Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1867-02-23
DECISIONS OF THE SUPREME
COURT.
Nashville. December Term, 1896.

". W. WO0dtOrE ug. the JHlOn BANK a. a..
I. CoRPoRATI0ss: The charter Of corpora
ti0n Is, after acceptance, an invtoiaole contract
between the State and the corporation; a. . is
also, between tho corporation and stockholders.
Neither can disregard ne obligations, or alter IT'S
essential franchises without the unanimous con
sent of the stockholders.
iur under "A former charter which accepts new
charter before the expiration Of the old. may
-till act under the former or partly under both
g SAMF. The power Of the Legislature 10
change. modify, enlarge or restrain O public cor
pOration. b. limited TO such measures as are mere
Is ancIllaTy 20 the main design Of the corporation
10 can not repeal, impair, OF alter the rights and
privileges conferred by the charter against the
consent and without the default of the corpora
u0n, iudicIally ascertained and declared
4. ssNE; legislative alterations in the char
ter Of a private corporation, when merely auXil-
larry 20 the same, may be accepted by n majority
Of the corporations, and, such acceptance will
bind the whole but If such proposed alterations
are fundamental, radical. or vital tbe acceptance
must then be unanimous
This i- a bin brought BY the complain
ant, WoOdfork in the Chancery Court at
Nashville, against the corporation known
as the "Union Bank Of Tennessee" and its
president and directors individually. The
bill alleges that the complainant Is the
owner OF three hundred end eighty-nine
shares Of the capital stock Of the corpora
ton, known, in law, as "The President,
Directors and Company Of the Union Bank
of the State Of Tennessee" aud that the
corporation, styled "The Union Bank Of
Tennessee" and liz officers, have wrong
fully converted his contributions TO the
former organization, and he now seeks 10
hold the latter, and iis president and di-
rector individually, responsible for his
stock, together with such profits az might
1 1. a.. 4
business under the organization 10 which
he contributed his capital.
Ia October, 1892 the Union Bank Of
Tennessee was first chartered under the
corporatenameof "The President, Directors,
and Company of The Union Bank of the
Stateof 4 Tennessee, TO continue in existence
until the ld OF Jannary, 1863, and no
longer The principal place Of business
was, by the charter established at Nash
Vile, and the capital stock was limited 10
three millions. Shortly after the passage
of its charter, the bank was organized and
went into successful operation. The com
plananta stock constituted a part of its
capital. aud he, in common with the other
stockholders, enjoyed all the advantages Of
Incorporation, and was in turn responsible,
as q corporator, for is liabilities.
On the 9th Of February, 1860 the Lcgis-
lature of the State, passed an act, commonly
known as the. " the Bank Code in which
il is declared that every bank which now
Is, or may hereafter be incorporated under
the authority of the State, shall be subject
10 tue liabilities and governed by the rules
and provisions contained in this act" On
the LIST Of March thereafter, 1860, the
Legislature passed an act ito incorporate the
capital stock Of the Union and Planters
Bank, in which it il enacted, that the
President, Directors, and Company Of the
Union Bank Of the State Of Tennessee, and
the Planters Bank Of Tennessee, be bodies
polite and corporate, until the lst day of
January, 1873 with all the powers, privi-
legcs, duties and obligations, and subject
10 all she stipulations and provisions Of the
acts passed the Sth day of October, 1882,
and the 18th day Of November, 1892, char
tcring said banks, and the acts amendatory
thereto, as now binding on each respec-
lively, except so far as the same are altered,
repealed or modified by an act passed on
The 9th Of February, 1860, styled an Act
20 reform and regulate the business of bank
ing in Tennessee, 10 which smdcharters are
subject, and that The existing stockholders
of said corporation respectively, (or those
who shall be such at the time of accept
ance,) shall have until the lst day of Oc-
tober, 1860, 10 accept this charter"
On the % Of July, 1860 large majority
Of the stockholders of the bank, under a
cali of its officers, and notice of the time
and place published in the city newspapers,
assembled in person and by proxy in the
banking house in Nashville, to ascertain by
au election, whether or not they would ac-
oept the act of the Legislature passed on
the LIST Of March, 1860 The election ap-
pears TO have been properly conducted, and
the result, as officially declared, shows that
g0O9 shares Of the capital stock were rep
resented, which, under the charter, entitled
the stockholders present and representing
the same, 10 S94 votes, of which S5S
were cast in favor of the acceptance, and 30
against IT, The complainant was present
and voted against the acceptance.
Under this state Of facts the complainant
charges that before the adoption Of the acts
amcndatury Of the old charter, that the
bank was suffering heavy losses, and that
on the Isl Of October, 1860, the time limited
by the act Of the 9th Of February, 1850, for
lie acceptance the old corporation ceased
TO exist, and the new, under the action Of
q majority ofthe stockholders, sprung into
being. That he was a member of the former
bui has no interest or connection with the
latter: and that the transfer Of his stock
from the old 10 the new organization,
against his vote and will, was illegal and
wrongful conversion Of il from the date Of
the stockholders, acceptance of the extend
ing act Of 1860, and for which the new
corporation, as well as its officers, the Pres
idcnt and Directors, are individually liable
20 account with him, not only for the safety
Of his stock, but for such profits as might
have been realized from it in banking UNI
der the original charter up TO the time of
it, acceptance on the Isl of January 1868.
These legal consequences, as it is insisted
ON in the bill, llow from the fact, that the
complainant had hv virtue ot his contribu-
tiuns 60 the capitol stock, right 10 have
the bank carried ON under the original
charter without material alteration or
modification until It's expiration and
that right has been defeated, hy the accept
ance Of the act of March lst lSGO, which
has worked such changes ia the original
charter as lin the language of the hilD,
d" the liabilities, rules, and provisions are
not the same as those prescribed i'm Oh
charter which created the corporate body
styled, The President Directors and
Company of the Union Bank of the State
of Tennessee: in which complainant Is
q stakeholder On the contrary, the bill
continues. "such liabilities, rules and proyi-
sions are, in some respects more oucrous,
stringent and critical than those prescribed
ia the charter aforesaid, which in other re
sperts the funds contributed hv the stock
holders are not IA safely guarded as by the
sgid charter, and are 60 be trusted 10 the
management of persons not owning stock
The bank answers at great length, and
the President and Directors, who are
made party defendants, respectfully adpot
The answer of the corporation. The allega-
tons in the bin with respect 20 the organl-
cation OF the bank under the original char
ter-the passage Of the acts Of February g,
5nd March J, 1850, and the acceptance Of
the latter hy majority Of the stockholders,
are all substantially admitted rs charged.
But the chargcin the bill that since the
l-t ct October, 1860, the corporation.
known Us the President, Directors aud
Company Of the Union Bank of
the State of Tennessee has ceased
% exist in law and in fact, and
that 30 has been succeeded 10y Incorporation