Presbyterian property law ruling cited in Episcopal case
By John H. Adams, The Layman Online, October 7, 2004
The Supreme Court of Pennsylvania has agreed to hear an appeal in an Episcopal property dispute that could test the validity of the property clause in the Constitution of the Presbyterian Church (USA).
The Presbyterian law – G-8.0200 in the Book of Order – says all property held by local congregations, presbyteries or the PCUSA is “held in trust nevertheless for the use and benefit of the Presbyterian Church (USA).”
The application of that church law means that congregations that choose to leave the denomination must either forfeit their property to the PCUSA or negotiate settlements with their presbyteries. In the last two years, five congregations have left the PCUSA, paying as much as $1.2 million to retain their property. In one case, the presbytery confiscated the property without a settlement.
The Pennsylvania case involves what used to be an Episcopal Church (USA) congregation, the Church of St. James the Less. In April 1999, the congregation approved a proposal from its governing body, the vestry, to separate from the denomination and become an independent church because of doctrinal differences. In May 1999, the bishop of the diocese declared that the diocese was taking over the property.
The congregation filed suit in Pennsylvania’s Orphan’s Court, lost the case and appealed to the Pennsylvania Supreme Court. The state’s highest court was not required to hear the appeal, but decided to do so.
The heart of the case, as presented by lawyers for St. James the Less, is a 1985 ruling by the Pennsylvania Supreme Court in a case called Presbytery of Beaver-Butler of United Presbyterian Church in United States v. Middlesex Presbyterian Church.
Lawyers for St. James the Less say that ruling and others should be reconsidered. In their appeal brief, they argued that the Orphans’ Court “departed from Pennsylvania law governing church property disputes and violated federal and state constitutional guarantees of religious liberty in awarding the Diocese title to and control of Church property.”
Citing Beaver-Butler v. Middlesex, the appeal said the lower court failed “to apply the neutral principles of law prescribed in that case: whether the property deeds, the Church charter and the relevant National Church and Diocesan constitutions and canons demonstrate clear and unambiguous evidence that the Church [St. James] intended to create a trust in favor of the National Church and the Diocese.”
Awarding the property to the diocese would penalize St. James “for exercising religious beliefs in that the Church’s withdrawal from the National Church was for religious reasons: the Church adheres to more orthodox religious tenets than does the National Church.”
The argument asks the Pennsylvania Supreme Court to apply “neutral principles of law” that require “either (1) an actual transfer of property from the congregation to the hierarchical church body or (2) clear and unambiguous documentary evidence or conduct on the part of the congregation evincing an intent to create a trust in favor of the hierarchical church body.”
The appeal asks the Pennsylvania Supreme Court to rule that the corporate charter of St. James – not the denomination’s hierarchical policy – be the deciding factor. As for its corporate charter, the lawyers say, St. James says the purpose of the corporation “is the support of public worship of Almighty God according to the faith and discipline of the Protestant Episcopal Church in the United States and the Diocese of Pennsylvania …”
After renouncing its affiliation with the Episcopal Church (USA), St. James formed a new corporation to assume control over the property and purpose of the independent congregation.
“Because the Church’s property always belonged exclusively to the Church, it had every right to disaffiliate in a manner that best protected its lawful property interests,” the appeal said. “Moreover, the merger did not require the approval of the Diocese or the Orphans’ Court because it did not entail amendment to any of the Church’s articles of incorporation.”
Furthermore, the appeal said the property had not been diverted for any use contrary to its original purpose – public worship.
“The Church states that the record shows that the vestrymen believed that what was best for the members of the Church was for the parish to continue to function as a viable faith community in its present location in the Orthodox Anglican tradition,” St. James said. “The members of the vestry believed they had the right to disaffiliate, and they sought and followed the advice of counsel, who identified the merger as the best option and who advised that a merger would not involve amendment of articles of incorporation subject to Diocesan approval. They rejected counsel’s suggestion, however, of bringing a quiet title action as such action against fellow Christians would not be consistent with scripture.”
After the St. James case was heard in the Orphans’ Court, James Gardner Colins, the presiding judge on that panel, dissented from the opinion by the other 10 judges. His dissent was published with the appeal.
The majority of the Orphans’ court declared that the new corporation set up by St. James “was established for a purpose completely different than that of the Church, namely, to take the property claimed by the Church out of the Diocese. Whether or not this founding [sic] was an act of bad faith, movement of church property from the Church to the Foundation would plainly constitute a change of purpose requiring the Orphans’ Court’s approval.”
In his dissent, Colins cited some of the contentions that led to St. James’ disaffiliation from the Episcopal Church (USA).
“In recent years, issues such as the ordination of women and the open acceptance of homosexuality within the priesthood have caused a widening breach between the Diocese and traditional parishes such as St. James,” Colins said. “The traditional parishes consider the Bible to be revealed truth; more liberal parishes and the Diocese view it as a guide to a personal religious interpretation.”
Colins said the majority failed to apply the “principle that the First Amendment does not require a state to compulsorily defer to religious authority in resolving church property disputes, but that civil courts were to resolve property disputes within religious denominations by the application of neutral principles of law.”
The majority turns “our law of trusts on its head when it concludes that a beneficiary [the denomination] can … unilaterally create a trust.”