A California court has rendered a decision in the remaining property dispute concerning congregations (or parts thereof) who had chosen to depart the Episcopal Church. At issue in this case, rather different from most others, is a letter from the bishop of the diocese written in 1991 telling the congregation they could buy some property that would not fall under the prevailing canonical “trust” of the diocese or the general church. The judge has found that the bishop did not have the authority to waive the canons, which state that all real property is held in trust; and moreover that the bylaws of the congregation also declared that all property they hold is held in trust. This renders the letter and the “gentlemen’s agreement” a nullity. This only came to a head, of course, when the congregation chose to depart the church.
Some have wrongly seen this decision as creating a whole new requirement for the sale of church property, even alleging that all church property transactions might have to come under national approval of some sort. This is a mistaken view for several reasons:
First, the decision of the court involving the supposed waiver of a trust, is distinct from the attempted alienation of property (dealt with as a consequence, since it was the alleged waiver that the congregation thought permitted the alienation.) As the trust requirement is canonical, it cannot be waived by any authority other than the national church through an amendment of the canon itself, or perhaps by legislation clarifying the meaning of the canon (as the General Convention is the authorized interpreter of the canons, through its actions.)
Second, the canons do provide for the alienation of property, which does not require national approval. All that is required for a parish to alienate property is the approval of the bishop and standing committee. This is true for parishes that remain within the Episcopal Church and any which choose to depart — in a few cases amicable settlements have been reached by which congregations leaving TEC have been able to retain their property upon reaching an agreed settlement with the diocese. Parishes cannot simply walk away in possession of property they held in trust.
Third, and this is the most important principle: parishes may well hold title to their property but they do not own it free and clear — and this was true long before the enactment of the so-called "Dennis Canon" — as attested by the other long-standing canonical regulations that restrict the sale of church property, and require diocesan approval (of bishop and standing committee) for such sale. Church property is not allodial, but feudal — its disposition is not entirely in the hands of those who hold title because of other legal restrictions. This is actually true of most property even outside of the church, where zoning laws and eminent domain and other state and local regulations restrict what one can do with one's property.
So those who were claiming that this court decision opens a can of worms for all church property ownership have wildly missed the point.
Tobias Stanislas Haller BSG
Postscript and update:
I am flattered that the venerable Anglican Curmudgeon has taken note of my musings. I fear he has mistook me in small part (which I attribute to my hasty comments at Thinking Anglicans more than to my effort here). Suffice it to say he and I have continued some discussion at his well-worth-visiting blog. I posted a couple of comments there the gist of which I will share here, as I think it helps to offer some additional clarity to my view of the situation, edited slightly for this different context.
As I see it, the main issue involves the distinction between the trust itself and the alienation of property.
I have to agree with the finding of the court that the bishop exceeded his authority in attempting to waive the trust. There is no suggestion that a bishop acting alone, or even in concert with the Standing Committee, could waive the trust established in the canon (acknowledging that some feel the canon itself is irregular and overreaching, it is nonetheless “on the books” and the courts appear in general to defer to it as consistent with what Jones v. Wolf mused might be one appropriate way to flag the existence of such a trust in explicit language.)
Let me add that I do not think any duplicity was involved in the action of the bishop or his canon to the ordinary, and it is a matter of some concern that succeeding bishops, and others, have chosen not to honor that commitment, even if it was inappropriately made. It seems to me that both sides in that agreement were poorly advised as to the state of the law at the time, both ecclesiastical and civil. It would more likely have been advisable for the parish leaders to undertake the establishment of a separate not-for-profit corporation to obtain the property and then to have leased the property to the parish for its use, none of which would have required the consent of the bishop, though an episcopal nod would have been seemly. This would have improved on the gentleman's agreement and provided legal protection.
The issue of the alienation or sale of property is distinct from the existence of the trust. I believe that the current court decision, even if upheld on appeal, should not concern any parish so long as it remains part of the Episcopal Church. That seems to me to be the plain reading of Canon I.7.4. (The "Dennis Canon.") I read "otherwise" in this canon not in reference to the trust (for the Church and Diocese thereof) but in reference to the normal property rights enjoyed by the parish restricted only by the immediately preceding section of the Canon (I.7.3) which describes the procedure and the requirements for encumbrance or alienation.
So my point is that the bishop and standing committee cannot waive the trust, but they can permit the sale or long-term lease of property so long as the parish is part of the Episcopal Church. (Which is the case for the vast majority of congregations.)
Furthermore, I do not see how this decision would apply to property transactions for parishes that remain part of the Episcopal Church -- or, indeed, who would have standing to challenge such a legitimately permitted and canonically correct sale if the Bishop and standing committee, and the vestry of the parish, have approved it – or even who would care to do so.
Matters are different for parishes that choose to leave the Episcopal Church. I am aware that national leadership have attempted to forbid amicable and fair-value settlements to departing congregations in a few cases; and very likely look askance at sales for a mere token; but I imagine that the urge to challenge even the latter in court will depend on the willingness to meet the legal costs, and I for one would hope that urging reasonable settlements would prevail.
TSH
Post-postcript
Further conversation with A Curmudgeon was very helpful and directs me to what I think is the difficulty I have with his position. This devolves to two points.
The attempted waiver on the acquisition of the property was really an attempt to waive responsibilities de futuro (pardon my mixing marriage law with real estate... just that my head is rather involved in work on the former at present), in other words, proactively to hold property free from the trust in the case of some future alienation. The court found that the trust relationship cannot be so dissolved, either in the future or the present. As I suggest, there were other possible ways to structure this, but a bishop cannot essentially authorize a sale of property (a parish doesn't yet own) in the future, or apply the dead hand to require a successor so to do -- and the St Com approval is also needed in any case. In the present, however, a Bp and SC can authorize an encumbrance (sale or lease) -- not "waive the trust." Which brings me to my second point.
Mr. Haley is interpreting the encumbrance of property in I.7.3 as a waiver of the trust in I.7.4. But it is not a waiver of the trust, since the value of the property remains for the use of the church. It is a transaction within the trust, not an escape from or waiver of it. It was the attempted waiver de futuro -- essentially to allow a parish allodial title to their property -- that the court found to be a nullity. Parishes do not hold their property free and clear.
I.7.3 was on the books long before I.7.4 was a glint in Walter's (or Blackmun's) eye. The trust element was, as various courts have stated it, implicit, in part because of the long-standing limitations on the encumbrance of property to the extent that a higher authority (Bp and SC) had to approve sales or long-term leases.
I do not see this as a case of special pleading, but an across the board requirement. Parishes are not able "to deal freely with their properties" even within TEC. They must have Bp and SC approval for any encumbrance. In NY this is written into the Not-or-Profit Religious Corporations statute as well (predating Dennis), so we need approval of the Supreme Court as well!
TSH
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