a city official brought on the theory that the defendant was an involuntary trustee. ( City of Petaluma v. Hickey, 90 Cal.App. 616 [ 266 P. 613].) This court has indicated, although without expressly so stating, that a lapse of time beyond the period of the statute would prevent relief in an action to cancel void bonds. ( Wenban Estate, Inc. v. Hewlett, 193 Cal. 675, 705-706 [ 227 P. 723]; Sechrist v. Rialto Irrigation Dist., 129 Cal. 640, 645-646 [ 62 P. 261].) Further, as the court said in Bogart v. George K. Porter Co., 193 Cal. 197, 201 [ 223 P. 959, 31 A.L.R. 1045]: "The legislature has . . . specified the limitations applicable to a wide variety of actions, and then to rebut the possible inference that actions not therein specifically described are to be regarded as exempt from limitations, it has specified a four-year limitation upon `an action for relief not hereinbefore provided for' (§ 343); and where it has intended that an action shall be exempt from limitations it has said so in clear and unmistakable language. (Code Civ. Proc., § 348; Civ. Code, § 309)" Although plaintiff contends that laches and lapse of time cannot be defenses in an action to cancel an instrument void because contrary to public policy, citing Colby v. Title Ins. Trust Co., 160 Cal. 632 [ 117 P. 913, Ann. Cas. 1913A, 515, 35 L.R.A. (N.S.) 813], the equitable factors considered in that decision may not be used as a means of avoiding the express mandate of the statute of limitations. We must hold, therefore, that if plaintiff had a cause of action for cancellation, it is now barred by section 343 of the Code of Civil Procedure.

The judgment is affirmed.

Shenk, J., Curtis, J., Edmonds, J., Carter, J., Traynor, J., concurred.

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MOSS v. MOSS
(Aug 3, 1942)