Case Name: The CONFERENCE OF AFRICAN UNION FIRST COLORED METHODIST PROTESTANT CHURCH v. Willie E. SHELL and St. Paul's African Union First Colored Methodist Protestant Church of Lancaster, A/K/A St. Paul A.U.M.P. Church, Appellants
Court: Commonwealth Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1995-05-17
Citations: 659 A.2d 77
Docket Number: 
Parties: The CONFERENCE OF AFRICAN UNION FIRST COLORED METHODIST PROTESTANT CHURCH v. Willie E. SHELL and St. Paul’s African Union First Colored Methodist Protestant Church of Lancaster, A/K/A St. Paul A.U.M.P. Church, Appellants.
Judges: Before COLINS, President Judge, and DOYLE, SMITH, PELLEGRINI, FRIEDMAN, KELLEY and NEWMAN, JJ.
Reporter: West's Atlantic Reporter, Second Series
Volume: 659
Pages: 77–83

Head Matter:
The CONFERENCE OF AFRICAN UNION FIRST COLORED METHODIST PROTESTANT CHURCH v. Willie E. SHELL and St. Paul’s African Union First Colored Methodist Protestant Church of Lancaster, A/K/A St. Paul A.U.M.P. Church, Appellants.
Commonwealth Court of Pennsylvania.
Submitted on Briefs Sept. 21, 1994.
Decided May 17, 1995.
Samuel M. Mecum,- for appellants.
Christina L. Hausner, for appellee.
Before COLINS, President Judge, and DOYLE, SMITH, PELLEGRINI, FRIEDMAN, KELLEY and NEWMAN, JJ.

Opinion:
SMITH, Judge.
The question presented in this appeal is whether Appellants Reverend Willie E. Shell and St. Paul's African Union First Colored Methodist Protestant Church of Lancaster (St. Paul's), a local church, held their church real property in trust for the Conference of African Union First Colored Methodist Protestant Church (Conference), a religious denomination, and were therefore required to execute and to deliver a quit claim deed transferring title of the property to the Conference. The Court of Common Pleas of Lancaster County issued its order on October 19, 1992 denying Appellants' post-verdict motions that raised the defenses of laches, estoppel and unclean hands to the equity action filed by the Conference and directing entry of the court's decree nisi as a final decree. The decree declared that the subject church property was held in trust for the Conference and directed St. Paul's to convey the property to the Conference.
I.
The Chancellor found that St. Paul's was formed by Reverend Shell and others in November 1977 when Articles of Incorporation were filed with the Department of State. St. Paul's was created as a domestic non-profit corporation, and its Articles of Incorporation contained the following stated purpose:
For Christian Worship and Fellowship subject to the law and usage of the Holy Bible and the Book of Discipline of the African Union First Colored Methodist Protestant Church of the United States of America or elsewhere as, from time to time, established, made and declared by the lawful authority of the said Church.
St. Paul's became affiliated with the Conference and specifically adopted its Book of Discipline in the Articles of Incorporation. The Conference, made up of approximately thirty churches in the Mid-Atlantic states, has adopted the Doctrine and the Book of Discipline of the African Union First Colored Methodist Protestant Church and Connection of the United States of America. The Book of Discipline governs the religious practices and administration of the Conference, also known as the "Connection," and its local congregations.
Article X, Paragraph 6 of the Book of Discipline of 1958 provides in pertinent part:
All Church property and other property belonging to the Connection shall be deeded to the members and Connection, and should the members disband or secede the property shall remain in the possession of the Connection, and that each local Church shall be so incorporated that if the members should disband or secede, the said Church and property shall remain in the Connection.
The Chancellor found that the 1958 edition of the Book of Discipline was in effect at all relevant times and is the controlling edition to be applied in this action.
In October 1980, St. Paul's purchased property at 736 South Duke Street in Lancaster, to be used as a church building. The property was purchased for $10,000 from the Lancaster Redevelopment Authority subsequent to a written offer submitted by the Conference on behalf of St. Paul's. The property was deeded to St. Paul's, and testimony indicated that its congregation paid all closing costs and made mortgage payments on the property until June 1989 when the Conference appointed a new pastor to the church. The Conference appointed Reverend Shell as pastor of St. Paul's in 1985 and 1986.
In September 1989, Reverend Shell resigned from the Conference after a dispute arose over the appointment of the new pastor, and the congregation -withdrew its affiliation. St. Paul's notified the Conference by letter that it was no longer affiliated with the Conference and that, despite its disaffiliation, it would maintain ownership and control of the church property. The Conference demanded that St. Paul's turn over the church property in accordance with Article X, Paragraph 6 of the Book of Discipline. St. Paul's refused, and the Conference filed its action in equity for declaratory and injunctive relief to establish the Conference's ownership rights to the church property.
The Chancellor concluded that the clear and unambiguous language of Article X, Paragraph 6 of the Book of Discipline is incapable of any other construction: all church property shall be deeded to the members and the Conference and in the event of a disbanding or secession of the members, the property remains with the Conference. He further concluded that St. Paul's acceptance of the real estate conveyance while the aforementioned provision was still in effect represents conclusive evidence of St. Paul's intent to take and hold the property in accordance with terms of the Book of Discipline.
Although the church property was deeded only to St. Paul's, the Chancellor concluded that St. Paul's withdrawal from the Conference constituted a disbanding or secession from the Conference, and thus St. Paul's held the property in trust for the Conference. The Chancellor imposed a constructive trust in favor of the Conference "finding equity regarding [as] done what ought to have been done." Chancellor Slip Op. at 4. The Chancellor required that St. Paul's deed the property over to the Conference consistent with an actual conveyance or trust.
II.
Because the dispute here involves principles of civil law as opposed to church doctrine, the parties agreed that the Chancellor possessed authority to resolve the dispute under the "neutral principles" doctrine: resolution of the dispute does not present an intrusion into sacred precincts. Orthodox Church of America v. Pavuk, 114 Pa.Commonwealth Ct. 176, 538 A.2d 632, appeal denied, 519 Pa. 669, 548 A.2d 258 (1988). A hierarchical denomination claiming a trust in its favor from a local congregation must demonstrate the trust through clear and unambiguous language or conduct evidencing an intent to create the trust. The Court must focus its inquiry on the settlor's intent at the time of creation of the trust. Presbytery of Beaver-Butler of United Presbyterian Church of United States v. Middlesex Presbyterian Church, 507 Pa. 255, 489 A.2d 1317, cert. denied, 474 U.S. 887, 106 S.Ct. 198, 88 L.Ed.2d 167 (1985); Orthodox Church of America. The record fully demonstrates that the Conference met its burden of proof.
St. Paul's accepted and agreed to be bound by the Book of Discipline, which governs matters related to the use and disposition of property held by a member church and represents a contractual agreement that may be enforced by the courts. Western Pennsylvania Conference of United Methodist Church v. Everson Evangelical Church of North America, 454 Pa. 434, 312 A.2d 35 (1973), appeal dismissed, 416 U.S. 923, 94 S.Ct. 1921, 40 L.Ed.2d 279 (1974).
When interpreting contracts, courts must consider the entire instrument and give effect to all of its provisions and construe the contract according to the plain meaning of its language. State College Manor, Ltd. v. Department of Public Welfare, 133 Pa.Commonwealth Ct. 343, 576 A.2d 407, appeal dismissed, 525 Pa. 263, 579 A.2d 1294 (1990). When Article X, paragraph 6 is read in its entirety, it becomes apparent that the term "all Church property" includes the local church building in question here and that the language of Article X, Paragraph 6 governs its disposition.
The Supreme Court stated in Mid-dlesex that " '[n]o particular form of words or conduct is required to manifest the intention to create a trust. Such manifestation of intention may be written or spoken words or conduct indicating that settlor intended to create a trust.' " Id., 507 Pa. at 268-269, 489 A.2d at 1324 (quoting Bair v. Snyder County State Bank, 314 Pa. 85, 89, 171 A. 274, 275 (1934)). Middlesex does not stand for the proposition that the intent to create a trust must be manifested by express language of an instrument. In the case sub judice, however, there is express documentary evidence demonstrating St. Paul's acceptance of the denomination's rales governing the use and disposition of real property; consequently, St. Paul's may not contest clear trust-creating language in the Book of Discipline on grounds of vagueness or lack of intent to create a trust.
In Everson the local church was the nominal titleholder of the subject property, and it admitted that the Book of Discipline and the Constitution of the national denomination, The United Methodist Church, governed all matters relating to use and disposition of property held by a member church. In affirming the decree entered by the court of common pleas in favor of the national denomination, the Supreme Court reiterated a longstanding principle in Pennsylvania:
It has long been established in Pennsylvania that when a local church is a member of and subscribes to the doctrine and control of a hierarchically governed denomination, it cannot sever itself from such religious denomination without forfeiting its property to the parent denomination.
Id., 454 Pa. at 437, 312 A.2d at 37.
Applying the principles articulated in Everson, this Court determines that the evidence conclusively demonstrates that a trust was created by St. Paul's for benefit of the Conference. Moreover, St. Paul's was bound by the terms of the Book of Discipline, and it failed to establish an express intent to retain rights to ownership and possession of the church property, thus distinguishing this case from Orthodox Church of America or Middlesex. In both cases, the local churches specifically expressed in the Articles of Incorporation or otherwise an intent to hold and retain control of their church property. Because the Chancellor's findings are supported by competent record evidence and his conclusions are supported by those findings and are consistent with the law, the final decree of the court of common pleas is affirmed.
ORDER
AND NOW, this 17th day of May, 1995, the order of the Court of Common Pleas of Lancaster County is hereby affirmed.
. This case was reassigned to the opinion writer on February 7, 1995.
. The Chancellor's findings of fact where supported by competent record evidence are binding on this Court. The Chancellor's conclusions of law however may be reviewed by this Court. Presbytery of Beaver-Butler of United Presbyterian Church in United States v. Middlesex Presbyterian Church, 507 Pa. 255, 489 A.2d 1317, cert. denied, 474 U.S. 887, 106 S.Ct. 198, 88 L.Ed.2d 167 (1985).
. Statutory law provides that when real property has been conveyed to an ecclesiastical corporation for use of any church, the property shall be taken and held subject to control of and disposition by officers or authorities of the church having a controlling power pursuant to rules or regulations of the church or religious society. Section 1 of what is commonly referred to as the Lay Control of Church Property Act, Act of April 26, 1855, P.L. 328, as amended, 10 P.S. § 81.
. The Chancellor denied St. Paul's post-verdict motions because the defenses of laches, estoppel and unclean hands were neither pleaded or developed at trial nor presented to the Chancellor for consideration in his adjudication, and were raised for the first time in the post-verdict motions. Citing Powell v. Powell, 244 Pa. Superior Ct. 264, 367 A.2d 314 (1976), St. Paul's asserted in its brief that the defense of laches is never waived and that the Chancellor erred in refusing to decide this issue. Even if Powell applies and the defense of laches is never waived, St. Paul's may not prevail on this defense because the Conference acted immediately after receiving notice of St. Paul's disaffiliation by filing its equity action. St Paul's remaining defenses of estoppel and unclean hands were properly deemed waived by the Chancellor.