Salt, Smurthwaite, and Smith: The Origins of the Modern Legal Identity of the Church of Jesus Christ of Latter-day Saints

Abstract

In 2019 there existed a legal entity known as The Church of Jesus Christ of Latter-day Saints.1 This fact will likely strike most readers as unexceptional. More interesting, however, prior to 2019 there had been no such legal entity as the Church of Jesus Christ of Latter-day Saints for over 150 years, the last of that name likely having been disincorporated in 1862. Even more strangely, although there were millions of people around the globe who identified themselves as Latter-day Saints, in 2019 the only member of the legal entity known as The Church of Jesus Christ of Latter-day Saints was Russell M. Nelson. This somewhat surprising state of affairs is the result of how the efforts to disestablish the established colonial churches in the wake of the American Revolution created a body of corporate law in the United States with a distinctly Protestant inflection; and how the Church of Jesus Christ of Latter-day Saints, with its hierarchical emphasis on prophetic authority and its massive ecclesiastical ambitions, became entangled within and ultimately resisted that body of law. It may also have been the result of a bitter dispute over salt, now long forgotten but famous at the time, between Joseph F. Smith, president of the church from 1901 to 1918, and Charles Smurthwaite, a Utah entrepreneur.2Beginning in 1830, the church struggled to define the nature of its legal personality. During the lifetime of Joseph Smith it attempted to formally incorporate under the laws of two states. No American jurisdiction at the time, however, provided a legal form that meshed harmoniously with the ecclesiastical structure and government of the church, contributing to the chaos that marked its legal affairs at the time of Smith's murder. The Latter-day Saints took advantage of the comparative legal independence of early territorial Utah to incorporate the church in a way that allowed it to pursue its ecclesiastical ambitions, but this legal structure soon drew the ire of Congress. In the late 1880s, as the federal government's crusade against polygamy reached its height, the corporate structure of the church became a key legal battleground. In the aftermath of those battles, the church chose to eschew any centralized legal entity for its affairs, despite its hierarchal ecclesiology. Unresolved questions came to a head when controversies over post-Manifesto polygamy and church business enterprises boiled over into litigation during Joseph F. Smith's administration. Smurthwaite, an excommunicated Mormon businessman, and Don Carlos Musser, the scion of a prominent Latter-day Saint family, sued Smith over the use of tithing funds. The case drew national media attention, and pitted two of the most prominent and talented members of the Utah Bar—church general counsel Franklin S. Richards and former Utah Supreme Court justice Charles Zane—against one another. Ultimately Richards prevailed, but the case vividly illustrated the precarious nature of the church's ambigious legal structure and likely contributed to the creation of the corporate entity that continues legally to embody the church today.The Church of Jesus Christ of Latter-day Saints was born into a legal system defined by the legacy of America's first disestablishment. In 1774, nine of the thirteen colonies had established churches, all of which had been abandoned by the end of the 1830s. The New York law that Joseph Smith tried to use to organize his new church in 1830 was the result of more than a century of conflict over the legal status of New York's established church.3 The colony of New Amsterdam was founded by the Dutch West India Company in 1625. While nominally committed to the Dutch Reformed Church, the company consistently subordinated Calvinist orthodoxy to commercial expediency by adopting a tolerant stance toward religion. After the English takeover of New Amsterdam in 1664, royal officials sought to create an established Anglican Church by granting special benefits to the Church of England and incorporating Trinity Church in New York City, the wealthiest and most important Anglican congregation in the colony. By the time of the Revolution, however, Trinity Church was widely hated, and dissenting sects continued to dispute whether Anglicanism was in fact the established church.4 The state's revolutionary constitution of 1777 provided that “the free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever hereafter be allowed within this State to all mankind.”5 The state constitutional convention published a statement that with the new constitution stating that “all such . . . statutes and acts . . . as may be construed to establish or maintain any particular denomination of Christians or their ministers . . . be and they are, abrogated and rejected.”6 Shortly after the Revolution, however, parishioner Alexander Hamilton fought off an effort to disincorporate Trinity, the approach taken to disestablishment in Virginia.7 In 1784, the legislature responded by abrogating the provisions in previously granted corporate charters giving churches taxing authority.8 Prior to this time, corporations had been formed by some special act of the legislature, but in the new law the New York legislature took the radical step of allowing any religious society to incorporate without legislative action merely by electing trustees and filing papers with the local court.9 This 1784 law and its descendants provided the basic framework for Joseph Smith in 1830.New York provided a model for many of the new states of the expanding republic, including Ohio and Illinois, where the church relocated.10 At the heart of this legal regime were three core assumptions.11 The first was that as a legal entity a church consisted of the aggregation of its individual members. A church corporation was not an independent institution providing religious services and instruction to congregants. Rather, it was a legal representation of the congregants themselves. The second key assumption flowed from the first: ecclesiastical control was to reside with the laity rather than the clergy. During the mid-nineteenth century, this produced a series of conflicts within the Catholic Church between the bishops on one side, who insisted on the right to control parish property and choose parish priests, and dissident church members on the other, who were eager to use the power conferred on them by state corporate law to control their own parishes.12 The third assumption was that the amount of property that a church could hold must be sharply limited. These so-called “mortmain” provisions had their origins in the Tudor Reformation as the mechanism by which the crown seized church property.13 In the United States, they reflected congregational Protestant assumptions about church government and a hostility toward the concentration of economic power in ecclesiastical hands.For most of its history prior to the move to Utah, the church was an unincorprated religious society. Church members very likely failed to comply with the formalities required to organize under New York law. Missouri law prohibited religious corporations, and it seems that no effort was made to incorporate the church as opposed to various church-related entities in Ohio.14 This changed in Nauvoo. Joseph Smith borrowed large sums of money on the credit of the church to purchase the land on which to build the city.15 However, because the church lacked legal existence, this meant that the status of these debts was ambiguous. Matters came to a head when a Nauvoo-based steamboat sank.16 Joseph Smith had guaranteed the loan that the promoters of the steamboat had used to finance its purchase and after it sank, Smith became liable on the guarantee. In 1842, Congress passed one of its recurrent nineteenth-century bankruptcy laws, and Smith sought to take advantage of the law while it was in force.17 The statute made Smith's personal assets available to his creditors as a condition of discharge, and in order to preserve church assets he sought to incorporate the church under Illinois law and transfer church assets to this new legal entity prior to filing for bankruptcy. An 1839 Illinois law, however, limited religious corporations to owning at most forty acres of land “for the purpose of camp-meeting ground.”18 Thus, at the time of Joseph Smith's murder, the legal status of the church was hopelessly complicated, contributing to the bitter disputes between Brigham Young, as representative of the church, and Emma Smith, who was the residual claimant on Smith's estate.19In 1851, the legislature of the State of Deseret sought to solve these problems by granting the church a corporate charter. It eliminated the issues that had bedeviled it for the previous two decades.20 The law gave the church the unlimited ability to hold property but did not break completely with American church law of the time. It conceptualized the church as the corporate expression of the members. It also contemplated ultimate lay control. Church officers in control of church property were required to post bonds, and “said trustee and assistant trustees shall continue in office during the pleasure of said church.” At the same time, the statute was unique. It provided that the church could “solemnize marriages compatible with the revelations of Jesus Christ,” a sly way of providing legal recognition for plural marriages.21 It went on to provide the church with the power to govern itself using language that envisioned a broad competence and jurisdiction: Said church . . . shall possess . . . the power and authority, in and of itself, to originate, make, pass, and establish rules, regulations, ordinances, laws, customs, and criterions, for the good order, safety, government, conveniences, comfort, and control of said church, and for the punishment or forgiveness of all offenses, relative to fellowship, according to church covenants: that the pursuit of bliss, and the enjoyment of life, in every capacity of public association, and domestic happiness; temporal expansion; or spiritual increase upon the earth, may not legally be questioned: provided, however, that each and every act, or practice so established, or adopted for law, or custom, shall relate to solemnities, sacraments, ceremonies, consecrations, endowments, tithings, marriages, fellowship, or the religious duties of man to his Maker, inasmuch as the doctrines, principles, or performances, support virtue, and increase morality and are not inconsistent with, or repugnant to, the Constitution of the United States, or of this State, and are founded in the revelations of the Lord.22After Congress organized the Utah Territory, the territorial legislature adopted the previous statutes of the now defunct State of Deseret, thus incorporating the church under American law.23By 1860, the Republican party—founded to rid the territories of the “twin relics of barbarism” (slavery and polygamy)—was in power, and in 1862 the Morrill Anti-Bigamy Act repealed the Utah statute incorporating the church and went on to limit its property holdings to $50,000.24 The Morrill Act, however, remained a dead letter in Utah for more than a decade, meaning that once again the legal status of the church was uncertain. Brigham Young responded by holding church property as “trustee in trust” (a legal neologism invented in Nauvoo as part of the effort to untangle Joseph Smith's legal affairs).25 What this meant was that the property was titled in Brigham Young's name, but held on behalf of the church. The precise nature of this holding, however, was uncertain. It was not clear that there was a common law trust—in which case Young would have held “bare legal title” while “equitable title” would have been held by church members as a whole—or if the property was owned outright by Brigham Young.26 Unsurprising, upon his death in 1877 another bitter dispute between the church and heirs took place in the courts.27Successive presidents of the church continued to hold church property personally as trustee in trust. In the early 1880s, Franklin S. Richards, the church's legal counsel, foreseeing that Congress was likely to pass laws to escheat church property, urged the creation of stake and ward corporations to which John Taylor as trustee in trust could transfer church property to shield it from federal confiscation.28 It was difficult for Richards to persuade Taylor and other leaders, but this was done around 1884. The law used was an 1878 statute that allowed for the creation of corporations consisting of “persons associated together for religious, social, scientific, benevolent or other purposes”29 but limited their ability to hold property. “[N]o such corporation,” the statute read, “must own or hold more real estate than may be necessary for the business and objects of the association.”30 The resulting corporations were also cumbersome, requiring multiple trustees and the authoring of elaborate bylaws. However, the strategy paid off when the solicitor general of the United States ruled that property held by these corporations was not subject to the Edmunds-Tucker Act passed in 1887.31 The law did, however, allow a federal receiver to confiscate property not held by stake or ward corporations, including, briefly, the Salt Lake Temple. Shortly after the constitutionality of the Edmunds-Tucker Act was upheld by the U.S. Supreme Court in 1890, Wilford Woodruff issued the Manifesto, which stated that the church would no longer perform plural marriages.32 In response, Charles Zane, chief justice of the Utah Territorial Supreme Court, which was administering the case, ruled that property should be returned to the trustee in trust to advance the legal, nonpolygamous goals of the church.33Utah became a state in 1896 and the legislature adopted a law allowing for the incorporation of religious societies.34 However, the church chose not to avail itself of this law. Most local meetinghouses continued to be held by stake and ward corporations. The remainder of church property was held by the church president as trustee in trust. The church had become heavily involved in the economic life of the Intermountain West, in part due to the cooperative movement of the 1870s.35 By the time of statehood, the United Orders of Young's time had largely ceased to function, but many of the businesses they spawned continued as church-owned enterprises. In addition, the church had invested in a variety of businesses from the Union Pacific Railroad to the Utah salt industry as a way of fostering economic growth and a diversified economy. With the arrival of a new century, however, Latter-day Saint dreams of autarky were dead and increasingly church-owned businesses were run along the lines of mainstream American capitalism. This is how matters stood in 1904 when a dispute over salt helped to spur on the transformation of the church's legal personality.Charles Smurthwaite was born in England in 1862. At the age of nineteen, he joined the church in Manchester and emigrated to Utah, settling ultimately in Ogden.36 Although he never served a mission for the church, he was ordained a seventy and was active in the church-sponsored People's Party in the 1890s.37 His estrangement from the church seems to have begun around this time, when he supported apostle Moses Thatcher in his political campaign and subsequent battle with church leaders.38 However, he was still active in his ward in 1904 when, in association with Richard J. Taylor, son of deceased church president John Taylor, he purchased controlling shares in the Beck Salt Company and began investing to expand its operations.39 Sometime later, then church president Joseph F. Smith contacted Smurthwaite through Ogden capitalist David Eccles.40 At a meeting in Salt Lake with the First Presidency and apostle John Henry Smith, Smurthwaite and his associate learned that the church controlled the Inland Crystal Salt Company, the Beck Salt Company's chief competitor. Indeed, after its creation via a merger with a competitor in 1898, the Inland Crystal Salt Company had a de facto monopoly on salt manufacture in Utah.41 Joseph F. Smith said, “I am very surprised . . . that a man of your experience would go into business in opposition to us without first coming to consult us. An hour . . . would have set you brethren right on this matter if you had come to consult us about it.”42 Smith suggested that if Smurthwaite and his associates wished to invest in the salt business they might be able to purchase shares in the Inland Crystal Salt Company, but that if they continued, “We will ruin you” because the Inland Crystal Salt Company would cut prices in the face of increased competition.43 By that time, the church had been involved in the salt business since the 1880s, and the Inland Crystal Salt Company—due to its more efficient capital investments—was capable of undercutting smaller, less efficient producers such as the Beck Salt Company.44 The Inland Crystal Salt Company was also allegedly part of the national “salt trust,” and thus may have been required to engage in unprofitable price cutting as a way of driving competitors out of business.45The interview with Smith was the final straw in Smurthwaite's mounting religious crisis. Two years earlier, the Utah legislature chose apostle Reed Smoot to fill one of the state's seats in the United States Senate. The choice set off a furor of national protest, and the Senate Committee on Privileges and Elections launched a wide-ranging investigation into Mormon affairs in Utah.46 Joseph F. Smith was called to testify before the United States Senate, where he admitted to cohabitating with his plural wives after the Manifesto of 1890. For Smurthwaite and many other Latter-day Saints, such conduct not only violated unlawful cohabitation statutes but was also sexually immoral, a violation of what they regarded as the church's new understanding of marriage. He informed his bishop that he thought Smith was “a bad man” and not a prophet of God. He went on to publish a lengthy letter in the Salt Lake Tribune in which he denounced all forms of post-Manifesto polygamy, demanded that church meetings be thrown open to debate on religious questions, and that the church retire from all political and commercial affairs.47 He also wrote: “I demand that all tithes be accounted for in detail, beginning at the next April conference, twice each year from that time forward at general conferences; that a list of all property holdings of the church and of the leaders of the church, acquired since he [sic] became president, be read semiannually at each conference.”48 In response, Smurthwaite's “block teacher” preferred a charge against him before his bishop for “apostasy and unchristianlike conduct” in March 1905.49Smurthwaite's ecclesiastical trial became big news. Each stage of the proceedings before the bishop's court and the high council was reported in the press.50 He raised the stakes by preferring his own charge against Hyrum Goddard, the block teacher who began the proceedings against him. Goddard was a polygamist who continued to cohabitate with his plural wives, and Smurthwaite asked the bishop to investigate him for “unchristianlike conduct.”51 Smurthwaite was ultimately excommunicated on April 4, 1905.52While the action against him seems to have arisen entirely at the local level in response to his published letter to the Salt Lake Tribune, press reports presented it as a vindictive plot instigated by Joseph F. Smith against a business rival.53 State legislators and other politicians discussed the case.54 The Salt Lake Tribune compared Smurthwaite to the Book of Mormon prophet Abinadi standing before a wicked King Noah in the person of Smith,55 and Godwin's Weekly hinted ominously that the case might require a return to the legal hardball of the 1880s: [I]t will be remembered that no arguments, nor prosecutions in the old days in Utah had the least effect until a bill to disenfranchise the whole organization was introduced into Congress. That brought the manifesto of President Woodruff. He was sincere and so were a few others who surrounded him; they wanted this alien system placed in accord with free institutions. But no such spirit is apparent among the leaders today and a caustic remedy is not only just, but a necessary act of self-defense on the part of the nation. The man who gives unquestioned allegiance to the rule of Joseph F. Smith and believes he has a right to rule, cannot give any but qualified allegiance to the Government of this Republic.56If church leaders thought that Smurthwaite's excommunication would bring the controversy to an end, they were mistaken. Three days after being expelled from the church, Smurthwaite filed a complaint in the Third District Court in Salt Lake City in the case of Smurthwaite et al. v. The Church of Jesus Christ of Latter-day Saints et al., and the Salt Lake County sherriff served the papers personally on Joseph F. Smith.57Smurthwaite was joined in his lawsuit by thirty-six-year-old Don Carlos Musser, the son of A. Milton Musser, a prominent Latter-day Saint leader who was serving as assistant church historian at the time of his son's lawsuit against Joseph F. Smith. Musser had four plural wives; Don Carlos's mother, Mary Elizabeth White, was the second.58 During the Raid of the 1880s, Musser was convicted in a celebrated unlawful cohabitation case where he refused an offer of leniency by then territorial chief justice Zane, rather than pledge to abandon his relationship with Mary, her children, and his other plural families.59 In 1891, Don Carlos was called to the Swiss-German Mission where he served for a year. He was then made president of the Turkish Mission from 1892 to 1894.60 Upon returning to the United States and working in journalism for a time, he volunteered to serve in the Spanish-American War, eventually becoming editor of an English language newspaper in the Philippines entitled Freedom.61 By 1905, he had become disillusioned with the church over a variety of issues, particularly polygamous husbands including his father continuing to cohabitate with plural wives after the Manifesto.As Smurthwaite's excommunication was being finalized, the church held its April 1905 general conference, and Don Carlos was one of two members who cast a dissenting vote to the sustaining of church leaders.62 In an interview at the time with the Salt Lake Tribune, he called on common Mormon narratives of apostasy. Drawing on anti-Catholic tropes, he compared Smith to the pope.63 “Is it not possible that if the people who make up the Mormon church do not think for themselves and act in accordance with their God-given reason, they, too will fall away and apostatize?” he said. “Indeed, is there a thinking, well informed man in the church, who cannot see that a great change has come over his people; that there is a class distinction in the church today that threatens the spiritual and temporal welfare of the masses?”64Despite Smurthwaite's extended list of complaints against the church in his published letter and Musser's broad ranging objections to polygamy, Mormon theology, and conditions in Utah, the legal issues in their lawsuit were fairly narrow. Suing on behalf of themselves and “all other members of the Church of Jesus Christ of Latter-day Saints who may come into the case,” they asked the court to order Smith to provide an accounting for the investment of all tithing funds and issue an injunction “restraining said defendants from investing said funds . . . in any business or enterprise established or prosecuted for commercial, industrial or business purposes.”65 The case was national news, with journalists embellishing beyond the facts alleged in the lawsuit. The complaint contained no allegation that Smith was appropriating church funds or profiting from church investments, but the New York Herald reported that he, “has been charged with taking the money paid as an offering to the Lord and using it for speculations to build up his own private wealth.”66Given the origins of the dispute in the Inland Crystal Salt Company's monopoly in Utah, one interesting question is why Smurthwaite didn't choose to pursue a case under the antitrust laws. In 1890 Congress had passed the Sherman Antitrust Act, which made “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade . . . illegal.”67 Critics such as Frank Cannon denounced the church's involvement in the salt industry in antitrust terms, although he suggests that at the time of the suit the Inland Crystal Salt Company may not yet have formally been part of the national “salt trust.”68 Antitrust suits over salt had been recently brought elsewhere. In 1902, the federal government sued the “Federal Salt Company . . . popularly known as the ‘Salt Trust’”69 in federal court in San Francisco, obtaining a restraining order against price fixing agreements.70 Furthermore, section 7 of the Sherman Act gave victims of monopolies a private cause of action for violations of the act, including the right to treble damages.71 Under the U.S. Supreme Court's 1894 decision in United States v. E.C. Knight Company, however, the Sherman Act did not reach purely intrastate manufacturers of “a necessity of life” such as the Inland Crystal Salt Company.72 Both the Utah state constitution and an 1896 state statute prohibited “any combination . . . having for its object or effect the controlling of the prices of . . . any article of manufacturing.”73 However, it was unclear whether the law provided an aggrieved party such as Smurthwaite a private cause of action.74 Furthermore, Smith's threat merely to undersell Smurthwaite's company was likely not prohibited by the Utah law unless it could be shown to be part of a broader conspiracy to control prices as opposed to merely underprice a competitor. Regardless, in his lawsuit Smurthwaite chose not to pursue any antitrust related claims against Smith, the church, or the Inland Crystal Salt Company.Inevitably with the filing of suit, lawyers became the leading actors in the resulting drama. For their attorney, Smurthwaite and Musser retained Charles Zane, one of the most prominent lawyers in Utah. Zane was born in 1831 and admitted to the Illinois bar in 1857, becoming a member of the Springfield legal community just as its leading light, Abraham Lincoln, rose to national prominence. Zane had become a judge in Illinois when he was appointed chief justice of the Utah Territorial Supreme Court in 1884.75 He presided over that court during the most intense period of the polygamy raids where he earned a reputation as a stern but essentially fair-minded judge, in contrast to earlier anti-Mormon crusaders on the territorial bench.76 Upon Utah's admission to the Union in 1896, he was chosen chief justice of the new state supreme court, serving until 1899 when he entered private practice in Salt Lake City.77 Given his reputation as a widely respected hero of the federal government's legal victories over the church, the choice of Zane gave a certain gravitas to Smurthwaite's and Musser's suit.Joseph F. Smith was represented by Franklin S. Richards. The son of apostle Franklin D. Richards, as a young man Richards had planned on a medical career. That changed after a conversation with Brigham Young in which the aging president urged him to study law instead. Young said, “[T]he time will come when the Latter-day Saints will need lawyers of their own to defend them in the Courts and strive with fearless inspiration to maintain their constitutional rights.”78 Richards abandoned medicine and after a course of self-directed study was admitted to the Utah bar in 1874. The timing of his entry into the legal profession couldn't have been better for a young Latter-day Saint attorney. He became the church's general counsel in 1880, just as the hard fought legal battles over the polygamy raids were beginning and argued the church's position before the territorial courts, as well as handling its numerous appeals before the United States Supreme Court.79 In addition, he worked with George Q. Cannon and others as an emissary for church leaders with legal and political leaders in the East. By 1905, he was an experienced attorney in the prime of his career with decades of experience defending the interests of his church in court.Richard struck a confident air with reporters when the suit was filed. “I feel assured in saying the whole matter will come to nil,” he said. “I do not wish my words to be taken as casting any reflection upon such an able practitioner as Judge Zane, but nevertheless, I cannot see any other result.” He went on to say, “I had a long talk with President Smith last night, but this matter was not touched upon. As you know, I represent the Mormon church in all legal matters, and for that reason these papers have been turned over to me.” Finally, as a good advocate, he ended by trying to change the public framing of the case away from grasping hierarchs speculating with the money of widows and orphans. He said: “The tithings are purely voluntary; they are not forced. They are never diverted from church work. Just so long as the tithings are properly used for the furthering of church and religious ends steps to prevent their voluntary contribution are absurd. The Mormon church has nothing to fear.”80 Despite the lawyer's confident public face, behind the scenes Joseph F. Smith was concerned. Richards later wrote, “President Smith was considerably disturbed in his mind about the suit and offered to employ additional counsel.” Richards, however, insisted that “we were entirely able to win the case ourselves.”81The surviving case file contains no briefing by the parties, and one must therefore reconstruct the legal theories in the lawsuit from pleadings