Lauderdale v. Peace Baptist Church of Birmingham

• Decision Date: 05 October 1944
• Docket Number: 6 Div. 135.
• Citation: 246 Ala. 178,19 So.2d 538
• Parties: LAUDERDALE et al. v. PEACE BAPTIST CHURCH OF BIRMINGHAM.
• Court: Alabama Supreme Court

19 So.2d 538

246 Ala. 178

LAUDERDALE et al. v. PEACE BAPTIST CHURCH OF BIRMINGHAM.

6 Div. 135.

Supreme Court of Alabama

October 5, 1944

Rehearing Denied Nov. 16, 1944.

Appeal from Circuit Court, Jefferson County; E.M Creel, judge.

D.G Ewing, of Birmingham, for appellants.

Wm E. James and James and James, all of Birmingham, for appellee.

SIMPSON, Justice.

Bill by appellants--heirs and the personal representative of W.L Lauderdale, deceased--against appellee, The Peace Baptist Church, a corporation, to establish a resulting trust in real property.

The legal title to the property was taken in the name of the Church, but it is contended that Lauderdale furnished the money for the purchase, in consequence of which he became the equitable owner of the property, authorizing equity to declare a resulting trust in his favor--or, he being now dead, in favor of appellants.

Basis for appellants' contention is sought to be rested on the general principle that the trust of the legal estate results to the person who advanced the money. The rule is well established. Where one buys land in the name of another and pays the consideration money, generally, the grantee will be regarded as holding the land in trust for the purchaser. 3 Story's Equity, 14th Ed., p. 234, sec. 1597; 65 C.J. p. 382, sec. 154.

It is declared: This rule has its foundation in the natural presumption, in the absence of all rebutting circumstances, that he who supplies the purchase-money intends the purchase to be for his own benefit, and not for another, and that the conveyance in the name of another is a matter of convenience and arrangement between the parties for collateral purposes. Perry on Trusts, 7th Ed., § 126, pages 190, 191; Montgomery v. McNutt, 214 Ala. 692, 108 So. 752.

But this is only a rule of presumption (65 C.J. p. 386, § 155) and applies in the absence of all rebutting circumstances. In other words, without circumstances to show a contrary purpose, the law presumes an intent on the part of the person advancing the money and taking title in another, that the former should reap the benefits of his purchase. It is after all, however, a question of intent. 26 R.C.L. 1214, 1215, § 57; 1220, § 64. And this presumption of an intention to create a resulting trust "is not of law but is one of fact, and may be rebutted. * * * The mere fact of payment of the purchase money will not always be sufficient to raise a clear presumption of trust." 65 C.J. 387-8, § 155.

It is said: "The rule has many exceptions, and the presumption does not arise, when the attendant circumstances are inconsistent with its existence. It is a mere presumption--a presumed intention--which the law raises, without any proof of the actual intention of the parties, other than the fact that one pays the consideration-money, while the other receives the title." Rose v. Gibson, 71 Ala. 35, 40; Story, § 1600.

Following the thesis then that this inferred intent to create a trust, which arises from the act of the payor in furnishing the purchase money, is not conclusive and may be rebutted or overcome by other evidence, it is also recognized that certain relationships, if existent between the grantee and payor, will afford an adverse inference in rebuttal of this normally presumed intention. 2 Bogert, Trusts and Trustees, p. 1360, § 454. Such cases are where the payor and grantee stand in certain fiduciary relations with each other. It is said that these are exceptions to the doctrine of resulting trust. Story, § 1600.

If the payor bears confidential relations with the grantee there may sometimes inhere such circumstances as will rebut the trust intent in the payor which is usually presumed where he and the grantee are strangers. And here, had there been no particular relation between Lauderdale and the Church the general principle of resulting trust would suffice to sustain the appellants' claim. But the appellee was not a mere third person in the transaction nor were Lauderdale and appellee mere strangers to each other. He was pastor of the Church and had been for a long time. As such he sustained a close confidential relation to the Church. 45 Am.Jur. p. 742, § 30. And as regards the transaction here involved, his conduct in connection with it must be scrutinized in the light of this relationship.

The Church had been considering the purchase of this property for some time and when the pastor borrowed the money from Dr. Maclin with which to buy the property for church use, we do not think he is in such equitable status as to contend that the money so borrowed became his own so as to support an equitable ownership of the property by virtue of a resulting trust. Under these circumstances the presumption usually prevailing to sustain the trust is clearly rebutted. Or, at least, the intent to create the trust has not been established by that full and accurate proof which the law demands.

The settled rule of proof is that the trust must be established by clear, convincing and unequivocal evidence. Lashley v. Lashley, 219 Ala. 312, 122 So. 314; Merchant's National Bank of Mobile v. Bertolla, 245 Ala. 662, 18 So.2d 378. "The proof must correspond with the pleading, and must be clear, full, satisfactory and convincing. If the proof is uncertain; if it is doubtful and unsatisfactory, relief cannot be granted. The presumption arising from the conveyance, that it fully speaks the whole truth, must prevail until the contrary is established beyond reasonable controversy. The burden of removing this presumption rests upon the party asserting the contrary, and it is not enough for him to generate doubt and uncertainty." Lehman v. Lewis, 62 Ala. 129, 133.

Rather than establishing unequivocally that a trust resulted, the evidence, with the rebutting circumstances appertaining in the relationship of pastor and church, sustains the conclusion of the trial court that Lauderdale was acting for the Church in the transaction. Indeed, the attorney with whom Lauderdale conferred and to whom he entrusted the business of procuring the deeds from the State was left under this impression. His testimony on cross-examination imported as much: Lauderdale came to his office and told him he was pastor of the Peace Baptist Church and that "they wanted to buy the property;" "they wanted to get a church out there." And, to corroborate this theory of the case, when this attorney sent the money to the State Auditor's Office for the deeds, title to the property was taken in the name of the Church. Clearly, there is warrant for the conclusion that Lauderdale, as pastor, was acting as agent for his Church in the purchase and the trial court must be affirmed as correct in so holding.

In these circumstances equity affords no relief to establish a resulting trust in the agent's favor. Although the preacher may have intended to profit from the transaction, as agent of the church he "may not expose himself to the suggestions of self-interest." Enslen v. Allen, 160 Ala. 529, 535, 49 So. 430, 431; 1 Perry on Trusts, § 206. He must not "traffic with the subject-matter of his agency, without the consent of his principal, so as to reap a profit for himself." Adams v. Sayre, 70 Ala. 318, 326.

It is the agent's duty, in all transactions concerning or affecting the subject of the agency, to act with due regard to the interest of the principal and with the utmost good faith and loyalty. The relationship is a fiduciary one demanding trust and confidence. Dudley v. Colonial Lumber Co., 223 Ala. 533, 137 So. 429; Enslen v. Allen, supra; 3 C.J.S., Agency, p. 6, § 138a.

Nor,...