Disputes Over Congregational Churches’ Property

A South Carolina court recently ruled on this issue.

A South Carolina court ruled that a local Baptist church congregation had the authority to authorize its trustees to obtain financing to purchase a new building by mortgaging the existing facility.

In 1952, a minister deeded a church building and lot to 5 individuals as trustees of his church. The deed provided that the trustees would hold the property for the benefit of the congregation, and subject to the "laws" of the Baptist church.

In 1983, the church membership became divided over the issue of moving to a new building. The existing sanctuary had become dilapidated, and repairs were not feasible. The majority of the congregation voted to move to a new facility and to change the church's name. The minority resolved to remain in the old building and continue using the church's original name.

Two of the original trustees, representing the majority faction, deeded the old church property to themselves as trustees of the new church. Later, these same trustees mortgaged the old building to a local bank in order to secure financing to purchase a new church building. Two of the other original trustees filed a lawsuit seeking to have title to the old church building vested in themselves as trustees, and to invalidate the mortgage.

A state appeals court ruled that the congregation is the governing body in a Baptist church, and that "the actions of the [church] in changing its name, moving to a new location, transferring the property, and mortgaging it were valid and consistent with Baptist church policy." Further, "because such actions are ecclesiastical in nature, they are not reviewable by this court in the absence of fraud, collusion, or arbitrariness."

The court noted that the 2 trustees representing the minority faction did not have "standing" to sue because they were not members of the present congregation. Finally, the court felt that its decision was bolstered by the wording of the original deed, which was made subject to the "laws" of the Baptist church. It observed: "Surely by providing in their deed that the trustees would hold the property subject to the laws of the Baptist church, the [donors] knew that in the event of a schism in the church the majority would continue to control the property under Baptist church policy." Blair v. Blair, 396 S.E.2d 374 (S.C. App. 1990).

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