Court Opinion

ID: 9779372
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:48:46.303845+00
Date Added: 2024-06-11T07:33:25.879547
License: Public Domain

John I. Purtle, Justice, dissenting. This is the second time this case has come before the court. The issues in each case concern the appellees’ rights under Arkansas’ corporation laws to examine various financial transactions of the church and to require an election of the board of directors by the church membership. The appellants, elders of the church, rejected these demands and argue that application of the state nonprofit corporation laws interfere with the religious doctrine and practice of the church in violation of the First and Fourteenth Amendments to the United States Constitution and Art. 2, §§ 24 and 25 of the Arkansas Constitution. When the case was first before us (see Gipson v. Brown, 288 Ark. 422, 706 S.W.2d 369 (1986)), we granted relief from an interlocutory order and held that an evidentiary hearing was necessary to determine the merits of appellants’ claims of constitutional protection against ordered disclosure of church information. We remanded the case to the chancellor with the specific purpose “to conduct a hearing on the claim of first amendment protection versus the disclosure requirements of corporations.” On remand the chancellor, pursuant to ARCP Rule 53, appointed a master “to investigate and [make] findings of fact and conclusions of law over all relevant matters pertaining to this action.” The master conducted six days of evidentiary hearings during which testimony and exhibits were considered. Upon conclusion of the hearings the master filed his report and submitted his recommendations to the chancellor who adopted the report in toto. Among other things the master recommended: 1. That the Defendants be required to answer the Interrogatories and Request for Admissions, except those relating to or concerning the selection of elders. 2. That the Defendants be required to conduct an election of the Board of Directors of the Sixth and Izard Church of Christ, Inc., pursuant to Ark. Stat. Ann. § 64-1910 (Ark. Code Ann. § 4-28-211 (1987)). 3. That the Defendants be required to make available to plaintiff and intervenors, at a reasonable time during regular office hours, all financial and business records of the corporation as provided in Ark. Stat. Ann. § 64-1913 (Ark. Code Ann. § 4-28-211 (1987)). However, no records concerning selection of elders or contributions of members or others are to be furnished. 4. That the court reserve jurisdiction of the cause for the entry of such orders as may be necessary to determine and enforce the rights of the parties hereto. The majority has now done an “about face” and evaded the basic issue before us. Hereafter, a nonprofit corporation may decide it does not agree with the laws under which it is incorporated and simply refuse to abide by the law under the pretext of “religious freedom.” The parties to the litigation are all members of the Sixth and Izard Church of Christ, Inc., located in Little Rock, Arkansas. The church was originally organized as an unincorporated association and operated as such until April 14, 1975, at which time it incorporated under Ark. Stat. Ann. § 64-1905 (Ark. Code Ann. § 4-28-205 (1987)) as a nonprofit corporation. The appellants are presently serving as elders of the church and as members of the board of directors of the corporation. I have no interest in the church-related responsibilities of the elders. However, the responsibilities of the elders in their capacity as members of the board of directors of a corporation created and organized pursuant to the laws of this state is quite a different matter. Had the church not chosen the elders to also serve as directors we likely would not have this problem before us. The appellees, as members of both the nonprofit corporation and the church congregation, have repeatedly demanded access to the church financial records and election of the board of directors by the church membership. These demands arise out of allegations of discrepancies and inconsistencies in church financial records kept by the elders. The elders have consistently refused to render a full accounting to the appellees setting forth in detail the purposes for which church funds have been expended. The appellees rely upon the provisions of the nonprofit corporation law which provide that the members of the corporation have the right to inspect the financial records of the corporation. The appellants maintain that the tenets of the Church of Christ religion place authority for church administration solely in the hands of the elders, and therefore the elders cannot be required to share any of this information with the appellees. In support of this view the appellants argue that it is the longstanding religious belief, polity and practice of the church that the elders have the absolute and final authority over all church matters, including all financial matters. In Gipson I, we emphasized, and I re-emphasize now, that the religious beliefs of all citizens are zealously protected from governmental interference under both the state and federal constitutions. The Arkansas Constitution recognizes that its people have a natural and indefeasible right to worship God according to the dictates of their own consciences and that no human authority can control or interfere with the right of conscience or give preference by law to any religious establishment or mode of worship. The church voluntarily incorporated itself under the secular laws. When the church decided to incorporate, it submitted itself to certain state laws governing corporations, thus opening the door to examination in a legal setting of the dispute within the church concerning adherence to those state laws. There is no doubt as to the power of the state of Arkansas to impose reasonable laws and regulations governing the operations of corporations within this state. Corporations are entities controlled by the board of directors and officers and are owned by the stockholders and members. The stockholders and members of a corporation are usually so far withdrawn from the everyday business affairs of the corporation that it is impossible for them to have knowledge of the management and finances of the corporation. The Arkansas legislature has wisely provided stockholders and members the right to inspect corporate books and records upon request, at a reasonable time, provided there is a valid reason for such a request. After all, the owners of a corporation are obviously entitled to know what their employees are doing with their money. Under the circumstances of this case, the Constitution requires a balancing process. If the statute impinges on fundamental rights that are specifically protected by the Free Exercise Clause of the First Amendment, the statute does not control. The state’s authority to impose reasonable laws and regulations upon corporations is sufficient to uphold the rights of the appellees in this case. No one can seriously argue that the Arkansas statute at issue here was in any manner intended to regulate, control or influence the religious belief or practice of any person. The United States Supreme Court has decided a line of cases recognizing that under some circumstances civil court review of ecclesiastical actions is appropriate. See Gonzalez v. Archbishop, 280 U.S. 1 (1929): the claim of right to.be appointed to a vacant collative chaplaincy and the right to receive the accrued income during the vacancy; Kedroff v. St. Nicholas Cathedral, 344 U.S. 94 (1952): the right to the use and occupancy of church property where a state legislature had transferred control of church property from one rival group of members to another; Wisconsin v. Yoder, 406 U.S. 205 (1972): a state’s interest in imposing reasonable regulations for the control of basic education; Presbyterian Church v. Hull Church, 393 U.S. 440 (1969): a state court’s interest in resolving disputes over church property; The Serbian Eastern Orthodox Diocese for the United States of America and Canada, et al. v. Milivojivich, 426 U.S. 696 (1976): a dispute over the control of the property and assets of the Serbian Eastern Orthodox Diocese for the United States of America and Canada. The Louisiana Supreme Court, in Bourgeois v. Landrum, 393 So. 2d 1275 (1981), addressed the issue of whether church members have a right to examine the financial books and records of the church under the provisions of the Louisiana nonprofit corporation law. The church had organized pursuant to the state’s nonprofit corporation laws. The court, holding that the church members had such a right, observed: “the underlying First Amendment principles, which protect against the entanglement of civil courts in questions of religious doctrine, polity or practice, are not offended by the judicial enforcement of a statute requiring a church, as a non-profit corporation, to keep at its registered office, corporate records for examination by its voting members.” The Louisiana Supreme Court, quoting from Presbyterian Church v. Hull Church, 393 U.S. 40 (1976), observed: First Amendment values are plainly jeopardized when church property litigation is made to turn on the resolution by civil courts of controversies over religious doctrine and practice. If civil courts undertake to resolve such controversies in order to adjudicate the property dispute, the hazards are ever present of inhibiting the free development of religious doctrine and of implicating secular interests in matters of purely ecclesiastical concern. The First Amendment therefore commands civil courts to decide church property disputes without resolving underlying controversies over religious doctrine. The Louisiana Supreme Court held that “First Amendment values are plainly not jeopardized by a civil court’s enforcement of a voting member’s right to examine these records.” Prior to incorporating on April 14,1975, the Sixth and Izard Church of Christ had, as is traditional with churches in Arkansas, operated as an unincorporated association. The church designated the elders as the first board of directors. They are to hold office until their successors have been elected and qualified. The elders are serving as elders of the church and directors of the corporation at the same time. The duties of the board of directors of a corporation are prescribed by statute. However as elders of the church their responsibilities and duties are purely ecclesiastical in nature. The issue in the present case is almost identical with the issue considered by the Louisiana court in the Bourgeois case. I believe that the First Amendment permits civil courts to decide church disputes involving secular matters without resolving the underlying controversies over religious doctrine. I find no interference by the state in any religious matters by permitting the voluntary incorporation of groups or associations in the manner utilized by this church. The statute providing for incorporation is completely void of any reference to religion. The members of the Sixth and Izard Church of Christ voluntarily incorporated pursuant to this statute. Their purpose in doing so is of no concern to this court. The state did not in any manner attempt to control or influence the religious beliefs of the people of the state of Arkansas. Neither did the state encourage the church to abandon its cloak of nondisclosure and voluntarily incorporate. It is my opinion that the chancellor acted within the bounds of our mandate in appointing a master and adopting the master’s findings of fact and recommendations. For clarification I note that the chancellor’s order does not require the appellants to respond to interrogatories and requests for admissions relating to the selection of elders; nor does it require them to furnish records concerning contributions of members or others. I find nothing in this decree that would interfere with the First Amendment rights of the appellants. I think our first decision in this case was correct and we ought to abide by it. I would affirm the decision of the trial court requiring the appellants to follow the mandates of the law and our prior opinion in this case. Dudley and Newbern, JJ., join in this dissent.