February 17, 1999
Texas church wins major
religious freedom case
___By Larry Chesser
___Baptist Joint Committee
___HOUSTON--Citing a federal law enacted last year to protect charitable gifts, a Texas appeals court ruled Feb. 4 that a Baytown Baptist congregation does not have to relinquish tithes contributed by a member who later filed for bankruptcy.
___The ruling by the 14th Court of Appeals reversed a 1997 trial court order that Cedar Bayou Baptist Church must turn over to a creditor four years of tithes given by church member Leland Collins.
___The tithes were sought by Gregory-Edwards Inc., a Houston firm that in 1991 won a $90,000 judgment in a lawsuit alleging that Collins and two other partners were overpaid that amount at the breakup of a business partnership.
___The next year, Collins filed for bankruptcy to protect personal assets such as his home, automobile and retirement funds.
___In 1995, Gregory-Edwards filed suit against Cedar Bayou Baptist Church, alleging that Collins' tithes given from Oct. 15, 1988, to Oct. 14, 1992, were "fraudulent transfers" under bankruptcy laws because Collins did not receive "a reasonably equivalent value" in return.
___Harris County Civil Court Judge Tom Sullivan agreed with Gregory-Edwards and ordered the church to pay the company the $23,428 Collins gave to the church during the four-year period, plus interest.
___In its appeal, Cedar Bayou argued that the new federal law barred the recovery of Collins' tithes.
___Last June, Congress enacted the Religious Liberty and Charitable Donation Protection Act of 1998, a law that protects tithes and other charitable donations given in good faith by individuals who later go bankrupt.
___Writing for a three-judge appeals court panel, Justice Ross Sears sided with Cedar Bayou, holding that the 1998 law was "tailored to cover the exact type of charitable contributions" that the trial court awarded to Gregory-Edwards.
___"The contributions made by Collins are directly covered by the new Act," Sears wrote. "Collins made charitable contributions, by cash or check, to Cedar Bayou Baptist Church consisting of 10 percent of his annual income."
___The 1998 law protects charitable gifts of up to 15 percent of a debtor's annual income and more in cases where the debtor can show a pattern of giving more than 15 percent. The law also permits Chapter 13 bankruptcy filers to budget for tithes and other charitable gifts during the time they are repaying creditors.
___Cedar Bayou pastor Richard Steel saw Collins' gifts to the church as part of a long-term giving pattern and not an attempt to shift funds away from a creditor.
___"He's been a tithing member of Cedar Bayou Baptist Church for more than 40 years," Steel said.
___Steel, who testified last year in support of the charitable gifts legislation passed by Congress, commended University of Texas Law School professor Douglas Laycock, who argued the church's appeal.
___"We just thank the Lord that this case has been reversed," he said. "I'm thrilled for our church and for every church in Texas."
___Steel said the church has incurred expenses of more than $30,000 in defending and appealing the lawsuit but that most of that has been paid by designated gifts from within and outside the congregation.
___Laycock, who also was among those urging Congress to pass legislation protecting charitable gifts, said after the appeals court ruling that the "important thing is that Congress has fixed this problem for the future."
___Baptist Joint Committee General Counsel Brent Walker applauded the appeals court's enforcement of the new federal law.
___'It's simply wrong for a civil court to undo an act of worship by raiding the church's collection plate," Walker said.
___"We are to render unto Caesar, but tithes are God's part."Frontpage / Contents/ Masthead / Why We're Here / Links / Archive / E-mail us/ SUBSCRIBE!