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Church v. Graves

Decided: July 24, 1980.


On appeal from the Superior Court, Appellate Division, whose opinion is reported at 167 N.J. Super. 563 (1979).

For affirmance -- Chief Justice Wilentz and Justices Sullivan, Clifford and Pollock. For reversal and remandment -- Justices Pashman, Schreiber and Handler. The opinion of the Court was delivered by Sullivan, J. Schreiber, J., dissenting.


[83 NJ Page 573] This case involves a dispute over control of local church property. The denomination involved is the Protestant Episcopal Church. Plaintiffs are the Protestant Episcopal Church (Church) in the Diocese of New Jersey (Diocese), the Trustees of Church Property of the Diocese and the Diocesan Bishop. Defendants are St. Stephen's Parish of Plainfield, New Jersey, and its rector, wardens and vestrymen.

The essential facts are not in dispute. St. Stephen's was incorporated on January 11, 1895 as an affiliate member of the Protestant Episcopal Church.*fn1 Its corporate title was and still is "The Rector, Wardens and Vestrymen of St. Stephen's Church in Plainfield." For a number of years after its incorporation St. Stephen's did not own any church property. However, in 1935 it purchased the chapel which it had been using for services and the property on which the chapel was situated. In 1967 and in 1970 additional property was purchased for use as a parish hall and school building. In each case the purchase was made with local funds without Diocesan financial assistance. The deeds run to the parish corporation and do not contain any words of trust or reverter in favor of the Diocese.

Defendants concede that from 1895 until 1976, when the local parish became embroiled in a doctrinal dispute with the Diocese of New Jersey and The Protestant Episcopal Church, St. Stephen's operated as an affiliated member of the Diocese and the Church, adhering to long-established Protestant Episcopal customs and usages including submission to Diocesan authority. The parish used the standard prayer book of the Episcopal Church and in 1928 accepted the new Book of Common Prayer. Substantial changes in the canons of the Church were also followed. Annual Diocesan assessments and missionary quotas were regularly paid and delegates regularly sent to the Diocesan Convention. When the parish decided to sell its old rectory and place a mortgage on the new one in 1973 it sought and obtained Diocesan approval in compliance with the requirements of N.J.S.A. 16:12-4, part of a 1901 supplement to the 1829 statute

regulating the affairs of the Protestant Episcopal Church in this State. In short, the undisputed facts demonstrate that from the time of its incorporation, St. Stephen's was an integral part of the hierarchical structure of the Church and submitted to the Church's authority in all matters connected with parish affairs.

The present controversy between the Diocese and St. Stephen's involves doctrinal disputes concerning, inter alia, the ordination of women, and changes in the 1928 Book of Common Prayer. In September 1976 the vestrymen of St. Stephen's wrote to Bishop Van Duzer claiming the actions were "heretical" and stating that the parish had decided to suspend its affiliation with the Diocese and the Church, withhold payment of assessments and not participate in Diocesan affairs or accept Diocesan authority.

In April 1977, at a special meeting attended by about 29% of St. Stephen's adult parishioners, a majority of those present voted to sever the parish relationship with the Diocese. As a result, Bishop Van Duzer "inhibited"*fn2 Rev. Mr. Graves, the rector of St. Stephen's, from performing any priestly duties. Despite the ban, Rev. Mr. Graves continued to conduct services and a substitute priest sent by the Diocese to St. Stephen's was denied permission to officiate at parish services. The present suit followed seeking essentially to bar Rev. Graves from conducting services at St. Stephen's and to restrain defendants from putting parish property to any use not sanctioned by the Diocese.

After the commencement of suit, Rev. Mr. Graves responded to the certificate of inhibition by characterizing the facts alleged as grounds for inhibition as "false." Bishop Van Duzer, however, considered the response to be insufficient, and when Rev. Mr. Graves failed to submit a further response, he was "deposed"

by formal action of Bishop Van Duzer. The relief sought was then expanded to include removal of Rev. Mr. Graves from the church rectory.

Cross-motions for summary judgment were submitted accompanied by numerous affidavits and documents. The trial judge granted plaintiffs' motion and entered a declaratory judgment that the parish property could not be used for any purpose not sanctioned by the Diocese. All assets of St. Stephen's were placed under the control of the Trustees of Church Property of the Diocese of New Jersey until the proper Church authorities decided otherwise. The judgment also ordered that Rev. Mr. Graves be removed from the church or parish house except to attend worship services or social events approved by the Diocese.*fn3 161 N.J. Super. 230 (Ch.Div.1978). On appeal, the Appellate Division upheld the judgment for the reasons expressed by the trial judge. 167 N.J. Super. 563 (1979). Defendants-appellants filed an appeal with this Court as of right alleging the existence of a substantial constitutional issue. See R. 2:2-1(a). We affirm for the following reasons.

In this country, courts have been repeatedly admonished not to attempt to decide ecclesiastical doctrinal controversies. It has been often stated that "[t]he law knows no heresy, and is committed to the support of no dogma, the establishment of no sect." Watson v. Jones, 13 Wall. 679, 728, 20 L. Ed. 666, 676 (1872). However, subject to certain limitations, a civil court can be called upon to resolve a church property dispute.

The United States Supreme Court has held that the First Amendment does not dictate that a state must follow a particular method of resolving church property disputes and any one of various approaches may be adopted so long as it does not involve consideration of doctrinal matters. Jones v. Wolf, 443 U.S. 595,

99 S. Ct. 3020, 61 L. Ed. 2d 775 (1979). One acceptable method of approach was outlined in Watson v. Jones, supra, which repudiated the English rule that church property was the subject of an implied trust in favor of those who truly adhered to church doctrine. The Supreme Court held that our basic constitutional requirement of the separation of Church and State prevented courts from using the departure from doctrine approach in the adjudication of church property disputes. In the absence of specific trust provisions in the deed, will or other instrument by which the property is held, Watson made inquiry as to where the particular church body had placed ultimate authority over the use of church property. Two broad types of church government were recognized. In a congregational church, church authority and control over church property rested completely in the local congregation and its elected elders. In a hierarchical church, however, the local church is an integral and subordinate part of the general church and subject to its authority. Watson, therefore, held that in a hierarchical situation where there was a property dispute between a subordinate local parish and the general church, civil courts must accept the authoritative ruling of the higher authority within the hierarchy.

The Watson rule, although admittedly not exclusive, has been modified to the extent that a civil court may inquire into fraud, collusion or arbitrariness in the ecclesiastical disposition. Gonzales v. Archbishop, 280 U.S. 1, 50 S. Ct. 5, 74 L. Ed. 131 (1929).

The Watson principle was followed in Serbian Orthodox Diocese v. Milivojevich, 426 U.S. 696, 96 S. Ct. 2372, 49 L. Ed. 2d 151 (1976). There, in a hierarchical church dispute over the removal of a bishop with its incidental effect on the adjudication of property rights, the United States Supreme Court reversed a state court ruling that had rejected the decisions of the highest ecclesiastical tribunals of the hierarchical church upon the issues in dispute. In so doing, the Supreme Court ruled that the First and Fourteenth Amendments permit hierarchical religious organizations to establish their own rules and regulations for internal discipline and government and to create tribunals for adjudicating disputes over these matters.

The Supreme Court held that when this choice has been exercised and ecclesiastical tribunals have been created to decide disputes over governmental direction of subordinate bodies, the Constitution requires that civil courts accept their decisions as binding upon them. 426 U.S. at 724-725, 96 S. Ct. at 2387. The Court also declared in Serbian that where the resolution of a church property dispute may be a consequence of an ecclesiastical determination, "[c]ivil courts must accept that consequence as the incidental effect of an ecclesiastical determination that is not subject to judicial abrogation, having been reached by the final church judicatory in which authority to make the decision resides." 426 U.S. at 720, 96 S. Ct. at 2385. Thus, Watson's holding with respect to the appropriate role of civil courts remains unchanged even where a church property dispute is incidentally resolved by an ecclesiastical determination.

Another acceptable method of resolving church property disputes is the neutral principles of law approach enunciated by the United States Supreme Court in Presbyterian Church v. Hull Church, 393 U.S. 440, 89 S. Ct. 601, 21 L. Ed. 2d 658 (1969). This approach, as evolved in succeeding cases, calls for the completely secular examination of deeds to the church property, state statutes and existing local and general church constitutions, by-laws, canons, Books of Discipline and the like to determine whether any basis for a trust in favor of the general church exists. In Jones v. Wolf, supra, the most recent decision in this area, the Supreme Court reaffirmed its approval of the neutral principles of law doctrine as one of the various approaches for settling church property disputes. The Jones decision involved a church property dispute between the local church and the general church in which the Georgia courts had examined the property deeds, state statutes, local church charter, the general church constitution and Book of Church Order. When the examination failed to reveal any language of trust in favor of the general church, the Georgia courts ruled that more than a mere connectional relationship between the local and general church must be shown to give rise to property rights in the general church. Accordingly, it was held that legal title to the church property

was vested in the local church congregation. The United States Supreme Court approved this neutral principles of law approach as an acceptable method of resolving the particular dispute.

Prior to the United States Supreme Court decision in Watson, the New Jersey cases had also recognized the distinction between congregationally structured churches and hierarchical churches. With respect to hierarchical church organization, it has been held that local church bodies were subject to the established discipline and authority of the central church body. American Primative Society of Paterson v. Pilling, 24 N.J.L. 653 (Sup.Ct.1855); Den v. Bolton, 12 N.J.L. 206 (Sup.Ct.1831).

After the Watson decision, a church property dispute was presented in Kelly v. McIntire, 123 N.J. Eq. 351 (Ch.1938). In Kelly, the Presbyterian Church in the United States of America and one of its local member parishes became involved in a doctrinal dispute. The local parish had declared its severance from the parent church and repudiated the authority of the parent church. In a suit brought by members of the local church "loyal" to the parent church, the court held that "a congregation belonging to a religious denomination and subject to the constitution, faith and doctrines thereof, cannot use its property for a purpose other than that sanctioned by the denomination." Id. at 361. The court rested its ruling on statutory provisions of this State relating to the acquisition, holding and use of local church property. Rev. 1877, p. 959, as amended by P.L. 1898, p. 397, 3 Comp.Stat., p. 4309; P.L. 1881, p. 256, 3 Comp.Stat., p. 4312, § 12d. Reference was also made to the statute regulating the incorporation of local Presbyterian parishes. P.L. 1905, p. 254, 3 Comp.Stat., p. 4343, § 81. In addition, the court quoted extensively from Watson and appears to have also relied on that holding in determining the property dispute.

More recently, in St. John's Greek Catholic Church v. Fedak, 96 N.J. Super. 556 (App.Div.1967), certif. den. 50 N.J. 406 (1967), a church property dispute involved a hierarchically structured national church (Metropolia) and a local parish which had never formally affiliated with the Metropolia but had ...

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