Opinion ID: 2505697
Heading Depth: 1
Heading Rank: 18

Heading: Absence of Any Express or Implied Trust as a Matter of Law

Text: There is no dispute about the source and dignity of CCS's original title in the subject property. CCS acquired its title to the various tracts of land at issue in this case by land grants and by deeds. The earliest of these conveyances traces back to 1733 when Christ Church was founded after the arrival of the original colonists. If a title lawyer were to bring CCS's title in the subject property forward in time, the lawyer's title search would reveal no transfer of title from CCS to another entity, such as by producing a valid deed that is effective to pass title from CCS to the National Church. See Curry v. Curry, 267 Ga. 66, 68, 473 S.E.2d 760 (1996) (Among the essential elements of a deed are a written instrument, description identifying the land, grantor's signature, and delivery to the grantee). Additionally, Pindar's Georgia Real Estate Law and Procedure, 2 Ga. Real Estate Law & Procedure § 19-15 (6th ed.), describes the basic essentials of a valid deed effective to transfer title to real property as follows: To produce a valid deed effective to pass title to real property, there are certain basic elements which must exist: a. A written instrument purporting to convey title to land. b. A grantor, that is a person or legal entity possessing contractual powers. c. A grantee, who must be a legal entity, but need not necessarily be competent or sui juris. d. Words of conveyance. e. A description sufficient to identify the land. f. Signature of the grantor. g. Delivery of the instrument to the grantee or to someone on his behalf. The Code points out two other requirements which cannot be considered basic, since the deed is valid between the parties in their absence: a. A good or valuable consideration. A deed of gift may be valid, without any of the ingredients of a valuable consideration as required for contracts generally. b. Attestation by at least two witnesses. The National Church has not produced a valid deed that would be effective to pass title in the subject property from CCS to the National Church in order to create a trust, though under Georgia law, no trust exists absent a valid deed being recorded. See OCGA § 53-12-25(b). Further, there is no evidence on the record that that any grantor with contractual powers on CCS's behalf, such as, CCS's agent, ever had sufficient authority to convey CCS's title in the subject property to the National Church by signing any form drafted by the National Church. As a result, the proper resolution of this case turns on whether, before the split between CCS and the National Church in 2007, CCS had done anything to transfer any property to, or otherwise establish a trust on the local church's property in favor of, the National Church. The evidence available would say noespecially under existing Georgia law. If existing Georgia law provided for any legally recognized trust, there would be no need to declare a new type of implied trust in order to find that a trust existed here. Moreover, no new type of implied trust could legitimately operate retroactively to penalize CCS as the majority opinion attempts to do today.
The majority acknowledges that no express trust was created on the local church's property for the benefit of the National Church, pursuant to the express trust statute, OCGA § 53-12-20. Maj. Op. at 243. I wholly agree with the majority that there is no express trust that comports with OCGA § 53-12-20, which defines the essential requirements of an express trust in Georgia. Here, contrary to the plain language of OCGA § 53-12-20, there is no writing creating an express trust; no signature by any settlor or agent of the settlor; no expressed intention by any settlor to create an express trust (assuming that we had any identified settlor of any trust; which we do not since neither CCS nor the National Church claim to have settled any trust, and there are no other candidates for settlor); and no trustee duties specified in writing. Therefore, I agree with the majority insofar as it concludes that there is no express trust on the property of the local church for the benefit of the National Church that complies with OCGA § 53-12-20. However, I strongly disagree with the majority opinion's related conclusion that if this Court required that the National Church and other hierarchical churches fully comply with OCGA § 53-12-20, it would create an immense burden on national and local churches that would require an enormous number of deeds and corporate charters would need to be examined and reconveyed or amended. Maj. Op. at 245. This imaginary burden on the National Church amounts to an excuse by the majority that gives the National Church privileges at law, completely unlike the privileges given to any other legal entity, to ignore and fail to comply with Georgia laws. The National Church did not ask to be relieved from complying with the state statutes that would require the National Church to file a deed before claiming a trust interest. The fact that the National Church never asked to be forgiven from following Georgia statutory laws and the dictates of Jones evidences that the National Church did not contend that the Dennis Canon would be interpreted by this Court as creating a trust interest on CCS's property. Because the majority contends that divining the parties' intentions is the ultimate goal here, this intention of the National Church is directly relevant to finding a trust or not. I also question whether this Court has any power to waive a party's duty to obtain and record appropriate deeds before declaring a trust to exist. Even so, there is no evidence of any substantial burden that would justify the majority granting the National Church the privilege of not complying with longstanding Georgia laws or with Jones. In fact, the only deed that would have had to be obtained is a deed from CCS to the National Church. That is a $200 burden at most. Further, it remains unclear whether this Court forgives only this National Church or all hierarchical churches regarding the legal requirements to obtain and record deeds to property or whether this Court's forgiveness extends to non-hierarchical churches and non-churches as well. However, assuming that the majority's unsolicited forgiveness is reserved only for the National Church, hasn't today's majority opinion effectively furthered the establishment of this church in direct violation of the Establishment Clause of the First Amendment? Perhaps the National Church could not obtain a deed because CCS would not give it a deed, but this has nothing to do with the burdens or costs associated with the National Church drafting and recording a deed. The majority's unsubstantiated claim that the costs of complying with the law would be too high is simply not supported by any evidence. The National Church's financial outlook would be improved significantly even if it was required to get deeds from every local church in the United States and if all it received nationwide was this one church from Christ Church in Savannah, Georgia. In any event, the imagined burdens if the National Church had to comply with the law cannot excuse the National Church from being required to comply with the laws that exist to protect all citizens. Assume that the National Church owns only 7,500 local Episcopal churches across the United States. If it costs the National Church $200 per church for a lawyer to prepare and execute one valid deed per church even though most local churches would have a lawyer-member who would do it for free, then the National Church would have spent $1,500,000 ($200 × 7,500 churches = $1,500,000) in order to obtain properly executed deeds to all 7,500 local parishes. That assumes that the National Church would need deeds from all local churches. It may not if some churches already have a trust in their corporate charter, or a reversionary clause to the National Church in their deeds as described by the Jones Court. Assume also that each of the 7,500 local churches affiliated with the National Church across the United States average only $1,000,000 in property value per local church, then the result of the National Church not needing to abide by Georgia laws and the laws of other states requiring deeds would yield in time $7,500,000,000 (7.5 billion dollars) in profits for the National Church (7,500 local churches × $1,000,000 in property per church = $7,500,000,000). Moreover, with this case alone, the National Church receives legal title to real property worth at least several million dollars in terms of the parcel's aggregate property value as well as whatever money CCS had on hand, including one building on which CCS borrowed $950,000 to renovate, with the approval of the National Church. Again, assuming that the subject property here is worth $5,000,000 in an arms length real estate transaction, the National Church's initial $1,500,000 investment in order to comply with the applicable laws for all 7,500 local churches across the United States would yield to the National Church a $3,500,000 net profit on this one transaction involving only this local church, plus the many billions of dollars of cash and other property of all of the local churches across the United States. Simplifying the numbers to deal only with this local church and the subject property at issue here, the benefit to cost ratio realized by the National Church on this local church is 5,000,000/200 or, a cost/benefit ratio of 25,000! In light of these calculations, I am mystified by the majority's unsubstantiated assertion that complying with the plain language of OCGA § 53-12-20 creates some sort of immense burden on the National Church justifying excusing the National Church from compliance with Georgia laws and the United State's Supreme Court's decision in Jones. The majority's opinion is a bonanza for the National Church, and would not be a burden even if the National Church had to comply with the same laws all other citizens of this state must comply with regarding obtaining and filing deeds to record one's property interest. Further, I question whether this Court or any other court has the right to give the National Church such preferential treatment especially where, as here, the preferential treatment afforded to the National Church by the majority opinion ultimately permits it to prevail over CCS in this church property dispute. This gift to the National Church to ignore Jones and various applicable Georgia laws regarding deeds would be invalid as an establishment of religion even if it costs CCS nothing. But, here, this furtherance in the establishment of the National Church by this Court gives to the National Church a generous gift worth several million dollars. All other legal entitiesindividuals, corporations, trusts, partnerships, LLCs, and investment clubshave to pay for properly recorded deeds. Yet, the National Church wins this fight without ever having to proffer any deeds to establish its interest in the subject property. What happened to the Jones Court's mandate that we look to neutral principles, including deeds, to determine whether a trust exists? Does today's decision annul Jones? Why should this Court give the National Church a gift worth several million dollars?
The majority opinion bypasses altogether whether this Court can find an implied trust under the Georgia statutes addressing the elements of an implied trust. See, e.g., OCGA §§ 53-12-130 and 53-12-132. If the majority had consulted the definition of an implied trust set forth in OCGA § 53-12-2(5), the majority would have found that under Georgia law, there can be no implied trust under the facts of this case. Therefore, the majority declares a new type of implied trust in violation of existing Georgia law. OCGA § 53-12-2(5) defines an implied trust as meaning a resulting trust as described in Code Section 53-12-130 or a constructive trust as described in Code Section 53-12-132. No party claims any resulting trust, pursuant to OCGA § 53-12-130, so this leaves us to consider only constructive trusts, pursuant to OCGA § 53-12-132. Therefore, the statutory language defining a constructive trust is critical. OCGA § 53-12-132 defines the essential requirements of an implied trust under a constructive trust theory as follows: (a) A constructive trust is a trust implied whenever the circumstances are such that the person holding legal title to property, either from fraud or otherwise, cannot enjoy the beneficial interest in the property without violating some established principle of equity. (b) The person claiming the beneficial interest in the property may be found to have waived the right to a constructive trust by subsequent ratification or long acquiescence. Since no one claims that CCS acted fraudulently toward the National Church or anyone else for that matter, there is no basis to imply a constructive trust under the plain language of OCGA § 53-12-132(a). Moreover, the facts of this case permit the court to imply a trust in favor of CCS for any interest that the National Church claims in CCS's property under OCGA § 53-12-132(b). At a minimum, there is a genuine issue of material fact for a jury to resolve regarding whether the National Church, as the party claiming a beneficial interest in the property, may be found to have waived the right to a constructive trust by subsequent ratification or long acquiescence in light of the National Church's silence since its formation about any claimed trust on CCS's property. OCGA § 53-12-132(b). Since the National Church undisputedly failed to ever assert any trust interest in the subject property, this provides a factual basis for a jury to determine that the National Church waived any beneficial interest in the property by its longtime acquiescence to CCS's ownership and control of the property. How long does the National Church claim that it can remain silent about its contention of a trust before CCS can assume that there is no such claim and act accordingly? This is a matter for jury determination in light of OCGA § 53-12-132(b). Has the National Church acquiesced in there being no contention of a trust? Does this Court claim that it can hold as a matter of law that the National Church had not waited too long and so acquiesced or waived its right to claim any trust pursuant to OCGA § 53-12-132(b)? How can this Court do so without the facts being fully developed at trial? Furthermore, in light of the plain language of OCGA §§ 53-12-130 and § 53-12-132, there simply is no implied trust of any type on the property of the local church for the benefit of the National Church that complies with applicable Georgia statutes. Therefore, the majority's new species of implied trusta trust implied pursuant to neutral principlesis inconsistent with Georgia's longstanding implied trust statutes. Which creator of trust, the Legislature or this Court, prevails where, as here, their separate creations are internally inconsistent with each other? Can this Court judicially create a new type of implied trust that conflicts with the existing implied trust statutes? After the majority conceded that there is no express trust that complies with Georgia's express trust statute and the majority failed to find an implied trust that complied with Georgia's implied trust statutes, the majority should have stopped its analysis and concluded that no trust existed under Georgia statutory law. Instead, today's majority opinion proceeds to find an implied trust in favor of the National Church based on the title instruments, statutes, and local and national church documents that the majority previously admitted did not create an express trust. A careful reader is left wondering how one can find an implied trust by looking at documents that would ordinarily evidence an express trust if an express trust existed; finding no express trust but finding that the same documents that do not create an express trust, magically create an implied trust under a new judicially-generated statutory equivalent that does not comply with the Georgia law of implied trusts. As stated, the majority opinion proceeds to retroactively apply its new variety of implied trust here after the majority opinion fails to find an implied trust, as it could not under the Georgia statutes addressing implied trusts, because there has been no alleged fraud or bad acts by CCS. Therefore, the majority's new type of implied trust cannot exist under Georgia law because the judicial creation of a new type of implied trust violates the Separation of Powers Clause of the Georgia Constitution. The end result of this long discussion is that there is neither an express trust; nor is there any resulting trust; nor is there any constructive trust implied on CCS's property that comports with Georgia statutory and constitutional law preventing judicial legislating. Likewise, the new type of implied trust created by this Court usurping the role of the Legislature is not defined by the majority opinion so that we can know what the majority means by it, or how it should apply in future cases, but even if we did know, this is the functional equivalent of a judicially-created state statute involving a new type of implied trust and it is void as being contrary to an actual statute, OCGA § 14-5-46. It also is constitutionally void as being retroactively rather than prospectively applied, pursuant to the Georgia Constitution. See Recycle & Recover, Inc. v. Ga. Bd. of Natural Resources, 266 Ga. 253, 254(2), 466 S.E.2d 197 (1996) ([O]ur Constitution forbids passage of retroactive laws which injuriously affect the vested rights of citizens. Thus, if [a citizen] has a vested right which would be injuriously affected by application of the amendment . . ., then our Constitution requires that that amendment be applied prospectively rather than retroactively. (citations omitted)). This new judicially-generated type of implied trust also violates the Separation of Powers Clause of the Georgia Constitution as discussed infra.