Protestant Episocapal Church v. Barker

• Decision Date: 30 January 1981
• Citation: 115 Cal.App.3d 599,171 Cal.Rptr. 541
• Court: California Court of Appeals Court of Appeals
• Parties: The PROTESTANT EPISCOPAL CHURCH IN the DIOCESE OF LOS ANGELES, a Corporation; the Protestant Episcopal Church in the United States of America, an Unincorporated Association; and Evelle J. Younger, Attorney General for the State of California, Plaintiffs and Respondents, v. The Reverend John D. BARKER, Spencer V. Bonanomi, Romer McCamy, Francise Dowd, Philip J. Mayfield, Jose Cedeno, Carol Maher, Otis Coontz, Ron Jernigan, and Forest Wood; and the Rector, Wardens and Vestrymen of St. Mary of the Angels' Parish, in Hollywood, Los Angeles, California, a Corporation, Defendants and Appellants. Civ. 59019.

Page 541

171 Cal.Rptr. 541

115 Cal.App.3d 599

The PROTESTANT EPISCOPAL CHURCH IN the DIOCESE OF LOS ANGELES, a Corporation; the Protestant Episcopal Church in the United States of America, an Unincorporated Association; and Evelle J. Younger, Attorney General for the State of California, Plaintiffs and Respondents, v. The Reverend John D. BARKER, Spencer V. Bonanomi, Romer McCamy, Francise Dowd, Philip J. Mayfield, Jose Cedeno, Carol Maher, Otis Coontz, Ron Jernigan, and Forest Wood; and the Rector, Wardens and Vestrymen of St. Mary of the Angels' Parish, in Hollywood, Los Angeles, California, a Corporation, Defendants and Appellants.

Civ. 59019.

Court of Appeal, Second District, Division 2, California.

Jan. 30, 1981.

As Modified on Denial of Rehearing March 2, 1981.

Hearing Denied April 22, 1981.

Frederick A. Morgan and Robert J. Stumpf, Bronson, Bronson & McKinnon, San Francisco, for defendants and appellants

O'Melveny & Myers, R. Bradbury Clark, John G. Niles, and Franklin A. Gevurtz, Los Angeles, for plaintiffs and respondents.

FLEMING, Associate Justice.

The question: Do four Los Angeles churches which have seceded from their regional and national affiliation lose title to church property held in their own names?

Yes, say the general church organizations with which the local churches have been heretofore affiliated. No, say the seceding local church organizations which hold title.

This litigation arose as a result of a doctrinal controversy within the general church involving ordination of women as priests and interpretation of the Nicene Creed. The four local church congregations, and others not involved in this litigation, dissatisfied with the resolution of the doctrinal controversy by the church's general convention held in 1976, withdrew their affiliation from the regional and national church bodies, but retained possession and control over local church property standing in the name of the local church organizations. Plaintiffs, the Protestant Episcopal Church in the Diocese of Los Angeles, a California corporation (Diocese), and the Protestant Episcopal Church in the United States of America, an unincorporated association (PECUSA), brought these four separate actions to obtain title and possession of the property of the seceding church organizations. The principal defendants are four local membership corporations created under the California nonprofit corporation law on the dates indicated to operate parish churches St. Matthias (1910), St. Mary's (1930), Our Saviour (1944), and Holy Apostles (1963). ¹ In a consolidated trial of the four actions the trial court ruled in favor of plaintiffs, determining that property in the name of the four local churches was held by defendant corporations for the benefit of the members of the Diocese and PECUSA. The court's determination was grounded on theories of hierarchy and implied trust. Defendants, the local church organizations, have appealed.

The issue, simply put, is whether the local church organizations are entitled to keep church property standing in their own names, or whether they must surrender it to the regional and national church organizations as property held in trust for the general church membership.

Our starting point is the presumption that the owner of legal title to property is presumed to be the owner of the full beneficial title to the property, a presumption rebuttable only by clear and convincing proof to the contrary. (Evid.Code, § 662; Civ.Code, § 1105.) Since the disputed properties are held in the names of the local church organizations, the latter presumptively own the full beneficial interest in these properties, unless the general church organizations succeed in establishing their claims to ownership and possession by clear and convincing evidence. This they purport to have done through three alternative theories, the validity of any one of which, they assert, entitles them to the beneficial interest in the disputed church properties:

(a) Hierarchical theory.

(b) Implied trust theory.

(c) Express trust theory.

The hierarchical theory asserts that when a general church has been organized and operated as a closely knit organization, when a hierarchical chain of command controls decisions in both ecclesiastical and temporal matters, and when there are superior ecclesiastical authorities which retain ultimate power of disposition, the decisions of such ecclesiastical authorities (tribunals or individuals) control the disposition of church property. Under the hierarchical theory centralized church control over church property supersedes civil law disposition of church property. Under a hierarchical system of church governance the canons and rules of the general church override any disposition of local church property mandated by state law.

The implied trust theory asserts that a local church accepts and holds local church property for the benefit of the entire membership The express trust theory relies on title deeds, articles of incorporation, canons and rules of the organizations concerned and statutes, to establish that a local church holds property under an express trust for the benefit of the general church membership as embodied in its regional and national organizations.

of the general church. A local church affiliated with a general church is impliedly bound to hold its church property as a charitable trust for the benefit of the specific religious use in effect at the time it acquired the property. If thereafter the local church attempts to apply the church property to a different religious use, it cannot do so, and the property reverts to a trustee who must apply it to its original religious purpose. Specifically, plaintiffs argue the existence of an implied trust to benefit the entire membership of the general church, for whom they are the appropriate and ultimate trustees.

Before discussing these theories, we review the relevant facts of the cause.

I FACTS

The Protestant Episcopal Church in the United States of America (PECUSA), organized in 1789, was the product of secession of the Anglican church in the colonies from the Church of England, the latter church itself being the product of secession from the Church of Rome in 1534. (The court takes judicial notice that the seceding churches in the two earlier secessions took their property with them.) PECUSA, an unincorporated association, is governed by a general convention and a presiding bishop. Affiliated with it are 93 dioceses, each of which is governed by a diocesan convention and a bishop. A diocese in turn operates missions and admits parish churches to constituent membership in the diocese and PECUSA. Normally, the property of a mission is held in the name and under the control of the diocese and its bishop, while the property of a parish is held in the name and under the control of the parish church. In California the parish church is usually organized as a nonprofit membership corporation run by an elected board of vestrymen which acts as a board of directors. The rector of the parish acts as the president of the church corporation. The communicants of the parish congregation are the members of the church corporation.

We review briefly the organizational history of the four defendant churches:

1. St. Matthias. St. Matthias church was organized as a diocesan mission in 1905 and admitted to parish membership in the Diocese in 1907. Title to its property has always been held in the name of the local church organization. In 1910 St. Matthias was incorporated as a nonprofit membership corporation. Its articles of incorporation declared the parish would form a constituent part of the Diocese in that branch of the Holy Catholic Church now known as PECUSA, and that the constitution, canons, and discipline of the Diocese and PECUSA would always form part of its articles and by-laws. The articles established no specific limitation or restriction on the holding or disposition of property by St. Matthias.

Over the years no moneys were given by the Diocese or PECUSA to St. Matthias. On the contrary, the flow of funds was in the other direction, and during the period of its affiliation St. Matthias contributed approximately $127,000 to the Diocese.

The members of the church corporation were its congregation, which elected its board of directors (vestry), which in turn elected its president (rector). The church's temporal affairs were run by its vestry, but transfers and incumbrances of real property and the selection of rectors were subject to approval by the Diocese. The church corporation had complete legal autonomy in its affairs, and as a membership corporation it was authorized to amend its articles of incorporation on approval of its board of directors and its membership. However, as a constituent part of the Diocese and PECUSA it was required to conform to the constitution, canons, and church discipline of the Diocese and PECUSA. At the time of St. Matthias' admission to parish status in 1907 In 1958 Diocesan Canon 10.06 was adopted, which declares that on dissolution of a parish its property shall be conveyed to the Diocese.

the Diocesan canons required that on admission of a parish its communicants promise that the parish would be forever bound by the ecclesiastical authority of the bishop of Los Angeles and PECUSA, that the constitution and canons of the Diocese and PECUSA would be incorporated in the parish's by-laws, that the parish would accede to the constitution, canons, doctrine, and worship of PECUSA and the constitution and canons of the Diocese.

In January 1977 the vestry of St. Matthias voted, and its membership approved, an amendment to St. Matthias' articles of incorporation deleting all references to the Diocese and to the Holy Catholic Church known as PECUSA, and identifying its corporate purpose as the maintenance of a parish as a constituent part of the Holy Catholic Church in the Anglican tradition. In February 1977...