## Facts

- Sidney Graham (plaintiff husband) and Margrethe Graham (defendant wife) were married and living together.
- Sidney worked at a hotel and wanted to keep working; Margrethe wanted to travel and wanted Sidney to accompany her.
- On September 17, 1932, they signed a written agreement stating that Margrethe would pay Sidney $300 per month “each and every month hereafter” until they no longer desired the arrangement to continue, and that it was made to adjust financial matters to avoid future disputes over what money Sidney would receive.
- Sidney alleged he quit his job at Margrethe’s request, traveled with her while she paid his expenses, and later wished to return to work; he claimed Margrethe entered the $300-per-month agreement to induce him not to return to employment.
- The parties divorced on July 11, 1933.
- Margrethe asserted that, in connection with the divorce, they executed a written settlement in which she paid Sidney $9,000 and each spouse surrendered all claims to the other’s property.
- In 1939, Sidney sued in the U.S. District Court for the Eastern District of Michigan (diversity) seeking $25,500 plus interest for alleged unpaid installments under the 1932 agreement.
- Margrethe moved to dismiss, arguing (among other defenses) that the contract lacked consideration, exceeded a married woman’s contracting power under Michigan law, and was void as against public policy because it attempted to alter legal duties of marriage while the parties were still cohabiting as spouses.

## Issues

1. Whether an agreement made between spouses while living together, requiring the wife to pay the husband a fixed monthly sum so he will refrain from working and accompany her on travels, is void as against public policy because it changes essential legal incidents of marriage.
2. Whether Michigan law then limited a married woman’s power to contract so that she could not bind herself to a general obligation of this kind apart from matters tied to her separate property.
3. Whether a later divorce settlement and decree extinguished any claim under the earlier intra-marital agreement.

## Decision

- The court granted the motion to dismiss and dismissed Sidney’s complaint.
- The court held the September 17, 1932 agreement void and unenforceable as against public policy because it sought to regulate and reallocate fundamental rights and duties arising from the marital status while the parties remained husband and wife living together.
- The court treated the public-policy ruling as sufficient to dispose of the case, without needing to decide the effect of the later divorce settlement on the claim.
- The court noted, as an additional concern, that Michigan statutes then restricted a married woman’s contracting power largely to matters related to her separate property, making enforceability doubtful even apart from public policy.

## Legal Principles

- Marriage is a legal status, not merely a private bargain; the state fixes key rights and duties of the relation, and spouses cannot freely rewrite those incidents by private contract while cohabiting.
- An intra-marital contract that attempts to shift basic marital obligations—such as the husband’s duty to support his wife or the traditional allocation of control over the marital home and movements—may be void as contrary to public policy.
- Courts generally distinguish between (a) agreements made in contemplation of immediate separation (often enforced when addressing property and support upon separation) and (b) agreements intended to manage ongoing marital life by trading payments for marital conduct (more likely void).
- When the complaint itself shows the contract is unenforceable as a matter of law on public-policy grounds, dismissal at the pleading stage is proper.
- Under then-existing Michigan law, a married woman’s authority to contract was limited in ways that could bar enforcement of broad personal obligations not shown to relate to her separate estate.

## Conclusion

Because the spouses made the $300-per-month arrangement while still married and living together, and because it effectively paid the husband to abandon outside employment and follow the wife’s travels—thereby shifting basic incidents of marriage—the court treated the agreement as contrary to public policy and dismissed the husband’s federal suit to enforce it.


Graham v. Graham, 33 F. Supp. 936 (1940)