Title: Berean Fundamental Church Council, Inc. v. Braun
Citation: 281 Or. 661, 576 P.2d 361
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: March 28, 1978

576 P.2d 361 (1978)
281 Or. 661
The BEREAN FUNDAMENTAL CHURCH COUNCIL, INC., a Corporation, Appellant,
v.
Ralph G. BRAUN, Will Winters, Gary Strahm, Chris Jones, Virgil Frazier, Larry Huffman, Fifty Jane Does and Fifty John Does, Respondents.

Supreme Court of Oregon, In Banc.
Argued and Submitted December 6, 1977.
Decided March 28, 1978.
*362 Merle A. Long, of Long, Bodtker &amp; Post, Albany, argued the cause and filed a brief for appellant.
Karen C. Allan, Medford, argued the cause for respondents. With her on the brief were Stuart E. Foster, and Frohnmayer &amp; Deatherage, Medford.
BRYSON, Justice.
Plaintiff, the national ruling body of the Berean Fundamental Church, brought this suit against defendants, the pastor, the local council, and the congregation of the Berean Fundamental Church of Brookings, Oregon, to recover possession of the local church's real property. Plaintiff held title to the property. Plaintiff also sought to enjoin defendants from using the name "The Berean Fundamental Church."
Defendants' answer and cross-complaint alleged, inter alia, that defendants, on reliance of plaintiff's representations, deeded the church property to plaintiff to be held in trust for the benefit of defendants and the Brookings congregation; that plaintiff had breached the trust and prayed that legal title be conveyed to them.
The trial court made extensive findings of fact which provided in part:
The trial court also made conclusions of law which provided in part:
The trial court entered a decree in favor of the defendants in accordance with the above findings of fact and conclusions of law. Plaintiff appeals from that part of the decree which ordered plaintiff to convey *363 the real property to defendants. The court also enjoined defendants from using the name "The Berean Fundamental Church." Defendants have not appealed from that part of the decree.
Plaintiff summarizes its first four assignments of error as follows:
Plaintiff argues:
The defendants acknowledge that the deed does not state that the property is held in trust but contend that several witnesses testified "that in the discussions held before the congregation [Brookings congregation] voted to join plaintiff and to deed over the church property, Reverend Gustafson and Reverend Olsen assured the congregation that if there were difficulties between the local church and plaintiff the local church would be allowed to withdraw with its property. Members of the congregation relied on these assurances."
As in most cases of this nature, there is a conflict in testimony as to what was agreed or stated between the parties at the time defendants' predecessors conveyed the church's real property to plaintiff on February 28, 1968, or immediately prior thereto.
This court gives substantial weight to the trial court's appraisal of conflicting testimony on de novo review of equity cases. Lichty v. Merzenich, 278 Or. 209, 213, 563 P.2d 690 (1977); Usinger v. Campbell, 280 Or. 751, 758, 572 P.2d 1018 (1977).
We have reviewed all of the testimony and exhibits. The evidence shows that defendants are the successors in interest of the Brookings Bible Church, which was an independent church until it joined plaintiff in 1968.
Reverend Gustafson was the west coast district leader and executive member of the plaintiff "council" and received a salary from the plaintiff. One of his duties was to locate new churches. In 1967 he contacted the members of the Brookings Bible Church regarding affiliation with The Berean Fundamental Church, and for several months in 1967 he was the minister at the Brookings Bible Church. He testified that he advised the defendants' predecessors as to the procedure in joining plaintiff as an affiliate. He employed an attorney and eventually the necessary resolution and deed here involved were prepared and executed, after several meetings with defendants' predecessors.
Reverend Braun, who held a position similar to that of Reverend Gustafson with the plaintiff, and who was pastor of the church at Brookings when the difficulties between plaintiff and defendants arose, testified:
Mrs. Kimberley, a member of The Berean Fundamental Church, testified that she was present at the meetings when Reverend Gustafson was explaining the manner of the Brookings congregation joining the plaintiff and the transfer of the Brookings church property to the plaintiff.
Several other witnesses testified to the same effect.
We find that defendants' predecessors in interest deeded the real property of the Brookings church, including the improvements  a church building and parsonage  to plaintiff in reliance upon a representation by plaintiff that if a controversy ever arose between the plaintiff and the Brookings church, the plaintiff would reconvey the property to the local governing body of the church and its congregation. Defendants had invested in excess of $97,000 in their property. No consideration was paid defendants or their predecessors for the deed conveying said property, and defendants did not intend to convey their beneficial interest therein.
It is not disputed that a controversy between the national church, plaintiff, and defendants did arise, and in 1975 plaintiff attempted to remove defendant Braun from his position as pastor of the Brookings church. Plaintiff gave notice that it was terminating recognition of the congregation under Braun's leadership and notified the congregation to vacate the church properties. The defendants and the congregation refused to vacate and this suit followed.
It is generally true that to be enforceable, an express trust involving real property must be in writing. However, the statute of frauds, ORS 93.020, provides as follows:
In Belton v. Buesing, 240 Or. 399, 402 P.2d 98 (1965), this court held that an oral express trust in land will be enforced if the grantee fails to raise the statute of frauds as a defense. In the present case, plaintiff has raised the statute of frauds and, therefore, an express trust is unenforceable. In Belton v. Beusing, supra, we also held:
The evidence in this case shows that the giving of the deed to plaintiff was a gratuitous conveyance.
In Person v. Pagnotta, 273 Or. 420, 541 P.2d 483 (1975), plaintiff conveyed property to defendants on condition that defendants convey the property to defendants' daughter after plaintiff's death. *365 Plaintiff became dissatisfied with this disposition of the property and sued to recover it. We held that even though the trust was not in writing, a constructive trust arose in favor of defendants' daughter because plaintiff and defendants were in a confidential relation to each other. In so holding, we referred to Restatement of Restitution § 183 (1937) as stating the applicable principle. A similar principle, applicable to this case, is stated in Restatement of Restitution § 182 (1937) (at 730-31) as follows:
The evidence in this case shows that when Reverend Gustafson, a member of the council and district leader for plaintiff, made the representation to defendants' predecessors that plaintiff would reconvey the local church property, he was then the acting minister for the Brookings congregation. Under these circumstances, a confidential relationship existed between Reverend Gustafson, representing the plaintiff, and the Brookings congregation.[1] Therefore, this is a proper case in which to impose a constructive trust. We conclude that there is strong and convincing evidence that a constructive trust be imposed in favor of the defendants in this case. See Marston v. Myers et ux, 217 Or. 498, 509-11, 342 P.2d 1111 (1959); Shipe v. Hillman, 206 Or. 556, 568, 292 P.2d 123 (1955).
This determination also answers plaintiff's ninth assignment of error, which is that "The court erred in failing to order the defendants to surrender property to the plaintiff."
Plaintiff summarizes its fifth through eighth assignments of error as follows:
Presumably, the parties felt that the organizational structure of The Berean Fundamental Church was important to the resolution of this case. However, having resolved the issue of whether or not there was a constructive trust in favor of the defendants, it is not necessary that we discuss the organizational issue of plaintiff and defendants.
We conclude, as did the trial court, that the plaintiff holds the Brookings church real property in trust for the benefit of the defendants and the Brookings church congregation. Plaintiff shall forthwith convey all of its right, title and interest in and to said real property to the defendants as decreed by the lower court.
Affirmed.
[1]  The trial court also found that there was a confidential relationship between Reverend Gustafson and the congregation. The relationship was one in which the transferors "`were justified in placing confidence in the belief that the transferee will act in the interest of the transferor[s].'" Person v. Pagnotta, 273 Or. 420, 424 n. 4, 541 P.2d 483 (1975), quoting from Restatement of Restitution 734-35, § 182, Comment c (1937).