• 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

* A Connecticut court ruled that a denominational agency had no authority to retain the property of a church that voted to withdraw. A church member submitted a complaint about the conduct of his pastor to a denominational agency (“regional church”). Officers of the regional church discussed, but failed to resolve, the complaint. During a church business meeting the congregation began discussing withdrawal from the regional church because of its failure to resolve the complaint to the satisfaction of the majority of the congregation. An overwhelming majority of the church membership voted to withdraw from the regional church, and also expressed their approval of their pastor. At a subsequent business meeting the pastor disciplined the church treasurer and prohibited him from performing his duties. The treasurer complained to the regional church, which responded by suspending the pastor and informing him that he no longer could perform ministerial duties within the denomination.

The regional church and the dismissed church treasurer asked a court to issue an order forbidding the pastor from performing ministerial duties for any church affiliated with the denomination, and reinstating the church treasurer.

A state appeals court noted that “the state has an obvious and legitimate interest in the peaceful resolution of property disputes and in providing a civil forum where the ownership [and control] of church property can be determined conclusively. The first amendment to the United States constitution, however, severely circumscribes the role that civil courts may play in resolving church property disputes. It therefore forbids civil courts from resolving church property disputes by inquiring into and resolving disputed issues of religious doctrine and practice.”

The court stressed that there was no evidence that the church’s property was ever “dedicated to the use of the regional church or to a particular organization. Where church property, as in the present case, has not been dedicated by way of express trust to the general religious body or the local church, the court must decide, without becoming entangled in religious controversy, what is the nature of the relationship between [denomination and local church].” The court concluded,

Whether a civil court may inquire into church property disputes depends entirely on whether the parties committed those questions to the exclusive province of a particular religious society. And this issue is not an exclusively ecclesiastical issue but rather one that properly may be submitted to a civil court for resolution. No constitutional considerations bar civil courts from determining for themselves whether the local church, upon its affiliation with a hierarchical organization, meant to confer on the latter body the authority claimed.

The court concluded that the evidence clearly demonstrated that the local church in this case had never ceded control over its property to the regional church. It referred to the following considerations: (1) The regional church never assisted the church in obtaining finances to purchase property. (2) The regional church has no legal interest of record. (3) The local church’s bylaws authorized the church directors to “appoint and remove, employ and discharge all officers, agents and employees of the corporation.” The church’s pastor had served for twenty-five years. Neither the directors of the church nor a majority of the congregation voted to discharge him. (4) The church had not participated in regional church programs for several years, and had not paid its annual assessment for four years.

The court concluded, “The history of the church’s affiliation with the regional church and the manner in which other churches have both joined and withdrawn from the regional church show that member churches have always enjoyed a high degree of independence. All have the ability to leave the denomination at will. However one may characterize the relationship between the local church and regional church it is clear that the local church never placed its property under the control of the regional church …. Accordingly, this court concludes that the regional church has not issued a decision that this court must accept as final and binding.”

Application. Most church property disputes are resolved on the basis of neutral principles of law contained in deeds, local church charters and bylaws, and denominational bylaws. So long as a civil court can resolve such a dispute by referring to neutral provisions in these documents, without any inquiry into doctrine or polity, it may do so. The court in this case concluded that the local church had never ceded any control of its property to the regional church in a deed, trust, or in its bylaws or the bylaws of the regional church, and therefore the regional church had no claim to the church’s property upon its withdrawal.

It is worth observing that the United States Supreme Court has noted that one of the principal advantages of the neutral principles of law approach to resolving church property disputes is that it permits religious organizations to “order their affairs” in advance of a property dispute through “appropriate reversionary clauses and trust provisions” that could reflect the intentions of a church and its members. Many churches and denominational agencies have done so. Several examples are cited in section 7-04 of Richard Hammar’s book, Pastor, Church & Law (3rd ed. 2000). Annual Conference v. St. Luke Unison Free Will Baptist Church, 2004 WL 425176 (Conn. Super. 2004).

© Copyright 2005 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 c0105