Decision Number 315

Petition of the National Division of the Board of Missions for a Declaratory Decision as to Whether or Not the United Methodist Investment Fund Authorized in Paragraph 1322.1(g) May Be Incorporated in the State of New York Without the Use of the Word "Investment" in Its Corporate Name.

Digest

Nothing in Paragraph 1322.1 (g) of the Discipline indicates that the precise name "United Methodist Investment Fund" is essential to the purposes of the legislation. Paragraph 1506 of the Discipline authorizes adjustments in disciplinary provisions, where necessary, to comply with state laws. Since the word "Investment" cannot be used in New York State by such a corporation as authorized by Paragraph 1322.1 (g) of the Discipline, the word may be omitted and a similar name provided for the new corporation.

Statement of Facts

Paragraph 1322.1(g) reads as follows:

"Under the provision of the Methodist General Conference of 1960 there shall be a Methodist Investment Fund, incorporated by the division under its administrative jurisdiction. The Evangelical United Brethren Investment Fund shall be merged, as soon as legally feasible, with the Methodist Investment Fund to form the United Methodist Investment Fund. The purpose of the United Methodist Investment Fund shall be to extend the mission of the Church through the granting of loans for construction and major improvement of churches, parsonages and mission buildings."

The Methodist Investment Fund was incorporated in the State of Pennsylvania. The Evangelical United Brethren Investment Fund is an Ohio corporation. The National Division of the Board of Missions of The United Methodist Church is incorporated in the State of New York. When the Division sought to follow the directive of Paragraph 1322.1(g) and merge the two investment funds into a new United Methodist Investment Fund in the State of New York its attorneys found that the word "Investment" cannot be used in New York State in the name of a corporation formed under general law.

The National Division of the Board of Missions therefore petitioned the Judicial Council for a declaratory decision as to the application of Paragraph 1322.1 (g), stating:

"Your Petitioner desires to proceed with the formation of a corporation in the State of New York to carry out the directive of Paragraph 1322.1 (g) but is uncertain as to whether said Paragraph requires the use of the name 'United Methodist Investment Fund' in the new articles of incorporation, or whether your Petitioner may provide a similar name which complies with the statutes of the State of New York."

Jurisdiction

The Judicial Council has jurisdiction under Paragraph 1715 of the Discipline.

Analysis and Rationale

Nothing in the legislative history of Paragraph 1322.1 (g) of the Discipline providing for the merger of the Methodist Investment Fund and the Evangelical United Brethren Investment Fund, so as to create a merged fund known as the "United Methodist Investment Fund," suggests that the use of the precise name referred to therein is essential to the purposes of the legislation. Obviously the chief goals of the disciplinary provisions are (a) to create an instrumentality for the lending of funds for the construction and major improvement of churches, parsonages and mission buildings, and (b) that said funds be under the administration and supervision of the National Division of the Board of Missions. Since the National Division is a New York corporation, it is evident that for reasons of economy and efficient administration, it is desirable that the new fund be incorporated under the laws of the same state. It seems clear that the intent of the General Conference will be fulfilled and the purposes and objectives of Paragraph 1322.1 (g) best achieved if the National Division proceeds with a New York incorporation.

Paragraph 1506 of the Discipline on "Compliance with Law" reads as follows:

"All provisions of the Discipline relating to property, both real and personal, and relating to the formation and operation of any corporation, and relating to mergers, are conditioned upon their being in conformity with the local laws, and in the event of conflict therewith the local laws shall prevail; provided, however, that this requirement shall not be construed to give the consent of The United Methodist Church to deprivation of its property without due process of law or to the regulation of its affairs by state statute where such regulation violates the constitutional guarantee of freedom of religion and separation of Church and state or violates the right of the Church to maintain connectional structure; and provided further, that the services of worship of every local church of The United Methodist Church shall be open to all persons without regard to race, color, or national origin. 'Local laws' shall be construed to mean the laws of the country, state, or other like political unit within the geographical bounds of which the church property is located."

The provisions of this Paragraph are clearly designed to apply to situations such as the one before us where there is a conflict between provisions of the Discipline and the law of the state, in which case the law of the state prevails if it does no violence to the basic principles or property rights of the Church.

We therefore hold that the National Division of the Board of Missions may adjust the name of the new corporation authorized in Paragraph 1322.1 (g) to comply with the statutes of the State of New York as long as the Articles of Incorporation are designed to carry out the purposes outlined in the Paragraph-". . . to extend the mission of the Church through the granting of loans for construction and major improvement of churches, parsonages and mission buildings."

Decision

It is the decision of the Judicial Council that the word "Investment" may be omitted from the corporate name of the United Methodist Investment Fund authorized in Paragraph 1322.1 (g) of the Discipline and a similar name provided to comply with the law of the State of New York.