Carmen v. Fox Film Corp.
269 F. 928, 15 A.L.R. 1209, 1920 U.S. App. LEXIS 1924 (1920)
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Rule of Law:
A plaintiff who engages in inequitable, unconscionable, or bad-faith conduct regarding the subject matter of the litigation is barred from receiving relief from a court of equity under the clean hands doctrine.
Facts:
- On July 31, 1917, the plaintiff, a minor actress, entered into employment contracts with Fox Film Corporation and William Fox Vaudeville Company, which included options to extend her employment for several years.
- On March 28, 1918, while still a minor and with the Fox contracts still in effect, the plaintiff entered into a new, more lucrative contract with the Frank A. Keeney Pictures Corporation.
- During her negotiations with Keeney, the plaintiff represented that she was free to accept employment.
- Keeney was unaware of the plaintiff's existing contracts with the Fox companies and would not have entered into the new contract had he known.
- After signing with Keeney, the plaintiff notified the Fox companies that she was repudiating her contracts with them on the ground of her infancy.
- The Fox companies informed Keeney of their existing contracts with the plaintiff and their intention to enforce them.
- Upon learning of the prior contracts, Keeney refused to proceed with his contract with the plaintiff to avoid litigation.
- The Fox companies and Keeney entered into an agreement whereby Keeney would refrain from employing the plaintiff, and Fox would indemnify Keeney against any lawsuits from the plaintiff.
Procedural Posture:
- The plaintiff sued the Fox Film Corporation and William Fox Vaudeville Company in a federal trial court.
- She sought to have her employment contracts declared void, an injunction restraining the defendants from enforcing the contracts, and damages.
- The trial court found in favor of the plaintiff, declaring the contracts void, issuing a perpetual injunction, and awarding her $43,500 in damages.
- The defendants (appellants) appealed the trial court's judgment to the U.S. Circuit Court of Appeals.
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Issue:
Does a plaintiff who, as a minor, repudiates employment contracts and enters into a new conflicting contract by misrepresenting her freedom to do so, come to court with 'clean hands' sufficient to obtain equitable relief declaring the original contracts void?
Opinions:
Majority - Rogers, Circuit Judge
No. A plaintiff who engages in unconscionable conduct regarding the subject matter of the lawsuit has 'unclean hands' and is not entitled to affirmative relief from a court of equity. The court held that regardless of whether the plaintiff had a legal right to void the contracts due to her infancy, her actions were morally and ethically wrong. She misled the Keeney Corporation by representing that she was free to contract when she was, at a minimum, under a moral obligation to the defendants. By unscrupulously disregarding her contractual promises for personal financial gain, she engaged in misconduct that bars her from seeking help from a court of conscience. The clean hands doctrine dictates that equity will not aid a plaintiff whose own conduct in the transaction has been unjust, marked by bad faith, or violates principles of righteous dealing.
Analysis:
This case serves as a quintessential application of the equitable maxim that 'he who comes into equity must come with clean hands.' The decision establishes that a legally sound claim, such as a minor's right to disaffirm a contract, may not be enforced in equity if it is part of a broader course of inequitable conduct. It highlights that courts of equity are concerned with fairness and morality, not just strict legal rights. The ruling reinforces that equity acts as a court of conscience and will refuse to assist a party who has acted in bad faith regarding the very matter for which they seek relief, leaving them to their remedies at law, if any exist.
