• Key point 7-03.3. Most courts apply the “neutral principles of law” rule in resolving disputes over the ownership and control of property in “hierarchical” churches. Under this rule, the civil courts apply neutral principles of law, involving no inquiry into church doctrine, in resolving church property disputes. Generally, this means applying neutral legal principles to nondoctrinal language in any one or more of the following documents: (1) deeds to church property; (2) a church’s corporate charter; (3) a state law addressing the resolution of church property disputes; (4) church bylaws; or (5) a parent denomination’s bylaws.
State Court Rulings Regarding Church Property Disputes
* Maryland’s highest court ruled that the property of a local church that disaffiliated from a national church belonged to the local church, based on the application of “neutral principles of law.” A local church was organized in 1981 as an affiliate of the African Methodist Episcopal Zion Church (“national church”). It was organized by a minister ordained by the national church. The church was incorporated as “Full Gospel A.M.E. Zion Church” under the Maryland Religious Corporations Law. The church’s articles of incorporation described its purposes as “to conduct a church for Christian religious purposes and to perform all necessary and allowable activities in connection therewith or incidental thereto, and to engage in any other lawful activity in accordance with the Disciplines of the African Methodist Episcopal Zion Church.” The church purchased property over the years, and none of the deeds contained any reference to the national church or contained a reversion or trust clause of any kind. The national church made no financial contributions toward the purchase of any of the church’s properties. In 1991 the church’s board of trustees amended the articles of incorporation to delete any reference to the national church.
The national church’s governing document is its Book of Discipline. The Book of Discipline requires each affiliated church to hold title to property “in trust for” the national church, “subject to the discipline, usage and ministerial appointments of said church.” The Book of Discipline also requires affiliated churches to obtain the consent of national church officials before selling church property.
The local church notified the national church that it intended to withdraw from the denomination. The national church asked the church to transfer all of its properties to it. The local church declined to do so, and asked a court to issue a “declaratory judgment” regarding the ownership of church property. The court awarded title to the property to the national church. It concluded that all property acquired by the church was subject to a trust in favor of the national church based on the provisions in the Book of Discipline. The case was appealed to the Maryland Court of Appeals (the highest court in the state).
The court noted that the United States Supreme Court has ruled that the civil courts can resolve church property disputes on the basis of “neutral principles of law” involving “objective, well-established concepts of trust and property law familiar to lawyers and judges.” Neutral principles of law “are principles that are applicable not only to religious bodies, but to public and private lay organizations and to civil governments as well.” Further, the court noted that the resolution of church property disputes requires an analysis of “all relevant documents and circumstances.” Unless the deed to the property “clearly provides for the holding of the property in trust for the parent church, it is not enough to consider simply the form of the church government, the constitution or other authoritative sources pertinent to the parent church’s claim to the property, consideration must also be given to … the relations between the parties, and the local church charter. The latter at the very least provides insight into the relations between the parties and may evidence the local church’s consent to the form of government and to be bound by provisions in the parent church’s constitution or other authoritative sources pertaining to the ownership and control of its property.”
The court conceded that (1) the national church is hierarchical in polity; (2) the Book of Discipline requires local churches to insert clauses in deeds to their property recognizing a trust in favor of the national church; and (3) the Book of Discipline imposes the trust requirement even if local churches fail to include a trust provision in their deed. However, it concluded that these provisions favoring a trust in favor of the national church did not resolve the issue in this case, because a court must consider all of the relevant evidence. It cited the following evidence suggesting the absence of a trust in favor of the national church: (1) the church acquired all of its properties in its own name, without any reference to the national church; (2) none of the church’s deeds contained any language indicating that the property was being held in trust for the national church; (3) the church’s articles of incorporation do not mention the national church; (4) the church’s bylaws contain no reference to the national church. The court stressed that to resolve church property disputes solely on the basis of provisions in a national church’s governing documents with no consideration of other evidence “comes quite close to … violating the first amendment’s prohibition against resolving rights to the use and control of church property on the basis of a judicial determination that one group of claimants has adhered faithfully to the fundamental faiths, doctrines and practices of the church prior to the schism, while the other group of claimants has departed substantially therefrom. Pressed to its logical conclusion, such a judicial inquiry becomes a heresy trial.”
The court conceded that there is no need to consider other evidence “when there is clear trust or reverter language in the deed to the property.” But, this was not such a case. It concluded that a review of all the evidence failed to support a trust in favor of the national church in this case. It stressed that the national church’s Book of Discipline did not contain a provision “dealing with the disposition of church property when a local church disaffiliates from the denomination, and certainly there is not an express provision mandating that such church relinquish its property upon that occurrence. Consent to holding property in trust during the course of affiliation does not automatically constitute consent to relinquishing that property once the affiliation terminates. This is particularly the case where the trust is revocable and is, therefore, another reason that there must be a more expanded review of documents and circumstances than merely the review of the church Book of Discipline.” From the Heart Church Ministries v. African Methodist Episcopal Zion Church, 803 A.2d 548 (Md. 2002).
© Copyright 2003 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m21 c0403
