If my iPhone 4 has spyware on it will encrypting my sms messages with an encryption app keep them private? I am currently dealing with a stalking situation and my iPhone 4 is being monitored. The person knows all my phone info like meid, imei, phone number etc…  Also I believe my phone has spy software on it. 

I have removed this before by restoring the phone to factory conditions through iTunes, however, I now think they can install it remotely. If I use an app that does SMS encryption in your opinion do you think that will keep my texts private?
It is extremely improbable that your iPhone 4 with the latest software, without jailbreak, has a spyware on it, especially if nobody else than you had physical access to your phone after jailbreak.

However if someone has remote access to your phone communications through "encrypted" messagging apps should be quite safe for itself, but if you have a spyware on your phone be sure that someone could see you screen as you see it, for example when you type and read messages in the "encrypted app".