Let us begin with some background. In his opinion for the majority in Jones v. Wolf, Justice Blackmun famously wrote (443 U.S. at 605-606; footnote omitted, emphasis added):
The dissent also argues that a rule of compulsory deference is necessary in order to protect the free exercise rights "of [443 U.S. 606] those who have formed the association and submitted themselves to its authority." Post, at 618. This argument assumes that the neutral-principles method would somehow frustrate the free-exercise rights of the members of a religious association. Nothing could be further from the truth. The neutral-principles approach cannot be said to "inhibit" the free exercise of religion, any more than do other neutral provisions of state law governing the manner in which churches own property, hire employees, or purchase goods. 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 hierarchical church will retain the church property. They can modify the deeds or the 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.In response to this judicial aside, or obiter dictum (something said in a judicial decision that is not part of the actual holding of the court in the given case), both the Episcopal Church (USA) and the Presbyterian Church made quick to adopt national rules which purported "to recite an express trust in favor of the denominational church" in all property held "by or for any parish" in that denomination.
The former church enacted its Dennis Canon as an "emergency measure" just a bare two months after the Jones decision was announced. (There are substantial questions as to whether proper procedures were followed in its enactment, but the secular courts have tended to brush those concerns aside.) General Convention happened handily to be scheduled to begin in Denver on September 11, 1979. The Rev. Canon Walter D. Dennis of New York was a former attorney who kept up with the legal news, read the Supreme Court's opinion, and decided that it would be a good idea for the Episcopal Church (USA) to follow Justice Blackmun's advice. So he had introduced through the House of Bishops (he was elected suffragan bishop of New York just three weeks after General Convention) the measure which eventually (after it became notorious) took his name. The language of this Canon (Sections 7.4 and 7.5 of Title I) states, in its entirety:
Sec. 4. All real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for this Church and the Diocese thereof in which such Parish, Mission or Congregation is located. The existence of this trust, however, shall in no way limit the power and authority of the Parish, Mission or Congregation otherwise existing over such property so long as the particular Parish, Mission or Congregation remains a part of, and subject to, this Church and its Constitution and Canons.
Sec. 5. The several Dioceses may, at their election, further confirm the trust declared under the foregoing Section 4 by appropriate action, but no such action shall be necessary for the existence and validity of the trust.The Presbyterian Church (USA) had formed from the union in 1983 of its northern and southern branches. The latter, which had been known as the Presbyterian Church in the United States ("PCUS"), had added a Dennis-Canon-like provision to its governing Book of Order in 1982. The northern branch ("UPCUSA"), however, did not have any such provision in its Book of Order. When the combined churches promulgated a new Book of Order following their union, they kept the trust provision of the southern branch, but they adopted an "opt-out" clause which allowed any presbytery not previously subject to the trust clause (i.e., the presbyteries who had previously belonged to UPCUSA) to send notice to PCUSA (within eight years of the union) that it elected not to be subject to the new Section G-8.0201, which provided:
All property held by or for a particular church, a presbytery, a synod, the General Assembly, or the Presbyterian Church (U.S.A.), whether legal title is lodged in a corporation, a trustee or trustees, or an unincorporated association, and whether the property is used in programs of a particular church or of a more inclusive governing body or retained for the production of income, is held in trust nevertheless for the use and benefit of the Presbyterian Church (U.S.A.).Note the slight differences in the wording of the respective trust clauses. The ECUSA version declares simply that all property is "held in trust" for the national church and the parish's governing diocese, while the PCUSA provision adds that the property is "held in trust . . . for the use and benefit" of just the national church, and not of the governing presbytery or synod. (Local congregations, or "sessions", in PCUSA are grouped into regional presbyteries, which in turn form synods, which then come together in the General Assembly of the national Church.) And the Dennis Canon adds a qualification which is only implied in the PCUSA version: "The existence of this trust, however, shall in no way limit the power and authority of the Parish, Mission or Congregation otherwise existing over such property so long as the particular Parish, Mission or Congregation remains a part of, and subject to, this Church and its Constitution and Canons." These differences will come to the fore in some of the cases to be discussed in this series of posts.
Perhaps the most unusual feature of both trust provisions is their attempt to engraft their trust on top of any already existing trust arrangements. Thus, the Dennis Canon claims to impose a trust on "[a]ll real and personal property held by or for the benefit of any Parish . . ." (emphasis added). And the Presbyterian version expressly asserts that its trust applies "whether legal title is lodged in . . . a trust or trustees . . ." (emphasis added).
One can only wonder how the trustees of a pre-existing trust are supposed to be (or become) subject to the authority of the national churches as well, so that in addition to holding the legal title in trust for the local congregation, they now have another trust beneficiary added to their responsibilities. As we shall see in our upcoming survey, this attempt at over-reaching has led to considerable confusion and unclear reasoning in the courts which try to reconcile the language with the law of trusts (and the ancient Statute of Uses -- a heritage from English law which, however, has not been adopted in every State).
For those who would like more background into the development of church trust law prior to Jones v. Wolf, I refer you to the two preceding posts here and here. They will give you a solid understanding for the survey of case law that will follow in the succeeding posts in this series. In brief, the Jones case legitimized an approach to resolving church property disputes in accordance with "neutral principles of [state] law", which gave the several States the freedom to apply their own principles of property law to cases involving churches and their denominations.
Nearly all such disputes revolve around a parish or congregation which, generally out of differences over doctrine, discipline or worship, decides to split off from one denomination to join another. For historical reasons explained in the earlier posts in this series, the courts tended to approach such disputes from a trust law point of view: most church property had been donated to the church, and so the question of which faction could continue to own the property following a dispute depended on the terms of the original donation -- if there were any such terms ascertainable.
Where there were no express terms, the courts (following English precedent) tried to imply them, and generally tried to discern which of the two factions was closer in doctrine and worship to the denomination as it was when the donor made his gift. But the U. S. Supreme Court in 1969 ruled out this approach, as tending to entangle the civil courts in questions of religious doctrine, which cannot be adjudicated by such courts consistently with the First Amendment of the United States Constitution.
In an effort to avoid such entanglement, earlier courts had declared that if a church was "hierarchical", meaning that it had a supreme adjudicatory which could decide all questions of doctrine, discipline, or worship in a manner binding on every congregation in the church, they would simply defer to the decisions of that highest adjudicatory body, and be guided and bound by it as well. Note, however, that this doctrine of "deference" had application only when principles of church doctrine, discipline, or worship were at stake -- that is, only in cases where the courts were conducting their inquiries into the differences between the tenets of the disputing groups based on the terms of an implied or express trust.
In matters involving the legal and equitable title to church property, however, principles of state law had broad application to all entities in a given State, whether secular or religious. Every such entity was bound to follow the same rules of law in creating, conveying and extinguishing interests in real and personal property. These were what the Supreme Court in Jones called the "neutral principles of law" which the civil courts were as free to apply in disputes between religious groups as they were in any other civil disputes.
In other words, under the "neutral principles" approach, the religious differences which may have brought about the dispute were irrelevant to the secular courts. They looked solely at the legal steps by which title had originally been acquired and subsequently held up until the time of the dispute. Then they made their decision based upon which party held the enforceable interest in the property, in accordance with standard principles of property and trust law.
Under these general principles of state law, there was one such uniform principle, adopted in every single State and stemming from the original version first enacted by the British Parliament in 1677, called the "Statute of Frauds", which required any interest in real property to be created only by a writing signed by the person(s) who owned the property at the time of the creation of the interest. Thus, one acquires title to one's house only by a written deed, signed by the previous owner(s) (and duly notarized and recorded, under other state law requirements). Land cannot be transfered validly by verbal agreement, or by words alone; there has to be a conveyance in writing. And to be other than a fraud or forgery, the writing has to bear the genuine signature of the person who owns the interest being conveyed, or the land out of which the interest is being created.
Similarly, a trust in real property arises, under the Statute of Frauds, only when there is a writing duly signed by the owner of the property being placed into trust. By that instrument, the title to the real property is divided into two parts: the "legal" title is given to the person(s) named as trustee, and what is called the "equitable" title is given to the beneficiary(ies) -- the persons for whose benefit the property is held by the trustees. Under the civil law, the beneficiaries have the legal right to come into court to enforce the terms of the trust, and to obtain an order directing the trustee(s) to perform in accordance with what those terms say. It is for this reason that the Statute of Frauds require that the terms of the trust be spelled out in writing; otherwise, there would be endless disputes over what the settlor of the trust (the original owner who agreed to place the property in trust) intended.
As equitable owners of the property, the beneficiaries may use and enjoy the property to the fullest extent permitted by the trust document, but they cannot convey legal title to it, or encumber or alienate it in any way -- those powers may be exercised only by the holder of the legal title, the trustee (again, if so authorized by the trust document). The Dennis Canon, and PCUSA's trust clause in its Book of Order, create an analytical problem because it is precisely the beneficiaries of the trust they declare who are attempting to create the trust in the first place.
It is common sense (and common law) that they could do so only if they had the full consent of the property owner to act in the owner's place. So the cases which we will be looking at go through various steps of analysis to determine just how, and when, this consent was given -- and whether it was an express consent, or only implied from the actions or conduct of the owner. And it is precisely in this process -- the steps in which a court looks at what constitutes the express or implied consent of the owner for the beneficiary to create a trust, acting for the owner and in his place, but in favor of the beneficiary -- that the civil courts have once again become ensnared in the convolutions of so-called "hierarchical" churches.
Some courts find that, by their very nature, hierarchical churches are so constituted that their members have consented in advance to every act that could be done in their name, just by virtue of belonging to the church and being a part of it. And other courts require more evidence of consent to this particular step of placing the member's property into a trust. The degree to which evidence of intent is required, rather than simply presumed from the hierarchical structure alone, is what analytically divides the cases and determines their ultimate outcomes.
It is also what determines (or should determine) their value as precedents for other courts approaching the same question. For it should be obvious, from what has already been said, that for a court to call a church "hierarchical", and then hold that by virtue of that name every member agreed to be bound by whatever the national church body enacted, including the placing of its property into a binding trust from which there is no escape, except if the national church allow it -- for a court to do such a thing, I say, borders on the nature of a "legal fiction".
A legal fiction is something the law simply presumes is the case, without being troubled by any evidence to the contrary, which is then used to apply a rule (such as the Statute of Frauds) which was not originally intended to be applied in that way. Thus, the legal fiction of a "hierarchical church" is used to imply the existence of a writing signed by the property owner which is sufficient to satisfy the Statute of Frauds. It sounds crazy, but that is where we are in many of the cases at which we will be looking. And literally millions and millions of dollars' worth of property has changed hands as a result.
In the next post, we will begin by looking at the sane approach to these questions adopted of late by the courts in Missouri. Then we will go on to consider how well the decisions from other states measure up to the standards of the Missouri decisions.