Mt. Olive African Methodist Episcopal Church of Fruitland, Inc. v. Board of Incorporators of African Methodist Episcopal Church Inc.

• Decision Date: 01 September 1996
• Docket Number: No. 26,26
• Citation: 348 Md. 299,703 A.2d 194
• Parties: MT. OLIVE AFRICAN METHODIST EPISCOPAL CHURCH OF FRUITLAND, INC. et al. v. BOARD OF INCORPORATORS OF the AFRICAN METHODIST EPISCOPAL CHURCH INC. et al. ,
• Court: Maryland Court of Appeals

Page 299

348 Md. 299

703 A.2d 194

MT. OLIVE AFRICAN METHODIST EPISCOPAL CHURCH OF FRUITLAND, INC. et al. v. BOARD OF INCORPORATORS OF the AFRICAN METHODIST EPISCOPAL CHURCH INC. et al.

No. 26, Sept. Term, 1996.

Court of Appeals of Maryland.

Dec. 19, 1997.

John C. Seipp, Salisbury, for Petitioners.

Thomas E. Starnes (A. Lindsey Crawford, Andrews & Kurth, L.L.P., on brief), Washington, DC, Leronia A. Josey, Baltimore, on brief, for Respondents.

Argued before BELL, C.J., and ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI, ^* RAKER and WILNER, JJ.

BELL, Chief Judge.

This appeal arose out of a dispute between a local church and the religious hierarchy with which it had been affiliated for more than one hundred years. The dispute concerns ownership of real property titled in the name of the trustees of the local church, and the question presented for our resolution is whether the trustees and the local congregation lost the rights given them by the deed of the property and confirmed by the Religious Corporations Law ¹ and the corporate charter to own, use and control that property, when the pastor, trustees, officers, and a majority of the congregation of the local church withdrew from that affiliation.

I

Mount Olive African Methodist Episcopal Church of Fruitland, Inc. (Mt. Olive), the petitioner, was established in Fruitland, Maryland in 1886. Then known as Carr Black Church, the congregation became affiliated with the African Methodist Episcopal Church (the "A.M.E.") one year later, at which time, it changed the church's name to Mt. Olive A.M.E. Church. The local church was formally incorporated under Maryland law on April 13, 1894. The Certificate of Incorporation ("charter") filed on that date in the Circuit Court for Wicomico County, provided, in pertinent part, as follows:

"Know all men by these presents,

"That the members of the African Methodist Episcopal Church situated at Fruitland Wicomico County State of Maryland ... at the church building known as Mount Olive on the thirteenth day of April Eighteen hundred and ninety four ... then and there resolved to organize and constitute themselves as a body politic or corporate and for that purpose elected Ebin Stanford, William Cornish, William Cottman, Nathaniel Stanford, S.C. Bulter and Ephraim Banks as Trustees in the name and on behalf of the said Mount Olive African Methodist Episcopal Church and congregation under the provisions of the Public General laws of Maryland and at the said meeting adopted the following regulations, to Wit:

* * * * * *

"4. The name of this Corporation shall be Mount Olive African Methodist Episcopal Church of Fruitland and the Congregation Mount Olive.

"5. The power and authority of said Trustees shall be in subjection to the discipline of said church and the property held by them in trust for the use of the ministry and membership of said church as a place of worship and as a parsonage or dwelling house for the preacher subject to the ministerial appointment of the proper authorities in said church."

* * * * * *

On September 16, 1993, when the petitioner withdrew from the A.M.E., the church owned two pieces of real property, a parsonage property acquired in 1913 and a sanctuary property purchased in 1975. The deeds to the properties conveyed the real estate involved to the "Mt. Olive African Methodist Episcopal Church of Fruitland, Inc., in fee simple." Neither referred to the parent A.M.E. Church, the respondent, ² by name, nor contained any explicit conditions, restriction, or reversions in its favor. Neither deed indicated that the property was being held in trust for the A.M.E.

The A.M.E. is an hierarchical, connectional ³ denomination, in which each individual affiliate church belongs and makes financial payments to the A.M.E. "Connection" through area "Annual Conferences." The A.M.E. publishes its internal governing policies in a handbook entitled The Doctrine and Discipline of the African Methodist Episcopal Church (hereinafter, the "Book of Discipline," or the "Discipline"), which is updated every four years. Neither the 1888 version of the Book of Discipline, ⁴ the 1972 version, in effect when the sanctuary property was purchased in 1975, nor the 1992 version, in effect when the local church withdrew from affiliation with the A.M.E., addressed the disposition of local church property upon such withdrawal. The 1972 and the 1992 version, however, both contained a provision with respect to the disposition of abandoned property. In addition to the abandoned property provision, the 1972 Book of Discipline and 1992 Book of Discipline also advised the use of a "Form of Deed," which provided that the local church take title to real property "in the trust for the use ... of the members of the African Methodist Episcopal Church in the United States of America...." Although both the 1972 Book of Discipline and the 1992 Book of Discipline contain a provision on the transfer of local property, only the 1992 Book of Discipline contains a provision that provides that such property is "held IN TRUST for the African Methodist Episcopal Church, Inc." ⁵

On September 16, 1993, the Mt. Olive trustees, congregation, and officers met and decided to withdraw from the A.M.E. Citing a number of reasons, including the burdensome financial demands placed upon it by the A.M.E., the lack of compassion shown by the A.M.E. for its financial condition, and the total decline in the moral conditions in the A.M.E. church, in a written resolution, the signatories, including all the Mt. Olive trustees, averred that the officers and members had "unanimously" voted to withdraw from the conference.

On November 18, 1993, the A.M.E. filed suit against Mt. Olive in the Circuit Court for Wicomico County seeking a declaratory judgment that the A.M.E. was entitled to have title to and control over the Mt. Olive properties. Both parties moved for summary judgment. After two hearings on those motions, the trial court granted the petitioner's motion and denied the respondent's. It subsequently declared that "[a]ll real properties in the name of the Mt. Olive African Methodist Episcopal Church of Fruitland ..., including the improvements advantages and appurtenances thereto, are ... the sole and exclusive property of the local church corporation, to wit, the Mt. Olive African Methodist Episcopal Church of Fruitland, Inc." The court concluded that the A.M.E. had not utilized one of the three methods this Court, in Maryland and Virginia Eldership of Churches of God v. Church of God at Sharpsburg, 249 Md. 650, 663, 241 A.2d 691, 699 (1968) (Eldership I ), ⁶ stated were available to an hierarchical denomination to maintain control of the local church property in the event the local church withdraws from the affiliation. ⁷

The A.M.E. appealed to the Court of Special Appeals. That court reversed the judgment of the circuit court. Assuming that the 1972 Book of Discipline was silent on the critical point, providing for the disposition of local church property on the withdrawal of the local church from the denomination, it held, based on Mt. Olive's 1894 corporate charter, specifically the portion hereinabove quoted, that, "apart from the A.M.E. Church Discipline, the certificate of incorporation, standing alone, created a trust relationship between the parent church and the local church, whereby the local property was held in trust, [by the local church,] for the benefit of the former." Board of Incorporators of African Methodist Episcopal Church, Inc. v. Mt. Olive African Methodist Episcopal Church of Fruitland, Inc., 108 Md.App. 551, 584, 672 A.2d 679, 695 (1996). ⁸ It also acknowledged the considerable controversy surrounding its meaning and recognized that the charter was far from clear in stating the interest of the A.M.E. in the local church property. Despite the very considerable ambiguity, the intermediate appellate court found dispositive:

"The record is clear that there is only one 'discipline'--that of the A.M.E. Church. Appellees have not introduced a separate 'discipline' governing their local congregation. Nor have they disputed that the term 'discipline' means anything other than the A.M.E. Church's governing constitution, as appellants argue. Additionally, it is undisputed that the only 'proper authorities' with the power of making a 'ministerial appointment' are found in the A.M.E. hierarchy. In this regard, during the hearing before the circuit court, appellees' counsel made it clear to the circuit court that there was no dispute that the local church accepted the pastors and ministers appointed by the A.M.E. Church."[ ⁹

Id. at 578, 672 A.2d at 692.

Cognizant of the methods set out in Eldership I for a parent church to insure that it maintains control over local church property, the Court of Special Appeals specifically did not hold that the A.M.E.'s governing documents contained any language providing that the local church property would revert to the parent church should the local church withdraw from the denomination, or its functional equivalent. Id. at 574, 672 A.2d at 690. It concluded, however, that the Eldership I methods were not exclusive, that sources other than the governing documents, to include the corporate charter, could be considered when deciding whether property is being held in trust for the A.M.E. Id. at 571, 672 A.2d at 690. The intermediate appellate court relied on Babcock Mem. Presbyterian Church v. Presbytery of Baltimore of the United Presbyterian Church, 296 Md. 573, 464 A.2d 1008 (1983), cert. denied, 465 U.S. 1027, 104 S.Ct. 1287, 79 L.Ed.2d 689 (1984). It explained:

"We reject appellees' assertion that in order for a parent church to retain control of local church property there invariably must be an explicit reverter upon withdrawal provision. In Babcock, the Court of Appeals noted that, as in contrast to the Eldership cases, there was a 'provision relative to control of local church property by the...