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Episcopal Diocese Wins Property Case in Breakaway Parish Movement
New York
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.

The appeals court began its opinion by noting that "by accepting the principles of the national church and the diocese for approximately 100 years, the [church] was subject to their canons, rules, and practices." Those principles included the so-called "Dennis Canons," adopted as Canons I.7.4 and I.7.5 of the Episcopal Church in 1979. These canons were adopted in response to the United States Supreme Court's decision in Jones v. Wolf, 443 U.S. 595 (1979), in which the Court ruled that the governing documents of a hierarchical church can be crafted to recite an express trust in its favor concerning the ownership and control of local church property:

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