Disaffiliated Local Church Allowed to Retain Property

This decision was clearly erroneous.

In a clearly erroneous decision, a North Carolina appeals court ruled that title to a local Church of God congregation that disaffiliated from the denomination belonged to the local church rather than to denominational officials.

Following a 6-week tent revival in 1949, a small group of persons decided to establish a church. A building was constructed, and the new congregation began conducting services. In 1955, the congregation voted to affiliate with the Church of God denomination "for purposes of fellowship." In 1988, the Church of God denomination altered its policy statement regarding how its members should live their daily lives.

As a result of this change, the local church voted to disaffiliate from the denomination. In response to this action, the "state overseer" of the Church of God dismissed the local church's board of trustees and appointed a successor board consisting of denominational trustees. The successor trustees executed a deed conveying to themselves title to the church's property.

When local church members opposed this denominational control of their property, the denominational trustees asked a court to determine the lawful owner of the church property. The denominational bylaws specify that a local board of trustees shall hold title to local church property and that "all such property shall be used, managed, and controlled for the sole and exclusive use and benefit of the Church of God."

A trial court ruled in favor of the dissident congregation, and the denomination appealed. The appeals court began its opinion by noting: "As a general rule the parent body of a connectional church has the right to control the property of local affiliated churches, and, as a corollary, this right will be enforced in the civil courts.

However, a local church may have retained sufficient independence from the general church so that it reserved its right to withdraw at any time, and, presumably, take along with it whatever property it independently owned prior to and retained during its limited affiliation with the general church."

The court concluded that such was the case here. It based its ruling on the fact that "when the local church affiliated with the denominational church, the property was deeded to trustees of, or for, the local church, not to the denominational church or to trustees of, or for, the denominational church." Unfortunately, the appeals court decision is in error, and disregards a century of decision issued by the United States Supreme Court.

In fact, the Supreme Court has urged denominations and affiliated churches to avoid property litigation by adopting trust provisions in denominational bylaws (as the Church of God has done). In its most recent church property ruling (Jones v. Wolf, in 1979), the Court observed that the parties can ensure, if they so desire, that the faction loyal to the hierarchical church will retain the church property.

They can modify the deeds or the corporate charter to include a right of reversion or trust in favor of the general church. Alternatively, the constitution of the general church can be made to recite an express trust in favor of the denominational church. The burden involved in taking such steps will be minimal. And the civil courts will be bound to give effect to the result indicated by the parties, provided it is embodied in some legally cognizable form …. Through appropriate reversionary clauses and trust provisions, religious societies can specify what is to happen to church property in the event of a particular contingency, or what religious body will determine the ownership in the event of a schism or doctrinal controversy. In this manner, a religious organization can ensure that a dispute over the ownership of church property will be resolved in accord with the desires of the members.

In summary, the Church of God denomination adopted a bylaw provision specifying that all local church property "shall be used, managed, and controlled for the sole and exclusive use and benefit of the Church of God."

This language imposes a trust upon local church property that can be interpreted and applied without any resort to religious doctrine. Accordingly, as the Supreme Court observed in 1979, "the civil courts will be bound to give effect to the result indicated by the parties."

Indeed, in the 1979 case the Supreme Court upheld the legal validity of the following trust provision in the Methodist Book of Discipline: "[T]itle to all real property now owned or hereafter acquired by an unincorporated local church … shall be held by and/or conveyed to its duly elected trustees … and their successors in office … in trust, nevertheless, for the use and benefit of such local church and of The United Methodist Church. Every instrument of conveyance of real estate shall contain the appropriate trust clause as set forth in the Discipline …." Looney v. Community Bible Holiness Church, 405 S.E.2d 811 (N.C. App. 1991).

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