Church Membership Provision Not Applicable to Board Members, Court Says

Unusual ruling does not address all issues in court case.

Church Law and Tax 1996-07-01

Officers, Directors, and Trustees

Key point: Provisions in a church charter or bylaws specifying the requirements of church membership do not necessarily apply to members of the church board.

In an unfortunate and clearly erroneous ruling, a Louisiana court ruled that provisions in a church charter listing the requirements of church membership did not apply to members of the church board. In 1992 a pastor informed his board of deacons that God had instructed him to relocate the church to another community. A majority of the board was not in favor of relocating, and so the pastor shared his vision with the congregation during an ordinary Sunday service. The congregation voted and approved the pastor’s proposal by a 32—21 margin. A few months later the church building burned to the ground. The church’s insurance company paid more than $140,000 to settle the fire loss claim. The first check for $118,600 was deposited in the church’s bank account, and thereafter the chairman of the deacon board and the church secretary signed a contract whereby the church assigned all insurance proceeds to a contractor in exchange for the contractor’s agreement to build another church building for the congregation. The agreement stipulated that the new church would be built in the same community as the church that burned—there would be no relocation. Offended because the chairman and secretary disregarded the congregation’s vote by executing a contract to rebuild the church in the same community, the pastor advised his congregation at an ordinary Sunday service that the chairman and secretary had been removed from office. A few days later, the pastor presesented a resolution to the bank purporting to be a resolution of the church board though in fact it was approved only by the minority of members who supported the pastor. The resolution authorized the pastor to withdraw the insurance proceeds from the bank, and deposit them with another bank. More importantly, the resolution authorized the pastor to execute any contract involving the funds that they deemed proper. The bank released the money and it was re—deposited at the other bank by the pastor. In response to these actions, a majority of the church board filed suit asking a court to prohibit the pastor from spending any portion of the insurance proceeds until the court could determine if the resolution presented by the pastor was valid. The contractor that had agreed to build the church’s new sanctuary promptly filed a suit asking the court to prohibit the insurance proceeds from being spent in any manner contrary to its agreement with the former chairman and secretary of the board. Meanwhile, the church’s deacons convened another board meeting at which all members were assembled. A lengthy discussion occurred concerning the voting eligibility of three members of the board who allegedly had failed to tithe in accordance with the following provision in the church’s charter:

This corporation shall be formed without capital stock and shall admit members by baptism, letters and experience of grace. Only those members who are in good standing and who have paid assessments set by the church and who have been members for a period of at least thirty (30) days shall have the power to petition and vote. Any person delinquent in assessments for a period of ninety (90) days or more are no longer members of the corporation; if assessments are paid up after a delinquent period of ninety (90) days or more, the member is required to wait for a period of thirty (30) days before s/he has the power to petition and/or vote. Financial assessments of members shall be tithing, pledging or monthly dues and Special Offerings as specified in the Bible, or as set by the corporation.

The pastor claimed that three of the board members who opposed him had failed to pay tithes for more than ninety (90) days to the church, and accordingly that these members had relinquished their right to vote and none of them remained members of the corporation. Following this discussion the board voted to rebuild the church in the same community and to honor the agreement with the contractor (with the challenged members voting). The pastor and his supporters filed a suit claiming that the board had usurped powers reserved for the corporate body by executing the agreement with the contractor without approval from the congregation. The pastor asked the court to prohibit the board from expending any portion of the insurance proceeds without congregational approval. All three cases (the board’s, the pastor’s, and the contractor’s) were consolidated for trial. The court ruled that the deacon board’s resolutions were legal and binding, and that the agreement with the contractor to rebuild the church was enforceable since the deacon board duly ratified it. The pastor appealed this ruling, claiming that his position was supported by provisions in the state nonprofit corporation law permitting corportations to “levy dues or assessments, or both, upon their members,” and to cancel membership “for nonpayment of dues or assessments.”

A state appeals court agreed with the trial court and ruled in favor of the board. It rejected the pastor’s argument that three of the board members had forfeited their right to vote by virtue of the fact that they failed to tithe. The court pointed out that the tithing requirement, and the provisions in the state nonprofit corporation law, both applied only to church members—and not to members of the board of deacons. It observed that “the statute’s unambiguous language confirms that its provisions pertain solely to the corporation’s members not to its directors …. In a like manner [the church charter] sets forth requirements for corporate membership exclusively; thus, individual directors need not comply with [the charter’s] assessment requirements to maintain their status as voting members of the deacon board.” Instead, the court concluded that the church’s board members were governed by another provision in the church’s charter stipulating that “the persons elected deacons of the church shall automatically become members of the board of directors.”

This is, at best, a very dubious ruling. The court failed to address the pastor’s argument that the board lacked the authority to enter into the agreement with the contractor without congregational approval. If the church’s charter required congregational approval for such agreements, then the composition or actions of the board were irrelevant. Second, most courts would agree with the pastor that persons who fail to maintain their status as church members are thereby disqualified from serving on the church board. Chimney Ville Missionary Baptist Church v. Johnson, 665 So.2d 730 (La. App. 1995). [ Election or Appointment of Church Officers, Directors, and Trustees, Removal of Church Officers, Directors, and Trustees]

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