Property of Disaffiliated Churches

In some cases, a church’s property reverts to its former denomination when it secedes.

A California state appeals court ruled that title to the properties of a local church that voted to disaffiliate from a parent denomination belonged to the denomination rather than to the church.

The local church was the oldest Korean immigrant congregation in the Presbyterian Church (U.S.A.) ("PCUSA"). It had participated actively in the Presbyterian Church for more than 80 years. PCUSA had assisted the church in acquiring its first properties, and in obtaining financing for various projects. A schism developed in recent years within the church, primarily over the views and leadership of the church's pastor. Attempts by the PCUSA to resolve the problems failed. As a result of the schism, a group (numbering up to 30% of the church's membership) left the church and formed a "church in exile."

The pastor thereafter had the remaining congregation vote to disaffiliate from the PCUSA. Acting in accordance with the Presbyterian Book of Order, the PCUSA designated the exiled congregation as the "true church," and as the rightful owner of the church properties. A lawsuit was filed to determine the ownership of the church properties.

A trial court ruled that the dissident congregation that voted to disaffiliate from the PCUSA was the rightful owner of the church properties, and that the designation by the PCUSA of the "true church" was entitled to no consideration. The case was appealed to a state appeals court. The appeals court reversed the trial court's decision, and awarded the church properties to the "exiled" congregation designated by the PCUSA as the true church. The court based its decision on the following 3 considerations:

Mandatory deference by the civil courts to decisions of hierarchical denominations regarding the true identity of an affiliated church. The court emphasized that "on ecclesiastical issues, including matters of religious doctrine or polity, civil courts must defer to the highest judicatory of the hierarchical church hearing and addressing the matter." The court noted that "it has long been the law in California that the identification of a religious body as the true church is an ecclesiastical issue," and accordingly the civil courts must accept the decisions of hierarchical denominations that identify a particular faction as the true representatives of a local church.

"Neutral principles of law." The court concluded that the exiled congregation was entitled to the church properties under the neutral principles of law approach. Under this approach, a civil court reviews nondoctrinal language in deeds, charters, and bylaws (both of the local church and the parent denomination) and awards title based on general rules of property law. The court noted that the charter and bylaws of the local church specifically required adherence to the PCUSA and its Book of Order. The court continued: "At that moment [when the church voted to disaffiliate from the PCUSA] if not before, these members had renounced any further obligation to be subject to the doctrines or discipline of the PCUSA, and, in effect,renounced their membership in [the local church] since its articles of incorporation required adherence to the doctrines and disciplines of PCUSA as a condition of membership. Having abandoned their membership in [the local church], they lost all power and ability to determine its future status."

Express trust. Finally, the court concluded that the "exiled congregation" was the rightful owner of the church properties on the basis of an "express trust." The "express trust" approach to resolving church property disputes "relies on title deeds, articles of incorporation, canons and rules of the organizations concerned and statutes, to establish that a local church holds property under an express trust for the benefit of the general church membership as embodied in its regional and national organizations."

The court found that several considerations supported a finding that the local church's properties were subject to an express trust in favor of the faction loyal to the PCUSA. One consideration was the fact that title to a portion of the church's properties had been vested in the name of a Presbytery for more than 50 years. A second consideration was the fact that the PCUSA Book of Order (to which the local church pledged its allegiance in its charter and bylaws) contained several paragraphs subjecting local church properties to an express trust in favor of the PCUSA. These included the following:

All property held by or for a particular church … whether legal title is lodged in a corporation, a trustee or trustees, or an unincorporated association … is held in trust nevertheless for the use and benefit of the Presbyterian Church (U.S.A.). [G-8.0200]

Whenever property of, or held for, a particular church of the Presbyterian Church (U.S.A.) ceases to be used by that church as a particular church of the Presbyterian Church (U.S.A.) in accordance with this constitution, such property shall be held, used, applied, transferred, or sold as provided by the presbytery. [G-8.0300]

The relationship to the Presbyterian Church (U.S.A.) of a particular church can be severed only by constitutional action on the part of the presbytery …. If there is a schism within the membership of a particular church and the presbytery is unable to effect a reconciliation or a division into separate churches within the Presbyterian Church (U.S.A.), the presbytery shall determine if one of the factions is entitled to the property because of it is identified by the presbytery as the true church within the Presbyterian Church (U.S.A.). This determination does not depend upon which faction received the majority vote within the particular church at the time of the schism. [G-8.0600]

What this means for churches

This case is significant for several reasons, including the following:

  1. It recognizes the principle that decisions of hierarchical denominations on matters of doctrine or policy are binding on the civil courts. Few courts have reached the conclusion that a denomination's act of identifying the faction within a local church that represents the "true church" is a matter of doctrine or polity that is beyond the authority of the civil courts to affect. However, such a conclusion seems perfectly reasonable, particularly in view of the provisions of the Book of Order quoted above.
  2. The court reached the logical, but somewhat unique, conclusion that members who vote to disaffiliate from a parent denomination thereby lose their status as members of their church and have no legal authority to "determine the future status" of their former church. Such a conclusion assumes that the local church's charter or bylaws contains a provision binding members to the doctrine and practice of the denomination.
  3. The decision sets forth "express trust" provisions in the Presbyterian Book of Order that effectively subjected all local church properties to a "trust" in favor of the PCUSA. These provisions can be a useful guide to other religious organizations interested in obtaining the same kind of protection. Korean United Presbyterian Church v. Presbytery of the Pacific, 281 Cal. Rptr. 396 (Cal. App. 2 Dist. 1991).

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