The Origins of Corporation Sole in America

As part of this series on the legislation that makes the Springfield Diocese a civil corporation in the eyes of the Commonwealth, I offer the following commentary about the origins of corporate sole. The history in England, where it arose from common law roots, is not uninteresting. Yet, for the sake of clarity it may be best to stick to how it is applied in the U. S. That application is ably sketched out below. The reference for this article, from which this extract has been taken is:
The Modern Corporation Sole. James B. O'Hara, 93 Dickinson Law Review, Fall 1988.

The Modern Corporation Sole

“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 property by the clergy, and strenuously battled the 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 of 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 broad 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 word."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."
48. Browers v. Fromm, 1 Add. 362 (Pa. 1798).
49. 1792 Md. Laws 55.
50. See generally 1 A. STOKES, CHURCH AND STATE IN THE UNITED STATES 808-18 (1950); Guilday, Trusteeism (1814-1821), 18 HIST. REC. & STUD. 7 (1928); McNamara, Trusteeism in the Atlantic Stales, 1785-1863, 30 CATH. HIST. REV. 135 (1944); Stritch, Trusteeism in the Old Northwest, 1800-1850, 30 CATH. HIST. REV. 155 (1944).
52. A. STOKES, supra note 50, at 808.
54. P. GUILDAY, A HISTORY OF THE COUNCILS OF BALTIMORE 1791-1884 (1932). The 1829 meeting was attended by Roger B. Tancy, a prominent Catholic layman, later Chief Justice of the United States from 1836 to 1864. Taney's role at this meeting of bishops is unclear, but possibly he was serving as legal counsel. Id. at 89.
55. 1832 Md. Laws 308.
56. Recent Cases, supra note 16, at 295-96.
57. There were a few Roman Catholic bishops ministering to congregations before 1850, but there were no dioceses until the hierarchy was reestablished in that year with the appointment of Cardinal Wiseman as Archbishop of Westminster.
58. This long-standing policy was formally codified in 1917 Code c. 100, § 2. For an exceptionally clear short explanation of the canonical concept of moral personality, see A. MAIDA. OWNERSHIP. CONTROL AND SPONSORSHIP OF CATHOLIC INSTITUTIONS 10-22 (1975).
59. C. CARR, supra note 14, at 16 n.l.
61. It is not the purpose of this study to create a state-by-state history of this pattern of incorporation. However, in some of the cases there are occasional references to the history of this pattern. A few examples will suffice: Illinois had created a corporation sole by private act in 1845; South Carolina in 1880; Kentucky in (or before) 1888; Massachusetts in 1898. See Chiniquy v. Catholic Bishop of Chicago, 41 III. 148 (1866); Decker v. Bishop of Charleston, 247 S.C. 317, 147 S.E.2d 264 (1966); McCloskey v. Doherty, 97 Ky. 300, 30 S.W. 649 (1895); Searle v. Roman Catholic Bishop of Springfield, 203 Mass. 493, 89 N.E. 809 (1909).
62. Union Church v. Sanders, 6 Del. (1 Houst.) 100, 127 (1855).
63. For a summary of the later stages of the trusteeship controversy, see 3 A. STOKES, supra note 50, at 408-13. The Vatican gave formal approval to the corporation sole as one of the approved modes of holding title to church property in a private letter sent to the American bishops in 1911. For the text, see 2 T. BOUSCAREN. CANON LAW DIGEST 443 (1966). The corporation sole is still the "preferable civil law instrument for the dioceses to use in holding title to property." See A. MAIDA & N. CAFARDI. CHURCH PROPERTY, CHURCH FINANCES, AND CHURCH-RELATED CORPORATIONS 129 (1986).
64. See Roman Catholic Archbishop v. Shipman, 79 Cal. 288, 21 P. 830 (1889) (affirming action taken by the legislature of California). For other decisions where a court did not recognize a corporation sole because the legislature had not acted or where a party had not followed a procedure created by state law, sec Dwenger v. Geary, 113 Ind. 106, 14 N.E. 902 (1888); Blakcslee v. Hall, 94 Cal. 159, 29 P. 623 (1892); First Nat'1 Bank v. Winchester, 119 Ala. 168, 24 So. 351 (1898).
65. Wright v. Morgan, 191 U.S. 55. 59 (1903).
66. Zollmann, Classes of American Religious Corporations, 13 MICH. L REV. 566, 571 (1915).
67. Id. at 573.