Friday, December 3, 2004

Filed 8/13/04

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

CALIFORNIA-NEVADA ANNUAL

CONFERENCE OF THE UNITED

METHODIST CHURCH et al.,

Plaintiffs and Respondents,

v.

ST. LUKE’S UNITED METHODIST CHURCH

et al.,

Defendants and Appellants.

F041778

(Super. Ct. No. 00CEPR10452)

OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Wayne R.

Ellison, Judge.

Doyle, Penner, Bradley & Watson, Peter Sean Bradley and Randall M. Penner for

Defendants and Appellants.

Lewis, Brisbois, Bisgaard & Smith, Robert M. Shannon and Claudia J. Robinson,

for Plaintiffs and Respondents.

-ooOoo-

This case involves the issue of who controls a local church’s property when the

local church (here, appellant St. Luke’s United Methodist Church) ends its affiliation

with a national or worldwide religious denomination (here, the United Methodist

Church). After a non-jury trial, the trial court ruled that the local church held the church

property in trust not only for the use and benefit of the local church, but also for the use

and benefit of the United Methodist Church. The court also ruled that the local church

could not revoke that trust. The trial court’s ruling was based largely on its

understanding of the meaning of subdivisions (c) and (d) of Corporations Code section

9142. On this appeal, the local church contends that (1) the court erred in concluding that

a trust existed in favor of the United Methodist Church, and (2) even if such a trust

existed, the local church could and did revoke that trust. As we shall explain, we agree

that the evidence presented at trial supports the trial court’s conclusion that a trust in

favor of both churches was created. But we disagree with the trial court’s conclusion that

St. Luke’s could not revoke the trust in favor of the United Methodist Church. We agree

with St. Luke’s contention that it could and in fact did revoke the trust which had existed

in favor of the United Methodist Church.

We publish because Corporations Code section 9142, subdivisions (c) and (d) do

not appear to have been analyzed in any detail in any other published cases, and because

the meaning of these subdivisions may well be of particular importance to churches

which now are, or in the future will be, experiencing difficult doctrinal disputes among

their members. As we shall explain in part “II” of this opinion, we hold that (1)

subdivision (c)(2) of Corporations Code section 9142 does not authorize a general church

to create a trust interest for itself in property owned by a local church simply by issuing a

rule declaring that such a trust exists, and (2) a local church’s creation of a trust interest

in favor of the general church, including a trust interest created by the local church’s

agreement to a general church’s rule calling for the local church to hold property in trust

for the general church, may be revoked by the local church unless the local church has

expressly declared that trust to be irrevocable.

FACTS

A.

Events Prior to Trial

Although the trial of this matter spanned 10 days, the evidence presented at trial

was essentially undisputed. In 1948 St. Luke’s United Methodist Church (then called

“St. Luke’s Methodist Church”) was incorporated under California’s General Non-Profit

Corporation Law. Its Articles of Incorporation describe its purposes as follows:

“(1) To establish and maintain a church in the County of Fresno,

State of California, as a part of and/affiliated with the Methodist

Denomination, and in connection therewith to establish and maintain

suitable and customary public religious worship, study and training,

according to the articles, rules, usage and discipline of the Methodist

Denomination;

(2) To acquire, manage and hold in trust for the benefit of said St.

Luke’s Methodist Church, property of every kind and nature, both real and

personal; to receive bequests, to lease, mortgage, sell and convey any

property belonging to said corporation, and to do all things necessary or

convenient to carry out the purpose of said corporation as herein set forth.”

What was then known as The Methodist Church united with the Evangelical

United Brethren Church in 1968 to form the United Methodist Church. In 1973 St.

Luke’s Methodist Church amended its Articles of Incorporation to change its name to St.

Luke’s United Methodist Church of Fresno. The “Book of Discipline” (sometimes called

simply “the Discipline”) is “the instrument setting forth the laws, plan, polity, and

process by which United Methodists govern themselves ….” The basic unit of the Book

of Discipline is the “paragraph” (as opposed to a page, chapter, or section). The

organizational structure of the United Methodist Church includes what are called a

General Conference, jurisdictional conferences, central conferences, annual conferences,

and charge conferences. We need not describe these in detail here, except to note that

“annual conferences” are described in the Book of Discipline as “the fundamental bodies

of the Church” and have certain supervisory responsibilities over the local churches.

Paragraph 118 of the Book of Discipline states in part: “‘The United Methodist Church’

as a denominational whole is not an entity, nor does it possess legal capacities and

attributes. It does not and cannot hold title to property, nor does it have any officer,

agent, employee, office, or location. Conferences, councils, boards, agencies, local

churches, and other units bearing the name ‘United Methodist’ are, for the most part,

legal entities capable of suing and being sued and possessed of legal capacities.”

Paragraph 2501 of the Discipline provides in part that “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.” Paragraph 2503 sets forth specific trust language to

be used in “instruments of conveyance by which premises are held or hereafter acquired

for use as a place of divine worship for members of The United Methodist Church or for

other church activities .…” Subparagraph 6 of Paragraph 2503 states in part that “the

absence of a trust clause … in deeds and conveyances previously executed shall in no

way exclude a local church or church agency from or relieve it of its connectional

responsibilities to the United Methodist Church.”

Over the years, St. Luke’s acquired title to nine parcels of property: three in 1949,

one in 1951, one in 1954, one in 1955, two in 1997, and one in 1998. Five of the nine

grant deeds contained trust clauses in favor of the United Methodist Church. Four of the

deeds did not. A standardized form on which the St. Luke’s board of trustees submitted

annual reports to a higher church authority (the charge conference) specifically asked,

about the local church property, “Does each deed contain trust clause (Para. 2503)?”

Annual reports for the years 1988, 1989, and 1991 through 1998 were received into

evidence. On each such report, the question about the trust clause was answered “Yes.”

The president of the St. Luke’s board of trustees, Vince LaNovara, testified that he did

not personally check to see if the trust clauses were on the deeds, but that nevertheless the

absence of the trust clauses was brought to his attention by the District Superintendent,

Rev. Vickie Healy, in June of 2000 after St. Luke’s used its real property as security for a

line of credit it obtained from a bank in the spring of 2000 for church renovations.

1

In connection with this transaction, a deed was recorded in May of 2000 in which “St.

Luke’s Methodist Church” granted three parcels of property to “St. Luke’s United

Methodist Church” to reflect the aforementioned 1973 name change of the local church.

But this deed omitted the trust language that had been included in the deeds to the same

property when that property had been deeded to “St. Luke’s Methodist Church” years

earlier. LaNovara testified that the board of trustees “had no intention of that happening”

and that the deletion of the trust language was “an oversight” and “a mistake.” He further

testified that it was his and the board’s intention that the trust clauses should remain in,

that the trustees reviewed what they were given by the bank and the title company, and

that he told the escrow department at the bank that the trust clause needed to be put back

into the deed. LaNovara told Healy that the omission of the trust clause was a mistake,

that “steps were underway to get it rectified,” and that new deeds containing trust clauses

were in fact prepared.

A doctrinal dispute arose within the United Methodist Church during 1999 and

2000. Many members of St. Luke’s, including its pastor, were in on one side in the

dispute. Their bishop, Bishop Melvin G. Talbert, was on the other. In August of 2000

Bishop Talbert replaced St. Luke’s pastor, David Wainscott, with another pastor, Doug

Norris. Reverend Healy brought Norris to St. Luke’s on August 15, 2000 and introduced

him to various people at the church. When Norris returned to St. Luke’s the next day, he

found that the lock had been changed and his key did not work. After this escalation of

the doctrinal dispute, the corrected deeds containing the trust language were never

( 1  A district superintendent is appointed by a bishop to assist the bishop. Healy was

superintendent of the Fresno District of California-Nevada Annual Conference.)

recorded. The deed without the trust language, and a deed of trust, were recorded to

secure the line of credit from the bank. Also in response to the doctrinal dispute, St.

Luke’s United Methodist Church leased the church facilities to a newly incorporated

entity called St. Luke’s Community Church. The lease was subsequently voided by the

two parties after about one month.

B.

The Start of Litigation

This litigation began when the California-Nevada Annual Conference of the

United Methodist Church (a non-profit, religious corporation and a regional body of the

United Methodist Church, hereinafter the “Annual Conference”), Bishop Talbert (the

bishop responsible for oversight of local churches within the geographical area of the

Annual Conference, including St. Luke’s), and Reverend Healy (the District

Superintendent for the Fresno District of the Annual Conference) sued St. Luke’s United

Methodist Church (“St. Luke’s”), LaNovara and Reverend Wainscott for breach of a

charitable trust. The action sought injunctive relief (which we will shortly describe) and

damages. Wainscott was soon thereafter dismissed as a defendant. St. Luke’s filed a

cross-complaint against the Annual Conference, Bishop Talbert and Reverend Healy.

The cross-complaint was a declaratory relief action seeking a declaration that the cross-

defendants had no interest in the property, and that St. Lukes could revoke any trust

interest which might exist in the real property by recording grant deeds (prepared and

attached as exhibits to the cross-complaint) by which St. Lukes would deed the real

property to itself, without any trust language.)

C. Subsequent Events

While the litigation was pending, and before the trial began, St. Luke’s amended

its Articles of Incorporation to state a change in the purposes of the religious corporation.

Its purposes became “to establish and maintain a church … which … shall follow the

tenets of Methodism, but which shall not be subject in any manner to the articles, rules,

usage, discipline, or jurisdiction of the United Methodist Church or any organization or

other entity which is part of and/or affiliated with the United Methodist Church” and “to

acquire, manage, and hold in trust for the sole benefit of this Corporation property of

every kind and nature, both real and personal ….” In short, St. Lukes would not be

affiliated with the United Methodist Church and would hold its property in trust for itself

only.

D.

The Trial Court’s Decision

After the evidentiary phase of the trial, the court received further briefing from the

parties before rendering its decision. We should note here, for purposes of clarity, that

the parties agreed that the subject of the litigation was the St. Luke’s real property, and

not any personal property. Also, the three plaintiffs did not contend that St. Luke’s had

forfeited its interest in the property. Their contention was that, in accordance with the

Book of Discipline, real property held by an incorporated local church “shall be held by

… the corporate body in its corporate name, in trust for the use and benefit of such local

church and of the United Methodist Church.” The main issues at trial were (1) whether

the United Methodist Church had any trust interest in the St. Luke’s real property at all

(since the St. Luke’s Articles of Incorporation, both in 1948 and as amended in 2000, did

not expressly state the existence of such a trust) and (2) if such a trust existed, whether St.

Luke’s had successfully revoked that trust. The trial court concluded that (1) there was a

trust interest in favor of the United Methodist Church, and (2) St. Luke’s could not and

did not unilaterally revoke that trust. The court found no liability on the part of defendant

Novara. It awarded injunctive relief in favor of the plaintiffs and against St. Luke’s, but

no monetary damages. The injunctive relief directed St. Luke’s to (1) prepare, execute

and record deeds to the St. Luke’s property containing trust language in favor of the

United Methodist Church, (2) grant access to the St. Luke’s property to duly authorized

representatives of the United Methodist Church, refrain from interfering with United

Methodist ministry and worship at St. Luke’s, and refrain from permitting any use of the

property by persons not affiliated with the United Methodist Church without the written

consent of the Annual Conference, and (3) remove the designation “St. Luke’s

Community Church” from signage on the property, and to restore the “St. Luke’s United

Methodist Church” signage on the property. The court further ruled that St. Luke’s “shall

take nothing by virtue of the Cross-Complaint.”

I.

THE TRIAL COURT’S FINDING THAT A TRUST INTEREST

WAS CREATED IN FAVOR OF THE UNITED METHODIST

CHURCH IS SUPPORTED BY SUBSTANTIAL EVIDENCE

We deal here with the events which occurred prior to St. Luke’s December 2000

disaffiliation from the United Methodist Church. St. Luke’s contends that the plaintiffs

made an insufficient evidentiary showing of the existence of a trust in favor of the United

Methodist Church. As we shall explain, there was substantial evidence to support the

trial court’s conclusion that a trust was created in favor of both the general church and the

local church.

A. The Resolution of Church Property Disputes

In the leading case of Protestant Episcopal Church v. Barker (1981) 115

Cal.App.3d 599 (Barker), the court reviewed legal theories which courts had utilized to

resolve disputes over church property when religious groups split into different factions

and each faction asserted a claim of right to the property. One was the hierarchical

theory, utilized in Watson v. Jones (1871) 80 U.S. (13 Wa.) 679. Under the hierarchical

theory, civil courts would defer to the authority of ecclesiastical tribunals in disputes over

church property. Another theory was the implied trust theory. Under this theory,

“church property was the subject of an implied trust in favor of those who adhered to the

faith of the founders of the church.” (Presbytery of Riverside v. Community Church of

Palm Springs (1979) 89 Cal.App.3d 910, 928.) The Presbytery of Riverside case

described but did not utilize this theory, instead noting that a “concomitant of this implied

trust doctrine was the necessity for the court to examine in great detail questions of

religious doctrine in its determination as to which group of claimed beneficiaries

continued to adhere to the ‘true’ faith and which had departed from the ‘true’ doctrine.

[Citation.]” (Id. at pp. 928-929.) A third was the “neutral principles of law” theory

explained in Jones v. Wolf (1978) 443 U.S. 595. In Jones, the court held that the First

Amendment does not require civil courts to defer to a church’s own resolution of a

property dispute, and instead “a State is constitutionally entitled to adopt neutral

principles of law as a means of adjudicating a church property dispute.” (Jones v. Wolf,

supra, 443 U.S. at p. 604.) The First Amendment “ prohibits civil courts from resolving

church property disputes on the basis of religious doctrine and practice” and “requires

that civil courts defer to the resolution of issues of religious doctrine or polity by the

highest court of a hierarchical church organization,” but “[s]ubject to these limitations, …

the First Amendment does not dictate that a State must follow a particular method of

resolving church property disputes.” (Jones v. Wolf, supra, 443 U.S. at p. 602.)

The Jones court also made it clear that the prohibited considerations of “religious

doctrine and practice” do not include church rules on ownership of property. (Jones v.

Wolf, supra, 443 U.S. @ p. 602.) Citing Maryland & Va. Churches v. Sharpsburg

Church (1970) 396 U.S. 367, the Jones court stated: “The neutral-principles

approach was approved in Maryland & Va. Churches, supra, on appeal from a judgment 

of the Court of Appeals of Maryland settling a local church property dispute on the basis of the

language of the deeds, the terms of the local church charters, the state

statutes governing the holding of church property, and the provisions in the

constitution of the general church concerning the ownership and control of

church property. Finding that this analysis entailed ‘no inquiry into

religious doctrine,’ the Court dismissed the appeal for want of a substantial

federal question.” (Jones v. Wolf, supra, 443 U.S. at pp. 602-603.)

The Jones court further observed that “[t]he neutral-principles method, at least as

it has evolved in Georgia, requires a civil court to examine certain religious documents,

such as a church constitution, for language of trust in favor of the general church.” (Id. at

p. 604.)

The Barker court concluded that “California has adopted neutral principles of law

as the basis for resolution of church disputes.” (Barker, supra, 115 Cal.App.3d at p.

615.) Barker noted that Presbytery of Riverside v. Community Church of Palm Springs,

supra, 80 Cal.App.3d 910, had reached the same conclusion. The parties here also

appear to agree that the neutral principles of law theory is applicable in California, or at

least that the hierarchical and implied trust theories do not apply. The Barker court added

“[s]imply put, the issue is whether the local churches expressly hold their property in

trust for the benefit of members of [the general church].” (Barker, supra, 115

Cal.App.3d at p. 620.) And Barker appears to have relied on the above-quoted language

from Jones v. Wolf, supra, to state:

“In determining the presence or absence of an express trust in

specific church property a court will look at four general sets of facts: (1)

the deeds to the property, (2) the articles of incorporation of the local

church, (3) the constitution, canons, and rules of the general church, and (4)

relevant state statutes, if any, governing possession and disposition of such

property. In Jones v. Wolf [, supra, 443 U.S. at pp. 600, 603], the United

States Supreme Court noted approvingly that both the Georgia Supreme

Court and the Maryland Court of Appeals employed these factors to resolve

church property disputes.” (Barker, supra, 115 Cal.App.3d at p. 621, fn.

omitted.)

The trial court evaluated each of these four considerations and concluded that a

trust interest existed in favor of the United Methodist Church.

B.

The Standard of Review

“[N]ormally, the question whether the parties in their dealings have created a trust

is one of fact to be determined largely by ascertaining the intent of the parties [citations].

Where … the trial court’s determination of fact is based on conflicting evidence, or at

least evidence giving rise to conflicting inferences, the substantial evidence rule applies,

and the trial court’s determination will not be disturbed on appeal.” (Presbytery of

Riverside, supra, 89 Cal.App.3d at p. 931.)

St. Luke’s contends that the plaintiffs failed to demonstrate by clear and

convincing proof that a trust existed in favor of the United Methodist Church. St. Luke’s

relies on Evidence Code section 662, which states: “The owner of the legal title to

property is presumed to be the owner of the full beneficial title. This presumption may

be rebutted only by clear and convincing proof.” This is really nothing more than an

argument that the finding of the existence of a trust was not supported by substantial

evidence. “‘The sufficiency of evidence to establish a given fact, where the law requires

proof of the fact to be clear and convincing, is primarily a question for the trial court to

determine, and if there is substantial evidence to support its conclusion, the determination

is not open to review on appeal.’” (Nat. Auto. & Cas. Co. v. Industrial Acc. Commission

(1949) 34 Cal.2d 20, 25; Crail v. Blakely (1973) 8 Cal.3d 744, 750; in accord, see also 9

Witkin Cal. Proc. (4th ed. 1997) “Appeal,” § 365.) Here, there was substantial evidence

of the existence of a trust.

C. Substantial Evidence Supports the Trial Court’s Finding of the Creation of a Trust in Favor of the United Methodist Church

As for the deeds, there was no dispute that five of the nine deeds contained the

trust language. The testimony of LaNovara was undisputed that even as late as the spring

or summer of 2000, he understood that the Book of Discipline required the trust clause to

be on the deeds, and that the St. Luke’ board of directors intended and attempted to

restore that language. It was not until the doctrinal dispute escalated in August of 2000

with the arrival of Pastor Norris that the board held off on recording corrected deeds and

then ultimately (in December 2000) disaffiliated St. Luke’s from the United Methodist

Church. St. Luke’s never contended that the omission of the trust language from four of

the nine deeds was intentional or was any expression of disagreement with the

requirement of the Book of Discipline (Para. 2503) that the trust clauses appear on the

deeds. As for the original articles of incorporation of St. Luke’s (i.e., those in effect

before the December 2000 amendment to them to disaffiliate from the United Methodist

Church), they did state that a purpose of the corporation was to acquire, manage and hold

property “in trust for the benefit of said St. Luke’s Methodist Church.” The articles did

not also expressly say “and also for the benefit of the United Methodist Church.” But

they did also state that a purpose of the corporation was to establish and maintain a

church “as a part of and affiliated with the Methodist Denomination” and “to do all things

necessary or convenient to carry out the purpose of said corporation.” To be affiliated

with the Methodist Denomination, St. Luke’s was required to adhere to the “articles,

rules, usage and discipline of the Methodist Denomination” (also expressly noted in the

articles of incorporation). And it was undisputed that although the Book of Discipline is

updated every four years, the Book of Discipline already required trust clauses in

property deeds when St. Luke’s was incorporated in 1948.

As for the rules of the general church, we have already pointed out that Paragraph

2537 of the Book of Discipline required an incorporated local church’s real property to be

“held by and/or conveyed to the corporate body in its corporate name, in trust for the use

and benefit of such local church and of The United Methodist Church” and that “[e]very

instrument of conveyance of real estate shall contain the appropriate trust clause as set

forth in the Discipline (§ 2503).”

As for “relevant state statutes, if any, governing possession and disposition of such

property” (Barker, supra, 115 Cal.App.3d at p. 621), St. Luke’s makes no showing of the

existence of any statute that would render erroneous the trial court’s conclusion that a

trust in favor of both churches was created. St. Luke’s calls our attention to the above-

quoted Evidence Code section 662, and then argues that the evidence of the creation of a

trust was not clear and convincing because the trial court did not give sufficient weight to

the provision of the St. Luke’s articles of incorporation stating that a purpose of the

corporation was to hold property “in trust for the benefit of said St. Luke’s Methodist

Church.” St. Luke’s candidly acknowledges, however, that those same articles of

incorporation also stated that a purpose of the corporation was to maintain a church

“affiliated with the Methodist Denomination” and “according to the articles, rules, usage

and discipline of the Methodist Denomination.” It also acknowledges that even in 1948

the Book of Discipline required trust clauses in favor of both the local church and the

general church. St. Luke’s could not simultaneously both (a) hold its real property in

trust only for the benefit of itself and (b) hold its real property in trust for the benefit of

itself and of the general church. The trial court harmonized the above-quoted clauses of

the St. Luke’s articles of incorporation by concluding that the articles of incorporation

themselves did not require St. Luke’s to hold property in trust only for the benefit of

itself. Thus although St. Luke’s correctly points out that the Book of Discipline serves as

the functional equivalent of corporate bylaws (see Metropolitan Philip v. Steiger (2000)

82 Cal.App.4th 923, 932), and that a bylaw or portion thereof that is in conflict with the

articles of incorporation is void (see Morris v. Richard Clark Missionary Baptist Church

(1947) 78 Cal.App.2d 490, 493), St. Luke’s did not demonstrate that the Book of

Discipline was in conflict with the St. Luke’s articles of incorporation.

II.

ST. LUKE’S COULD AND DID REVOKE THE TRUST

IN FAVOR OF THE UNITED METHODIST CHURCH

The plaintiffs contended, and the trial court agreed, that Corporations Code section

9142 barred St. Luke’s from revoking any trust which existed in favor of the United

Methodist Church. The trial court relied on subdivisions (c) and (d) of Corporations

Code section 9142. These subdivisions state:

“(c) No assets of a religious corporation are or shall be deemed to be impressed with any

 trust, express or implied, statutory or at common law unless one of the following applies:

“(1) Unless, and only to the extent that, the assets were received by

the corporation with an express commitment by resolution of its board of

directors to so hold those assets in trust.

“(2) Unless, and only to the extent that, the articles or bylaws of the

corporation, or the governing instruments of a superior religious body or

general church of which the corporation is a member, so expressly provide.

“(3) Unless, and only to the extent that, the donor expressly

imposed a trust, in writing, at the time of the gift or donation.

“(d) Trusts created by paragraph (2) of subdivision (c) may be

amended or dissolved by amendment from time to time to the articles,

bylaws, or governing instruments creating the trusts. However, nothing in

this subdivision shall be construed to permit the amendment of the articles

to delete or to amend provisions required by Section 214.01 of the Revenue

and Taxation Code to a greater extent than otherwise allowable by law.”

The parties agree that nothing in subdivisions (c)(1) or (c)(3) would operate to

recognize any trust interest in favor of the United Methodist Church. The plaintiffs

contend, however, that under subdivision (c)(2) the Book of Discipline created a trust in

favor of the United Methodist Church. This is because the Book of Discipline is a

“governing instrument” of the general church. Subdivision (d) provides that a trust

created by subdivision (c)(2) “may be amended or dissolved by amendment … to the …

governing instruments creating the trust.” The Book of Discipline has not been amended

so as to change or delete its Paragraph 2537 requirement that the real property of an

unincorporated local church be held “in trust for the use and benefit of such local church

and of The United Methodist Church.” Thus, the plaintiffs say, the trust in favor of the

United Methodist Church has not been dissolved.

St. Luke’s, on the other hand, argues that nothing in Corporations Code section

9142 was intended to supplant basic principles of trust law, one of which is that “[u]nless

a trust is expressly made irrevocable by the trust instrument, the trust is revocable by the

settlor.” (Prob. Code, § 15400.) As we shall explain, we agree with St. Luke’s.

A trust is “a fiduciary relationship with respect to property, subjecting the person

by whom the title to the property is held to equitable duties to deal with the property for

the benefit of another person, which arises as a result of a manifestation of an intention to

create it.” (Rest.2d Trusts, § 2, p. 6.) “A trust is created by a manifestation of intention

of the settlor to create a trust, trust property, a lawful trust purpose, and an identifiable

beneficiary.” (Chang v. Redding Bank of Commerce (1994) 29 Cal.App.4th 673, 684.)

“An express trust is generally created in one of two ways: (1) a declaration of trust, by

which the owner of property declares that he holds it as trustee for some beneficiary; (2) a

transfer in trust, by which the owner transfers to another as trustee for some beneficiary,

either by deed or other transfer inter vivos, or by will.” (11 Witkin, Summary of Cal.

Law (9th ed. 1990) Trusts, § 26(a), p. 911; see also Prob. Code, § 15200; and Rest.2d

Trusts, §17.) In the present case, there appears to be no dispute that St. Luke’s purchased

the properties that are the subject of the present dispute. If the properties were held in

trust for the benefit of the United Methodist Church, it is because St. Luke’s manifested

in a number of different ways its intention to so hold the properties. “Unless a trust is

expressly made irrevocable by the trust instrument, the trust is revocable by the settlor.

This section applies only where the settlor is domiciled in this state when the trust is

created, where the trust instrument is executed in this state, or where the trust instrument

provides that the law of this state governs the trust.” (Prob. Code, § 15400.) California’s

rule that a trust is presumed to be revocable differs from the rule in many other states

where trusts are presumed to be irrevocable unless the settlor reserves the right to revoke.

(See 18 Cal.L.Rev. Com. Reports, p. 565.) But the presumption of revocability has been

the rule in California since 1931 and applies to trusts created since a 1931 amendment to

the former Civil Code, section 2280. (See Witkin, supra, § 201, p. 1054.)

“The person who creates a trust is the settlor.” (Rest. 2d Trusts, § 3, p. 12.)

Because this trust was created by St. Luke’s manifested intention to hold the property in

trust for the benefit of itself and of the United Methodist Church, we see no conclusion

other than that St. Luke’s was the settlor, and that St. Luke’s could and did revoke the

trust when it amended its articles of incorporation in December of 2000 to disaffiliate

itself from the “discipline … of the United Methodist Church” and to declare that it

would hold property “in trust for the sole benefit of this Corporation.” (See Prob. Code,

§ 15401.)

The trial court’s decision that the trust was irrevocable rested on its reading of

subdivisions (c) and (d) of Corporations Code section 1942. Although the trial court

found that a trust existed in favor of the United Methodist Church by considering the

Barker factors, the court also found that subdivision (c)(2) itself created a trust in favor of

the United Methodist Church. It concluded that the Book of Discipline was the

“governing instrument” creating the trust. And since that governing instrument had not

been amended to eliminate the Book of Discipline’s requirement that a local church’s

property be held in trust for the benefit of both the local church and the United Methodist

Church, a trust in favor of the United Methodist Church still existed and could not be

revoked by the local church. In other words, the “amendment” referred to in subdivision

(d) did not exist and so the trust had not been revoked. Under the trial court’s (and the

plaintiffs’) reading of the statute, only the general church could revoke the trust which

existed in its favor. And since the general church had not done so, there was no

revocation. We thus turn to the key question in this case: what do subdivisions (c)(2)

and (d) of Corporations Code section 9142 mean?

“When construing a statute, we must ‘ascertain the intent of the

Legislature so as to effectuate the purpose of the law.’ (DuBois v. Workers’

Comp. Appeals Bd. (1993) 5 Cal.4th 382, 387 [20 Cal.Rptr.2d 523, 853

P.2d 978].) The words of the statute are the starting point. ‘Words used in

a statute … should be given the meaning they bear in ordinary use.

[Citations.] If the language is clear and unambiguous there is no need for

construction, nor is it necessary to resort to indicia of the intent of the

Legislature .…’ (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [248

Cal.Rptr. 115, 755 P.2d 299] (Lungren).) If the language permits more

than one reasonable interpretation, however, the court looks ‘to a variety of

extrinsic aids, including the ostensible objects to be achieved, the evils to

be remedied, the legislative history, public policy, contemporaneous

administrative construction, and the statutory scheme of which the statute is

a part.’ (People v Woodhead (1987) 43 Cal.3d 1002, 1008 [239 Cal.Rptr.

656, 741 P.2d 154].) After considering these extrinsic aids, we ‘must select

the construction that comports most closely with the apparent intent of the

Legislature, with a view to promoting rather than defeating the general

purpose of the statute, and avoid an interpretation that would lead to absurd

consequences.’ (People v. Jenkins (1995) 10 Cal.4th 234, 246 [40 Cal.Rptr.2d 

903, 893 P.2d 1224].)” (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 977-978.)

The plaintiffs’ reading of (c)(2) appears to be that this statute enables a general

church to create a trust, in favor of itself, with the trust property being the local church’s

property. In plaintiffs’ view, the general church (or “superior religious body”) can do this

by so providing in the general church’s “governing instruments.” Such a statute would

appear to be sharply at odds with other general principles of trust law. A trust can be

created by a “declaration by the owner of property that the owner holds the property as

trustee.” (Prob. Code, § 15200, subd. (a); see also Rest.2d Trusts, § 17, p. 59.) We know

of no principle of trust law stating that a trust can be created by the declaration of a non-

owner that the owner holds the property as trustee for the non-owner. A more reasonable

reading of the statute is that subdivision (c)(2) was intended to be a codification of or

recognition of Barker, supra. This is especially so since subdivisions (c) and (d) were

enacted shortly after Barker was decided. Barker was decided in January of 1981.

Subdivisions (c) and (d) of Corporations Code section 9142 were enacted in 1982, and

took effect in 1983. (Stats. 1982, c. 242, p. 784, §1.) Nothing in Barker supports the

view that a general church can create a trust in favor of itself simply by enacting a rule

stating that a local church holds property in trust in favor of the general church. Barker

involved four local churches and one general church. The general church adopted a rule

(“Canon 10.06”), which declared that on dissolution of a local church its property became

distributable to the general church. The