by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
randolphp@umkc.edu

TITLE; RELIGIOUS INSTITUTIONS: A congregation's majority vote to join a parent church's hierarchy and to transfer all the old church's real estate to the parent are valid where such procedures are not controlled by any statute nor limited by the pertinent congregation's or parent church's charters, constitutions or by-laws.

Apostolic New Life Church of Elgin v. Dominquez, et al, 686 N.E.2d 1187 (Ill. App. 2 Dist. 1997).

Plaintiff New Church, a "rump group" of dissaffected congregants who had belonged to a local congregation, "Old Church," sued Defendant "Home Church" - a multinational denomination - asserting that it had carried out a transfer of the Old Church property and wrongfully occupied real estate belonging properly to New Church and had used New Church's funds without authority.

Old Church had "merged" with Home Church some years earlier, pursuant to majority vote of the congregation, and had conducted itself as a branch of Home Church by using its name in public and private business affairs (even, as the court notes, obtaining a Sam's Club card in Home Church's name). Old Church had not, however, dissolved as a formal entity nor changed the title to the real estate. When the Old Church pastor died, Home Church sent an interim minister, and that minister determined that the mortgage on the church property would carry a lower interest rate if Home Church assumed it. Consequently, the pastor proposed, and the congregation approved by a majority vote, the formal dissolution of Old Church and the transfer of all its property to Home Church, together with Home Church's assumption of the debt.

There apparently were no formal documents controlling these matters either in the organizational documents of Old Church or in the rules of Home Church. New Church, however, argued that a simple majority vote of the congregation could not authorize the dissolution of Old Church and the merger of the congregation and all its assets into Home Church.

The Trial Court entered judgment in favor of Home Church based upon stipulated facts, and made no finding of fact or conclusions of law. The Appeals Court affirmed. The appeals court pointed out that civil law has a limited function under the First Amendment in dealing with church politics. But here, it noted that there were no available internal documents providing any guidance as the policy of either Old Church or Home Church regarding dissolution or merger of local congregations. This led to an inquiry into state law, but the court found that all state laws had exemptions that excluded this type of organization from their coverage of dissolution or merger issues. Consequently, the court was left to decide whether, as a naked proposition, a simple majority vote was sufficient to effectuate major changes in the institutional life of the congregation.

The court noted (without citation) that majority rule generally is employed in the governance of religious societies. Further it noted that prior actions of Old Church relating to affiliations and disaffiliations with other larger denominations had been carried out by majority vote. Absent any indication of law or policy to the contrary, therefore, the court held that the transfer of real estate approved by a majority vote of the congregation was valid. The fact that the minister who signed the transfer documents had no formal status as minister was of no consequence, as there were no express formalities in any documents relating to Old Church or Home Church and the minister had the apparent authority of the majority of the congregation to do what he did.

Comment: Informal organizations like nascent church congregations and social clubs often are somewhat lax about developing formal documentation relating to their organizational lives. Lawyers would do big favors for such organizations by assisting them in preparing such documentation. The editor has no quarrel with the outcome in this case, but notes that some long forgotten document that derived from an earlier period in Old Church's development might have surfaced that could have had a profound impact on this dispute, in light of the total void that existed otherwise. Matters such as dissolutions and transfers of church property over the objection of a significant number of congregants should not occur through accident or inadvertance. (Here, the objections appeared to arise years after the original merger and months after the final dissolution and sale.)

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1-6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Woodward at the ABA. (312) 988 5260 or woodwars@staff.abanet.org

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