On certification to the Superior Court, Chancery Division.
For affirmance -- Chief Justice Wilentz and Justices Sullivan, Clifford and Pollock. For reversal -- Justices Pashman, Schreiber and Handler. The opinion of the Court was delivered by Sullivan, J. Schreiber, J., dissenting.
[83 NJ Page 595] This case is before us on certification of defendants' appeal pending unheard in the Appellate Division. 82 N.J. 268 (1979). The factual background and issues involved are almost identical to those considered in The Protestant Episcopal Church v. Graves, 83 N.J. 572 (1980), also decided today. Plaintiffs herein are the Diocese of Newark of the Protestant Episcopal Church (Diocese), the Trustees of the Episcopal Fund and Diocesan
Properties and the Diocesan Bishop. Defendants are St. Mark's Church in Orange, New Jersey, its rector, wardens and vestrymen.
As in Graves, the essential facts are not in dispute. St. Mark's Church was originally incorporated in 1827 as "a congregation of Christians of the Protestant Episcopal church." In 1832, St. Mark's reincorporated under the act of February 17, 1829 entitled "An Act to incorporate religious societies worshipping according to the customs and usages of the Protestant Episcopal Church" and, pursuant to the provisions of that act changed its corporate name to "The Rector, Wardens and Vestrymen of St. Mark's Church in Orange, New Jersey."*fn1 Following the division of New Jersey into two dioceses of the Protestant Episcopal Church, St. Mark's became a part of the Diocese of Newark.
St. Mark's acquired its first piece of property about 1828 and built its church on the site. Thereafter, additions were made to the church building and additional property acquired. St. Mark's now owns approximately three acres of land on which is located the church, rectory, a frame house and parish hall. Financing of the acquisitions and construction was by local funds only. None of the deeds of conveyance to St. Mark's make any reference to a trust in favor of the Diocese or the Protestant Episcopal Church.
Until 1977, St. Mark's, in accordance with Episcopal law, participated fully in Diocesan and Church activities. It sent delegates to the Diocesan Convention and regularly paid its Diocesan assessments and quotas. Following the enactment of the 1877 supplement to the laws regulating the affairs of the Protestant Episcopal Church, L. 1877, c. 56, now N.J.S.A. 16:12-4, St. Mark's, in conformity with the requirements of that statute, generally sought Diocesan consent to the transfer and mortgaging of its real estate.
Over the years, St. Mark's had received numerous donations and bequests of funds some of which were delivered to the Trustees of the Diocesan Episcopal Fund for management. It is undisputed that the funds belong to St. Mark's and that of the approximately $192,000 (at cost) presently held by the Trustees, only $3,788.98 thereof is subject to an express reversionary interest in favor of the Protestant Episcopal Church.
In 1977, as a result of the same doctrinal disputes as precipitated the Graves litigation,*fn2 the Wardens and Vestrymen of St. Mark's notified the Diocese that St. Mark's was terminating its affiliation with the Diocese and the Protestant Episcopal Church. Pursuant to resolutions adopted by the vestry and congregation, St. Mark's affiliated itself with the Anglican Catholic Church, a denomination other than the Protestant Episcopal Church, and demanded the return of funds being held by the Diocese for the benefit of St. Mark's. Bishop Rath immediately "inhibited" defendant Rev. Mr. Burns, the Rector of St. Mark's, from performing priestly duties and thereafter deposed him. See Graves p. 575. A substitute priest was sent to St. Mark's by the Bishop but was refused admittance and denied permission to officiate at parish services. This suit followed. It sought an injunction against defendants prohibiting them from exercising control over parish property and a declaration that all property of St. Mark's was held in trust for the use and benefit of the Diocese of Newark and the Protestant Episcopal Church.
The case was tried over a period of six days, at the conclusion of which the trial judge ruled in favor of plaintiffs. He held that the individual defendants had no interest in the real or personal property of St. Mark's and "that title to all of said properties is in St. Mark's." The judgment also provided that the Rev. Mr. Burns, having been deposed as a priest of the Protestant Episcopal Church, was not entitled to the office of Rector of St. Mark's and that the other individual defendants,
having renounced their affiliation with the Diocese and Church, were not entitled to vote or hold office in St. Mark's Church. Defendants were enjoined from exercising any control over parish property and prohibited from interfering with the use of the premises or with the conduct of the affairs of ...