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Appeals court win for US congregation in land battle: The Church of England Newspaper, November 11, 2011, p 6. November 11, 2011

Posted by geoconger in Church of England Newspaper, Property Litigation.
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First published in The Church of England Newspaper.

A Louisiana appeals court has opened the legal door for Episcopal churches in the state to quit the national Church and keep their properties.

On 14 September 2011 the First Circuit Court of Appeal in Baton Rouge upheld a lower court decision allowing a Presbyterian congregation to leave its presbytery and keep its property – even though the Presbyterian Church’s constitutional documents claimed an interest in the property.

Relying upon the US Supreme Court’s decision in Jones v Wolfe, the appeals court in the case of Carrollton Presbyterian Church v the Presbytery of Southern Louisiana rejected the argument put forward by the presbytery that the addition of a trust clause in a denomination’s constitution was sufficient to create a valid and enforceable trust on property.

While the ruling addressed the Presbyterian Church’s property disputes, the legal principle articulated by the court also applies to the Episcopal Church’s Dennis Canon – which purports to create a trust interest in the property of all Episcopal congregations in favour of the Diocese and the national Church. The ruling is in line with a South Carolina Supreme Court decision, but is at odds with rulings made in California, New York and Pennsylvania.

In its opinion, the court held that “applying neutral principles of law, we find that any purported trust would be subject to the form requirements set forth in Louisiana’s Trust Code.”

The attorney for the congregation, Lloyd Lunceford told The Church of England Newspaper: “This statement [by the court] would lead one to conclude that the mere addition of an express trust clause in the Episcopal canons (the Dennis canon) would likewise be insufficient by itself to form an enforceable trust in Louisiana.”

The Presbyterian Church’s Book of Order at section 6-3 creates a trust over church property. It states that “all property held by or for a particular church … is held in trust nevertheless for the use and benefit of the Presbyterian Church in the United States.”

The court wrote that although the US Supreme Court “opined that a trust in favour of a general church could be created by the constitution of the general church being made to recite an express trust provision in favour of the denominational church, “ this must be ‘embodied in some legally cognizable form’.

“We are not persuaded by the Presbytery’s contention that the requirement of a ‘legally cognizable form’ was met simply by the [Presbyterian church’s] amending its constitution.”

Mr Lunceford stated the “First Circuit’s decision is an important one, but it does not really break new ground” as it was “consistent” with the US Supreme Court’s ruling “which requires consent by the local owner and compliance with state trust law.

“The question in a case involving an Episcopal church in Louisiana would be whether the Episcopal canons that require the permission of the bishop and diocese, and a local church practice of seeking such permission, sufficed to create an implied trust (separate the express provision of the Dennis canon) that complied with ‘the form requirements set forth in Louisiana’s Trust Code.’ I believe the answer to that question would be ‘no’,” the attorney noted.

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