Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1872-02-04
AN IMPORTANT QUESTION FOR CORPORA
TONS.

We understand that interested parties
have consulted prominent and able law
yers in New York city upon the question
of the authority of Chancery Courts to con-
fer corporate powers under the general
laws passed by our General Assembly.
This power is exercised by virtue of an
act of the Legislature providing by general
laws for the granting of letters of incorpo-
ration by the several Chancery Courts of
the State. Section article NJ of the Con-
stitution says: NO corporation shall be
created. or its powers increased or dimln-
ished by special laws, but the general AS
sembly shall provide by law for the organi-
Zation of all corporations hereafter created,
which may, at any time, be altered or re-
pealed and no such alteration or repeal
shall interfere with, or divest, rights which
have become vested"
1t is the opinion of the counsel referred
TO, as we understand, that this section
vests in the General Assembly the authOri-
ty to delegate corporate powers by gene
ral laws, but that it does not vest
Them with the authority to dele
gate this specific grant of power to the
Courts. As they interpret the Constitu-
ton, the power to define and create corpo-
rate powers is specific grant to the Leg
islature and can not be delegated by it to
the Courts. The section quoted might be
susceptible of such construction if con-
sidered alone. But section 8, Immediately
following, says: "The Legislature shall
have the hight TO vest SUCH powers III the
courts of justice, with regard to private
and local affairs as may be eXpedient."
This section, it seems to us, must mean
that the power created by the preceding
section may be granted to the courts by
the Legislature. 1t is broad, compre-
hensive provision. 1t gives to the Legis-
llture full discretion to vest i'll the Chan
Gerry, Circuit or other courts, all powers
with regard to local and private affairs"
that it may deem expedient.
Under this grant of power, the General
Assembly enacted a general law vestingi in
the Chancery Courts the authority first re-
ferred to. 1t provides how applications
for letters of incorporation shall be made,
and what powers shall be conferred. The
granting Of such powers by the Courts, it
seems to us, belongs to the class of private
and local affairs which the General AS
sembly has authority to delegate to the
Courts.
But if there is any doubt about the right
of the Courts to assume this new iurisdic-
ton, steps should be taken to have the
question promptly brought before our
Court of last resort. The authority to Or
ganize corporations and to modify or re-
peal them is one of the most important
powers conferred upon our Chancery
Courts. Upon the wise and prudent exer-
else of the powers depends, in a large mea-
sure the well being and prosperity of
communities. We believe it was a Judi
ciouS change, to take this power from the
Legislature and vest it III the Courts, and
we should regret if our Supreme Court
should find it their duty to hold the pres
cut law unconstitutional. But as we have
before said, the question is too important
to remain long in doubt. Corporations
have been created, and are doing business
under powers conferred by our Chancery
Courts. If their charters are void, the
sooner the business community under
stands it, the better it will be-