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Grace Ev. Luth. Ch. v. Luth. Ch.-mo. Synod





Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.


Rehearing denied October 17, 1983.

This is an appeal by all parties from an order of the circuit court of Cook County declaring an option agreement to be valid and legally binding, but also declaring that a particular provision of that option agreement was unenforceable at law because such enforcement would necessitate an impermissible intrusion by the court into matters of religious doctrine and polity.

We affirm.

Appellant and cross-appellee, the Lutheran Church — Missouri Synod (the Synod), a Missouri not-for-profit corporation, is the second largest Lutheran church body in North America. Appellant and cross-appellee, Concordia Teachers College, is an Illinois not-for-profit corporation located in River Forest. Concordia is owned and maintained by the Synod. (All further references to positions taken by the Synod in this appeal also apply to Concordia.) Appellee and cross-appellant, Grace Evangelical Lutheran Church of River Forest, Illinois (Grace), is an incorporated congregation with approximately 1700 members. Intervenors Wilbur Werling, Carl Driessnack, Loren Saar, and Henry Eickelberg, who are appellants and cross-appellees in this appeal, represent a group of Grace members who disagree with certain actions undertaken by Grace.

Grace was incorporated in 1902 and became a member of the Synod in 1903. In 1929, Grace purchased from the Synod the property which is the subject of this dispute, about one acre of land located on Concordia's campus. On that land Grace's present church structure was built. The property was conveyed pursuant to an agreement, signed by Grace, Concordia, and the Synod, granting the Synod and Concordia a 99-year option to repurchase the property upon the happening of any one of three events:

(A) Whenever Grace sought to sell the property and received a bona fide offer from a bona fide purchaser, the Synod had the right to purchase the property at that price. If the price was not agreeable to the Synod and they could not agree with Grace on a price within 20 days, then three "appraisers" would be selected (one by Grace, one by the Synod, and the third by the first two appraisers) to determine the price and terms. The results of this "arbitration" were to be accepted within 20 days. The Synod was also required to exercise its option under this clause within 40 days of receiving notice from Grace of the receipt of a purchase offer;

(B) Whenever Grace decided to affiliate, consolidate or merge with any other corporation, association or organization not affiliated with the Synod;

(C) "Whenever [Grace] shall fail or decide to not teach and preach the scriptures as set forth under Article II entitled `Confession' of the Constitution of said Missouri Synod and in accordance with the rules, regulations and customs of [the Synod]." (The "Confession" states that the Synod and its members accept without reservation the Bible as the only rule and norm of faith and practice and certain other religious writing as the "true and unadulterated statement and exposition of the Word of God.")

The agreement also provided that upon the happening of either of the latter two events the Synod or Concordia had the option of repurchasing the property with its improvements. If a price could not be agreed on within 30 days then the price was to be "arbitrated" within 60 days by three men selected in the same manner as was provided for under paragraph A. Their findings were to be accepted within 10 days. The agreement further stated that failure to exercise the option "within the time specified" would relieve Grace of all obligations under the agreement and render it null and void.

Grace purchased the property for $20,000. Five thousand dollars was paid in cash and the remaining amount was paid over a period of years, with some of that money allocated from money Grace had collected from its congregation for Synod purposes.

In the 1970's certain controversies within the Synod caused Grace to re-evaluate its position in that body. One of these controversies concerned a resolution passed at the Synod's 1973 convention, declaring that certain members of the faculty of Concordia Seminary in Saint Louis were teaching false doctrine. Grace had opposed this resolution. Most of the faculty and many of the students of the seminary left it to form a school called Seminary in Exile, or Seminex.

On June 13, 1976, Grace ordained as assistant pastor Aaron Sorrels, a graduate of Seminex who had not been certified by the Synod as required under Synod rules. The Synod and Concordia had opposed his ordination because of this lack of certification; however, there were continuing efforts by the parties to reconcile their differences on this issue before and after the ordination.

On August 24, 1977, Grace's church council recommended to the congregation that Grace withdraw from the Synod. On September 20, 1977, the Voters' Assembly of Grace voted to accept this recommendation effective October 1, 1977. On the latter date the Synod and Concordia notified Grace that they were exercising their option to repurchase the property.

On October 28, 1977, Grace filed a complaint for declaratory judgment, seeking a declaration that the option agreement was unenforceable under the first amendment and under principles of contract law. The Synod and Concordia filed an answer and counterclaim in which they sought a declaration that they were entitled to repurchase the property pursuant to paragraph C of the option agreement. Intervenors were permitted to file a complaint for injunction and other relief in which they raised certain procedural objections to the vote taken by Grace. (They have abandoned these contentions on appeal.)

After the filing of Grace's complaint the Synod asked its commission of adjudication to resolve this dispute. Under Synod rules that body had jurisdiction in resolving disputes involving the Synod as a party. Grace did not participate in the ensuing proceedings, having advised the Synod that because of Grace's withdrawal from the Synod it did not believe the Synod's adjudicatory bodies had jurisdiction and that in any event such an adjudication would not even be binding on the Synod's member congregations because of their autonomy. On June 12, 1978, the Synod commission of adjudication rendered ...

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