This is Part III (see Part I and Part II) of my post on the legal history of the Church as a corporation.
After Joseph’s death, the Quorum of the Twelve took over control of the Church. I don’t know the precise corporate status of the Twelve-led church of 1844-48. The Illinois statute provided that “The trustees elected or appointed under the provisions of this act, and their successors, shall have perpetual succession and existence” (emphasis added). In 1848, Brigham Young was made President of the Church at a conference in Winter Quarters (prior to that he had been operating as president of the Quorum of the Twelve), which also made him Trustee-in-Trust of the Church.
One of the things that the Church did when it arrived in the Great Basin was to try to sort out is legal status more effectively. In 1851, the legislature of the Provisional State of Deseret passed a law granting to the Church a corporate charter. There are a couple of interesting facets of this charter. First, it vested control over Church property in a Trustee-in-Trust, a clear echo of the Illinois statute used in Nauvoo. Second, the charter contained no mortmain provisions and thus allowed the Church to acquire and hold unlimited amounts of property. Third, the charter did not contain any limitations on the purposes for which the Church could hold property. Thus, unlike the Illinois statute used in Nauvoo, church property was not limited solely to property used for worship services. Fourth, the charter gave the Church the power to solemnize marriages and provided any marriages solemnized by the Church could not be questioned in any other forum. After Congress refused to admit Deseret to the Union as a state and organized the Territory of Utah in its stead, an identical version of the Church’s charter was re-enacted by the Utah Territorial Legislature in 1855.
In many ways, the corporate charter granted to the Church by the Territorial legislature had more in common with the Charter granted to the City of Nauvoo than it did to the Illinois ecclesiastical corporation created by Joseph Smith in 1841. (Interestingly, the Illinois church corporation was created on the same day that the Nauvoo Charter went into effect.) Like the Nauvoo Charter, the Utah Church Charter was a special act of the legislature, and my understanding is that its provisions were in some sense extraordinary, in particular its unlimited ability to own and use property was quite different from that of most other ecclesiastical corporations.
This legal solution, however, was short lived. In 1862, Congress passed the Morrill Anti-Bigamy Act. This law did three things to the Church’s legal status. First, it specifically revoked the laws passed by the Provisional State of Deseret and the Territorial legislature. Second, it provided that any property held by an ecclesiastical corporation in the territories in excess of $50,000 was escheted to the United States government. Third, it provided that any laws that the territorial legislatures might seek to pass that would shield or promote polygamy were void.
The Morrill Act did not have any immediate impact. It contained no effective enforcement mechanism and the law was completely ignored for about ten years. I do think, however, that it had two impacts. First, it removed any legal incentive that there might have been to sharply distinguish between Brigham Young’s personal property and Church assets. Second, it created an incentive to fragment the Church’s legal personality into more local units, e.g. stakes, etc. I don’t know the precise legal status of these local units, however.
More importantly, the Church started to create joint-stock companies to carry out many of its activities. It is important to understand that not all corporations are joint stock companies and not all joint stock companies are corporations. In other words, organizations that have a legal personality via incorporation don’t necessarily have to issue stock, and organizations that issue stock don’t necessarily have to have a separate legal personality. The 17th century saw the rise of some huge, incorporated, joint-stock companies like the British East India Company. However, most joint stock companies operated without a corporate charter. They were simply contractual arrangements for dividing up the assets and liabilities of a business venture. After one of these unincorporated joint-stock companies created a huge financial panic in the second decade of the 18th century ? the so-called South Seas Bubble ? Parliament passed the Bubble Act of 1720, which made unincorporated joint stock companies illegal. The act, however, seems to have been more honored in the breach than in the observance. The result is that up until the 1860s there were lots of joint stock companies, but their legal status was ambiguous at best. At almost the same time, the Church starts forming lots of joint stock companies to carry on activities designed to foster economic development and other Church missions ? e.g. the Deseret News Company. The Church ? or more often individual general authorities or loyal church members ? then owned this stock. One interesting question to which I do not have the answer is the precise status of these companies. Arrington’s Great Basin Kingdom, which is an economic history of the 19th century church, talks a lot about the formation of church companies from about 1860 until about 1890. What he doesn’t talk about ? or even seem aware of ? is the revolution that was going on in corporate law at the time, as the previously “contractual” joint stock companies were transformed into formal corporations. I don’t know what the Utah Territorial law of business corporations looked like.
In 1887, Congress passed the Edmunds-Tucker Act, which included a corporate disollution provision almost identical to the Morrill Act. There were a couple of differences. First, the escheted property was to be sent to the territorial public schools, rather than the United States Treasury. Second, and more importantly, the Edmunds-Tucker Act contained a detailed enforcement provision under which a government receiver was appointed to institute an action in territorial court to take possession of Church property. By the time that this action was instituted, however, the “Church” didn’t own much property. There was temple square and its adjascent property, some cattle herds, and stock in a bunch of corporations. In anticipation of the Act, most of the Church’s property had been conveyed to local leaders or local ecclesiastical units. The reciever began instituting actions to void these transfers. However, everyone wanted to get a case testing the constitutionality of the Edmunds-Tucker Act in front of the Supreme Court as soon as possible. Accordingly, the reciever and the Church’s lawyers reached a deal whereby the reciever stopped trying to void pre-Edmunds-Tucker Act transfers in return for $155,000 in cash. In due time, the Edmunds-Tucker Act was upheld by the Supreme Court in the case of The Late Corporation of the Church of Jesus Christ of Latter-day Saints v. the United States (although it produced one of the few vigorous Supreme Court dissents of the anti-polygamy crusades. Justice Field objected to the revocation of the corporation charter, which he though violated due process.) Almost immediately after the Supreme Court issued its opinion, President Woodruff issued the Manifesto. By this time, the previous reciever had been dismissed under a cloud of accusations of mismanagement of escheted assets. The new reciever backed off, and eventually the Church’s property ? less thousands of dollars of attorneys and administrative fees ? was returned.
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