1 NICS App. 37, Holt v. Kallappa (December 1988)
IN THE METLAKATLA TRIBAL COURT OF APPEALS
METLAKATLA INDIAN COMMUNITY
METLAKATLA, ALASKA
Robert M. Holt, et al. v. Reverend George Kallappa, et al.
No 87-001 (December 31, 1988)
SUMMARY
Appellants, beneficiaries of a trust, claim that Respondents' use of a church building formerly supported by trust funds violated the terms of the trust. Respondents contend that Appellants are without standing, as the trust res has lapsed.
The doctrine of standing insures that an actual controversy exists and requires court resolution. Holding that Appellants have standing, the Court found this case had divided the followers of the William Duncan Memorial Church for more than four years and that members of that church deserve a careful investigation of what occurred at the trial, and a thoughtful and reasoned decision from the court.
Affirming the trial court's ruling in favor of the Respondents, the Court of Appeals held that when the trustee turned over the $8,000.00 remaining in the trust, it was with the intent that the trust no longer exist.
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Charles R. Hostnik, Chief Justice; Rosemary Irvin, Justice; and Elizabeth Fry, Justice. |
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Gary Guss and Law Offices of Clifford H. Smith, Ketchikan, Alaska for Appellant; Ross Boundy and Francis Pennell and Shidler, McBroom, Gates & Lucas, Seattle, Washington for Respondents. |
DECISION AND ORDER
HOSTNIK, Chief Justice:
This action concerns the right of two competing religious groups to use of the William Duncan Memorial Church building.
Appellant represents a group of Metlakatla community members who are affiliated with the Congregational Church. Respondents are affiliated with the Assembly of God Church. In July of 1984 the members of the William Duncan Memorial Church voted to discontinue their affiliation with the Congregational Church and to affiliate with the Assembly of God Church. That action spawned this litigation.
1 NICS App. 37, Holt v. Kallappa (December 1988) p. 38
Appellants contend that use of the church building by the Assembly of God members violates the terms of Father William Duncan’s trust. When Father William Duncan passed away he left all of his property in trust for the benefit of members of the Metlakatla community. One of the restrictions on that trust was that the work supported by the trust was to remain “free from all sectarian influence.” Appellant contends that since the Assembly of God requires its members to accept various tenets of faith, the Assembly of God Congregation is not free from sectarian influence. Since the building had been supported by trust monies, that group cannot use the church building.
Respondents contend that Father William Duncan’s trust no longer exists and therefore cannot control any use of the church building.
ISSUES ON APPEAL
A three-day trial was conducted before Judge James Bowen. Eighteen witnesses testified, and numerous exhibits were admitted. This case raises a number of complicated issues, however, the parties have cooperated in an effort to distill the issues raised upon appeal, and agree to the following:
A. Plaintiffs’ Issues.
1. Did the trial court err in refusing to enforce the William Duncan Memorial Church Trust against the defendants?
(a) Did the trial court err in ruling that the William Duncan Memorial Church Trust had lapsed?
(b) Did the trial court err in failing to rule on whether defendants’ possession and control of the William Duncan Memorial Church violates the terms of the William Duncan Memorial Trust?
B. Defendants’ Issues.
1. Did the trial court err in holding that Robert Holt had standing to bring this action on behalf of the board and members of the congregational faction of the William Duncan Memorial Church?
2. Was the trial court correct in holding that the William Duncan Memorial Trust could no be used to deprive the defendants of possession and control of the William Duncan Memorial Church?
(a) Was the trial court correct in holding that the church and manse were never a part of the Duncan Trust?
(b) Was the trial court correct in holding that the Trust had lapsed?
3. Would enforcement of the William Duncan Memorial Trust to
1 NICS App. 37, Holt v. Kallappa (December 1988) p. 39
deprive defendants of possession and control of the William Duncan Memorial Church violate the Free Exercise Clause of the Indian Civil Rights Act, 25 U.S.C. § 1302?
STANDING OF HOLT
Respondent contends that Mr. Holt has no standing to bring this action since he does not represent the Board of Elders of the church. Respondent argues that there is only one Board of Elders of the William Duncan Memorial Church, and that is the Respondent's group, composed of the Assembly of God followers.
The doctrine of standing insures that an actual case in controversy exists requiring court resolution. The claimant must have an interest in the dispute so that the legal rights of that party will be affected by the operation of the court's order.
During oral argument Appellants' counsel stated that if nothing else is clear from the record before this court, it is amply demonstrated that a real controversy exists in this case. This court agrees.
This case has divided the followers of the William Duncan Memorial Church for more than four years. The members of that church deserve a careful investigation of what occurred at the trial, and a thoughtful and reasoned decision from this court. This panel will not shirk from that duty.
TRUSTEES AS NECESSARY PARTIES
The trial judge determined that the William Duncan Memorial Trust no longer had a res to administer. He concluded that the trust res lapsed in 1976, well before the church members voted to change affiliations in 1984. Appellant contends that the trial judge had no jurisdiction to determine that issue because the trustees were not named parties to this action.
In 1976 one of the trustees, John Smith, delivered to the Board of Elders of the William Duncan Memorial Church the remaining $8,000.00 held in the trust bank account. These funds were turned over to the Board along with the trustees' deposit stamp. At that time the trustees indicated that the money could either be used for travel expenses for the trustees so they could conduct a meeting, or could be used for more beneficial purposes. They elected the latter course of action. After 1976 the trustees did not meet to discuss trust business.
It is Appellant's contention that the trust res survived, even though the trustees themselves did not meet after 1976. If so, the Board of Elders of the William Duncan Memorial Church became de facto trustees for purposes of administering that trust res. No matter which view is taken of who constitutes the Board of Elders of the William Duncan Memorial Church, it is undisputed that those board members are parties to this litigation, either as the Board of Elders of the Congregationalist group, or as the Board of Elders of the Assembly of God group.
1 NICS App. 37, Holt v. Kallappa (December 1988) p. 40
If the William Duncan Memorial Trust still exists, the de facto trustees are parties to this litigation and are before this court. If the trust does not exist, failure to name the trustees is moot. It is clear that the parties to this litigation have done a commendable job of protecting the interests of the trustees.
DOES THE TRUST EXIST?
Appellant contends the trust is still in existence, and consists of two parts: (1) an unpaid building loan for the church in the approximate amount of $50,000.00; and (2) approximately $8,000.00 in cash turned over to the Board of Elders of the William Duncan Memorial Church in 1976.
REBUILDING LOAN
After the William Duncan Memorial Church burned to the ground in 1949, it was rebuilt with various donations. One of those donations was a loan of approximately $50,000.00 from the Duncan Trust. According to the testimony of Solomon Guthrie, there was no firm agreement for the money to be repaid. In fact, none of the loan has been repaid to date.
There are no documents indicating that the $50,000.00 was a loan, rather than a gift. No witnesses other than Solomon Guthrie were able to testify to this sum of money being a loan.
It is apparent that trust monies were used for various expenditures for the church during the 1940s and 1950s. The trust money was expended to pay the salary of various pastors, to help out various individuals, and a lot of money was given to the church when it burned in 1949. See testimony of Dr. Gerhart, Transcript p.127. There is no indication that any of the other trust monies were expended in the form of loans.
Appellant has failed to meet his burden of proof on this issue. The testimony and exhibits failed to establish that this $50,000.00 was a loan. In fact, it appears that this was just another trust expenditure. The fact that no demand for repayment has been paid, and that almost 40 years have passed without such demand, indicates that these monies were a gift, not a loan. Therefore, the trust cannot survive on this basis.
CASH GIVEN TO BOARD OF ELDERS
In 1976, Trustee John Smith delivered the balance of the trust fund in the amount of $8,000.00 to the Board of Elders of the William Duncan Memorial Church. The trustees did not meet to discuss trust business after that date until shortly before this litigation was started. The trust and trustees were inactive for eight years after the remaining trust funds were turned over to the Board of Elders in 1976.
Appellant contends that when the remaining trust funds were turned over
1 NICS App. 37, Holt v. Kallappa (December 1988) p. 41
to the Board of Elders, that board became de facto trustees, and the trust survived. The record indicates otherwise.
At the time John Smith turned the remaining $8,000.00 over to the Board of Elders, he told them "there was really no reason to maintain a separate trust account and that it was so small that [Trustee John Smith] really didn't know what to do with it, so he figured he best turn it over to the general council." Testimony of Burley Wellington, Transcript p.178. Mr. Wellington further testified:
Defendant's Counsel: Okay, in your years of service on the board, and in your conversation with John Smith, have you ever heard it said that the Board of Elders owes the trust any money?
Mr. Wellington: No, I haven't, only when this issue came up, were we told that we owed money to the trust. It was never brought to our attention before.
Defendant's Counsel: Okay, only after this lawsuit?
Mr. Wellington: Yes.
Testimony of Burley Wellington, Transcript p. 178.
Another member of the Board of Elders testified that John Smith recommended that "the trustees no longer exist because the funds were running low and at that time the Board [of Elders] had full control and was able to take care of the affairs of the church." Testimony of Leo Guthrie, Transcript p. 212.
This testimony indicates that when John Smith turned over the remaining $8,000.00 of the trust in 1976, he did so with the intent that the trust no longer exist. This was the trial court's conclusion, and there is ample evidence in the record to support this conclusion.
Since the trust lapsed in 1976, it did not exist thereafter. It therefore did not exist in 1984 when the majority of the members of the William Duncan Memorial Church voted to change affiliations by an overwhelming margin of 50 to 8. Nothing constrains the right of the majority of church members to practice whatever religion they desire within the confines of the William Duncan Memorial Church.
We do not find it necessary to reach the remaining issues. The trial court's order is affirmed.