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SUPREME COURT OF ALABAMA

OCTOBER TERM, 2012-2013

1110843


The Boys & Girls Clubs of South Alabama, Inc.

v.


Fairhope-Point Clear Rotary Youth Programs, Inc., and Ruff
Wilson Youth Organization, Inc.

Appeal from Baldwin Circuit Court
(CV-10-900712)

WOODALL, Justice.

The Boys & Girls Clubs of South Alabama, Inc. ("the

Club"), a nonprofit corporation, appeals from a judgment in

favor of the Fairhope-Point Clear Rotary Youth Programs, Inc.

("Rotary Inc."), and the Ruff Wilson Youth Organization, Inc.

("Wilson Inc."), in their action against the Club seeking
declaratory and injunctive relief. We vacate the judgment and
dismiss the case and the appeal.

I. Factual and Procedural Background
The dispositive facts are undisputed. The Club, which

1

was incorporated in 1958, has its headquarters in Mobile. It
currently operates several facilities in Mobile County to
promote, as stated in its certificate of incorporation, "the
health, social, educational, vocational, and character
development" of youth in Baldwin and Mobile Counties. In
1996, it was also operating facilities in Baldwin County. In
particular, it operated a facility in Fairhope sometimes
referred to as the "Fairhope Boys and Girls Club" ("the
Fairhope Club"). It operated another such facility in Daphne
sometimes referred to as the "Daphne Boys and Girls Club"
("the Daphne Club"). The Fairhope Club and the Daphne Club
had no legal existence apart from their affiliation with the
Club.

On November 13, 1996, B.R. Wilson, Jr., one of the
incorporators of the Club and a principal benefactor, executed

1Throughout its history, the Club has undergone a series
of name changes, which are not here pertinent.

a "gift deed," transferring to the Club approximately 17 acres

of real estate ("the property"). Contemporaneously with the

execution of the deed, Wilson gave a letter to the Club ("the

letter"); that letter stated:

"Gentlemen:

"I am giving to you the property, located in
Point Clear, known as my 'Stables.' This gift is
totally unrestricted. The property is presently
occupied by Bill Adams, who is operating the
stables, mostly for use by Grand Hotel guests and
other 'paying customers.' I believe that he is
technically 'holding over on a month to month basis'
since his written leases expired some time ago. He
has been working with the [Club] in the past and
wants to work with you in the future, not only as a
tenant, but also to allow your members to use the
facilities on some mutually agreeable basis. I
understand that you intend to attempt to work out a
mutually satisfactory arrangement with Bill Adams.
I appreciate that; but it is not a condition of this
gift.

"I understand that you hope to continue the use
of my son's name in connection with these
facilities, or some other facility in the Fairhope-
Point Clear area. I also appreciate that; but it is
not a condition of this gift. I will also again
confirm to you that you are free to ultimately
dispose of this property if, in your judgment, it is
in the best interest of the [C]lub to do so.  It is
my desire and understanding that you will use the
proceeds from any such disposition for the [C]lub's
facilities and/or activities in the Fairhope-Point
Clear area."

Wilson died in 1997.

In March 2000, the Club sold the property and deposited
the proceeds into three separate accounts, two of which were
separately earmarked for the Daphne Club and for the Fairhope
Club. However, on May 31, 2009, the Club discontinued its
operations in Daphne and Fairhope, citing "operating deficits"
as a contributing factor. It transferred the remainder of the
proceeds from the sale of the property to an account in the
Community Foundation of South Alabama ("the bank").

On June 1, 2009, the facilities in Daphne and Fairhope
were reopened by volunteers and former Club personnel, who
began operating the youth centers under their own independent
management structures. Subsequently, some of these
individuals incorporated Rotary Inc. and Wilson Inc., under
which they continued to operate the facilities in Fairhope and
Daphne, respectively.

Rotary Inc. and Wilson Inc. sued the Club, seeking
declaratory and injunctive relief. They alleged that the Club
"ha[d] used," or, perhaps, was "anticipat[ing] using," the
proceeds for its own operations, rather than for the use of
the facilities then being operated by Rotary Inc. and Wilson
Inc. They sought a judgment (1) declaring that the "desire

and understanding" of B.R. Wilson expressed in the letter
controlled the disposition of the funds, and (2) enjoining the
use of the proceeds for anything but the benefit of the youth
facilities as operated by Rotary Inc. in Fairhope and by
Wilson Inc. in Daphne.  

After a bench trial, the trial court entered a judgment
setting forth its findings of fact and conclusions of law.
More specifically, it considered the letter and testimony of
witnesses regarding B.R. Wilson's intent and found that it was
his intent that the property or proceeds from the sale of the
property would "be held in trust for the operation of the
Baldwin County facilities," and that the bank was holding the
funds in trust as trustee for the "exclusive benefit of the
[youth facilities in Fairhope and Daphne]." (Emphasis added.)
It concluded that "because entities [(Rotary Inc. and Wilson
Inc.)] now exist which are capable of receiving and
administering the sales proceeds for the benefit of the
Fairhope and Daphne clubs, there is no further purpose for the
continued existence of the trust." (Emphasis added.) The
court ordered the termination of the "trust" and the disbursal

of the remainder of the proceeds, namely, $893,377.02 and
$210,704.76, to Rotary Inc. and Wilson Inc., respectively.  

The Club appealed, challenging, among other things, the
standing of Rotary Inc. and Wilson Inc. to sue over
distribution of the proceeds of the sale of the property. In
particular, the Club contends that the entities that may sue
a nonprofit corporation are defined by the Alabama Nonprofit
Corporation Act, Ala. Code 1975,

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