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 non- doctrinal 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.
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 South Carolina appeals court ruled that a denomination did not have a legal interest in the property of a local church that voted to disaffiliate from the denomination. A regional denominational agency of the African Methodist Episcopal Church (the "regional church") claimed an interest in a 5-acre tract and bank account of a church that voted to disaffiliate from the denomination. A trial court ruled that the regional church failed to prove any ownership interest in the property or bank account, and the regional church appealed.
A state appeals court agreed with the trial court. In rejecting the regional church's argument that the properties of all affiliated churches were held in trust for the national church according to the denomination's Book of Discipline, the court pointed to a state law specifying that "to be valid, a trust of real property, created by transfer in trust or by declaration of trust, must be proved by some writing signed by the party creating the trust." The court referred to a ruling by the state supreme court that provisions in denominational governing documents purporting to impose a trust on the property of affiliated churches "could not have created a trust over the local church's property because, without legal title to the property, a denominational church could not declare the property was held in trust … . It is an axiomatic principle of law that a person or entity must hold title to property in order to declare that it is held in trust for the benefit of another or transfer legal title to one person for the benefit of another." All Saints Parish Waccamaw v. Protestant Episcopal Church, 685 S.E.2d 163 (S.C. 2009).