## Facts

- In 1934, Jacob Landau conveyed real property to his son Alfred without consideration to conceal the asset from Landau’s creditors, with Alfred to hold for Landau’s benefit.
- In 1945, Landau filed a voluntary bankruptcy petition and swore he owned no real property, omitting the parcel from his schedules.
- In 1950, Alfred conveyed the property (without consideration) to Landau’s son-in-law, Jack Chazanof.
- The same day, Chazanof executed a deed conveying the property to Seagirt Realty Corp., a corporation wholly owned by Landau.
- The deed from Chazanof to Seagirt was never recorded and was later lost.
- Seagirt sued for equitable relief compelling Chazanof to execute a replacement deed to evidence and perfect Seagirt’s title.

## Issues

1. Whether the equitable doctrine of unclean hands barred Seagirt from obtaining a decree compelling execution of a replacement deed where the property’s earlier history included a fraudulent conveyance intended to hinder creditors.

## Decision

- The Court of Appeals reversed the Appellate Division and reinstated the trial court’s judgment for Seagirt.
- The court held unclean hands did not bar relief because the earlier creditor-directed fraud did not have an immediate and necessary relation to the specific equitable relief sought.
- The court ordered Chazanof to execute a new deed to Seagirt to replace the lost instrument.

## Legal Principles

- Unclean hands bars equitable relief only when the plaintiff’s inequitable conduct has an immediate and necessary relation to the equity sought.
- Equity may distinguish between (a) enforcing or effectuating a fraudulent transaction and (b) protecting or confirming existing ownership and removing a cloud from title.
- Where recognition of title and correction of the record would not aid the consummation or continuation of the earlier fraud, equitable relief may be granted.
- Courts may consider the public interest in accurate and reliable land records when deciding whether to deny equitable relief.

## Conclusion

Because Seagirt sought only to replace a lost deed and clear the record of an already-completed conveyance, and because the earlier misconduct was collateral to the relief requested, the court refused to apply unclean hands and required the defendant to execute a replacement deed.


Seagirt Realty Corp. v. Chazanof, 13 N.Y.2d 282, 196 N.E.2d 254, 246 N.Y.S.2d 613 (N.Y. 1963)