Church of God Pent., Inc. v. Freewill Pent. Church of God, Inc.
Docket: 96-CA-00922-SCT
Court: Mississippi Supreme Court; June 4, 1998; Mississippi; State Supreme Court
Church of God Pentecostal, Inc. filed a lawsuit against Freewill Pentecostal Church of God, Inc. seeking injunctive relief, accounting, and to quiet title to property used for church purposes. The dispute arose after Floyd Langer, a former leader of Church of God Pentecostal who had been defrocked, continued to lead his congregation at the property in question. Church of God Pentecostal contended that it retained ownership of the property and that Langer and his church were no longer affiliated and thus had no rights to the property. The chancellor ruled in favor of Freewill Pentecostal Church.
Church of God Pentecostal appealed, claiming the trial court erred in affirming Freewill’s title and in excluding certain testimony from the record. The Supreme Court of Mississippi reviewed the case and determined that the chancellor did not abuse his discretion regarding either of the appellant's claims, thereby affirming the lower court's decision.
The procedural history indicates that the case was initially filed against Langer and others, who were later dismissed from the case. Church of God Pentecostal, a national organization based in Alabama with established bylaws, asserted ownership of the property through various deeds. Freewill Pentecostal Church, located in Moss Point, Mississippi, claimed ownership based on the deeds stating the property was held for its membership.
A deed executed on July 28, 1959, conveyed Lot 16 in Block 1 of Gautier's First Addition, Moss Point, Mississippi, from Henry and Clara Brown to the Church of God Pentecostal, General Assembly. Prior to this, local residents had held religious services independently, with testimonies from community members indicating no formal church affiliation. The property was purchased for $500, funded through local fundraising efforts such as selling food, with no evidence presented that Pentecostal contributed financially to this purchase. Following the acquisition, the local congregation constructed a building on the property, which they believed belonged to them.
A second deed, executed in May 1968, transferred the East 40' of Lots 14 and 15 to the Church of God Pentecostal of Moss Point, with funds again raised by local residents. The local congregation, under the leadership of James Armstrong, built their church on Lot 16 without assistance from Pentecostal. In 1976, legal advice led to the preparation of a deed that conveyed realty to local trustees, aiming to comply with state laws for unincorporated religious societies.
In 1986, the Moss Point congregation received a $5,000 loan from Pentecostal, which was repaid within 90 days without interest. Subsequently, on October 26, 1993, the congregation acquired Lot 15 through a Commissioner's deed after paying taxes and clearing the land. Initially, Pentecostal held a lien on this property, which was later foreclosed. At some point, the local congregation executed a Deed of Trust in favor of Magnolia, making timely payments without any support from Pentecostal. The Chief Apostle Davis was unaware of the Deed of Trust until recently, and his testimony was affected by his age and health issues prior to the trial in April 1996.
In March 1994, Langer was defrocked by Pentecostal due to alleged misconduct and violation of its By-Laws. Langer had a longstanding relationship with the Moss Point congregation, where he served in various leadership roles since 1953, including Bishop and trustee. Following his defrocking, the Moss Point church changed its locks, purportedly for insurance reasons, and altered its signage to reflect the new leadership. In November 1994, former trustees of the Church of God Pentecostal attempted to transfer the church property to the newly established Freewill Pentecostal Church.
On June 13, 1996, a chancellor ruled in favor of Freewill, confirming its title to the property based on the ambiguous nature of the original deed and the intent that the property was meant for the local congregation. The chancellor found that subsequent deeds clearly indicated the property should remain with the local congregation. Pentecostal appealed this ruling, arguing that the trial court erred in its decision.
The appeal addresses the standard of review for factual determinations by a trial judge without a jury, which is based on substantial evidence. Civil courts are authorized to resolve church property ownership disputes, provided they do not delve into issues of religious doctrine, as mandated by the First Amendment.
The United States Supreme Court first addressed church property disputes in Watson v. Jones (1872), which arose from a schism in a Kentucky Presbyterian church during the Civil War. The Court determined that for congregational churches, disputes should be resolved based on the majority's corporate decisions unless a higher ecclesiastical authority exists, in which case the court must enforce that authority's ruling. Over a century later, in Wolf v. Colorado (1980), the Supreme Court adopted the 'neutral principles of law' approach for resolving church property disputes, emphasizing a secular examination of property deeds, state laws, and church governing documents to establish trust rights. In Wolf, Georgia courts found no trust language favoring the general church, leading to a ruling that the local church held legal title to the property. The Supreme Court affirmed that while some religious documents may be examined, the inquiry should remain strictly secular, devoid of religious precepts, to determine trust intentions.
Mississippi case law regarding property disputes involving religious organizations is limited and largely predates the U.S. Supreme Court's ruling in Wolf. The most relevant case, Sustar v. Williams, provides a historical overview of Mississippi law and incorporates decisions from other jurisdictions. It suggests that previous cases primarily adhered to the "judicial deference" standard. This Court has now opted for the neutral-principles approach endorsed by Wolf, which is secular and flexible, relying on established trust and property law.
For the Pentecostal denomination to obtain the requested relief, it must prove either an actual property transfer from the local congregation, the existence of an express trust, or clear evidence of the congregation's intent to create a trust in favor of the denomination. Evidence presented indicates that the Moss Point congregation, now Freewill, did not transfer the disputed property to Pentecostal, and no documents establishing an express trust were provided. Consequently, the only way for Pentecostal to confirm title is through a resulting or constructive trust. Constructive trusts, unlike express or resulting trusts, arise by legal operation rather than by agreement or intention.
Resulting trusts occur when one person purchases property in another's name while paying for it, establishing that the property is held in trust for the purchaser's benefit. The legal titleholder is obligated to hold the property for the rightful owner, reflecting the principle that the true owner is the one who provided the funds. This concept remains intact even if the property is moved to another state or exchanged for different property. Resulting trusts also serve to prevent unfair division of marital property.
Constructive trusts arise by operation of law due to fraud, duress, abuse of confidence, or other unconscionable conduct, compelling an individual who holds property unjustly to convey it to the rightful owner. They can be established in various transactions where one party possesses funds that should equitably belong to another. Unlike resulting trusts, constructive trusts do not require intention or agreement and can be established without showing fraud. However, they require clear and convincing evidence to be validated in court.
A resulting or constructive trust concerning contested property requires examination of Pentecostal's by-laws and the four relevant deeds, alongside the conduct of the Moss Point congregation. The by-laws specify that all local church deeds remain the property of the national church and must be sent to its general office, reflecting the national church's intent to retain ownership of local church property. The relationship between Pentecostal and the Moss Point congregation is ambiguous, raising questions about whether Moss Point was a legitimate 'sister church' and if it adhered to Pentecostal's by-laws.
Evidence presented at trial indicated that the Moss Point congregation did not adopt Pentecostal's by-laws, as it elected its own trustees and failed to comply with the by-laws. Additionally, the by-laws were not established until at least 1963, making them inapplicable to a 1958 real estate transaction, since Pentecostal was not incorporated until 1961. Consequently, Pentecostal could not have ownership claims over property purchased by Moss Point in 1958.
Further, evidence suggested that Pentecostal did not recognize Mississippi congregations as part of its denomination. Davis's 1993 affidavit listed states with sister churches, excluding Mississippi, and the by-laws required sister churches to be incorporated in their respective states, which did not occur in Mississippi until 1993. The Moss Point congregation did not participate in Pentecostal meetings or conferences and had no voting rights. The by-laws mandated that all deeds and property reports be submitted to the general office, which the Moss Point congregation failed to do, along with sporadic assessments and payments made to other denominations.
Moss Point's status as a 'sister church' of Pentecostal in 1993 is based on a tenuous assumption regarding its incorporation in Mississippi. According to Pentecostal's by-laws, property title must be confirmed in the Moss Point congregation (now Freewill), allowing established members to retain property rights unless they choose to deed it to the Church of God Pentecostal, Inc. However, evidence suggests that the Moss Point congregation did not adopt or adhere to these by-laws, indicating no intent to hold the contested property in trust for Pentecostal.
Under neutral principles, the four relevant deeds and associated documents must be interpreted according to property law, considering the instruments as a whole to determine the parties' intent from their clear language. Courts prioritize the expressed words over unarticulated intentions. While there is disagreement over the deeds' meanings, this does not create ambiguity. The chancellor's decision on whether the deeds are ambiguous and their implications is reviewed de novo as a legal question.
The chancellor found the 1958 root deed ambiguous concerning the term 'general assembly,' which had two interpretations: referring either to the national denomination or the local congregation. Ultimately, the chancellor concluded that the local congregation had no affiliation with any national organization and noted that the purchase price was entirely funded by local members. Thus, the intent was determined to be that the property was acquired for the local congregation.
Upon de novo review, the Court affirms the chancellor’s determination that the 1958 deed is ambiguous, indicating that the property was purchased for the local congregation, not for Pentecostal, which was not incorporated until 1961 and lacked by-laws at the time of purchase. Testimony presented at trial does not support Pentecostal's claim that the land was acquired on its behalf. Regarding three additional deeds, the chancellor found their language clearly reflects that the local congregation purchased the property for itself. The evidence supports this finding, and there is no indication of an intent to create a trust in favor of Pentecostal in the deeds, by-laws, or party conduct, with Pentecostal failing to demonstrate the existence of such a trust.
The Court also addresses an assignment of error related to the trial court's refusal to admit certain testimony under Rule 406 of the Mississippi Rules of Evidence. The trial court exercised its discretion in excluding testimony regarding alleged actions by Langer to recruit members from a related church, determining it involved ecclesiastical issues beyond neutral principles. Pentecostal contends this exclusion was an abuse of discretion, arguing the testimony was relevant and probative. The Court reviews the rules of evidence, stating that relevant evidence must make the existence of a consequential fact more probable, while Rule 406 allows for evidence of habitual conduct to prove conformity on a specific occasion.
Davis's proposed testimony regarding Langer's past behavior of attempting to siphon members from another church does not meet the criteria for admissibility under Mississippi Rule of Evidence 406, as it pertains only to one isolated incident rather than a habitual practice. The relevance of this testimony to the case is minimal and does not significantly impact the relationship between the Moss Point congregation and the Pentecostal church concerning the disputed property. Additionally, admitting this testimony would require the chancellor to address ecclesiastical issues, which is not within his jurisdiction. Therefore, the chancellor's decision to exclude Davis's testimony was not an abuse of discretion.
Pentecostal's request to confirm title to the contested property was unsuccessful. They bore the burden of proving that the property was held in trust for them by the Moss Point congregation, which they failed to do. The chancellor's confirmation of title to Freewill was upheld, and the exclusion of Davis's testimony was affirmed.
The court's decision was unanimous, with all justices concurring except for McRae, who concurred only in the result. The legal framework for property trusts and the implications of ecclesiastical authority were also acknowledged in the notes, emphasizing the need for written declarations of trust and the limitations of church tribunal decisions.
