This is not the first time this court has faced a situation in which both parties appeared to have unclean hands. In Thompson v. Spint, 247 Or. 484, 430 P.2d 1014 (1967), plaintiff brought a quiet title suit against defendants. The defendants had conveyed the property in question to plaintiff for the purpose of placing the property beyond the reach of defendants' creditors.

"Equity will refuse to aid a plaintiff whose claims had their inception in his own wrongdoing, whether the victim of that wrongdoing was the defendant, Casteel v. King et al, 201 Or. 234, 269 P.2d 529 (1954), or a third party. Thompson v. Spint, 247 Or. 484, 430 P.2d 1014 (1967) * * *."

Equity will refuse to aid a plaintiff whose claims had their inception in his own wrongdoing, whether the victim of that wrongdoing was the defendant, Casteel v. King et al, 201 Or. 234, 269 P.2d 529 (1954), or a third party. Thompson v. Spint, 247 Or. 484, 430 P.2d 1014 (1967) Robinson et ux v. Manning et al, 233 Or. 392, 378 P.2d 277 (1963); Lyon v. Mazeris et al, 170 Or. 222, 245-247, 132 P.2d 982 (1943); Fadeley, The Clean-Hands Doctrine in Oregon, 37 Or L Rev 160, 171-173. And where both parties to a suit, or those under whom they claim, participated in the wrong, equity will refuse its aid to either, leaving the parties as it finds them. Thompson v. Spint, supra; Barnhisel v. Watters, 138 Or. 8, 17, 4 P.2d 316 (1931).

See Smith v. Barnes, 129 Or. 138, 159, 276 P. 1086 (1929) (considering, in the context of a plaintiff's entitlement to a resulting trust for property, whether the plaintiff had unclean hands and concluding that “we do not believe that we would be justified in holding that the plaintiff's request for a conveyance to the defendant was intended as an act to defraud his creditors or the prosecuting officials”); Osborne v. Nottley, 206 Or.App. 201, 205, 136 P.3d 81, rev. den., 341 Or. 579, 146 P.3d 884 (2006) (“A conveyance designed ‘for the purpose of placing property beyond the reach of creditors' constitutes inequitable conduct sufficient to bar relief under the unclean hands doctrine.”) (Quoting Thompson v. Spint, 247 Or. 484, 485, 430 P.2d 1014 (1967).). The common law is well established with regard to whether a resulting trust can rescue a party from an effort to defraud creditors.

A conveyance designed "for the purpose of placing property beyond the reach of creditors" constitutes inequitable conduct sufficient to bar relief under the unclean hands doctrine. Thompson v. Spint, 247 Or 484, 485, 430 P2d 1014 (1967); see also Reid v. Multnomah County, 100 Or 310, 327-28,196 P 394 (1921) (administrator attempting to evade taxation on debt owed to estate by administrator committed inequitable actions that clouded title to encumbered property and barred him from asking equity court "to remove the cloud which his own act has cast"); Damerow Ford Co. v. Bradshaw, 128 Or App 606, 618-19, 876 P2d 788 (1994) (stock transactions that were "concealed" and "covered up," adversely affecting purchaser of shares, were inequitable and barred wrongdoers from recovery). The "dirt upon" Osborne's "hands" was inequitable conduct related directly to the subject of the litigation.

"[W]e agree with the trial judge that no cause of action is stated. The essence of this paragraph is that plaintiff and defendant cooperatively presented a perjurious tale at plaintiff's criminal trial, and the tale did not sell. Because of his acknowledged perjury, plaintiff brings his complaint with unclean hands and may not recover. North Pacific Lumber Co. v. Oliver, 286 Or. 639, 596 P.2d 931 (1979); Thompson v. Sprint, 247 Or. 484, 430 P.2d 1014 (1967)." (Emphasis supplied.)

With respect to the allegations of paragraph V of plaintiff's complaint, even read together with specifications (2) and (4) of paragraph VII of the complaint, we agree with the trial judge that no cause of action is stated. The essence of this paragraph is that plaintiff and defendant cooperatively presented a perjurious tale at plaintiff's criminal trial, and the tale did not sell. Because of his acknowledged perjury, plaintiff brings his complaint with unclean hands and may not recover. North Pacific Lumber Co. v. Oliver, 286 Or. 639, 596 P.2d 931 (1979); Thompson v. Spint, 247 Or. 484, 430 P.2d 1014 (1967). Strikingly, however, defendant's motion directed at plaintiff's pleadings made no mention at all of paragraph VI of plaintiff's complaint, or of specifications (1), (4) and (5) of paragraph VII.