Reprinted from Dickinson Law Review, Fall 1988 By: James B. O'Hara
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III. Transition from "Old" to "New"
"At a very early period the religious establishment of England seems to have been adopted in the colony of Virginia, and, of course, the common law upon that subject, so far as it was applicable to the circumstances of that colony." {32} Justice Story went on to count the corporation sole as among the "general rights" of the Episcopal Church "growing out of the common law." {33} After the revolution, "the Episcopal Church no longer retained its character as an exclusive religious establishment," {34} but the Supreme Court still recognized the rights of the parson as a corporation sole to continue in full force. {35}
After the Declaration of Independence, early case law indicated that the corporation sole lived on. However, sometimes it was found in its pure common law form, other times in a variant form. {36} In New England, title to the real property of territorial parishes was occasionally vested in the resident clergyman. {37} In the South the Episcopal glebe was usually held by the minister-in-charge (whatever his title), just as in England. {38} "The most numerous group of private corporations in the colonies comprises those which were concerned with religious worship." {39}
The corporation sole, however, applied only to the clergy of the churches that were or had been legally and formally established. {40} In another early opinion written by Justice Story, the Supreme Court voided a royal grant of land to the Episcopal Church in New Hampshire. The decision was based on the grounds that no one was legally competent to accept title, since that state had never had an established church, even in colonial days. {41}
The link with church establishment sealed the fate of the common law corporation sole in America. The first amendment technically did not require states to disestablish a church. By implication, however, establishment was doomed by the Bill of Rights and without religious establishment, the rights of establishment were moot. {42}
The civil form of the corporation sole never really took hold in the United States. The king was the most obvious civil corporation sole in colonial days. After the Revolution, however, only a few minor officers in some states were accorded a corporate identity: probate judges, {43} and town supervisors. {44} The governor of a state was regarded as a corporation only in Tennessee. {45} For the most part, the powers and duties of public officers were adequately defined by statute. Incorporation was not necessary to guarantee bonds or contracts, {46} or to continue lawsuits. {47}
Beginning in the first half of the nineteenth century, however, new social and religious forces gave a revived impetus to the sole corporation. The chief thrust came from a most unlikely source. When John Carroll was chosen as the first Roman Catholic bishop in the United States in 1789, gaining secure title to the property of his church in the various states and territories was one of his most pressing tasks. This task was by no means easy.
Roman Catholicism had no legal standing in England, and its position in the new nation was awkward. Although Catholicism shared the fruits of the first amendment, it had a structure that many Americans judged to be autocratic and monarchical. At that time, congregational ownership of church property was natural to many denominations in America, but was contrary to long-established Roman Catholic policy.
Sometimes, for want of a better method, church property was held in fee simple by the local priest or by a pious layman. This system, however, led to endless difficulty. There was a constant fear that church property held in a private name might be claimed by a relative of the holder. Worse yet, the possibility existed that some unworthy claimant with a plausible story could make out a case for ownership. In one lawsuit, an unfrocked priest claimed to be heir to land that a deceased predecessor had purchased to build a church. {48}
Bishop Carroll won that suit, but for the next seventy years the Roman Catholic hierarchy struggled to find a legally sufficient and canonically suitable manner for its church to own property. Vesting title in a board of elected or appointed trustees was one obvious possibility. In fact, that is the way Carroll originally incorporated in Maryland. {49} But "trusteeism" itself became an issue when the trustees in some areas used their property ownership to pressure the bishops in doctrinal or disciplinary disputes. {50}
The internal problems of the Catholic Church were exacerbated and complicated by the rise of a national social and political phenomenon called the "Know-Nothing" movement. {51} In addition to their many other objections to Catholicism, these opponents had particular objections to control of church on this issue. {52} The bishops battled back, in what they saw as a defense of the doctrine and practice of their religion against bigots on the outside and recalcitrants on the inside. Over time, the corporation sole became a major weapon. {53}
Beginning in 1829, a series of national bishops' meetings was held to address the problems of Catholicism in America. Invariably, property problems were on the agenda. {54} Soon after the first of these gatherings, Archbishop Whitfield of Baltimore sought a charter in the form a corporation sole from the Maryland General Assembly. In 1832, it was granted. {55}
The link between Roman Catholicism and the legal concept of a corporation sole was surprising for two reasons. First of all, in England, this mode of incorporation was limited to the Anglican Church. {56} In fact, the Roman Catholic hierarchy was not reinstated in England until 1850. {57} Second, Catholic Canon Law did not envision a one-person corporation. The minimum number required to constitute a "collegiate moral person" was three. {58} Even the Pope was not a corporation sole. {59} Even though bishops of dioceses have great autonomy in church law, favorable action by a board of consultors is still required on major property decisions to this day. {60}
As Roman Catholicism spread geographically and grew in numbers in the last decade of the nineteenth century, new dioceses were created as new areas of the country were settled. Where they could, the bishops incorporated as corporations sole. {61} In some states, this required a private act of special incorporation; in others, a general incorporation statute was utilized.
The effort was not successful everywhere. On at least one occasion, a legislature defeated a bishop's request for sole incorporation on the grounds that Catholicism would thus acquire a legal right not held by other religious denominations. {62} Slowly, Roman Catholics won the battle for their church to be incorporated in a manner consistent with church polity. {63} During this struggle, the old common law corporation sole was gradually transformed. There was no longer any link with an established church. Although legislative action was often the result of activity by one church, the laws passed were usually bread enough for others.
In the courts, judges began to require specific legislative authorization for a corporation sole. The common law was not invoked to create sole corporations in states where the legislature had not acted. {64} Finally, at the beginning of this century, the Supreme Court, in an opinion by Justice Holmes, Confirmed what was already an almost universal judicial stance: "Apart from statute the law does not recognize the bishop as a corporation sole..." {65}
The transformation of the corporation sole from its common law form to a legislative format, however subtle, created something altogether new. Zollmann, writing in 1915, called it "a new form... Vigorously flourishing" {66} and "American in the true sense of the world." {67} The tide had turned. Momentum to secure the property rights of the Roman Catholic Church a century ago left permanent traces in modern American law. Today at least thirty states have a corporation sole in one form or another.
