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.
A New York intermediate appellate court ruled that an Episcopal diocese was the rightful owner of the property of a local church that voted to disaffiliate from the denomination. After operating as an Episcopal congregation for more than 100 years, the members of an affiliated church voted to incorporate as a nondenominational church. The following year the Episcopal diocese declared the church to be "extinct." The diocese asked a court to determine who owned the church property. The trial court ruled that the diocese was the rightful owner of the church property, and this ruling was affirmed on appeal.