St. James Loses in Property Dispute with Diocese of Pennsylvania

Dear Friends,

The Supreme Court decision in our case was posted late yesterday afternoon. It went against us. The majority reversed the trial court finding that the property belongs to the Diocese, but concurred that there exists an implied trust in favor of the Diocese. This was based not on the Dennis canon, but on various factors in the situation prior to that time.

The majority opinon was written by Justice Nigro, and joined in by all the justices except Justice Newman. She wrote a concurring opinion, which concurred only in the ruling that the property belonged to the parish. She dissented on the existence of a trust, basing her argument primarily on the previous precedent (Beaver-Butler).

In effect, the majority has altered their standards of what constitutes an implied trust, abandoning the standard of Beaver-Butler. This gives us the faint comfort of knowing that under the Beaver-Butler standard, we would have retained the property. The bottom line is that the decision was based on factors specific to St James, and is not of immediate applicability to anyone else. It does not (so far as I can tell) resolve the question of whether the Dennis canon is sufficient to create a trust -- an issue which affects many Episcopal parishes. You can look up the opinions on the Supreme Court web page if you wish.

What happens next? Under the trial court ruling, the Diocese is now free to replace the vestry, and thereby take control of the parish. I don't know that I will find out how they wish to proceed until next week, with the holiday and all. They can also go to the Orphans Court to enforce the part of the ruling which calls for an accounting and assessment of damages against individual vestrymen (though only the four named vestry members, one of whom is now deceased, are immediately liable - JAA). We would hope that the Diocese will be committed to a smooth transition. . . .

I expect that for the next Sunday or two (or longer?) we will gather at coffee after the ten o'clock for updates, and discussion about the various practical matters before us. I plan to maintain the usual service schedule (and Bible study) as long as possible. This could change, however, on short notice, depending on what the Diocese chooses to do. One practical matter I will mention here. contributions to the Church of St James the Less from here on are subject to a trust in favor of the Diocese of Pennsylvania. Parish funds remain with the property when we leave. I want you to be clear about your contributions when you make them.

This is, to put it mildly, a great disappointment. Being faithful to our principles has now cost us much that is dear. But the grace is before us to bear the Cross and follow Jesus -- as it always is. This is no doubt not the road we would have chosen, but we may be sure that God will turn the suffering to our good. This does not make the suffering any less painful. It does assure us that Jesus is bearing the greater part of the burden with us and for us.

Remember also that the church is the faithful, not the buildings. The court can take from us nothing that is essential to life -- or to Life. While some may have intended us ill, God desires only our good. I trust you will be sensitive to one another at this difficult time, and be ready to encourage one another.

It has been the sense of the parish that in this event, we would try to continue as a congregation, and we have made some contingency plans for the next steps. The vestry will be meeting . . . as soon possible. We will need to discern what plans God has for us, though we may be sure He has some. We can, even in the midst of sorrow, look forward with some anticipation to what He will do with us next. As always, we are to give thanks -- not for the evil of the situation, but because it is within God's providence. For that we can always be thankful, even when it contains the Cross.

Fr David Ousley is the Anglo-Catholic rector of St. James the Less in North Philadelphia, Pennsylvania

There is a certain amount of spin in the posted article. They said the Dennis Canon was valid and DID apply. If nothing else, skip down to the last paragraph quoted here:

"However, we disagree with Appellants that St. James had a vested interest in its property prior to the enactment of the Dennis Canon because St. James' Charter makes clear that St. James had already agreed to hold its property in trust for the Diocese prior to the enactment of the Dennis Canon. In this regard, we initially note that St. James' Charter declares that St. James' purpose is to serve as a place to worship God "according to the faith and discipline of the [National Episcopal Church]." Exh. P-9 (emphasis added). More importantly, the Charter ensures that St. James will always be used for this purpose as it (1) states that any person who disclaims the authority of the National Episcopal Church or the Diocese can no longer be a member of St. James; and (2) requires St. James to obtain the Diocese's consent for amendments to its Charter.28 See id. Accordingly, St. James effectively agreed in these provisions to always accede to the authority of the National Episcopal Church and the Diocese and to forever serve as a place of worship for those who adhere to that same authority. As such, it plainly held its property for the benefit of the National Episcopal Church and the Diocese, i.e., in trust for those entities....

"Other provisions specifically concerning St. James' property also compel the conclusion that St. James intended to, and did, hold its property in trust for the Diocese and
the National Episcopal Church. For example, when it acceded to the Diocesan canons in effect when it last amended its Charter, St. James specifically agreed to take and hold its
property "for the work of the [Diocese]." Exh. P-51 at canon XII, § II. Further, by acceding to the National Episcopal Church's canons , St. James agreed not to alienate or encumber its property without the Diocese's consent. See Exh. P-43 at canons 6.3 ("No Vestry, Trustee, or other body, authorized . . . to hold, manage, or administer [parish property] shall encumber or alienate the same or any part thereof without the written consent of the Bishop and Standing Committee of the Diocese . . . ."), 25.2 ("It shall not be lawful for any Vestry, Trustees, or other body authorized by laws of any State or Territory to hold property for any [Parish] to encumber or alienate any consecrated Church or Chapel . . . without the previous consent of the Bishop, acting with the advice and consent of the Standing Committee of the Diocese . . . ."). Finally, St. James declared in its Charter that if it ever dissolves, its property will be placed in trust for the Diocese. See P-16. Through these provisions, St. James not only explicitly pledged that its property would always be used for Diocesan purposes, but by giving the Diocese the ultimate authority over decisions affecting its property, it cknowledged its obligation to the Diocese to always do so.

"Accordingly, these provisions, like the ones discussed earlier, are clear evidence that St. James intended to create a trust over its property in favor of the Diocese.29 Furthermore, the evidence indicates that St. James' vestry were well aware that St. James had granted the Diocese such a trust interest because (1) the Bishop's attorney informed them in 1978 that the Diocese had a trust interest in St. James' property; and (2) they purposefully sought to merge into the CSJL Foundation to void the Diocese's trust nterest in the property. See Exh. P-20. On the basis of the above provisions, we find that St. James clearly intended to place its property in trust for the Diocese prior to the enactment of the Dennis Canon and consequently, the Dennis Canon does not deprive St. James of its vested property rights. Rather, the Dennis Canon "merely codified in explicit terms a trust relationship" that was implicit in St. James' Charter...."

However, as explained above, we hold that St. James is bound by the Dennis Canon under neutral principles of law as well as the fact that St. James had already agreed to place its property in trust for the Diocese prior to the enactment of the Dennis Canon. Accordingly, contrary to St. James' contention, we are not simply deferring
to a religious canon "to override the rights of parties under civil law."

Here's another objective Presbyterian view of the decision which tracks my view. http://www.layman.org/layman/news/2006-news/pa-supreme-court-issues-mixed-ruling.htm

I'll give the author of the posted story the benefit of the doubt and assume that he was misinformed as to what the court held.

From the Layman article:

"In a decision handed down on Dec. 29, the Pennsylvania Supreme Court affirmed the property trust clause of the Episcopal Church (USA). But the court overruled a lower court that held that the Church of St. James the Less, whose members voted to leave the denomination, was required to transfer its property title to the diocese.

The state's highest court concluded that the congregation still owns its property but that its vestry is obligated by church law and the congregation's Charter of Corporation to use that property for the benefit of the diocese. Diocese leaders had hoped that the court would affirm what they contended was their right to claim the property and banish the vestry from governing the congregation.

The ruling left in limbo exactly how that the court's decision might be worked out. The congregation of St. James, in strong disagreement with the policies and actions of the Episcopal Church (USA), voted to disaffiliate from the denomination and become a part of an Orthodox Anglican communion ...."

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