January 19: Who Owns Your Church Property?

Two Cases that Came Before the Supreme Court.

When the Presbyterian Church in America was formed in 1973, most of the churches leaving the old denomination were able to keep their property. Off-hand, I know of only one church that lost its property. Moreover, these churches did not have to pay exit fees. This was a great providence of God in allowing the faster initial growth of the new denomination, and the legal basis for this provision came as a result of the  work of two churches in Georgia. Savannah, GA pastors Clifford Brewton and Todd Allen, together with their respective Sessions and congregations, had the decade before fought the matter through the civil courts, all the way to the Supreme Court, and so paved the way for the 274 churches that would later form the PCA. 

 

WHO OWNS YOUR CHURCH PROPERTY? A JURIST SPEAKS
Reprinted from Contact: Newsletter of the Presbyterian Churchmen United, Number 6 (January 1971)

(NOTE: The following address by Judge Leon F. Hendricks was delivered at a rally sponsored by the Presbyterian Churchmen United, and held at the First Presbyterian Church of Jackson, Mississippi.)

The question is simple. The answer is difficult and complicated.

Before an answer is attempted there are other questions that arise.

Is a congregation of the Presbyterian Church, U. S. in reality the true legal owners of the church property or does it legally belong to Presbytery, Synod, or to the General Assembly of the denomination known as the Presbytenan Church in the United States?

Ultimately, the question is whether a majority of the members of a local Presbytenan church may withdraw from the Presbyterian Church in the United States and take wIth them the title, use and control of the church property.

The United States Supreme Court in the case of Watson vs. Jones, 13 Wall 679, 20 L Ed. 666, decided in the year 1871, classified the questions concerning the right of property held by religious bodies under three headings.

Most of our local Presbyterian churches would fall in the third category, to-wit:

“Where the property is not subject to any expressed trust and is held by a congregation, whose church government is hierarchIal or connectional in nature.”

The Presbyterian Church, U. S. is representative in government. Some of our civil courts have put our Church in the same class as Catholic, Episcopal and Methodist, whose government is hierarchial or connectional in nature. For this reason these civil courts have held that the property of a congregation is subject to an implied trust in favor of the General Church. The Supreme Court of Florida and South Carolina have so held and one or two local congregations in these states lost their property when they withdrew from the General Church.

The Supreme Court of Mississippi has never had before it a case involving a congregatIon of the Presbyterian Church, U.S.

Prior to January 19, 1970 it would have been the opinion of many lawyers:

(1) “That if a Presbyterian Church is incorporated under the laws of Mississippi, as some churches now are, legal ownershIp is in the entity known as the First Presbyterian Church of Jackson, for an example;

(2) “That the legal title is in the Corporation but the Corporation holds title in trust for and on behalf of the Congregation which may be identified in case of division, by the governing body of the Presbyterian Church in the United States. The trust extends to an implied prohibition against diversion to uses not approved by the Presbyterian Church or foreign to its doctrines;

(3) “That ownership is in the Corporation. Control is in the Congregation, but identity is not determined by a majority of the members and the control is limited by and subject to the government of the Presbyterian Church in the United Church in the United States;

(4) “That a majority of the members of the local church cannot withdraw from the Presbyterian Church in the United States and take with the church properties without the consent of the general Church.” In my opinion the Presbytery could give that consent under the provisions of our Book of Church Order.

Now, what happened on January 19, 1970? The two Savannah Presbyterian Churches finally won the legal battle for their local church property. The Supreme Court of the United States refused by a vote to again hear the appeal of Presbyterian Church in the United States against the Savannah churches on the ground that no substantial federal question had been raised by the parent Church’s appeal. By this action the decision of the Supreme Court of Georgia, rendered on April 14, 1969, became final. Thus, The Hull Memorial and the Eastern Heights Churches of Savannah were awarded their property and the legal title was declared to be in the local congregations.

In 1966 two churches withdrew from the Presterian Church, U. S. The Presbytery of Savannah and the general church intervened and attempted to take the property of each of the churches. The trial court of Georgia decided in favor of the local churches and on appeal the Supreme Court of Georgia affrmed. On petition the Supreme Court of the U. S. took jurisdiction and reversed on the grounds that the Georgia Courts decided the controversy on ecclesiastical law which the Civil Courts could not do under the first and fourteenth amendments, and sent the cases back to the Supreme Court of Georgia for further proceeding not inconsistent with the decision of the U. S. Supreme Court. The Supreme Court of Georgia then adopted the “Neutral principle” approach and found the legal title in the local churches and awarded them their respective properties. So this ended the matter.

Hence, it is the judgment of many that in any future case involving local property of a congregation in the Presbyterian Church in the United States, a State Civil Court cannot apply the implied trust theory. This would violate the decision in the Savannah cases, and also the holding in the Maryland Church of God case.

This conclusion is reached because there is no ecclesistical law in the Presbyterian Church, U. S., which binds the local church property to any superior tribunal. Our Book of Church Order gives the control of local church property to the local congregation. It can buy, sell and mortgage such property. The only case where a superior ecclesiastical tribunal has anything to do with local church property is when a church ceases to exist and no disposition has been made of its property. Then and only then the property shall be transferred to The Presbytery. This has always been the historic position of The Presbyterian Church, U. S. This position may now be enforced in a civil court.

It is hoped and believed that the other states, as Georgia did, will adopt the “Neutral principles of law” approach; which means legal and equitable principles of ownership are studied and applied to a factual sItuation, such as, Where is the title vested? Who paid for the property? Who has the use and control since the church was built? Who controls the membership? Who has the authority to buy, sell or mortgage the property?

The State Courts will find that for most local Presbyterian Churches the answer will be the local congregations.

The State Courts may also now consider special state statutes govern:ng church property. We have a good one in Mississippi. which is Section 5350 of the Code of 1942.

When a church is organized under it the section provides that the church “shall be a distinct and independent society” and that its property “shall not be divested out of the same, or encumbered, except by a deed, deed of trust, or mortgage, duly executed under the authority of a resolution adopted by a majority vote of the members present at a meeting duly called by that purpose, at which meeting at least twenty percent (20%) of the members in good standing of such organized society must be present.” If your church is not incorporated under the provisions of that section I suggest that it be done. The procedure is simple.

Who Owns Your Church Property? At this time, it is my opinion that the local congregation does. The General Church recognizes this. Because it intervened in the Savannah cases, and one or two overtures were offered at the Memphis, 1970, General Assembly to change the Book of Church Order as to property so as to give control to The Presbytery. Thus our Higher Court realizes the force of the Georgia cases and the Maryland case. Careful watch will have to be made of the aforesaid overtures.

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