Pilgrim Evangelical v. LUTH. CHURCH-MO. SYNOD

661 S.W.2d 833
CourtMissouri Court of Appeals
DecidedNovember 8, 1983
Docket45963
StatusPublished
Cited by1 cases

This text of 661 S.W.2d 833 (Pilgrim Evangelical v. LUTH. CHURCH-MO. SYNOD) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pilgrim Evangelical v. LUTH. CHURCH-MO. SYNOD, 661 S.W.2d 833 (Mo. Ct. App. 1983).

Opinion

661 S.W.2d 833 (1983)

PILGRIM EVANGELICAL LUTHERAN CHURCH OF the UNALTERED AUGSBURG CONFESSION OF ST. LOUIS, MISSOURI, A Missouri Corporation, Plaintiff-Appellant,
v.
The LUTHERAN CHURCH-MISSOURI SYNOD FOUNDATION, a Missouri Corporation, et al., Defendants-Respondents.

No. 45963.

Missouri Court of Appeals, Eastern District, Division Five.

November 8, 1983.
Motion for Rehearing and/or Transfer Denied December 13, 1983.
Application to Transfer Denied January 17, 1984.

*836 J. Peter Schmitz, St. Louis, for plaintiff-appellant.

Stolar, Heitzmann, Eder, Seigel & Harris by Jay L. Levitch, St. Louis, for The Lutheran Church-Missouri Synod Foundation and The Lutheran Church-Missouri Synod.

Motion for Rehearing and/or Transfer to Supreme Court Denied December 13, 1983.

ARTHUR LITZ, Special Judge.

Plaintiff-appellant Pilgrim seeks to reverse the trial court's judgment dismissing its claims against defendants-respondents in a court tried case. The crux of the controversy is an attempt by appellant, the settlor of a trust, to gain control over an endowment fund and two bequests under a charitable trust. The trial court denied appellant's attempts to revoke the trust agreement and we affirm.

Appellant was incorporated in 1914 as a pro forma corporation. Respondent The Lutheran Church-Missouri Synod ("Synod") is a national Lutheran church body consisting of various congregations, district organizations, educational institutions and affiliated agencies. Appellant has been a member congregation of respondent Synod since 1915. Respondent The Lutheran Church-Missouri Synod Foundation ("Foundation") is a corporation created to provide, inter alia, trust management services for respondent Synod, its constituent members and agencies, and donors to those organizations and agencies.

Appellant's constitution stated that "The purpose and object of this corporation shall be to hold the title and manage such real estate as may be acquired for the use of a church edifice and parsonage for said congregation." The constitution also provided for a board of directors to manage the business affairs of the corporation, subject to the direction and control of the congregation. The by-laws provided that the corporation shall decide all matters relating to appellant's affairs and government. Unchallenged testimony established that the voting member of the corporation, the voter's assembly, controlled appellant's affairs.

The endowment fund in question was established pursuant to a vote of appellant's membership in 1921. On a few occasions from 1921 until 1944, monies from the endowment fund were loaned to the congregation in exchange for interest-bearing notes that were included in the endowment fund's investment portfolio.

In 1944, the membership amended its by-laws to formalize the operation of the endowment fund under the management, custody and control of a special committee. The membership also approved rules providing that the committee could not encroach upon the principal of the fund, but could lend principal to the church for maintenance of church real property or could use income for maintenance purposes. The congregation never used the fund for maintenance purposes, however.

At various times between 1965 and 1970, the board rejected proposals to use the fund to meet deficits and general expenses. In 1969, the board of directors approved a transfer of funds from two estates, the Dingerson and De Lore estates, out of appellant's general fund into the endowment fund. The membership approved the transfer expanding the endowment fund even though appellant had a deficit of approximately $8,300. Appellant used other accounts to reduce the deficit, leaving the endowment fund intact, containing $110,000.

*837 Appellant's membership adopted a resolution in November, 1970, suggesting that the endowment fund be placed into a "permanent trust." The resolution suggested that where possible, use of the income from the proposed trust fund would be expanded, but that the corpus must be held intact and only income generated by the corpus would be made available.

The membership named a committee to develop a formal plan to establish the trust fund. The evidence showed that the committee members viewed the endowment fund as a permanent fund, the corpus of which had always been held intact. The committee agreed that appellant should have use of income generated by the fund for a more expanded range of "maintenance" expenses, although the fund would retain a character consistent with the original donor's intentions. The committee selected respondent Foundation as their choice for the fund's trustee. A member of the committee contacted an attorney for respondent Foundation, furnished him with background information and explained appellant's objectives in seeking to place the endowment fund in a trust. The attorney prepared a draft trust agreement and proposed amendment to appellant's by-laws, authorizing adoption of the trust agreement.

At a special meeting on December 1, 1970, appellant's membership discussed the trust agreement and debated the terms of the provisions. One week later, on December 8, 1970, the membership again were read the proposed trust agreement and by-law amendment. The evidence established that during the extensive debate, all concerned had an opportunity for thorough consideration of the terms and provisions of the proposed trust agreement and by-law amendment. The members adopted the by-law amendment.

Respondent's attorney then explained the provisions of the trust agreement in detail. He pointed out that the restrictions on trust fund's income would be the same as the restrictions on the endowment fund's income. The attorney explained that the principal would not be encroached upon, that the trust was a permanent, irrevocable fund, that if certain events occurred the fund would terminate, and that the fund would be distributed in a prescribed fashion upon termination. In addition, appellant's pastor made the membership aware of the "unalterable and irrevocable" nature of the trust agreement. Following the discussion and debate, appellant's voters assembly voted to adopt the trust agreement.

The trust agreement provided for transfer of the endowment fund into a trust administered by respondent Foundation so that respondent, as trustee would distribute all income twice a year for appellant to reimburse itself for certain specified categories of "maintenance" expenses. To receive such income, appellant had to present certification to respondent Foundation of those reimbursable expenses. Respondent Foundation was to hold the principal, which would not be made available for appellant's current purposes. In addition, the trust agreement provided that if appellant disbanded, dissolved, or moved to another locality, respondent Foundation was to continue to hold the principal of the trust and pay over the income to respondent Synod and respondent Lutheran Altenheim. Finally, the trust agreement specifically stated that it was irrevocable.

The endowment fund's assets, including the bequests from the De Lore and Dingerson estates, were transferred to respondent Foundation to be held in the trust created pursuant to the trust agreement. Appellant thereafter regularly compiled vouchers and certificates of reimbursable expenses and presented them twice a year to respondent Foundation, who turned over the income from the trust.

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661 S.W.2d 833, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pilgrim-evangelical-v-luth-church-mo-synod-moctapp-1983.