For reversal and remandment -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Conford. For affirmance -- None. The opinion of the court was delivered by Mountain, J.
This is a companion case to Smith v. Smith, 72 N.J. 350 (1976), decided this day. As in Smith, we are called upon to consider the effect of a pre-1971 separation agreement on a claim for equitable distribution incident to a divorce action initiated pursuant to the "no-fault" amendments to the divorce law, N.J.S.A. 2A:34-1 et seq. The agreement in this case differs somewhat from that in Smith. It cannot be described as dealing only with maintenance and support, since, superficially at least, it has some of the characteristics of a property settlement. Furthermore, it was not a purely private contract between the parties, but was incorporated in a judgment for separate maintenance.
The trial judge in the present divorce action, viewing it as a support agreement, confirmed most of its provisions and additionally awarded defendant wife $100,000 by way of equitable distribution as her share of the assets acquired during marriage. The Appellate Division, regarding it as a property settlement agreement, held that it was binding on the parties if found to be equitable and fair. It accordingly
reversed and remanded the case to the trial court for a determination of this latter issue. Carlsen v. Carlsen, 131 N.J. Super. 34 (App. Div. 1974). Defendant wife petitioned for certification, contending that the agreement reached in the earlier separate maintenance suit should not have been held to bar her right to equitable distribution in the present divorce action. Plaintiff husband cross-petitioned, disputing the correctness of that part of the Appellate Division opinion and judgment which held that the provisions of the earlier agreement were subject to judicial review. We granted both petition and cross-petition, 67 N.J. 94 (1975), in order to give further consideration to the effect of a pre-1971 separation agreement on subsequent proceedings under the new divorce law.
Mr. and Mrs. Carlsen were married in 1958. Both were of mature age and had been previously married. Mr. Carlsen was divorced from his first wife, by whom he had had two children; Mrs. Carlsen was a widow with two children. Two more children were born of the 1958 union.
At the time of the marriage Mr. Carlsen was the proprietor of a roofing and siding business and also owned farm property in Colts Neck. His total assets, according to his own testimony, were valued at $285,000.*fn1 His annual business income seems to have been approximately $20,000. Mrs. Carlsen had a net worth of $542,000, mainly representing the value of inherited stocks, which yielded an income of about $18,000.
When the parties married, they moved into Mrs. Carlsen's house in Oradell. Later, apparently using Mrs. Carlsen's money, they bought a home in Montclair where they lived
for four years before selling it and moving to the Colts Neck farm. According to Mrs. Carlsen, her income was used throughout this period to maintain the household, and when it did not prove sufficient, she sold some of her holdings to obtain more cash. She also claims to have put $25,000 into her husband's business and at some point created a trust fund for the benefit of her mother and children. Mr. Carlsen, meanwhile, applied the greater part of his own income to meet his support obligation to his first wife and to improve his business and the farm property.
In 1967, Mrs. Carlsen filed a complaint in Superior Court seeking separate maintenance on the grounds of extreme cruelty and constructive desertion. She also sought an accounting of moneys advanced by her during the marriage for payment of household bills and as an investment in Mr. Carlsen's business, and demanded a one-half share in the farm property. The agreement at issue in the present action was reached in settlement of that litigation.
In addition to defining rights and obligations, not here relevant, as to custody, visitation and child support, the agreement included ...