Church properties

In Korea, a church, regardless of Christianity, (종교단체로서의 교회) is treated in a special manner because it is:
 * protected by the freedom of religion under the Constitution;
 * exempted from income tax; and
 * treated as an unincorporated association (법인격 없는 사단).

In this regard, there occur a series of legal issues when some church members quit the church in a group, and demand the division of church properties because a church is not a legal entity. In 2006, the Supreme Court rendered a noteworthy decision on church properties.

Key words
church, religion, membership, association, juristic person

Facts
Some church members cancelled their membership in a group and the association was divided into two (2) due to a group cancellation of membership of the association. whether separation of a church should be recognized where the properties of the association before the separation result in belonging collectively to each member of the separated associations and in case where church members lose their status as church members by withdrawal from the church, where the properties of the pre-existing church should belong (collectively to the remaining members of the pre-existing church)

Where the properties of the pre-existing church should belong (collectively to the withdrawing members of the pre-existing church) in case where a church leaves a religious order or changes into a different religious order after satisfying resolution elements that must be met for the change of or withdrawal from religious order (approval of 2/3 of the members who have a voting right)

Majority Opinion
Our Civil Act recognizes the cancellation of membership or dissolution of a legal entity, but it does not recognize the separation of a legal entity in the way that the members of a legal entity are divided into two (2) legal entities, which independently exist while owning the properties that were owned by the previous legal entity. Therefore, the legal reasoning applies to an association which is not a legal entity as well, and it is not permitted that an association is divided into two (2) due to a group cancellation of membership of an association which is not a legal entity and that the properties of the association before the separation result in belonging collectively to each member of the separated associations.

As long as a church exists as an association which is not a legal entity, in resolving disputes surrounding its legal relations through a lawsuit, the judgment shall be based upon the general theory of the Civil Act concerning an association which is not a legal entity to understand the essence of the church and to judge who the church properties belong to. Therefore, the above legal reasoning concerning the properties relations of an association that is not a legal entity, the members′ right to the properties and the effect of the members who cancel their membership, especially when they cancel their membership in a group, shall apply to churches as well.

Therefore, the members of the church shall jointly own the church properties and use and gain profit from them, and if some members leave the church and lose their status as the members of the church, be it an individual cancellation or a group cancellation, they shall lose the status of being able to participate in resolutions concerning the management and the disposition of the jointly owned properties of the previous church along with the right to use and gain profit from the properties, while the previous church shall exist by maintaining the remaining members and keeping the consistency of its essence, and in principle, the properties of the previous church shall be jointly owned by the remaining members of the church.

And in the case that some of the members of a branch church that belonged to a religious order decide to leave their religious order, leave their church, establish a separate church, elect a new representative and join a different religious order, such church shall be deemed as a newly formed church that was established by meeting the criteria of an association which is not a legal entity by the people who left their previous church in group, and therefore the members of such church shall no longer hold the right to the properties of the previous church.

Separate Opinion
by Justice Park Si-hwan Since our Civil Act does not specifically prohibit the division of an association and there seems to be on reason to prohibit the division of an association, it shall be deemed that the division of an association is permitted under our Civil Act. There is also no reason not to permit the case where an association is divided, not through a voluntary resolution of the members but for other reasons, and there is no possibility for it to be recovered as one association, and arrange the legal relationship as such.

It shall be feasible to constitute a legal reasoning that explains church disputes on the premise that a church division is recognized. But they shall have to be deemed divided to each divided church (any debt shall be borne by each divided church), and it shall be reasonable to determine the ratio of each church′s share by the number of baptized members who are registered with each divided church at the time of the division.

Dissenting Opinion
by Justice Kang Shin-wook

The reason why the previous precedents permitted only churches out of all associations that are not legal entities to be divided and recognized that the members before the division shall jointly own the properties, is because a church in essence is a religious organization based upon Christianity, and in the case that the members have different faiths and go as far as having a separate reverend under whom they engage in religious activities or in the case that the church is divided into organizations of different religious orders, they no longer are based upon the fundamental foundation of a religious community, and also because the members′ right to use and gain profit from the church properties should be guaranteed, even if some members leave the previous church, since most of the properties are formed based upon the monetary donations from the members, and the members who left must have contributed to the formation of the properties of the previous church.

Then the previous precedents shall not be deemed contradictory about the legal reasoning concerning the provisions of the Civil Act about legal entities and concerning associations that are not legal entities, but rather that as they reflect the reality of church operations, there is no need to revise the previous precedents. Following the majority opinions will create the problem of infringing the freedom of religion of the minority. It is desirable to maintain the previous precedents and then find and develop legal reasoning that shall reasonably regulate the legal relationships concerning the properties of the previous church after a division.

Supplementary Opinion to the Majority Opinion
by Justice Kim Young-ran

(A) I will only point out again that the conclusion of the previous precedents, with the intention of not intervening with a church′s internal dispute and of promoting autonomous resolution between the parties, have lost their function of resolving actual disputes, as well as their persuasiveness about the need to apply other theories than the basic principles of the law of organizations only to churches, therefore, that the general theory on associations that are not legal entities shall be followed in judging about church properties and resolving disputes in a legal way.

(B) Separate opinion lacks theoretical ground for the sharing theory and it does not have the function to resolve disputes in reality. Even in accepting the social reality of a divided association, concerning the property relationship between each divided association, unless stipulated in the articles of incorporation of the previous association, Articles 275 to 277 of the Civil Act shall apply, and the right to the properties of the previous association shall be determined by the status of membership. This is an inevitable result of the fact that our Civil Act identifies that an association that is not a legal entity shall have its properties jointly owned, and a discussion to rule out this legal effect shall not be accepted by the interpretation of the current laws.

(C) It is also hard to agree with the dissenting opinion that points out the freedom of religion of the minority, for the reason to maintain the previous precedents. As a result of applying the principle of majority, even a few number of church members can follow their doctrine by choosing a church on their own, leave the chosen church and find a church they want, thereby enjoying the freedom of religion. Therefore, going beyond it by determining who the church properties shall belong based upon the freedom of religion of each individual member is an act of denying the principle of organization law that buries the characteristics of members, which has already lost its persuasiveness, and shall not be accepted.

Majority Opinion
In the case where it is recognized that a branch church that belongs to a certain religious order has accepted the constitution of the religious order as its rules, changes in the religious order result in the changes of the rules of the branch church, and if the branch church has its own rules, changes in the religious order entail the changes of the provisions included in the rules of the branch church such as the name and objectives of the branch church, therefore the membership cancellation from the religious order and the changes in the religious order shall require a resolution agreed by 2/3 or more of the members with the voting right, as it shall be dealt with as it involves changes of the articles of incorporation of a legal entity. If a resolution was reached about the cancellation of membership from a religious order and about changes of the religious order (hereinafter referred to as the resolution about religious order changes) but the number of members who agreed is less than 2/3 of the members with voting rights, the consistency of the previous church shall still belong to the previous religious order and maintained as such.

Therefore, the members who agreed to the resolution about religious order changes and left their previous church in a group or joined a different religious order shall be deemed to have lost their status as the member along with their right to the properties of the previous church. In the event the above conditions were met for the resolution about religious order changes and the members either left their religious order or moved to a different order, the previous church shall remain as a church that has left the religious order while the properties of the previous church shall jointly belong to the members of the church that left the religious order.

Separate Opinion
by Justices Son Ji-yol, Park Jae-yoon, Kim Yong-dam, Ki Ji-hyung

For a church to move to a different religious order, from the viewpoint of a religious community, does not simply mean that the church is changing the purpose of its activities or changing its name, but it brings about changes in the contents of the doctrine, which is the key element of the existence of a church, or the form of the service, which is the expression of the faith, and it also brings about fundamental changes in the collective paths and the activity systems concerning the missionary work and the administrative work, which shall be evaluated to have a significant impact on the identity and the consistency of the church as a religious community. Also from the legal point of view, for a church to move to a different religious order, does not simply mean that the church belongs to the previous religious order and just changes its rules which amount to the articles of incorporation of an association or changes the purpose of its activities, but it shall be evaluated to be able to lead the members of the previous church to dissolve the church and newly establish a church that belongs to the new religious order. If moving to a different religious order is evaluated as above, what shall apply to the change of the religious order by a church, should not be Article 42 Section 1 of the Civil Act concerning the revision of the articles of incorporation of an association, but it shall be Article 78 of the Civil Act concerning the resolution to dissolve an association, and therefore is shall be deemed that a church shall legitimately leave its religious order or move to a different order only in the case that 3/4 or more of the members with voting rights agree at a general assembly convened through legitimate procedures that are stipulated in the rules of the church et al.

Supplementary Opinion to the Majority Opinion
by Justice Kim Young-ran

Moving to a different religious order is naturally based upon the premise that the previous church exists while maintaining its consistency but only moves to a different religious order (the above separate opinion does not seem to purport to deny this either) and therefore the Civil Act provisions concerning the requirements for the resolution to dissolve an association cannot just apply to the requirements for the change of the religious order as a result of a logical conclusion that the provisions concerning the procedures to dissolve a legal entity cannot apply to the change of religious orders.

Article 31 of the Civil Act (Rule to Formation of Juristic Person)
 * No juristic person can come into existence other than in accordance with the provisions of the Acts.

Article 40 of the Civil Act (Articles of Incorporated Association)
 * The founder of an incorporated association shall draw up Articles of incorporation containing the following matters, and shall sign and seal it:
 * Objective;
 * Name;
 * Seat of Office;
 * Provisions concerning assets;
 * Provisions concerning appointment and removal of directors;
 * Provisions concerning the acquisition and loss of qualification for membership; and
 * Period for duration or cause of dissolution, if any.

Article 42 of the Civil Act (Alteration in Articles of Incorporated Association)
 * (1) The Articles of an incorporated association may be altered only with the consent of two thirds or more of all the members: Provided, That other provisions concerning the quorum are stipulated in the Articles of incorporation, such provisions shall apply.
 * (2) Any alteration in the Articles of incorporation shall not be effective unless it is permitted by the competent authorities.

Article 78 of the Civil Act (Resolution for Dissolution of Incorporated Association)
 * Unless otherwise provided in the Articles of incorporation, an incorporated association shall not adopt a resolution for dissolution, except with the approval of at least three fourths of all the members.

Article 275 of the Civil Act (Collective Ownership of Property)
 * (1) If a piece of property is owned collectively by the members of an association which is not a juristic person, it shall belong to collective ownership.
 * (2) With regard to collective ownership, the following two Articles shall apply subject to Articles of an association or other covenants.

Article 276 of the Civil Act (Administration, Disposition and Use of and Profit from Property in Collective Ownership)
 * (1) The administration and disposition of property in collective ownership shall be determined by resolutions from a general meeting of the members.
 * (2) Each member is entitled to make use of the property in collective ownership and to take the profits from it in accordance with the Articles of an association or other covenants.

Article 277 of the Civil Act (Acquisition and Loss of Rights and Duties concerning Property in Collective Ownership)
 * The rights and duties of members concerning property in collective ownership shall be acquired or lost by acquiring or losing the membership therein.