Example A church conducts an annual business meeting at which 15 percent of the members are present. Some members question whether a quorum exists. Church staff scour the church office, looking for a copy of the church’s bylaws. Two editions are found. One defines a quorum as 20 percent of the church’s membership, and the second defines a quorum as 10 percent of the church’s membership. Neither edition is dated, and no one knows which of these editions is more recent, or even if either of them represents the current edition. What steps can church leaders take to identify the current version of the church bylaws?

Example A church’s constitution and bylaws address many of the same issues. At a membership meeting the members approve an amendment to the bylaws pertaining to the size of the church board. However, the members failed to amend a corresponding provision in the church’s constitution. The provisions in these two documents are now in conflict.

Tip The drafting of church bylaws is a complex task that should not be attempted without the assistance of an attorney. Knowing what to include, and exclude, from your bylaws are important tasks that require legal knowledge and experience.

Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.

Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code.

No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof. No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501(c) (3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or the corresponding section of any future federal tax code.

Key point. Some churches define their exempt purposes to include charity and education in addition to religion, believing that this will accommodate a greater diversity of ministries. However, note that such an expansion of corporate purposes may also jeopardize various exemptions that are available to “religious” organizations. Church leaders should discuss this important issue with an attorney.

Case Study Blanton v. Hahn, 763 P.2d 522 (Ariz. App. 1988) An Arizona court agreed to interpret a clause in a church’s bylaws specifying that “a pastor may be terminated by the church congregation … but only if … the vote equals or exceeds three-fourths of the voting members present.”

A church voted to oust its pastor at a duly called meeting by a vote of 18 of the 26 members present (the remaining 8 members did not vote). The pastor refused to acknowledge that the vote resulted in his dismissal, since less than “three-fourths of the voting members present” had voted to dismiss him (18 is only 70 percent of 26). Several disgruntled members of the congregation disagreed with this interpretation, and petitioned a court for a ruling recognizing that the congregational vote had resulted in the dismissal of the pastor.

The members argued that the phrase “three-fourths of the voting members present” should be interpreted to mean three-fourths of the individuals who actually cast votes at the business meeting rather than three-fourths of all members actually present and eligible to vote. Since all 18 of the persons who actually voted at the meeting voted to dismiss the pastor, 100 percent of the votes were cast in favor of dismissal. A state appeals court ruled that the pastor had not been lawfully dismissed in the meeting in question.

The court relied on Robert’s Rules of Order, which had been adopted by the church (in its bylaws) as the governing body of parliamentary procedure, as support for its conclusion that the phrase “three-fourths of the voting members present” means three-fourths “of the individuals present and eligible to vote.” Accordingly, the pastor had not been dismissed by the congregational vote since less than three-fourths of the members present and eligible to vote had voted to dismiss him.

Case Study Holmstrom v. Sir, 590 N.W.2d 538 (Iowa 1999) The Iowa Supreme Court suggested that it was barred by the First Amendment guaranty of religious freedom from resolving a dispute involving the interpretation of church bylaws. A group of church members filed a lawsuit claiming that the pastor and other members had violated the church bylaws in several ways, including the following:

(1) Placed some members on “probation” when no such status was recognized by the bylaws;

(2) terminated longtime members without cause;

(3) allowed the minister and his wife to take money from the church treasury and funds for their own personal and private use;

(4) appointed members to leadership positions illegally;

(5) refused to honor a proper request for a meeting of the congregation called for the purpose of exploring the relationship of the church and its minister;

(6) leased church property to private individuals;

(7) disposed of property belonging to the church to private individuals;

(8) eliminated church committees;

(9) held illegal meetings;

(10) violated church spending limits.

The pastor’s attorney filed a motion to dismiss the case, arguing that the First Amendment guaranty of religious freedom prevents the civil courts from resolving such disputes. The trial court agreed, and dismissed the lawsuit. The disgruntled members appealed. The state supreme court began its ruling by noting that “civil courts are precluded by the First Amendment from deciding doctrinal issues,” including “membership in a church organization or church discipline,” and that “the courts have no jurisdiction over, and no concern with, purely ecclesiastical questions and controversies, including membership in a church organization, but they do have jurisdiction as to civil, contract, and property rights which are involved in or arise from a church controversy.”

Case Study Cherry Valley Church of Christ v. Foster, 2002 WL 10545 (Tex. App. 2002)

A Texas court ruled that it could not resolve an internal church dispute on the basis of the church’s constitution and bylaws since the critical provisions in these documents could not be applied without the court delving into church doctrine and governance. The case involved the question of “who has the right to select and remove the trustee-directors and the minister.” Both sides relied on the church’s articles of incorporation in support of their position. The court noted that “ordinarily, we would construe the articles of incorporation of a Texas nonprofit corporation according to the body of neutral legal principles that governs Texas corporations generally. If we could do so without running afoul of constitutional constraints, we would also apply those principles to construe the articles of incorporation of a nonprofit corporation organized for religious or spiritual purposes.” However, it concluded that it could not apply neutral legal principles in construing articles of incorporation or bylaws of the church, since both documents used the phrase “custom and practices of the church.” Such language, the court concluded, “removed any dispute regarding the selection of its directors from the purview of the judicial system. Interpreting this phrase would require the court to examine the historical, administrative, and ecclesiastical affairs of a religious organization and decide the outcome of the issue based on its determination of what are the customs and practices of the church …. Our deciding the central issue here would require us to interpret religious law and usage. Not only is that issue ambiguous, its resolution would require the state, through the judicial system, to determine issues of internal church governance. We may not delve into those issues.”

Case Study Organization for Preserving the Constitution of Zion Lutheran Church v. Mason, 743 P.2d 848 (Wash. App. 1987)

A church’s constitution provided that “the candidate receiving the majority of all votes cast shall, upon unanimous approval, be declared elected.” The church convened a congregational meeting to vote on a pastoral candidate, and the candidate received a majority of the votes cast (but not “unanimous approval”). The candidate was subsequently employed, and a group of dissidents filed a lawsuit asking a civil court to enforce the church’s constitutional requirement of “unanimous approval.” While noting that the First Amendment prohibits a court “from entangling itself in matters of church doctrine or practice,” a Washington state court concluded that it could resolve controversies, such as this one, involving the interpretation “of an ambiguous provision in what amounts to a contract between the members of the congregation, dealing with a purely procedural question” and involving “no ecclesiastical or doctrinal issues.” The court also noted that it found no “dispute resolution process” within the denomination to which it could defer.

Case Study Scotts African Union Methodist Protestant Church v. Conference of African Union First Colored Methodist Protestant Church, 98 F.3d 78 (3rd Cir. 1996)

A federal appeals court ruled that a local church’s articles of incorporation took priority over a conflicting provision in a denominational “Book of Discipline” which the court viewed as the “functional equivalent” of the local church’s bylaws. In 1991 the African Union Methodist Protestant Church (the “national church”) adopted a “church property” resolution specifying that “the title to all property, now owned or hereafter acquired by an incorporated local church … shall be held by or conveyed to the corporate body in its corporate name, in trust for the use and benefit of such local church and of the African Union Methodist Protestant Church.” The property resolution was incorporated into the national church’s governing Book of Discipline. At the same 1991 meeting of the national church, another resolution was adopted authorizing pastors “to sign official documents pertaining to the individual local church.” On the basis of these resolutions, the national church directed a number of pastors to sign a quitclaim deed transferring title to their church’s property to the national church. One church, whose property was deeded to the national church by its pastor pursuant to such a directive, voted unanimously to secede from the national church and then challenged the legality of the transfer in court. A federal appeals court ruled that the pastor’s attempt to deed his church’s property to the national church had to be invalidated. It based this conclusion on a provision in the local church’s articles of incorporation that permitted conveyances of church property only upon a vote of at least two-thirds of the church’s members. The court noted that this provision conflicted with the national church’s “property resolutions” that were incorporated into its Book of Discipline. However, the court concluded that the Book of Discipline “functioned” as the local church’s bylaws, and it concluded that whenever there is a conflict between a church’s articles of incorporation and its bylaws, the articles of incorporation prevail. As a result, the pastor was bound by the requirement in the articles of incorporation rather than the Book of Discipline since “provisions of a corporation’s charter or articles of incorporation enjoy priority over contradictory or inconsistent bylaws.”

Case Study Morris v. Richard Clark Missionary Baptist Church, 177 P.2d 811 (Cal. 1947)

A church charter provided for seven trustees and the church’s bylaws called for nine. A California court ruled that the charter provision took priority over the provision in the church bylaws.

Case Study New Mount Moriah Missionary Baptist Church, Inc. v. Dinkins, 708 So.2d 972 (Fla. App. 1998)

A Florida court ruled that a church board properly removed a pastor without a congregational vote, since this was the procedure specified in the church’s articles of incorporation. A church’s board of deacons voted to terminate their pastor’s employment pursuant to the following provision in the church’s articles of incorporation: “With respect to the hiring of a … pastor … the sole responsibility for both hiring and firing said individuals shall rest with the deacons, as more fully set out in the bylaws of this not for profit corporation.” The bylaws contained a similar provision. However, when several members of the congregation objected to the board’s decision, the board decided to submit the question of the pastor’s removal to the church membership at a specially called business meeting. The membership voted to retain the pastor. The board ignored this vote, and attempted to enforce its previous decision to remove the pastor by seeking a court order. The pastor, on the other hand, argued that the board had “amended” the bylaws when it permitted the membership vote, and therefore the vote was valid and the pastor was retained. A state appeals court agreed with the board that the pastor had been properly removed. It noted that the state nonprofit corporation law requires that any new bylaws must be consistent with the articles of incorporation. As a result, the pastor’s argument that the board “amended” the bylaws by calling a meeting of the membership to vote on the pastor’s retention had to be rejected, since such an “amendment” would be in direct violation of the articles of incorporation which allow a pastor to be removed only by the board.

Case Study Nevada Classified School Employees Association v. Quaglia, 177 P.3d 509 (Nev. 2008)

The Nevada Supreme Court ruled that a corporation’s bylaws are void to the extent that they are inconsistent with its articles of incorporation.

Case Study Leeds v. Harrison, 87 A.2d 713, 720 (N.J. 1952)

A New Jersey court ruled that “religious and quasi-religious societies may adopt a constitution and bylaws for the regulation of their affairs, if conformable and subordinate to the charter and not repugnant to the law of the land ….”

Case Study First Born Church of the Living God, Inc. v. Hill, 481 S.E.2d 221 (Ga. 1997)

The Georgia Supreme Court ruled that a provision in the state nonprofit corporation law mandating annual membership meetings did not take priority over a provision in a church’s bylaws calling for membership meetings once every four years. The members of a church filed a lawsuit in civil court seeking to compel their church to conduct an annual membership meeting. The members relied upon a provision in the state nonprofit corporation law specifying that a nonprofit corporation “shall hold a meeting of members annually at a time stated in or fixed in accordance with the bylaws.” The church’s bylaws called for a membership meeting once every four years. The state supreme court ruled that state nonprofit corporation law did not override the church’s own bylaws and therefore the church was required to conduct meetings only once every four years. The court observed that the state nonprofit corporation law itself specifies that if any of its provisions is inconsistent with religious doctrine governing a nonprofit corporation’s affairs on the same subject, “the religious doctrine shall control to the extent required by the Constitution of the United States or the Constitution of this state or both.” As a result, the issue “is whether the frequency with which the church’s membership meets is a matter of religious doctrine having constitutional precedence over inconsistent statutory provisions of [the nonprofit corporation law].” The court noted that the church in this case was “hierarchical” in nature, and that the members had very limited authority to direct church affairs. It concluded: “An annual meeting as contemplated by [the nonprofit corporation law] would be totally inconsistent with the church’s fundamental religious freedom, as a hierarchical religious body, to determine its own governmental rules and regulations. Members have no legal right to wrest the governing of the church from [church officials] by obtaining court-ordered annual meetings conducted in accordance with [nonprofit corporation law].”

Words of corporate bylaws are to be interpreted in their ordinary, popular sense …. A bylaw will be construed in harmony with the charter if it is reasonably possible to do so. Additionally, a bylaw will be interpreted to avoid conflicts among its provisions. In the interpretation of bylaw provisions, courts must give effect to the intent of the parties as revealed by the language of the bylaws and the circumstances surrounding their creation and adoption. The intent of the [drafters] in enacting particular bylaw amendments is instructive in determining whether any ambiguity exists. A construction that will render a bylaw just and equal in its operation will be adopted in preference to one that will have a contrary effect. Another principle of construction adopted by some courts is that no provision of a bylaw should unnecessarily be rendered meaningless or superfluous. The rules used to interpret statutes, contracts, and other written instruments are applicable when construing corporate bylaws ….

If a bylaw is unambiguous in its language, a court will not interpret it or search for the parties’ intent behind the bylaw. But where there exist reasonable and contradictory interpretations of a bylaw provision, its interpretation is a question or fact for the jury, reviewable by a court for clear error. A bylaw is not made ambiguous merely because parties disagree on its proper construction; in order to be ambiguous the bylaw must be reasonably susceptible of different constructions or interpretations. However, ambiguity may be found when the bylaw is read together with another corporate document. The contract is to be construed against the party who drafted it when the surrounding circumstances do not clarify the ambiguity.

Ambiguous or obscure provisions should be construed to make them harmonize with the general intent of the bylaws as a whole, and to promote the business welfare of the corporation. … In determining the rights of a member of a corporation under its bylaws, portions dealing with the same subject must also be construed. If it can be ascertained, the design and intent of the framers of the bylaw must prevail, and where a particular bylaw was adopted to meet a specific situation, the purpose for which it was adopted is pertinent in determining the proper construction to be given it. Fletcher, Cyclopedia of the Law of Corporations § 4195.

Case Study Kansas Heart Hospital, L.L.C. v. Idbeis, 184 P.3d 866 (Kan. 2008)

The Kansas Supreme Court ruled that the bylaws of a corporation are self-imposed rules, resulting from an agreement or contract between the corporation and its members to conduct the corporate business in a particular way. As a result, corporate instruments such as charters and bylaws are interpreted in the same manner as other contracts. Where the parties have created an unambiguous written statement of their contract, the language of that contract will control, not as subjectively understood by either party but as understood by a hypothetical reasonable third party. Additionally, even if a word has two or more meanings, a document is ambiguous only if an examination of the entire document leaves a genuine uncertainty as to which of the two meanings was intended by the parties. Finally, bylaws of a corporation are presumed to be valid, and the courts will construe the bylaws in a manner consistent with the law rather than strike down the bylaws.