After reviewing the history of church property cases in the United States Supreme Court, and fleshing out what that Court meant by the term “neutral principles”, the Texas Court of Appeals then focused on its own Supreme Court’s recent decision in Masterson v. Diocese of Northwest Texas (Tex. 2013) 422 S.W.3d 594 as instructing how neutral principles of law are used to resolve church property disputes in Texas. It set out the following concise summary of Masterson’s holdings (pp. 78-79):
- Absent specific, lawful provisions in a corporation’s articles of incorporation or bylaws otherwise, whether and how a corporation’s directors or those entitled to control its affairs can change its articles of incorporation and bylaws are secular, not ecclesiastical matters, and an external entity—under the former or current statutory scheme—is not empowered to amend them absent specific, lawful provision in the corporate documents. Id. at 609–10 (citing Tex. Bus. Orgs. Code § 3.009; Tex. Rev. Civ. Stat. Ann. art. 1396–2.09).
- The TEC-affiliated bishop could, as an ecclesiastical matter, determine which faction of believers was recognized by and was the “true” church loyal to the Diocese and TEC, and courts must defer to such ecclesiastical decisions, but his decision identifying the loyal faction as the continuing parish does not necessarily determine the property ownership issue, and his decisions on secular legal questions such as the validity of the parish members’ vote to amend the bylaws and articles of incorporation are not entitled to deference. Id. at 610.
- If the title to the real property is in the corporation’s name and the language of the deeds does not provide for an express trust in favor of TEC or the Diocese, then the corporation owns the property. Id.
These propositions are all correct statements of Texas law as expounded in Masterson. Followed correctly, they should have led to a correct decision in the Fort Worth case. Instead, look where the Salazar court ended up…