Cite as 2020 Ark. App. 253 Reason: I attest to the accuracy and integrity of this document ARKANSAS COURT OF APPEALS Date: 2021-07-06 12:57:57 DIVISION I Foxit PhantomPDF Version: 9.7.5 No. CV-19-509
Opinion Delivered April 22, 2020 FIRST PRESBYTERIAN CHURCH OF MAGNOLIA, ARKANSAS APPELLANT APPEAL FROM THE COLUMBIA COUNTY CIRCUIT COURT V. [NO. 14CV-16-87]
THE PRESBYTERY OF THE PINES APPELLEE HONORABLE ROBIN J. CARROLL, JUDGE
REVERSED AND REMANDED
BRANDON J. HARRISON, Judge
This case is about the First Presbyterian Church of Magnolia, Arkansas, and its right
to retain the use and control of local church property. The Magnolia church argues that
the circuit court clearly erred by ruling that no justiciable issue was presented to decide.
The church argues that this court should reverse the mistaken order, remand the case to the
circuit court, and direct it to quiet title in the “true owner” of the local church property.
We agree that the circuit court had a justiciable issue before it that needs to be decided.
The March 2019 order that dismissed the church’s complaint is reversed, and the case is
remanded for further proceedings consistent with this opinion.
I.
In 2016, the local Magnolia church filed a “Petition for Declaratory Judgment,
Temporary Restraining Order, Permanent Injunction and Suit to Quiet Title.” In it the
church asked the Columbia County Circuit Court to determine who has use and control of the church’s assets, including real property. The Presbyterian form of church government
is hierarchical, so the local Magnolia First Presbyterian Church joined Presbytery of the
Pines and the Presbyterian Church (U.S.A.) as defendants in its lawsuit. The Presbyterian
Church (U.S.A.)’s position is represented by appellee Presbytery of the Pines; they are one
and the same for this case’s purposes. The Presbytery of the Pines is the Presbyterian Church
(U.S.A.)’s governing body for the geographic district where Magnolia, Arkansas, is located.
We will refer to Presbytery of the Pines and the Presbyterian Church (U.S.A.) collectively
as “the denomination” in this opinion to simplify matters.
The Magnolia First Presbyterian Church was formed in 1954. When the local
church was formed it was a member of the Presbyterian Church in the United States. The
Presbyterian Church in the United States was the southern branch of the denomination, but
it no longer exists. The governing rules of the Presbyterian Church in the United States
(commonly called the “southern branch”) were collected in the Presbyterian Church in the
United States’ Book of Church Order (sometimes referred to in the parties’ papers as
“BOCO”). According to an affidavit of Rev. Joseph W. Hill, in 1982, the southern
denomination added a “trust clause” stating that local churches hold their property in trust
for the southern denomination (that is, for the Presbyterian Church in the United States).
The record reveals that a ruling elder and pastor from the local Magnolia church attended
the 9 February 1982 meeting in which the “trust clause” amendment to the Book of Church
Order (BOCO) was approved.
The circuit court eventually held a bench trial to adjudicate the local church’s request
that the court determine whether the congregation or the denomination owned the local
2 church property. During the trial, the First Presbyterian Church pastor, Rev. Michael
David Morgan testified. He said that local Magnolia church meeting records showed that,
on 3 May 1981, there was a session meeting about the new trust-amendment proposal that
was circulating in the southern denomination. He said that prior to 1982 there had been
no trust provisions of any kind that pertained to the southern churches. The reverend read
into the record some minutes from the 1981 session meeting of the local Magnolia church.
Those minutes stated: “These [trust] amendments do not in any way change the fact that
the congregation owns its own property nor do they give Presbytery, Synod or General
Assembly any jurisdiction over the property.” A written copy of the minutes from the 1981
meeting was received as evidence.
The 1981 local session meeting predated the 1982 adoption of the trust amendment
by the southern denomination. The record does not tell us how the representatives from
the local Magnolia First Presbyterian Church voted in the national convention of the
southern denomination. The record does, however, tell us that the trust provision was
approved; and in 1982 the General Assembly of the Presbyterian Church in the United
States (southern denomination) adopted a property “trust clause” in its Book of Church
Order. The parties agree that the Magnolia First Presbyterian Church was a member of the
Presbyterian Church in the United States when the trust clause was adopted in 1982 and
that the Magnolia church was governed by the denomination’s Book of Church Order.
In 1983, the Presbyterian Church in the United States and the northern branch of
the denomination joined to form the Presbyterian Church (U.S.A.). The local Magnolia
church became a member of the Presbyterian Church (U.S.A.) denomination at that time.
3 According to its terms, the Presbyterian Church (U.S.A.) Book of Order (BOO) was
effective immediately upon the formation and “reunification” of the southern and northern
branches that merged to become the Presbyterian Church (U.S.A.). The only surviving
entity from that merger is the Presbyterian Church (U.S.A.). Since 1982, the Presbyterian
Church (U.S.A.) Book of Order has included a trust provision stating that all property held
by a particular church was for the use and benefit of the denomination. The current
provision states:
All property held by or for a congregation, a presbytery, a synod, the General Assembly, or the Presbyterian Church (U.S.A.), whether legal title is lodged in a corporation, a trustee or trustees, or an unincorporated association, and whether the property is used in programs of a congregation or of a higher council or retained for the production of income, is held in trust nevertheless for the use and benefit of the Presbyterian Church (U.S.A.).
Book of Order G-4.0203 (formerly G-8.0201) (formerly § 6-3).
The denomination’s Book of Order permitted a local church—within eight years of
the formation of the Presbyterian Church (U.S.A.)—to vote “to be exempt” or “opt to be
exempt” from the Book of Order’s property “trust clause.” A later decision gave local
churches until 1992 to opt out. Magnolia First Presbyterian Church did not “opt out”
before the 1992 deadline, which was the latest time that it was allowed to do so under the
Book of Order. In fact, the local Magnolia church did not attempt to opt out until 2012,
when it sought to revoke any trust provisions favoring Presbyterian Church (U.S.A.).
Simply put, the local Magnolia church tried to opt out some twenty years past the deadline.
The land on which the local church is located is titled in the “First Presbyterian
Church, Magnolia, Arkansas.” The church is an incorporated nonprofit corporation; it is
registered with the Arkansas Secretary of State as “First Presbyterian Church of Magnolia,
4 Arkansas, Incorporated.” The church land and other properties have been mortgaged
through the years. The church has also executed leases and easements. None of the deeds
or mortgages identify Presbytery of the Pines or the Presbyterian Church (U.S.A.).
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Cite as 2020 Ark. App. 253 Reason: I attest to the accuracy and integrity of this document ARKANSAS COURT OF APPEALS Date: 2021-07-06 12:57:57 DIVISION I Foxit PhantomPDF Version: 9.7.5 No. CV-19-509
Opinion Delivered April 22, 2020 FIRST PRESBYTERIAN CHURCH OF MAGNOLIA, ARKANSAS APPELLANT APPEAL FROM THE COLUMBIA COUNTY CIRCUIT COURT V. [NO. 14CV-16-87]
THE PRESBYTERY OF THE PINES APPELLEE HONORABLE ROBIN J. CARROLL, JUDGE
REVERSED AND REMANDED
BRANDON J. HARRISON, Judge
This case is about the First Presbyterian Church of Magnolia, Arkansas, and its right
to retain the use and control of local church property. The Magnolia church argues that
the circuit court clearly erred by ruling that no justiciable issue was presented to decide.
The church argues that this court should reverse the mistaken order, remand the case to the
circuit court, and direct it to quiet title in the “true owner” of the local church property.
We agree that the circuit court had a justiciable issue before it that needs to be decided.
The March 2019 order that dismissed the church’s complaint is reversed, and the case is
remanded for further proceedings consistent with this opinion.
I.
In 2016, the local Magnolia church filed a “Petition for Declaratory Judgment,
Temporary Restraining Order, Permanent Injunction and Suit to Quiet Title.” In it the
church asked the Columbia County Circuit Court to determine who has use and control of the church’s assets, including real property. The Presbyterian form of church government
is hierarchical, so the local Magnolia First Presbyterian Church joined Presbytery of the
Pines and the Presbyterian Church (U.S.A.) as defendants in its lawsuit. The Presbyterian
Church (U.S.A.)’s position is represented by appellee Presbytery of the Pines; they are one
and the same for this case’s purposes. The Presbytery of the Pines is the Presbyterian Church
(U.S.A.)’s governing body for the geographic district where Magnolia, Arkansas, is located.
We will refer to Presbytery of the Pines and the Presbyterian Church (U.S.A.) collectively
as “the denomination” in this opinion to simplify matters.
The Magnolia First Presbyterian Church was formed in 1954. When the local
church was formed it was a member of the Presbyterian Church in the United States. The
Presbyterian Church in the United States was the southern branch of the denomination, but
it no longer exists. The governing rules of the Presbyterian Church in the United States
(commonly called the “southern branch”) were collected in the Presbyterian Church in the
United States’ Book of Church Order (sometimes referred to in the parties’ papers as
“BOCO”). According to an affidavit of Rev. Joseph W. Hill, in 1982, the southern
denomination added a “trust clause” stating that local churches hold their property in trust
for the southern denomination (that is, for the Presbyterian Church in the United States).
The record reveals that a ruling elder and pastor from the local Magnolia church attended
the 9 February 1982 meeting in which the “trust clause” amendment to the Book of Church
Order (BOCO) was approved.
The circuit court eventually held a bench trial to adjudicate the local church’s request
that the court determine whether the congregation or the denomination owned the local
2 church property. During the trial, the First Presbyterian Church pastor, Rev. Michael
David Morgan testified. He said that local Magnolia church meeting records showed that,
on 3 May 1981, there was a session meeting about the new trust-amendment proposal that
was circulating in the southern denomination. He said that prior to 1982 there had been
no trust provisions of any kind that pertained to the southern churches. The reverend read
into the record some minutes from the 1981 session meeting of the local Magnolia church.
Those minutes stated: “These [trust] amendments do not in any way change the fact that
the congregation owns its own property nor do they give Presbytery, Synod or General
Assembly any jurisdiction over the property.” A written copy of the minutes from the 1981
meeting was received as evidence.
The 1981 local session meeting predated the 1982 adoption of the trust amendment
by the southern denomination. The record does not tell us how the representatives from
the local Magnolia First Presbyterian Church voted in the national convention of the
southern denomination. The record does, however, tell us that the trust provision was
approved; and in 1982 the General Assembly of the Presbyterian Church in the United
States (southern denomination) adopted a property “trust clause” in its Book of Church
Order. The parties agree that the Magnolia First Presbyterian Church was a member of the
Presbyterian Church in the United States when the trust clause was adopted in 1982 and
that the Magnolia church was governed by the denomination’s Book of Church Order.
In 1983, the Presbyterian Church in the United States and the northern branch of
the denomination joined to form the Presbyterian Church (U.S.A.). The local Magnolia
church became a member of the Presbyterian Church (U.S.A.) denomination at that time.
3 According to its terms, the Presbyterian Church (U.S.A.) Book of Order (BOO) was
effective immediately upon the formation and “reunification” of the southern and northern
branches that merged to become the Presbyterian Church (U.S.A.). The only surviving
entity from that merger is the Presbyterian Church (U.S.A.). Since 1982, the Presbyterian
Church (U.S.A.) Book of Order has included a trust provision stating that all property held
by a particular church was for the use and benefit of the denomination. The current
provision states:
All property held by or for a congregation, a presbytery, a synod, the General Assembly, or the Presbyterian Church (U.S.A.), whether legal title is lodged in a corporation, a trustee or trustees, or an unincorporated association, and whether the property is used in programs of a congregation or of a higher council or retained for the production of income, is held in trust nevertheless for the use and benefit of the Presbyterian Church (U.S.A.).
Book of Order G-4.0203 (formerly G-8.0201) (formerly § 6-3).
The denomination’s Book of Order permitted a local church—within eight years of
the formation of the Presbyterian Church (U.S.A.)—to vote “to be exempt” or “opt to be
exempt” from the Book of Order’s property “trust clause.” A later decision gave local
churches until 1992 to opt out. Magnolia First Presbyterian Church did not “opt out”
before the 1992 deadline, which was the latest time that it was allowed to do so under the
Book of Order. In fact, the local Magnolia church did not attempt to opt out until 2012,
when it sought to revoke any trust provisions favoring Presbyterian Church (U.S.A.).
Simply put, the local Magnolia church tried to opt out some twenty years past the deadline.
The land on which the local church is located is titled in the “First Presbyterian
Church, Magnolia, Arkansas.” The church is an incorporated nonprofit corporation; it is
registered with the Arkansas Secretary of State as “First Presbyterian Church of Magnolia,
4 Arkansas, Incorporated.” The church land and other properties have been mortgaged
through the years. The church has also executed leases and easements. None of the deeds
or mortgages identify Presbytery of the Pines or the Presbyterian Church (U.S.A.).
According to the case record, every title document or related statement has included the
local Magnolia church only. The parties have not identified any documents or provided
any testimony showing that the denomination’s church hierarchy (presbytery, synod,
General Assembly, etcetera) has ever approved or denied the Magnolia church’s property
transactions or has even been told about them.
After the bench trial, the circuit court dismissed all of the Magnolia church’s claims
seeking relief against the defendants. The order of dismissal states;
1. The Court has jurisdiction of the Parties.
2. That the trust agreement as set forth in the Constitution of the Presbyterian Church, U.S.A. either in Section G-8.0200, now known as G- 4.0203, is not a cloud on the title of any real or personal property owned by the First Presbyterian Church of Magnolia, Arkansas, Inc.
3. The issue concerning the trust provision is not justiciable as there has been no actual harm to the Plaintiff and therefore the issue is not ripe.
4. The Court is not going to reach the merits of whether the trust clause is a valid trust provision or not.
5. Whether the trust provision is a valid trust provision is an issue for another day, as there has been no harm to the church by the existence of this alleged trust provision.
6. The Temporary Restraining Order is lifted and is no longer in effect.
IT IS THEREFORE ORDERED that this case is dismissed as there is no justiciable issue before the Court at this time.
5 II.
Our primary task here is to decide whether the circuit court erred when it dismissed
the church’s complaint for want of a justiciable issue. A “justiciable” issue is presented when
it is “subject to proper resolution on the merits by a court of justice; capable of being
disposed of judicially.” Justiciable, Black’s Law Dictionary (11th ed. 2019). The circuit court
erred by holding that the local Magnolia church failed to present a judiciable issue in this
case.
Arkansas courts have express statutory and common-law authority to resolve
property ownership between local churches and their denominations. Ark. Presbytery of
Cumberland Presbyterian Church v. Hudson, 344 Ark. 332, 40 S.W.3d 301 (2001). True, the
First Amendment to the United States Constitution limits the role civil courts can play in
resolving some types of church disputes. The Supreme Court of the United States has not
adopted a “particular method” that states must follow when resolving church-property
disputes. Jones v. Wolf, 443 U.S. 595, 602 (1979). But our supreme court has adopted the
“neutral principles” approach for Arkansas. Hudson, supra. When settling a church-property
dispute that asks whether a local church or one of its governing bodies holds title to church
property, a court may look at
(1) the language of the deeds;
(2) the terms of the local church charters;
(3) the state statutes governing the holding of church property; and
(4) the provisions in the constitution of the general church concerning the ownership and control of church property
6 Ark. Annual Conf. of the AME Church, Inc. v. New Direction Praise & Worship Ctr., Inc., 375
Ark. 428, 434, 291 S.W.3d 562, 566 (2009).
Under the neutral-principles approach, when courts review religious documents they
must “take special care to scrutinize the document in purely secular terms” and give effect
to the parties’ intent. Wolf, 443 U.S. at 602. So the circuit court must apply Arkansas’s
trust and property law without regard to the organizational structure of the religious
denomination. Id. at 609 (“The neutral-principles approach . . . obviates entirely the need
for an analysis or examination of ecclesiastical polity or doctrine in settling church property
disputes.”). This is true whether the court has to interpret the language of a deed or
conveyance, or whether it must determine how a purported trust applies to the parties, if it
applies at all. Id.
As we have said, a court’s first task when applying the neutral-principles approach is
to review the language of the deed. New Direction, 375 Ark. at 435, 291 S.W.3d at 567.
The circuit court did not do so. Nor did it apply any other aspect of the relevant legal test.
In fact, the circuit court mistakenly ruled that it could not adjudicate the dispute before it.
Therefore, it did not decide the core question in this case: which church entity owns the
local Magnolia property in dispute. It did not quiet title in either party. Instead, the court
held that no justiciable issue was presented, and that was an error of law.
III.
We reverse the circuit court’s March 2019 order and remand the case to it. On
remand, the court must determine the merits of the church’s complaint against the
denomination, applying neutral principles of law, and determine whether an express or
7 implied trust in favor of the Presbyterian Church (U.S.A.) exists on the property to which
the local Magnolia church holds title and resolve who owns the property. We also direct
the circuit court to decide any other matters that the parties have properly raised.
Reversed and remanded.
VIRDEN and VAUGHT, JJ., agree.
PPGMR Law, PLLC, by: Kimberly D. Logue, for appellant.
McMillan, McCorkle & Curry, LLP, by: Ed W. McCorkle, for appellee.