A.S. Haley: Watch out What You Ask for: CA Judge Puts Cloud on all ECUSA Parish Property Sales

April 4, 2014

Excerpt:
Fast forward now to the present day. One of the withdrawing San Joaquin parishes that ECUSA sued was St. John’s, in Stockton. It brought a motion for summary judgment that its Dennis Canon applied to all of St. John’s property, and that the withdrawing congregation had no right to any of it.

Notwithstanding that (in contrast to the Southern California cases) St. John’s had not left on its own, but together with the entire Diocese and also with the express written consent of Bishop Schofield, the trial court judge today decided that Bishop Schofield or his diocese had no authority to consent to remove the Dennis Canon trust from any parish property.

He reached this conclusion despite the evidence that Bishop Schofield and his standing committee for all the years they ran the Diocese, just like every other diocesan bishop and standing committee elsewhere in the Church, had regularly consented to the sale and disposition of parish properties—without ever seeking any kind of approval or release from the national body. In other words, the evidence was undisputed that the national Church had always, since 1979, allowed bishops and their dioceses to act as its agents in permitting sales of property free and clear of the Dennis Canon trust.

But no longer. Once again, a trial court’s decision has beclouded the title of every transaction involving any sale or disposition of its real or personal property by any Episcopal parish in California from August 1979 forward. Technically, even goods purchased at a parish fundraiser or rummage sale are literally still impressed with a Dennis Canon trust under its broad language applying to “all” property.

To be sure, in most cases, the trust interest imposed by the Dennis Canon will have been extinguished by application of the bona-fide-purchaser doctrine, because it is an unrecorded interest. If you have an unrecorded trust interest in your cousins’ property, say, but they sell it to someone else who has no way of knowing about your interest (because it is not part of the record title), then so long as the property is acquired for its fair value, the sale extinguishes your unrecorded interest, and the buyers take title free and clear of that interest.  the rest

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