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Liability for Ignoring Donors' Designations
Liability for Ignoring Donors' Designations
Churches must honor designated contributions—or else risk refunding them.

2. "St. Paul #1"—Schmidt v. Catholic Diocese, 18 So.3d 814 (Miss. 2009)

A. Using designated contributions for other purposes

The plaintiffs appealed to the Mississippi Supreme Court, claiming that the case could be decided on neutral principles of trust and property law, and therefore the trial court erred in dismissing the case. According to plaintiffs, their case addressed the church defendants' obligations with regard to funds donated for the rebuilding of St. Paul church. The church defendants claimed that "the core" of the dispute was an internal church disagreement over the decision not to rebuild the church, and that plaintiffs were simply masking their claims as a property dispute. The court observed:

Plaintiffs submit that church defendants hold any donations made for the purpose of rebuilding the St. Paul church in trust. They argue that these funds were given based on church defendants' promise to rebuild the church, and that the funds may not be used for any other purpose. They assert that church defendants breached their fiduciary duties by merely contacting donors for permission to use the donors' contributions toward a different purpose. Plaintiffs thus seek to enjoin the diversion of the funds, and request an adjudication of whether church defendants' decisions have been fiscally irresponsible, and whether those funds must be used in a manner mutually agreeable to them or in their best interest.

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