Lawyers trace church property law changes and challenge PCUSA resource for enforcing trust clause
By John H. Adams, The Layman Online, June 20, 2005
EDINA, Minn. – Three Presbyterian elders who are also lawyers – including one who specializes in church law – gave a panoramic view of church property law, from Colonial days until current, during a New Wineskins seminar June 16.
They carefully avoided giving specific legal advice and suggested that congregations uncertain about their church property situation should seek counsel from a lawyer familiar with their states’ property trust laws.
The seminar was evidence of a growing national development, particularly among mainline denominations like the Presbyterian Church (USA), in which some evangelical congregations are challenging denominational trust clauses in civil court.
The three attorneys speaking at the seminar during the New Wineskins Convocation were:
- Valerie J. Munson of Philadelphia, who heads the Religion and Law Practice Group at Eckert Seamans Cherin & Mellott, LLC.
- Peggy Hedden of Colombus, Ohio, who once practiced legislative law before she decided to devote full time to her family. She is the chairman of the Presbyterian Lay Committee.
- Robert L. Howard, senior counsel for Foulston Siefkin LLP. Howard, former chairman of the Presbyterian Lay Committee, has been a trial lawyer for 46 years, and has been on the Committee of Council for two cases that resulted in rulings in his side’s favor by the General Assembly Permanent Judicial Commission, the highest court in the denomination.
Munson reviewed civil court cases – including Supreme Court decisions – involving disputes within congregations over church property ownership. Hedden addressed Biblical concerns over Christians becoming entangled in civil suits over property. Howard talked about current disputes and the response of the denomination as it seeks to enforce its constitutional property clause that says a local congregation holds its property in trust for the benefit of the denomination.
The three lawyers distributed a 24-page outline titled “Church Property and God’s Economy.”
Munson was the first to speak. She gave a brief review of American law governing church property disputes, beginning with two general, but varying, rules that were applied in Colonial America:
- 1. The “Departure from Doctrine Rule,” which was based on Scottish law. Under this rule, the congregational faction that the courts believed to “most closely adhere to the religious principles of the people who founded the church were awarded the property,” she said.
- 2. Other early American courts, particularly in New England, settled property disputes according to the wishes of the congregation’s majority without regard to religious principles.
The first U.S. Supreme Court decision in a church property dispute was in 1871, when the court adopted what is known as the “Deference Rule” in a Presbyterian case titled Watson v. Jones. In that case, involving a post-Civil War property dispute at a church in Louisville, Ky., the Supreme Court held that religious disputes should be settled by the church’s governing body, not the civil courts.
But Munson said the Deference Rule was not binding on the states until after the adoption of the 14th Amendment.
In 1969, she said, the Supreme Court, ruling in a Georgia case involving a Presbyterian property dispute, opened the door to other considerations for settling disputes. The decision noted that “neutral principles of law exist, developed for use in all property disputes, which can be applied without ‘establishing’ churches with to which property is awarded.”
In 1979, in another Presbyterian case, the Supreme Court favored settling church property disputes through “neutral principles of law.” Munson read what she described as the “key language” in the decision, Jones v. Wolf: “Under the neutral principles approach, the outcome of a church property dispute is not foreordained. At any time before the dispute erupts, the parties can ensure, if they so desire, that the faction loyal to the hierarchal church will retain the church property. They can modify the deeds or corporate charter to include a right of reversion or trust in favor of the general church. Alternatively, the constitution of the general church can be made to recite an express trust in favor of the denominational church. The burden involved in taking such steps will be minimal and the civil courts will be bound to give effect to the result indicated by the parties, provided it is embodied in some legally cognizable form.”
Hedden suggested a careful and prayerful review of Scripture before a congregation might become embroiled in a property dispute, beginning with the understanding that “God ‘holds title’ to all property, real and personal.” She quoted Scriptural passages exhorting Christians to love each other and not to bring charges against each other in the civil courts.
But does the Bible teach that a congregation must never bring a lawsuit in civil court over a property dispute?
Hedden concluded: “Christians on both sides of a church property dispute who want to take the issue to court are taught to examine their motives very closely and to choose to suffer wrong land loss rather than to violate the rule of love.”
She added that there are “ways of peaceably settling disputes between Christians without resorting to the civil courts – counseling, mediation and arbitration.”
“If an individual or group comes to the point where their conscience impels them to separate, there is no question that they have the liberty in Christ and under the constitution to do so; the questions are the reasons and manner in which they do so … Christ commands us to resolve the diverging claims in a way that honors him and our brothers and sisters in Christ …”
Howard added one possible reason for taking a property dispute to the civil courts: a fiduciary responsibility to preserve the use of the church property for the legitimate purposes of glorifying God and furthering the mission of the church.
“Litigation is not a good way to settle property disputes,” Howard said. “But sometimes, you can’t avoid it. When you are a trustee you have fiduciary responsibilities” that may conflict with the oath officers took when they were ordained.
He used some of his time to respond to the denomination’s Property Resource Manual, which is published by the Office of the Stated Clerk. He raised questions about several sections of the manual.
The manual says that the PCUSA’s property trust clause “is central to Chapter VIII [of the Book of Order] and, in many respects, the life of the Presbyterian Church (USA).”
“Is control of property really central to our life as a church?” Howard asked rhetorically. “Is control of property really what makes us connectional?”
Howard noted that representatives of the stated clerk’s office have recently been meeting with presbytery and synod groups urging them to “ensure” that local church property is held in trust for the benefit of the denomination. (In some property disputes, including California and Maryland, civil courts have concluded that the local congregation had the right to revoke a denomination’s trust clause unless they included in their own documents of incorporation and deeds expressed consent to the denominational rule.)
“Why are denomination officials now directing presbytery officials to ‘ensure’ the local church legal documents recite that the property is held in trust?” he asked.
Furthermore, comparing that current quest for ensuring compliance with the Legal Resource Manual, Howard asked:
“If additional local church legal documentation is ‘strongly advised,” why does the legal manual then assert that ‘the absence of a trust clause in a conveyance instrument ‘in no way mitigates or compromises the obligations of the particular church or other church agency to the presbytery or denomination as a whole?”
Howard said the manual “does not answer such questions, but that two other comments in the manual reveal lack of confidence that the ‘trust clause’ is easily enforced in civil law courts.
- 1. “Remember almost all property matters are governed by state law. An attorney familiar with your State’s property laws should be used.” (Emphasis Howard’s)
- 2. “Unfortunately, a number of church property cases do not reflect the free exercise of religion by respecting the polity and structure a church has chosen for itself.”
Howard’s conclusion from reading the PCUSA manual on property was, “Beware of the legal claims of the legal manual of this denomination.”
He also referred to other sections of the Book of Order, including G-9.0102, which says: “Governing bodies of the church are distinct from the government of the state and have no civil jurisdiction or power to impose civil penalties. They have only ecclesiastical jurisdiction.” (emphasis Howard’s)
Howard said that “by requiring each Presbyterian Church “to form a corporation to hold its property, the [PCUSA] Constitution knowingly subjects such corporations to the civil law and a ‘Neutral Principles’ analysis” – the very approach the PCUSA strongly opposes.
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