Appeal by plaintiffs from Godwin, Judge. Judgment entered 3 August 1978 in Superior Court, Wake County. Heard in the Court of Appeals 21 August 1979.
Vaughn, Judge. Judges Hedrick and Arnold concur.
Defendants moved for judgment on the pleadings pursuant to Rule 12(c) of the North Carolina Rules of Civil Procedure. The function of Rule 12(c) is to dispose of baseless claims or defenses which the pleadings show on their face lack any merit or fail to
present any controversy of fact. Ragsdale v. Kennedy, 286 N.C. 130, 209 S.E.2d 494 (1974). Rule 12(c) provides, in part, "If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56. . . ." In this case, a pretrial order had been entered wherein certain facts were stipulated. All of the material facts stipulated, however, had been admitted in the pleadings. Plaintiffs and defendants conceded on oral argument that there were no facts outside of the pleadings for consideration by the court. The motion and its granting must, therefore, be judged under the standards of Rule 12(c). When so considered, we conclude that the trial court erred in the granting of the motion. There is no showing on the face of the pleadings that they lack merit or fail to present any controversy of fact. The deeds of 2 January 1970 and 17 February 1970 from Isham to Elsie and from Elsie to Isham and the recordation of these deeds before any deed from Elsie to the defendants was ever executed makes Isham's claim of title valid on its face. The reconveyance from Elsie to Isham recites consideration. The repayment of the debt obligation would also be consideration. Therefore, it does not appear to be a deed of gift and, consequently, void for failure of registration within two years as required by G.S. 47-26. Thus, upon appropriate proof of title under his deeds of record, Isham could prevail in the action without regard to the various trust theories alleged.
We also note that the court, in the order for judgment on the pleadings, made findings of fact and conclusions of law.
"The court is not required to find facts in judgment on the pleadings since the facts determining disposition are those alleged in the pleadings; and the court cannot select some of the alleged facts as a basis for granting the motion on the pleadings if other allegations, together with the selected facts, establish material issues of fact." Contracting Co. v. Rowland, 29 N.C. App. 722, 725, 225 S.E.2d 840, 842, cert. den., 290 N.C. 660, 228 S.E.2d 452 (1976).
The court made selective findings of fact and conclusions of law inappropriate for a Rule 12(c) motion.
The court found for example "[t]hat the acts and conduct of the plaintiffs themselves in their pleadings, constituted a calculated design and scheme to defraud creditors and they therefore have come into equity with unclean hands." The plaintiffs pled no such fact. Their pleadings state "[t]hat in an effort to secure his indebtedness to his sister, the Plaintiff, Elsie Earl High, and to protect said land from possible lien, Plaintiff, Isham High, and his wife executed a Form Warranty Deed describing said property to the Plaintiff Elsie Earl High. . . ." The plaintiffs in a reply reiterated that the deed secured the money loaned by Elsie to Isham to buy the land and to give him an opportunity to farm the land to pay off the creditors rather than defraud the creditors who were, in fact, paid. The trial court's findings went beyond the pleaded facts and resolved material disputed issues of fact that should have been resolved on trial.
The trial court concluded as a matter of law "[t]hat the equitable relief sought by plaintiffs is barred by the 'clean hands' doctrine" and denied relief upon the maxim of equity that "he who comes into equity must come with clean hands." In this case, if the plaintiffs did anything inequitable -- and this is a material issue of fact for trial -- it was not against defendants but against third party creditors not involved in the property dispute in any way. A person is not barred from his day in court in a particular case because he acted wrongfully in another unrelated matter or because he is generally immoral. Branch Banking & Trust Co. v. Gill, 286 N.C. 342, 211 S.E.2d 327 (1975), withdrawn, 293 N.C. 164, 237 S.E.2d 21 (1977); see also, 27 Am. Jur. 2d, Equity § 142; 30 C.J.S. Equity § 98c. Further, whatever interest defendants derive also comes from this same allegedly unclean act against third persons by plaintiffs.
The trial court also concluded that the agreement of Elsie with Irenda and Dorothy was an oral contract to convey land in violation of the statute of frauds. G.S. 22-2. We conclude, however, that if this interest in land conveyed by Elsie was to be held in trust for Isham as well as Elsie as the plaintiffs' complaint alleges, the statute of frauds would not apply. Thompson v. Davis, 223 N.C. 792, 28 S.E.2d 556 (1944). Elsie could not, of course, contradict her deed to defendants by alleging an oral trust for ...