Internal Property Dispute Resolution Procedures

• Key point 7-04. Churches and denominational agencies can avoid church property disputes by adopting appropriate nondoctrinal language in deeds, trusts, local church bylaws, or denominational bylaws.

A Kansas court ruled that a national church owned the property of a local church that attempted to disaffiliate. From its inception in 1979, a local church was affiliated with the Church of God in Christ (the “national church”). In 1994 a dispute arose in the church over the status of a new pastor. Some members were opposed to the new pastor, while others wanted him to stay. A representative of the national church sided with the pastor, and this led members of the church to change the locks on the church building in an attempt to force out the pastor. These members then changed the deed to the church property to remove any reference to the national church. Officials of the national church asked a court to determine the legal owner of the church’s property. A trial court ruled that the property was held by the local church in trust for the use and benefit of the national church. The dissident members appealed.

A state appeals court conceded that “the jurisdiction of the courts to address matters involving church affairs is limited. Purely theological questions and matters ecclesiastical in character must be determined by the authorities of the particular church involved according to its laws and usage. Civil courts have no jurisdiction to review or control the decisions of duly constituted church authorities. However, when church-related controversies involve civil or property rights, the civil courts will take jurisdiction and decide the merits of the case in order to assure regularity of business practices and the right of private use and ownership of property.” The court then made the following critical observation:

The applicable civil law respecting religious societies governed by trustees is clear in this state and does not differ significantly from the law in jurisdictions across the country. When a local religious organization has acquired property through the contributions and sacrifices of many members, past and present, all of whom have adhered to certain doctrines regarded as fundamental to a particular national denomination, no faction may be permitted to divert the church property to another denomination or to the support of doctrines, usages, and practices basically opposed to those characteristic of the particular denomination ….

The Church of God in Christ, Inc., is a 91-year-old ecclesiastical organization. Numerous local churches are a part of its hierarchical system …. The national church has duly adopted a constitution and bylaws which apply to its local churches. Jurisdictional Bishops are responsible for ensuring local compliance with the national church’s doctrinal and other policies and are empowered to appoint and remove pastors for the local churches within their jurisdiction …. [The] Official Manual of the Church of God in Christ provides as follows: “A local church, which has been accepted by the Church of God in Christ and issued a Certificate of Membership, shall not have the legal right or privilege to withdraw or sever its relations with the General Church, except by and with the permission of the General Assembly ….”

The [local church] maintained a longstanding, formal affiliation with the national church. There was continual, substantial participation of the [church] and its members in the national, state, and district meetings, activities, and functions. Pastors of the [church] were appointed by the Jurisdictional Bishop of the Kansas Southwest Jurisdiction and given a certificate of appointment as pastor of the local church. The [church] made state and national “reports,” which were financial contributions to help carry on the business of the national church. The national church issued a certificate of membership to the local church.

The court based its decision in part on the following language from a Tennessee case: “Our cases have consistently held that property conveyed to a local church which is a part of a connectional church does not remain the property of the local church even when there is no trust language in the deed. Therefore, when a local church acquires real property by deed, it is held in trust for the parent church even in the absence of express trust language …. According to these cases the law would appear to be established in Tennessee. A local church that is a part of a connectional church holds property in trust for the benefit of the superior organization.” Church of God v. Middle City Church of God, 774 S.W.2d 950 (Tenn. App.1989).

The local church insisted that its relationship with the national church was insufficient to support an implied trust in favor of the national church. The court noted, however, that the United States Supreme Court has recognized that property held by a local congregation may be held by implied trust for a general church depending upon the relationship found in fact to exist between the local and general churches. The court pointed out that the church had “a continual, longstanding, and formal affiliation with the national church” and that this relationship “is sufficient to support an implied trust in favor of the national church.”

The court concluded:

A local church, if it desires to remain independent of the influence of a parent church body, must maintain this independence in the important aspects of its operation, e.g., polity, name, finances. It cannot, as here, enter a binding relationship with a parent church which has provisions of implied trust in its constitution, bylaws, rules, and other documents pertaining to the control of property, yet deny the existence of such relationship. A local church cannot prosper from and enjoy the benefits afforded by a parent hierarchical church, participate in the functioning of that body, and then disclaim affiliation when the parent church acts contrary to the desires of the local church, so as to shield from equitable or contractual obligations the property acquired by the local church either before or during such affiliation.

Application. This case suggests that long-term affiliation by a local church with a denomination, and participation in its programs, may create an “implied trust” in favor of the denomination. This means that the local church holds its property “in trust” for the denomination, and cannot disassociate itself from the denomination and retain ownership of its property. It should be noted that in 1969 the United States Supreme Court greatly limited the use of the “implied trust” approach to resolving church property disputes. It is difficult to understand why the court in this case did not refer to that ruling.

In recent years, the civil courts have applied either the “neutral principles of law” or “compulsory deference” rule in resolving church property disputes. While the Kansas court surprisingly did not refer to either rule in reaching its decision, the fact remains that its decision would have been the same under either rule. Church of God in Christ v. Board of Trustees of New Jerusalem Church of God in Christ, 1999 WL 1000437 (Kan. App. 1999).

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