Appeal from the Order of the Court of Common Pleas of Chester County, in case of Presbytery of Donegal v. S. Reed Calhoun et al., No. 78 Term, 1980.
Gregory M. Harvey, with him, Elizabeth L. Hoop and George W. McKeag, of Counsel: Morgan, Lewis and Bockius, and P. Richard Klein, Klein, Elicker, Head & Knauer, for appellants.
Tom P. Monteverde, with him, Jean C. Hemphill, Monteverde, Hemphill, Maschmeyer & Obert, for appellees.
President Judge Crumlish, Jr., Judges Rogers, Craig, Doyle, Colins and Palladino. Opinion by Judge Doyle. Judge MacPhail did not participate in this decision.
[ 99 Pa. Commw. Page 302]
The case before us involves a property dispute between a local church congregation and its parent denomination. The denomination, represented by the Presbytery of Donegal (Presbytery), filed an action in equity with the Court of Common Pleas of Chester County requesting that title be transferred to it to the real property under the control of the local church congregation known as the Coatesville Presbyterian Church (Coatesville Church). The Presbytery appeals to this Court from the trial court's dismissal of that action.
The Coatesville Church was established as a local congregation in 1832, and in 1833 voluntarily affiliated with the New Castle Presbytery, a predecessor of the Presbytery of Donegal. Between the years 1845 and 1958, Coatesville Church acquired real estate upon which it constructed its present church, manse, and education building. The acquisition of the properties, and the improvements thereon, were funded exclusively by the members of the local congregation, and prior to 1979, title to all property was at all times held by a board of trustees of a corporation made up of the members of the local congregation.
The Presbytery is part of a nationwide denomination known as the United Presbyterian Church in the United States of America (UPCUSA).*fn1 Under the constitution
[ 99 Pa. Commw. Page 303]
of the denomination, each local congregation is governed by a session, composed of members elected by the congregation, who are known as elders. In addition, authority in certain matters is delegated to a series of higher governing bodies, such as the Presbytery and the Synod, composed of an equal number of elders and ministers from each church in a given geographical area. In a similar fashion, the highest governing body, the General Assembly, consists of representatives from each presbytery in the denomination.
In the fall of 1979, Coatesville Church became aware that the denomination intended to initiate proceedings to amend its constitution so as to impose a trust upon all congregational property in favor of the denomination.*fn2 In light of previous doctrinal disagreements it had with the denomination, the session of the Coatesville Church became concerned that the new amendment would prevent it from retaining the property should it feel compelled to leave the denomination at some time in the future. Out of this concern the session called a joint meeting of the congregation and the corporation, and proposed that the church transfer its assets to an independent corporation, known as the Coatesville Presbyterian Foundation, which would then lease back the property for one dollar per year for a period of 99 years. The proposal was overwhelmingly approved by the members present on October 28, 1979, and on November 2, 1979, the assets were transferred to the Foundation, with immediate lease back.
On November 20, 1979, the Presbytery appointed an administrative commission to investigate the actions taken by the Coatesville Church. Joint meetings were held between the Presbytery's commission and the session,
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at which time the session assured the commission that it did not intend to leave the denomination. In spite of these assurances, it became apparent that the Presbytery intended to take whatever legal action was necessary to rescind the property transfer. For this reason the session of the Coatesville Church became convinced that it would be unable to retain control of its property unless it disaffiliated itself with the denomination immediately. Accordingly, on February 24, 1980, after a number of congregational meetings had been held on the session's proposal, the congregation resolved by a vote of 442 to 65 to terminate the congregation's relationship with the Presbytery and the denomination.
Thereafter on March 18, 1980, the Presbytery appointed a second administrative commission giving it complete power to act as the session of the Coatesville Church, thus purporting to replace the elected session of the church.*fn3 The elected session of the Coatesville Church remained in control of the church property, however, and refused demands by the Presbytery's commission for access to church ...