Baptist Foundation for Christian Educ. v. Baptist College at Charleston, 0172

• Decision Date: 21 February 1984
• Docket Number: No. 0172,0172
• Citation: 317 S.E.2d 453,282 S.C. 53
• Parties: , 18 Ed. Law Rep. 482 BAPTIST FOUNDATION FOR CHRISTIAN EDUCATION, Respondent, v. BAPTIST COLLEGE AT CHARLESTON, Appellant. . Heard
• Court: South Carolina Court of Appeals

Page 453

317 S.E.2d 453

282 S.C. 53, 18 Ed. Law Rep. 482

BAPTIST FOUNDATION FOR CHRISTIAN EDUCATION, Respondent, v. BAPTIST COLLEGE AT CHARLESTON, Appellant.

No. 0172.

Court of Appeals of South Carolina.

Heard Feb. 21, 1984.

Decided May 14, 1984.

Bailey & Buckley, Charleston, for appellant.

Solomon, Kahn, Smith & Baumil, Charleston, for respondent.

SHAW, Judge:

This is an appeal from a decision of the Master in Equity of Charleston County. The respondent--Baptist Foundation for Christian Education (the Foundation) seeks to recover a fund of $259,076.88 plus interest that was transferred to the appellant--Baptist College of Charleston (the College) in 1973. The Master imposed a constructive trust on the fund, awarded $112,628.48 in interest and ordered that the entire amount be transferred to the Foundation. The College appeals. We reverse.

This matter began in 1967 when Dr. and Mrs. J.W. Carpenter transferred about $250,000 to the New Orleans Baptist Theological Seminary. The transfer was subject to several conditions such as the use of the income to be generated by the principal fund. The main condition was that the Seminary agreed to transfer the money to another tax-exempt eleemosynary organization chosen by Dr. Carpenter anytime after a two year period.

In 1972, Dr. Carpenter began discussions with Dr. Hamrick, then President of the College, concerning the transfer of these funds to the College's Department of Religion. (Dr. Carpenter was chairman of the Department of Religion at that time) The funds were to be transferred for an indefinite period of time pending the establishment of Dr. Carpenter's family religious foundation. When Dr. Carpenter's foundation was fully established, the College was to transfer the funds to it. Not surprisingly, Dr. Hamrick readily agreed to these terms by letter dated September 7, 1972.

Dr. Carpenter then began organizing his tax-exempt entity, the Foundation. The Foundation was incorporated in the state of South Carolina and later received I.R.S. approval of its tax-exempt status in April of 1973, subject to the condition that the Foundation amend its charter to meet certain federal tax requirements.

In a letter dated February 1, 1973, from Dr. Carpenter to the New Orleans Seminary, Dr. Carpenter wrote The time has come that I wish to make a formal request that the entire corpus plus the one-half income which has been plowed back 'into the principle [sic] in order to offset the built-in inflation of the national economy' be transferred to the Department of Religion, Baptist College at Charleston, South Carolina. I ask that this be done in its entirety with the quickest dispatch. This should not be a problem since the Carpenter Fund has been invested in tact [sic] with the Northern Trust Company of Chicago.

We are seeking to enlarge the Religion Department at the Baptist College at Charleston into a School of Religion with its own building, faculty and staff. This money would become part of the basis of a campaign for matching funds to raise approximately $2 million.

In an undated letter written early in May of 1973, Dr. Carpenter then requested the New Orleans Seminary, pursuant to their agreement, to "donate" the funds to the College. Subsequent negotiations were conducted to ensure that the transfer followed all federal laws required to keep the funds tax-exempt.

The actual transfer occurred on June 5, 1973. The transferring document is entitled an "Act of Donation". The only two parties to the document were the New Orleans Seminary and the College. None of the language in this document reads in terms of a limited, revocable transfer. Instead, the New Orleans Seminary did "irrevocably give, grant, alienate, confirm, and donate" the funds to the College, "its successors and assigns forever". After the execution of the documents and as a further indication of his donative intent, Dr. Carpenter endorsed a separate check to the College for $992.11 which was interest on the fund.

The only reference to Dr. Carpenter in this document is a statement that the donation occurred pursuant to his instructions. A copy of Dr. Carpenter's instructions to the New Orleans Seminary was attached to the document. His instructions are found in the undated letter of early 1973. This letter makes no mention of a limited, revocable transfer. It further states that neither Dr. Carpenter nor his wife were to have any control over the funds to be transferred to the College.

Neither my wife, Lucy Sells Carpenter, nor I will in any way come into control of the moneys to be transferred by you to the Baptist College at Charleston, all of which are to be used solely to foster the purposes of that institution.

The Master ruled that it would be inequitable for the College to keep the funds and imposed a constructive trust.

The parties consented, pursuant to Sections 14-11-90 and 15-31-10, Code of Laws of South Carolina, 1976, to have the Master's decision appealed directly to the Supreme Court. See Glass v. Glass, 278 S.C. 527, 299 S.E.2d 693 (1983). Even though the consent was not reduced to writing as is now required (see Long v. Ehni, order filed April 19, 1983, Smith's Advance Sheets), this requirement only applies to appeals from a Master's final judgment filed after April 19, 1983. Precision Power Co. v. Adams, order filed July 20, 1983, Davis' Advance Sheets. Since this appeal was filed prior to April 19, 1983, it is proper.

In an action in equity, tried before one judge, this court has jurisdiction to find facts in accordance with its views of the preponderance of the evidence. Townes Associates, Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976).

The Master admitted extrinsic evidence under an exception to the parol evidence rule which contradicted the document accomplishing the donation. Ordinarily, parol evidence cannot be given for the purpose of changing an intention or understanding different from that which is expressed in a written agreement. Muckelvaney v. Liberty Life, 261 S.C. 63, 198 S.E.2d 278 (1973); McLeod v. Sandy Island Corp., 265 S.C. 1, 216 S.E.2d 746 (1975). However, when there is a controversy between a third party and one of the parties to the instrument in question, parol evidence is admissible. City of Orangeburg v. Buford, 227 S.C. 280, 87 S.E.2d 822 (1955); Suttles v. Wood, 312 S.E.2d 574 S.C.App. (1984). Here, the Foundation was not a party to the Act of Donation; only the College and the New Orleans Seminary. Thus, the evidence concerning Dr. Carpenter's intentions was properly admitted under this exception to the parol evidence rule.

The question for our consideration is whether or not Dr. Carpenter, when he exercised his right to transfer the funds, intended to make a gift of the funds to the College.

A gift is a voluntary transfer of property by one to another without any consideration or compensation therefor. McLeod v. Sandy Island Corp., supra. An inter vivos gift is a contract between the living which takes place by the mutual consent of the donor, who divests himself of the property given in order to transmit the title to it to the donee gratuitously, and the donee, who accepts and acquires legal title thereto. It operates, if at all, in the donor's lifetime, immediately and irrevocably. The mere intention to give without delivery is unavailing, the intention must be executed by a complete and unconditional delivery. The transfer of possession and title must be absolute and go into immediate effect, so far as the donor can make it so by intent and delivery. To constitute a valid gift, the donee must have an immediate right to the property; in other words, the donee must be vested with immediate...