Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1872-12-24
VERY IMPORTANT DECISION.

The Constitution of 1870 provides that
mo corporation shall be created or its
powers increased or diminished by special
laws; but the General Assembly shall
provide by general laws for the Organiza-
ton of all corporations hereafter created"
etc. Art. NJ, Sec. VIII. In accordance
with this provision the last legislature
passed a general law, vesting in the Chan
Gerry Courts Of the State the power to Or
ganize corporations. Under this law a
great many charters have been granted,
and under them important business enter
prises have been projected. Some months
ago the CHRONICLE referred to teese char
tiers and made some suggestions in answer
to an objection that the courts referred to
had no power to create corporations. The
practice in the various chancery divisions
of the State in granting charters has varied
and the extent of the power of the Cham
cellors in the premises been misun-
derstood. We notice in the Nashville
Banner the report ola decision of Chancellor
w. F. Cooper, in re of the petition of citi-
zens of Nashville for charter for a manu-
featuring company. In the petition a
decree is prayed for, which, in detail,
enumerates the specific powers desired.
In noticing this application the Chancellor
says:
The petition goes upon the idea that
the Court of Chancery is clothed with the
power to grant charters of incorporation
in precisely the same way, and to the same
extent, as the Legislature itself could do,
and was in the habit of doing previous to
the adoption of the new Constitution OF
1870. The impression seems to prevail
that the persons desiring to be incorporat-
ed, are at liberty to fix up a charter to suit
themselves, and to call out from the pro-
visions of the Code and from former acts
ofincorporations such rights and privileges
as they may think will best answer their
purposes. Neither the Legislature nor
the Court is supposed to have any voice in
the matter.
1t is obvious that it becomes a question
of serious importance to know whether
this practice is correct. For, if it be not,
such charters are, even if decreed by the
Court, clearly void, and will be no protec-
ton to those who become parties to the
association. The stockholders, in that
event, instead of being members of a cor
pOration and liable only to the extent of
their stock respectively, are, in fact, part
ners in q joint stock company, and each is
liable for the whole debts of the associa-
ton, as in the case of ordinary partner
ship. I propose, in these, the first appli-
cations brought before me, carefully to
examine the subject, and to see whether
the general impression which seems to
prevail, outside of the profession certainly,
and, to some extent, inside of it also, is
well founded. If it be, then the State is
in the anomalous position, that whereas
before the new Constitution it had one
Legislature to grant and regulate charters
of interpretations, it now has, under con-
stitutional provision that was intended to
prevent the formation of corporations with
special charters, twelve Legislatures, there
being that number of Chancery Districts,
authorized to grant charters of incorpora-
ton, either according to the wishes of the
applicants, or the unlimited discretion of
the Chancellor for the time being. Such a
condition of affairs is somewhat startling
to say the least of it, and could scarcely