Opinion ID: 2624191
Heading Depth: 4
Heading Rank: 1

Heading: Unequivocal intent to create a trust

Text: St. Paul argues that the language of The Book of Discipline does not itself constitute a `manifestation of intent' by St. Paul, Inc. to give The United Methodist Church a beneficial interest in its property. But St. Paul seems to suggest that the articles of incorporation and the deeds to the disputed properties themselves negate intent on the part of St. Paul to create a trust. We decline to adopt either polar position and instead view the relationship between St. Paul and UMC as a whole in order to discern intent. When St. Paul chose to affiliate with UMC, the record reveals that its members were fully cognizant of the implications of affiliation. At the time of affiliation, the Discipline expressly stated: In consonance with the legal definition and self-understanding of The United Methodist Church . . . and with particular reference to its lack of capacity to hold title to property, The United Methodist Church is organized as a connectional structure, and titles to all properties held . . . by a local church . . . shall be held in trust for The United Methodist Church and subject to the provisions of its Discipline. Through the February 21, 1984 letter from Bishop McConnell, the founding members of St. Paul were informed: When a new forming religious community agrees to become a United Methodist Church they agree to its constitution, Articles of Religion, and its polity and governance. Part of its polity and governance involves property being held in trust on behalf of The United Methodist Church. St. Paul's founders were also referred to the trust provisions of the Discipline, and told, [y]our group needs to be sure that it really wants to be United Methodist. If so, there are certain understandings which are inherent within it . . . [including] holding property in trust on behalf of the denomination. Yet the members of St. Paul willingly presented themselves for membership in UMC and incorporated as St. Paul United Methodist Church. Furthermore, St. Paul continued to affiliate with UMC, using the name, customs and polity of The United Methodist Church . . . in such a way as to be known to the community as a part of such denomination [41] for almost twenty years, until the discontinuation. Given the express trust language of the Discipline and the mutually understood connectional nature of UMC, the overt acts undertaken by the members of St. Paul to affiliate with UMC constitute a manifestation of intent to create a trust in favor of UMC. Contrary to the argument of St. Paul that it is a violation of neutral principles to rely upon provisions of the Discipline when discerning the intent of St. Paul, examining the trust provisions of the Discipline in connection with the actions of the parties is fully consonant with neutral principles. As when parties agree to be bound by the law of another jurisdiction, we faithfully apply Alaska law by honoring the secular rules by which the parties have chosen to be bound. [42] Furthermore, reliance upon trust language such as that contained in the Discipline to determine the objective intent of the parties was contemplated by and endorsed by the United States Supreme Court in Jones, when it observed: [T]he neutral-principles analysis shares the peculiar genius of private-law systems in general  flexibility in ordering private rights and obligations to reflect the intentions of the parties. Through appropriate reversionary clauses and trust provisions, religious societies can specify what is to happen to church property in the event of a particular contingency, or what religious body will determine the ownership in the event of a schism or doctrinal controversy. In this manner, a religious organization can ensure that a dispute over the ownership of church property will be resolved in accord with the desires of the members.[ [43] ] Although the record is replete with evidence that St. Paul intended to affiliate with UMC, and thereby undertook to hold its property in trust in favor of UMC, St. Paul argues that as the title holder, it is entitled to the presumption that it is the absolute owner, and that presumption has not been overcome. While St. Paul is correct that as the titleholder of the disputed properties, it is entitled to the presumption that it is the owner of the disputed properties and this presumption may not be overcome by mere surmise or conjecture, [44] the evidence in the record that St. Paul intended to create a trust far surpasses mere surmise and conjecture and is sufficient to overcome the presumption. The deeds to the disputed properties are in the name of St. Paul United Methodist Church and they do not contain the trust clauses which the Discipline provides they shall contain. From the absence of the trust clauses, St. Paul asks that we draw the inference that it did not intend to impress its property with a trust in favor of the UMC. But the Discipline expressly provides that the absence of a trust clause does not relieve a local church of its connectional responsibilities to UMC if the intent of the founders of the church to hold the property in trust is shown through the use of the name, customs and polity of The United Methodist Church. [45] Since the deeds are recorded in the name of St. Paul United Methodist Church, the deeds are consistent with the means set forth in the Discipline to manifest an intent to create a trust. St. Paul asks that we accord significance to the fact that on its annual report forms submitted to AMC, St. Paul annually informed the AMC that it did not put the trust clause in its deeds and that the failure of AMC to insist upon inclusion of the trust clauses constituted a waiver of the trust requirement. This argument is unpersuasive in light of the default trust provisions in the Discipline, of which St. Paul was made aware. Furthermore, the affirmative act of submitting annual reports to AMC on a yearly basis in itself constitutes yet another outward manifestation of St. Paul's intent to affiliate with UMC. St. Paul also argues that the $25,000 GBGM mortgage is absolutely inconsistent with any other trust interest in favor of The United Methodist Church or its affiliated entities over St. Paul, Inc.'s real property. It relies upon the provision of the Trust Agreement and Mortgage which states: [I]n case [St. Paul] shall cease to be connected with The United Methodist Church, or its successor, or the corporate existence of [St. Paul] shall cease, or the property hereinafter described shall ever hereafter be alienated from The United Methodist Church, or cease to be used for or be devoted to other uses and purposes than the uses [or] purposes set forth herein, then [St. Paul] shall and will forthwith repay to the party of the second part, the successors or assigns thereof, the said amount with lawful interest thereon, from the date of the aforesaid alienation, dissolution or abandonment. However, this routine documentation of a financial transaction between two distinct entities is immaterial in the face of the manifest intent of St. Paul to affiliate with UMC. Additional language within the very same Trust Agreement and Mortgage reflects an intent on the part of St. Paul to hold the disputed properties for the use of UMC: [S]aid premises shall be held, kept, and maintained as a place of residence for the use and occupancy of the ministers of The United Methodist Church, who may from time to time be entitled to occupy the same by appointment, and/or[] used, kept, and maintained, as a place of divine worship of the United Methodist ministry and members of The United Methodist Church; subject to the Discipline, usage, and ministerial appointments of said church as from time to time authorized and declared by the General Conference of said church, and the Annual Conference within whose bounds the said premises are situated[.]