Monday, September 21, 2009

All Saints Church Waccamaw – Abuses of the Statute of Uses?

By Eric Von Salzen

In the recent case of All Saints Church Waccamaw v. Protestant Episcopal Church, the South Carolina Supreme Court held that All Saints Church of Waccamaw had lawfully withdrawn from the Episcopal Church and the Diocese of South Carolina and taken its property with it.

As a real estate lawyer, I found this a fascinating case. As a loyalist Episcopalian, I found it disturbing.

The history of All Saints parish goes back to 1745, when Percival and Ann Pawley transferred some 60 acres of land to George Pawley and William Poole “forever in trust for the inhabitants on Waccamaw Neck for use of a chapel or church for divine worship of the Church of England established by law.” All Saints Parish was established on this land in 1767 and has conducted services there ever since.

In August 2003, “prompted by events that are not relevant here,” the Court’s opinion says (but I suppose we can guess), the congregation appointed a committee to recommend whether it should leave the Episcopal Church and the Diocese, and by a two-thirds vote in January 2004, the congregation voted to amend its corporate charter to separate from the larger church. This being America, lawsuits followed.

The state Supreme Court faced two issues. Did the parish own its real estate (so it could take the property out of the Episcopal Church) or did it hold it in trust for the Diocese or the national church? And did the congregation have the corporate power to take the parish out of the Episcopal Church? The trial court had answered both questions in the negative, that is, in favor of the Episcopal Church and Diocese. The Supreme Court reversed and decided in favor of the break-away parish on both issues.

First, the Court had to decide what rules governed these issues. When civil courts are called on to decide disputes involving churches, the courts must tread carefully. Under the First Amendment to the U.S. Constitution, the government may neither “establish” a church nor deny any person the right to freely exercise his/her religion. This means that courts must steer clear of resolving religious disputes on religious grounds – the Court could not decide this case, for example, by determining which side of the dispute was more consistent with Episcopalian doctrine.

The U.S. Supreme Court, according to the South Carolina Supreme Court, has said that there are two valid approaches that the civil courts can use in deciding church disputes: the “deference approach” and the “neutral principles of law approach.” The South Carolina Court described the deference approach as follows:

Under this approach, a court must only determine whether a church is “congregational” or “hierarchical” in nature. If the church is congregational, the court will resolve the dispute by deferring to a majority of the congregation. However, if the congregation at issue is part of a hierarchical organization, the court will defer to the decision of the ecclesiastical authorities.
Under the neutral principles approach, however, the decision does not depend on the organizational structure of the church.

Rather, the neutral principles of law approach permits the application of property, corporate, and other forms of law to church disputes.
Which approach you take in this case is going to determine the outcome: If you use the deference approach, the Diocese and the national church win; if you use the neutral principles approach, the parish wins (for reasons that I’ll get to in a minute). According to the South Carolina Supreme Court, the U.S. Supreme Court has ruled that a state can adopt either approach. This seems strange to me, but I’m not a First Amendment lawyer. If anyone reading this knows anything about this issue, please comment. Also according to the South Carolina Supreme Court, it had adopted the neutral principles approach in a previous case in 1996, and would take that approach in this case.

To apply neutral principles to the property dispute, you start with the deeds on record, of which there were two, one from 1745 and one from 1903. The 1745 deed conveyed the property to George Pawley and William Poole as trustees for the benefit of the inhabitants of Waccamaw Neck. Under an old English law called the Statute of Uses, enacted by Parliament in the reign of Henry VIII, where land is conveyed to one party “for the use of” another party, the title is treated as though it was conveyed directly to the second party. This statute has been incorporated into the real estate law of most U.S. states, including South Carolina. If George Pawley and William Poole had been “real” trustees, with actual duties to perform with respect to the management of the land, the Statute of Uses would not have applied, but the South Carolina court concluded that they weren’t “real” trustees – they had no duties to perform other than holding nominal title to the land - so the Statute of Uses applied. The Court also held that “inhabitants of Waccamaw Neck” meant All Saints Parish, so the 1745 deed gave the parish title to the land in question.

The other deed was issued in 1903, from the Diocese to the parish, and transferred to the parish any interest that the Diocese might have in the parish’s property. With that, I’m not sure the Court even needed to bother with the Statute of Uses (but that’s the sort of arcane material that lawyers and judges can’t leave alone).

So applying “neutral principles” of real estate law, the parish owns its real estate, and the Diocese and the national church have no interest in it. When the Diocese amended its canons in 1987 to declare that all parishes held their land in trust for the Diocese and the national church, and in 2000 recorded notice in the land records to that effect, those actions had no effect because the Diocese had no ownership in the land, and you can’t declare a trust over property that you don’t own.

As for the second issue, the authority of the congregation to amend its charter and withdraw from the Episcopal Church and the Diocese of South Carolina, under neutral principles that becomes a question of corporate law. The parish was incorporated as a non-profit corporation under South Carolina law. It adopted its charter amendment withdrawing from the Episcopal Church in accordance with the non-profit corporation act. Nothing in the articles of incorporation of the parish corporation gave the Diocese or the national church any say in the manner. Although at canon law the parish might be subordinate to the diocese, as a matter of corporate law it was an independent corporation, not a subsidiary.

Thus, applying neutral legal principles, the state Supreme Court held that All Saints Church Waccamaw properly withdrew from the Episcopal Church and could take its real estate with it.

When I was in law school, a classmate and I wrote a song about the ancient doctrines of land law that we were studying. It was set to the tune of Woody Guthrie’s This Land Is Your Land, and the first verse went like this:

This land was your land, but now it’s my land
Thanks to a writ of novel disseisin [*]
And through abuses
of the Statute of Uses
Your land will all belong to me.

[* Don’t Ask.]

As the Episcopal loyalists who used to be congregants of All Saints Church Waccamaw look for a new church home, they may feel that they’ve been abused by the Statute of Uses.

40 comments:

  1. And let's pray that The Rule in Shelley's Case doesn't rear its ugly head again (along with her friend otherwise known as The Rule Against Perpetuities).

    With no thanks to Powell on Real Property, these are the only two things I remember from Real Propery class in law school.

    Thanks, Eric, for a great summary of the case which, I, too, find very disturbing.

    The corporate lawyer part of my brain now switches to those who have given charitably to that parish, its not-for-profit standing, encumbrances on its real property, etc., etc.

    Now my head hurts . . .

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  2. According to the South Carolina Supreme Court, the U.S. Supreme Court has ruled that a state can adopt either approach. This seems strange to me, but I’m not a First Amendment lawyer. If anyone reading this knows anything about this issue, please comment.

    Jones v. Wolf references Maryland & Va. Churches v. Sharpsburg Church "Since state court's resolution of property dispute between church bodies was made on basis of state law that did not involve inquiry into religious doctrine, the appeal involves no substantial federal question."

    But I think there's a Free Exercise argument in here somewhere that perhaps hasn't been fully considered.

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  3. Thanks, ruidh, for the cite; I'll check it out. I think St. Paul told us not to take disputes within the Christian community to the civil (did he say pagan?) courts, and he seems to be right again.

    Chad, thanks for reminding me of the Rule in Shelley's Case. I'll try to forget it again as quickly as possible!

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  4. Very well written post, sir, and I have linked to it in my post on this case. ruidh is correct that the majority in Jones v. Wolf felt that the Sharpsburg Church case offered a precedent for the rule they were announcing, but in point of fact, the 5-4 majority in Jones was an amalgam of two previous groups who happened to see their respective views served by the outcome in Jones -- which sent the case back to Georgia for that State's Supreme Court to elucidate a neutral rule of decision which would keep its courts out of religious disputes. As I traced in this post and then this one, there were only two justices (Stevens and Rehnquist) out of the five who actually endorsed the "neutral principles" approach without reservation. The other three (Brennan, Marshall and Blackmun) believed that courts should stay away from deciding religious questions under any circumstances. The four dissenters (Powell, Burger, Stewart and White) all favored the "deference" approach. So the "neutral principles" idea was established only because it happened to satisfy two of the three factions of the Court in the circumstances of the Jones case, and not because there was a solid majority behind it.

    There has never been a Supreme Court case since Jones which tested the alignment for "neutral principles" in a church property case. When the Supreme Court lets us know (probably on October 5) whether or not it will grant review in the St. James case from California, we will know if there are any supporters of the concept (besides Justice Stevens) who are on the Court today.

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  5. Thanks for your comments Mr. Haley. Your "O Tempora!" posts on Anglican Curmudgeon about the church-state legal issues are very interesting.

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  6. This was a sad day for the Diocese of SC. My only question is will All Saints Church continue to operate as usual, just without affiliation with TEC? Whats the deal?

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  7. If the original deed was "forever in trust for the inhabitants on Waccamaw Neck for use of a chapel or church for divine worship of the Church of England established by law", why then did the court not preserve the use "for divine worship of The Episcopal Church" == that being the successor to the Church of England in this country?

    Was this not argued?

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  8. Paul, the argument you suggest is not expressly discussed in the S.C. Supreme Court opinion. However, the Court did rule that there was no valid trust, and if that's so, you don't get to the question of the purpose of the trust. You're back to the Statute of Uses.

    You might argue that the Court was wrong to interpret the phrase "people of Waccamaw Neck" to mean All Saints Parish and should have interpreted that phrase to mean a parish of the Episcopal Church in that location. However, that argument would be hard to square with the overall "neutral principles" approach taken by the Court.

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