Denominational Bylaws and Local Church Property

Are denominational bylaws regarding district supervision legally valid?

What is the legal effect of denominational bylaws giving a denomination the authority to assume control of a dissident congregation's property? That was the issue before a Missouri appeals court.

The board of deacons of a local Assemblies of God church voted to oust its pastor. The next day, the pastor contacted the Southern Missouri District of the Assemblies of God, and requested that the District intervene on the basis of "irreconcilable differences" between himself and the board.

The local church's bylaws contained a provision specifying that "[s]hould there arise irreconcilable differences between the pastor and members of the official church board, destroying unity and the successful ministry of the local assembly, the District executive presbytery … upon request from the pastor or a majority of the official board, shall investigate such differences and … may declare that the church be brought under District supervision until such strife ceases."

A week later, the church membership voted to dismiss the pastor. A District officer attended the membership meeting, and advised the congregation that its actions were in violation of the bylaws of both the church and District and accordingly were void. The District thereafter voted to place the church under District supervision "until strife ceases."

The District retained the pastor, and appointed a new board. A few months later the congregation voted overwhelmingly to disassociate the church from the Assemblies of God. When the District attempted to change the names of persons authorized to withdraw funds from the church's bank accounts, a lawsuit was filed to determine the legality of the District's actions.

A trial court ruled in favor of the church, concluding that the District had no authority to remove the board or change the signature cards at the bank. A state appeals court later reversed the trial court's action. The court provided the trial court with guidance regarding the question of "whether a local church, acting under Missouri's not-for-profit corporation act, can lawfully adopt a 'district supervision' bylaw which empowers the Southern Missouri District Council of the Assemblies of God to assume management of the secular affairs of the local church by temporarily replacing the duly elected directors of the local church when disputes arise among the local directors."

The appeals court noted the general rule that "the bylaws of a not-for-profit corporation may contain any provision for the regulation and management of the corporation which is not inconsistent with law or the corporation's articles of incorporation. A bylaw provision that is inconsistent with this state's law is void and must give way to the superior authority of the state. Likewise, any bylaw provision that conflicts with the articles of incorporation is void." However, the court concluded that the local church's bylaw provision authorizing District supervision "would not conflict with state law of the local church's articles of incorporation." The court observed:

In Missouri, the legislature has not prohibited temporary removal of directors of not-for-profit corporations during their term nor has the legislature established conditions or procedure for the removal of directors of not-for-profit corporations …. Here, it was left to the local church corporation, by enactment of bylaws, to establish the procedure for removal, reasons for removal, and criteria or events triggering temporary removal of directors. Removal od directors under the "District supervision" bylaw would not appear to violate [state law]. A bylaw provision which provides for two classes of directors, the first class being those elected for a given term, subject to temporary removal by the District Council when irreconcilable conflict arose, and a second class, those appointed by the District Council to serve temporarily during periods of irreconcilable conflict, would not conflict with [state not-for-profit corporation law].

The appeals court sent the case back to the trial court to determine the legal validity of the bylaw provision authorizing "District supervision." Any further developments will be reported in future issues of this newsletter. Boatmen's First National Bank v. Southern Missouri District Council of the Assemblies of God, 806 S.W.2d 706 (Mo. App. 1991).

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