Confusion in California

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

Mrs Ashworth is misinformed

and perhaps a meddlesome interferer who by her own admission did not consult with any Episcopalians other than those she appears to represent; or at the very least a well-meaning busybody.

Mrs Lorna Ashworth is bringing a Private Members Motion to the General Synod of the Church of England, appealing recognition by the Church of England of a state of communion with ACNA (the self-styled "Anglican Church in North America). You can review her background document for yourself. Amongst the numerous errors and half-truths in this document, I want simply to flag her assertion that the "Dennis Canon" was somehow a novel creation by which all parish property was transferred to "the ownership of the national church."

In fact, the "Dennis Canon" (which she quotes but clearly does not understand) merely put into canonical language the practice and understanding of the church (and in most places, the state) up to that time: that parishes may own their property, but they hold it as trustees for the wider church. It is not theirs to sell, for instance, and never has been, without diocesan approval, under canons far older than that proposed by Walter Dennis. (This is perhaps slightly different than they do in England, admittedly, but I very much doubt the leadership of an English parish could suddenly claim no longer to be part of the Church of England and retain the real property until then held in its name.) The Dennis Canon merely made explicit what had been the normal practice up to that time. Dozens of court cases had been decided in favor of the larger church prior to the adoption of this canon, and very, very few against (most of the latter involving peculiar circumstances in a given parish).

But to clarify for Mrs Ashworth, and any member of the Synod who might not understand, the question isn't ownership but trusteeship. I have dealt with this at length before and will not dwell on it here, but the basic principle is not that hard to understand: when people have custody of a property as trustees, the maintenance of the trust forms the basis of their control. Most Episcopal parishes were founded for the good and use of The Episcopal Church; they were maintained and contributed to over (in some cases) generations with that end in mind, and the vestries serve as the custodians of that trust. Those who give to the support of the church give -- the church doesn't belong to them simply because they have contributed to its construction or maintenance. (Ananias and Sapphira learned that the hard way.)

Moreover, when leaders of a parish vote to leave The Episcopal Church, even though they may feel that they are the truly faithful Anglicans, they fail in their trustee responsibilities, and at the very least remove themselves from being qualified to exercise that trust — they have, in fact, violated the trust. So the control of the property (not its ownership, per se) reverts to the body for whom it was held in trust: the diocese and national church. In many cases the members of the parish who remained part of The Episcopal Church will take up control of the property. Mrs A seems to show a great deal of pity of those she says are "excluded" from their churches, with scant recognition that in many cases a portion of the congregation has no wish to secede from The Episcopal Church, and it is they who have been "excluded" and are seeking to regain property wrongly occupied by those who wish to walk apart from the church of which they formerly were part.

I certainly hope this mischievous motion is not adopted. It will seriously muddy already well-trodden waters. (See the comments to this effect in the additional document from the Secretary General, especially noting the citations from the Windsor Continuation Group Report ¶ 93-96.)

Tobias Stanislas Haller BSG

The Dennis Canon Was Adopted

It has become popular recently in certain circles to foment doubts as to whether the so-called Dennis Canon was actually adopted by General Convention in 1979. Matt Kennedy, in ¶15 of his affidavit filed in Diocese of Central New York vs. Good Shepherd, claimed that White & Dykman (the Annotated Constitution and Canons of the Episcopal Church) notes a “defect in the adoption” of the canon on page 296. This is inaccurate. The authors note that the adoption of the canon does not appear in the “Concurrent Actions” section of the 1979 Journal of General Convention. They express no doubt about the adoption of the canon itself.

There remains some confusion, nonetheless, and I would like to clarify a number of things, and will take them point by point.

First of all the “Dennis Canon” actually involves two canons. Resolution D-24 of the 1979 General Convention amended Canon I.6 to render explicit the implicit trust relationship under which the church had functioned since its foundation, whereby parishes hold property in trust for the diocese and general church. The same resolution also amended Canon II.7 to specify the types of churches (that is, whether parish or mission) to which Canon I.6 would apply.

Second, and perhaps most importantly, the canonical amendment was not controversial at the time of its adoption. It was proposed in response to a suggestion from the US Supreme Court in Jones v. Wolf that a general church could clarify an explicit binding trust relationship concerning church property either by having all churches change the titles and deeds to express it, or by making a change to the governing documents of the general church. The Dennis Canon was a direct response to this suggestion, and it had wide support. The record in the Journal shows none of the usual marks of controversy: no roll call vote was required in the House of Bishops, nor a vote by orders in the House of Deputies. The only amendment to the original proposal, made in the House of Bishops, was to hasten the effective date of the resolution; this amendment was adopted easily.

Third, the Journal of the Convention clearly (in its own rather complicated way) shows that Resolution D-24 was adopted in both Houses. This is also contrary to Kennedy’s assertion in ¶19 of his affidavit, that the Journal “does not indicate that this so-called Dennis Canon passed both houses of that Convention.”

On the contrary, the Journal shows that the House of Bishops approved the changes to the canons, amended to add the change in effective date, on the Fifth Day of the session. This appears in the Journal on pages B-60 and 61. The House of Bishops communicated this action to the House of Deputies in HB Messages #75 (the amendment to Canon II.7) and #76 (the amendments to Canon I.6 with the change in effective date). On the Tenth Day, the Journal shows (page D-154) that the House of Deputies received and concurred with these messages. The Journal does not show the message number for the communication of their concurrence to the House of Bishops, but the Eleventh Day minutes of that House (Journal page B-144) indicate receipt of HD Message #204 informing the Bishops that the Deputies had concurred with HB Messages #75 and #76 on Resolution D-24 — Amend Canon I.6 and Canon II.7. George Conger, in a search of the Archives of the Episcopal Church, stated in ¶17 his affidavit in DCNY vs. Good Shepherd, that he found independent corroboration for the existence of HD Message #204 (though not a copy of the message itself) on page nine of a print shop order summary showing that “resolution D-24 as amended was adopted by the House of Deputies, and message 204 memorializing this action was sent to the House of Bishops.” While bemoaning the state of the archival records for this entire convention (and they are, frankly, appalling), and the paucity of back-up material, he does report that he found documentary evidence of the adoption of the resolution in the House of Bishops.

So there appears to be no reason to doubt that the Resolution was adopted and concurred. It was so reported in the actions of each House in the published edition of the Journal of the General Convention 1979, in the next printed edition of the Constitution and Canons as amended, in the 1982 revision of the Annotated Constitution and Canons, and all subsequent editions of the Constitution and Canons as amended in subsequent sessions of General Convention ever since.

Still, a listing of the adoption of Resolution D-24 is missing from the 1979 Journal in its “Concurrent Actions” section — exactly the omission to which White and Dykman referred. But what is this “Concurrent Actions” section?

Because of the way resolutions are adopted in the General Convention — acted upon first in one House, and if approved passed through a legislative committee to the other for concurrence — the minutes of the meetings of the separate Houses form a complicated web of cross references, as can be seen in the account above showing the back-and-forth trail of evidence of action, reaction, and communication. Over the years different editors have developed various ways to make the final results of the Convention — most especially the actions adopted — convenient to find. At the 1979 Convention this was done by repeating the minutes germane to any given resolution in each House in a separate section of the Journal arranged by topic. This was, in theory, a convenient way to find all of the resolutions concerning social issues or liturgy, for example, neatly gathered together. Obviously this is a very repetitive way of working, duplicating material that already appears elsewhere in an already cumbersome volume, and other more efficient summary mechanisms have been adopted since. It is also an invitation to additional editorial error, and this is precisely what appears to have happened in the case of Resolution D-24, which was certainly concurred, but doesn’t appear in the section of concurrences.

I have a theory to offer for the reasons for this omission. As an editor, in particular a past editor of the Journal of General Convention itself in 1991, assisting the late Charles Scott in that task — I have a grasp of the way an editor of this particular volume is forced to think, and the complexities with which one must wrestle. One question that arises, when producing the summary of concurrent actions, whatever form it takes, is the order in which resolutions will be reported, and to what categories they will be assigned.

While the 1979 editor chose to list many canonical changes under the heading “Canons,” there is also a note that some canonical changes are listed elsewhere under more relevant topics which the particular canons address. An additional problem was created in that Canon II.7, amended in part by resolution D-24, was also subject to another resolution that added a new first section to the same canon. This, which also dealt with church property, was classified not under “Canons” but under “Structure” — and I really am not sure why, unless that was the legislative committee that first dealt with that part of the canon. It appears to me that the original intent was to include the canonical changes in D-24 in this same section — indeed the page reference at the concurrence points to this very place — but that in the paper shuffling necessarily involved in such an editorial operation, the collated text from the minutes of each house did not make it into its final position. Thus, there is no question about the actual adoption of the resolution — the minutes in the Journal in each House make that clear — and all the “Concurred Actions” section would have shown is the same text drawn together under a single heading.

This omission is confusing, but it in no way affects the validity of the adoption of the amendments to the Canons. It is purely an editorial error concerning an altogether supplementary portion of the Journal of General Convention.

Tobias Stanislas Haller BSG

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The Last Laugh (?)

The California Supreme Court has issued a decision unanimously favorable to The Episcopal Church, on the question of who has the proper right to church property in the case of parishes whose members choose to abandon The Episcopal Church. In this, they support the well-argued Appeals Court decision of last year.

Still, many people on the dissenting side feel that this was a mistake. They almost invariably cast this as an issue of ownership of property; and, indeed, the courts can do little but to frame it as such. But the real issue is not ownership, but control and use, of the property in question. And this is where the church's understanding of itself comes in. As I wrote in a post in June of 2007, this is about the alienation of property from its use by the church for the church -- that is, from The Episcopal Church of which the parish, or the diocese, is an element, not a mere detachable and autonomous entity. I framed the discussion in terms which find an echo in the Supreme Court decision, and I repeat them here:

...much as folks like to demean the Dennis Canon, it is the law of the church; moreover, it was created in response to the request of the Supreme Court to render implied trusts (on the basis of which such cases had been decided up until then as sufficient) explicit. In short, there was no change in practice with the introduction of the Dennis Canon, merely a spelling out of what was already implied by both uniform practice and the already long-existing canons on alienation.... (Parishes cannot alienate, that is abuse, church property without the permission of the bishop and standing committee — clear evidence of the hierarchical nature of such decision-making processes concerning property.)

More than that, a moral issue is involved. Some have suggested that it is not fair that members of a dissenting parish should have to leave their property. This begs the question that it is “their” property. It isn’t, on several grounds. (I will not apply the various epithets of theft, poaching, &c., as I think the dissidents are honestly though mistakenly convinced of their proper ownership.)

Giving: When people give to the church, they give up control over what they have given. (A designated gift can, of course, allow for limited degree of control as to purpose.) However, most gifts are for the general operation of the church and its mission. Many people claim a tax deduction for such gifts; and if they were to attempt to recover them would incur a tax liability. It is an affront to the concept of stewardship to try to regain control over something you have given for the work of a larger entity. It would be very odd indeed if people could remove, say, a stained glass window, because they didn't like the new rector's preaching. We should not only not let our right hand know what our left hand is doing when we give open-handedly, but if we do know, forget it as soon as possible.

Custodianship: custodians have the care of property but they do not own it. They maintain it for the benefit of others. (Remember what Archbishop Temple said about the nature of the church: the only institution dedicated to serve those not yet its members.) The present members of a parish do not own the parish; it isn’t about “them.” They are not free to do with it as they please. Even in the days of pew rent, people only “rented” their pews.

Franchise: Parishes function as a part of and under the name of The Episcopal Church. While some may now see this to be a liability, for most of the life of these congregations it was an asset in that newcomers to the community could identify the parish as part of a larger entity, with its own identity. It is only through that larger entity that these parishes participate in the real-life Anglican Communion, as the Panel of Reference recently affirmed.

Tenancy: a church is the people, not the building; but not always the same people — as members pass into the ranks of the church expectant new members are added to the church militant. All of us, in the long run, are only temporary members of any congregation; tenants, not owners.

Usufruct: in a sense all congregations are like the Louisiana widow who has the right to continue to live in her intestate husband’s home, but doesn’t have the authority to sell it out from under the children, who inherit by right. (As I understand it, under Louisiana law a spouse is not an inheritor by right. That might seem odd, but it is similar to the situation in not-for-profit corporations which, when they dissolve, don’t divvy up the assets among the surviving members of the board, but turn the property over to another not-for-profit entity.) Moreover, the Louisiana widow loses usufruct over the property when she remarries, and the children come into their own inheritance. This seems a good analogy for the congregations who have hooked up with Uganda. There are still loyal Episcopalians who have the right to that property, and there will be more to come. The church is not only about the past but the future.

Stare decisis, returning to where we came in: In a hierarchical church such as The Episcopal Church, all real parish property is, and always has been, held in trust for the work of that church. Some have suggested that this case may be overturned if it comes to the Supreme Court of the United States. I would suggest that should it reach that Court, it will most likely rule in favor of TEC, since the Dennis Canon was enacted at it’s recommendation, to render explicit what was already implicit (and universal practice until that point, and was also covered in the canons on alienation, which go back to the 19th century).

It seems to me that the California Supreme Court takes my view of things, in general and in detail.

Tobias Haller BSG

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Update: for those who don't know, the photo is of Bishop Walter Dennis. Walter was an old friend and colleague, and was Visitor to the Brotherhood of Saint Gregory. I snapped this portrait of him at one of his Visits. He is the source of the eponymous "Dennis Canon."

The Mercy of Property

... is strained.

On Monday afternoon I posted the following to the House of Bishops/Deputies list:

Parishioners have the right to use church property for the work of the church. They have a custodial relationship over church property, but they do not own it. They have a form of usufruct, but have no power of alienation, as the canons made clear long before the Dennis Canon was a gleam in Walter Dennis’ eye.

Attempts to claim control of church property, conveying it to uses other than for the benefit of this Church, represent a form of alienation. It is not use but abuse, in the technical sense.

I received a couple of humorous notes about the use of the word usufruct — the right to make use of a property but not to dispose of it by sale or other conveyance. The technical meaning of the word abuse, by the way, is alienation, the opposite of use.

Then, late yesterday the California Court of Appeals issued a decision concerning a number of parishes that had sought to come under the governance of an overseas bishop and remain in control of their property. The decision rightly overturned the anomalous ruling that had held sway in California for about 30 years — a ruling out of step not only with most of the other states of the union but with the Supreme Court decision that led to the adoption of the Dennis Canon in the first place.

So I would like to make the further observation, in response to a press release from one of the dissident parishes arguing that the Court of Appeals decision is a departure from 30 years of precedents. Even a casual reading of the court’s decision shows that the earlier decision was a major departure — and an erroneous one — from many times more decades of precedents; moreover, precedents recognized throughout the US, based on a decision of the Supreme Court concerning implied and explicit trusts. The earlier California decision was an anomalous departure from the principal of stare decisis, as the Court of Appeals makes clear, and it led to an uneven and confusing application of law.

Moreover, much as folks like to demean the Dennis Canon, it is the law of the church; moreover, it was created in response to the request of the Supreme Court to render implied trusts (on the basis of which such cases had been decided up until then as sufficient) explicit. In short, there was no change in practice with the introduction of the Dennis Canon, merely a spelling out of what was already implied by both uniform practice and the already long-existing canons on alienation, to which I referred above. (Parishes cannot alienate, that is abuse, church property without the permission of the bishop and standing committee — clear evidence of the hierarchical nature of such decision-making processes concerning property.)

More than that, a moral issue is involved. Some have suggested that it is not fair that members of a dissenting parish should have to leave their property. This begs the question that it is “their” property. It isn’t, on several grounds. (I will not apply the various epithets of theft, poaching, &c., as I think the dissidents are honestly though mistakenly convinced of their proper ownership.)

Giving: When people give to the church, they give up control over what they have given. (A designated gift can, of course, allow for limited degree of control as to purpose.) However, most gifts are for the general operation of the church and its mission. Many people claim a tax deduction for such gifts; and if they were to attempt to recover them would incur a tax liability. It is an affront to the concept of stewardship to try to regain control over something you have given for the work of a larger entity. It would be very odd indeed if people could remove, say, a stained glass window, because they didn't like the new rector's preaching. We should not only not let our right hand know what our left hand is doing when we give open-handedly, but if we do know, forget it as soon as possible.

Custodianship: custodians have the care of property but they do not own it. They maintain it for the benefit of others. (Remember what Archbishop Temple said about the nature of the church: the only institution dedicated to serve those not yet its members.) The present members of a parish do not own the parish; it isn’t about “them.” They are not free to do with it as they please. Even in the days of pew rent, people only “rented” their pews.

Franchise: Parishes function as a part of and under the name of The Episcopal Church. While some may now see this to be a liability, for most of the life of these congregations it was an asset in that newcomers to the community could identify the parish as part of a larger entity, with its own identity. It is only through that larger entity that these parishes participate in the real-life Anglican Communion, as the Panel of Reference recently affirmed.

Tenancy: a church is the people, not the building; but not always the same people — as members pass into the ranks of the church expectant new members are added to the church militant. All of us, in the long run, are only temporary members of any congregation; tenants, not owners.

Usufruct: in a sense all congregations are like the Louisiana widow who has the right to continue to live in her intestate husband’s home, but doesn’t have the authority to sell it out from under the children, who inherit by right. (As I understand it, under Louisiana law a spouse is not an inheritor by right. That might seem odd, but it is similar to the situation in not-for-profit corporations which, when they dissolve, don’t divvy up the assets among the surviving members of the board, but turn the property over to another not-for-profit entity.) Moreover, the Louisiana widow loses usufruct over the property when she remarries, and the children come into their own inheritance. This seems a good analogy for the congregations who have hooked up with Uganda. There are still loyal Episcopalians who have the right to that property, and there will be more to come. The church is not only about the past but the future.

Stare decisis, returning to where we came in: In a hierarchical church such as The Episcopal Church, all real parish property is, and always has been, held in trust for the work of that church. Some have suggested that this case may be overturned if it comes to the Supreme Court of the United States. I would suggest that should it reach that Court, it will most likely rule in favor of TEC, since the Dennis Canon was enacted at it’s recommendation, to render explicit what was already implicit (and universal practice until that point, and was also covered in the canons on alienation, which go back to the 19th century).

Tobias Haller BSG

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