Disaffiliated Church Allowed to Retain Property

Although the denomination was hierarchical, court ruled that no trust was created.

Key point: A church affiliated with a hierarchical denomination may be able to retain its property if it disaffiliates from the parent denomination, despite a provision to the contrary in denominational bylaws.

A Massachusetts appeals court ruled that a local church could retain its property after disaffiliating from a parent denomination.

The members of a local church voted to amend the church's bylaws to remove all reference to a parent denomination. The executive board of the denomination asked a court to declare the congregational meeting illegal and to rule that all of the church's properties were subject to the control of the denomination.

A trial court ruled that while the denomination was hierarchical in terms of "internal administration, discipline, and matters of faith," it was congregational as far as the control and use of local church property. Accordingly, the court ruled that the congregational meeting was valid and that the local church was the sole owner of its properties. The denomination appealed, claiming that the church was not "congregational" with regard to the ownership of property, and that the church's bylaws were not legally amended.

A state appeals court rejected the denomination's claims and upheld the ruling of the trial court in favor of the local church. First, the court rejected the denomination's claim that the local church was congregational for purposes of property ownership. The court quoted from a Supreme Court ruling defining the terms congregational and hierarchical:

The courts, in answering this question have recognized two broad categories of church government. One is congregational, in which authority over questions of church doctrine, practice, and administration rests entirely in the local congregation or some body within it. In disputes over the control and use of the property of such a church, the civil courts enforce the authoritative resolution of the controversy within the local church itself. The second is hierarchical, in which the local church is but an integral and subordinate part of a larger church and is under the authority of the general church. Jones v. Wolf, 443 U.S. 595 (1979).

The court observed that "[c]ivil courts must accept as binding the decisions of the highest judicatories of a religious organization of hierarchical polity on matters of discipline, faith, internal organization or ecclesiastical rule, custom, or law." However, the court concluded that the denomination was congregational with respect to the ownership of local church property. The court conceded that denominational documents "provide considerable force" to the denomination's claim that it is hierarchical in terms of the control of local church property.

For example, among the matters coming within the jurisdiction of the denomination, according to denominational rules, are "[m]atters concerning church property." Denominational bylaws also specify that the "diocesan bishop, having the overall care of his diocese and its prosperity … supervises all church property in the diocese …." The court continued:

In assessing the [trial judge's] findings, the documents are but part of the evidence. When the testimony at trial is considered, the judge's finding that the parish is congregational in terms of the ownership and management of its property and is not subject to the [denomination] in such matters is not clearly erroneous. The parish, as the judge found, was always a separate legal entity and not a subdivision of any other entity. It had paid for the real estate and its other property with its own funds and always had held title in its own name.

The court also noted that there had been "considerable movement in and out of the [denomination] by individual parishes who took with them their own property without claim by the [denomination]." Based on this evidence, the court concluded that the trial court's finding that the local church was congregational as far as the control and use of its property was concerned was correct.

Next, the court addressed the denomination's claim that the church had not legally amended its bylaws. The denomination argued first that there was not a two-thirds vote as required by the bylaws, since two members were not permitted to vote. In rejecting this argument, court observed: "Under the bylaws … parish members who have failed for twelve months to pay their membership dues are excluded from parish membership. The [denomination's] claim that the vote lacked a two-thirds majority because two members were entitled, but not permitted, to vote is without merit as there was evidence that those two members had not paid dues for twelve months."

Next, the denomination argued that bishop had not approved the church's bylaw amendments as required by denominational rules. In rejecting this position, the court quoted from an earlier court ruling:

Such a regulation, putting it out of the power of the corporation to amend its constitution except with the approval of [a denominational official] is unreasonable and inconsistent with the legal right of control of the affairs of the corporation existing in its membership, and in such form it is utterly subversive of the right of control of a corporation which belongs to its members. Saltman v. Nesson, 88 N.E. 3 (1909).

The court acknowledged that "[t]he articles of organization establish the purposes and governance of a corporation … and where bylaws are in conflict with the articles, the bylaws being subordinate, the articles of organization control." However, the court insisted that the

original articles of organization gave no rights to the [denomination] and under [state nonprofit corporation law] the members were authorized to make any amendment … which they could have included in the original articles. Nothing precluded the … amendment which provided that "the bylaws of the corporation may be amended by a two-thirds vote of the members of the corporation without the consent or approval of any other person." Not only was the amendment authorized, but the original bylaw requiring approval by non-members of the corporation was, itself, of questionable validity.

Finally, the court rejected the church's claim that since the church is hierarchical in terms of internal administration, discipline, and matters of faith, the church's property is held in trust for the denomination. The court noted simply that this position "is refuted by the evidence" since the "original articles of organization did not mention the [denomination]" and "neither the documents nor the testimony suggests that a trust was created." Primate Synod v. Russian Orthodox Church Outside Russia, 617 N.E.2d 1031 (Mass. App. 1993).

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