Church Property – Part 3

A Tennessee court ruled that a local church retained control of its property following its withdrawal from a parent denomination, based on the wording of the deed to the property.

Church Law and Tax2002-07-01

Church Property

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 Tennessee court ruled that a local church retained control of its property following its withdrawal from a parent denomination, based on the wording of the deed to the property. In 1940, a church member conveyed property to the trustees of his local church "in trust for the use and benefit of the [national church] and to their successors in trust forever." The deed also contained the following provisions, "In case of division or misunderstanding of any kind in the [national church] the serving trustees shall have governing power over the above mentioned property." In 1997 the church withdrew from the national church, and the national church asked a court to declare it the rightful owner of the local church’s property. A trial court ruled that the property belonged to the local church, and the national church appealed.

The appeals court began its opinion by observing that "as a general proposition, when property is conveyed to a local church having a connectional relationship to a central organization, the property belongs to the central organization." The court conceded that that national church was a "connectional church with a central organization presided over by a bishop overseer," and that the national church’s bylaws contained a provision treating local church property as the property of the national church. However, the court concluded that "the general rules are subject to the clear intent of the grantor in the deed manifesting a contrary purpose."

The court concluded that the language of the deed demonstrated an intent by the grantor that the locally appointed trustees "are to retain governing power over the property in case of a division or misunderstanding of any kind in the parent church." It concluded, "Although [the grantor] was not a literate man, he was careful to … make sure that the local trustees would always have the power to decide what to do with the property in case of a controversy." Emmanuel Churches of Christ v. Foster, 2001 WL 327910 (Tenn. App. 2001).

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