Holmes v. Henderson

Fletcher, Presiding Justice.

James Henderson brought a declaratory judgment action against Jerry Holmes seeking to establish that certain property was jointly owned. The trial court entered judgment granting the relief sought and Holmes appeals. Because the trial court’s judgment does not depend on equitable principles and properly reflects the jury’s verdict, we affirm.

Henderson and Holmes have operated real estate partnerships for many years. In 1986, they jointly purchased a 77.98 acre tract in Dawson County. In 1990, Henderson conveyed his interest in the property to Holmes in order to protect his interest from a potential judgment creditor. Despite the conveyance, the parties continued to treat the property as partnership property. When Holmes refused to reconvey the property, Henderson sought an implied trust and a declaratory judgment. The case was tried with a jury, which answered special interrogatories. The jury found that the property is partnership property, that Holmes owns one-half of the property in an implied trust for the benefit of Henderson, that Henderson is guilty of unclean hands in deeding the property for the purpose of defrauding creditors, and. that Henderson and Holmes are both guilty of unclean hands.

1. Holmes contends that the trial court’s judgment is in error because the jury’s finding of unclean hands precludes the granting of equitable relief to place the property in partnership hands. The equitable doctrine of unclean hands, however, has no application to an *9action at law.1 The jury was instructed on partnership law as found in Georgia statutes and its finding that the property is owned by the partnership is not dependent upon principles of equity.

2. (a) The trial court was required to produce a judgment that conforms to the jury’s verdict.2 Had the trial court entered a judgment that denied partnership rights to the property, it would have failed to conform the judgment to the jury’s verdict. A review of the jury instructions demonstrates that the trial court’s judgment is consistent with all the jury’s responses to the special interrogatories. The jury was charged on the doctrine of unclean hands and was instructed that “the doctrine applies only when the reprehensible conduct complained of pertains to the controversy at issue.” Thus, by finding that the partnership owned the property, the jury implicitly made a finding that the wrongful conduct did not pertain to the controversy in issue.

(b) Additionally, the jury asked for a definition of “equally guilty.” The trial court answered, “The phrase ‘equally guilty,’ as it is used in question number four of the verdict form, means that both parties have unclean hands, and not that the unclean hands of each are equal.”3 This explanation, consented to by both parties, is inconsistent with OCGA § 23-1-15, which recognizes that while equal fault will preclude equitable relief, fault that is unequal will not. In view of the definition given, there is no finding of equal fault and, thus, no hindrance to the granting of equitable relief.

Judgment affirmed.

All the Justices concur, except Hunstein and Carley, JJ, who dissent.

See Jones v. Douglas County, 262 Ga. 317 (418 SE2d 19) (1992).

OCGA § 9-12-9 (judgment and execution shall conform to the verdict).

The fourth question of the verdict form reads: “Do you find that both the Plaintiff, James Perry Henderson, and the Defendant, Jerry Holmes, are equally guilty of unclean hands in the deeding of the Dawson County property known as Fawsett’s Lake?”