Knoxville weekly chronicle. [volume] (Knoxville, Tenn.) 1870-1875, 1872-12-25
A VERY IMPORTANT DECISION.

! 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,n
etc. Art. NJ, Sec. VIII. In accordance
with this provision the last legislature
passed 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 teesc char
ters 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 Chan>
cellors in the premises been misun-
derstood. We notice in the Nashville
Banner the reportofa decision of Chancellor
w. +. Cooper, in re of the petition of citi
zens of Nashville for q charter for manu-
featuring company. In the petition q
decree is prayed for, which, in detail,
enumerates the specific powers desired.
In noticing this application the Chancellor
says:
90 The petition goes upon the idea that
! the Court of Chancery is clothed with the
power TO grant charters of incorporation
i'm 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-
f 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
5 as they may think will best answer their
purposes. Neither the Legislature nor
E the Court is supposed to have any voice in
the matter.
1t is obvious that it becomes n question
of serious importance to know whether
this practice is correct. For, if 1T be not,
2 such charters are, even if decreed by the
Court, clearly void, and will be no protec-
{ ton to those who become parties to the
e association. The stockholders, in that
} event, instead of being members of cor
e poration, and liable only to the extent OF
r their stock respectively, are, in fact, part
ners in Joint stock company, and each is
liable for the whole debts of the associa-
ton, as in the case of ordinary partner
ship Ipropose, in these, the first appli-
= cations brought before me, carefully to
examine the subject and to see whether
I, the general impression which seems to
: prevail outside of the profession certainly,
a | and, to some extent, inside of il also, is
+ we'll 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-
q stitutional provision that was intended to
y | prevent the formation of corporations with
| h0 fXVplUp | thpFp
n being that number of Chancery Districts,
II authorized to grant charters of incorpora-
!, ton, either according to the wishes of the
q ! 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
, have been in the contemplation of the
members of the Constitutional Convention
of 1870.
o The Chancellor then considers the con.
stitutionality of the law in.the light or fer
mer decisions:
On the 26th day of February, 1856, under
c the State constitution of 1884, the Legisla-
/ ture undertook to clothe the Circuit Courts
e of this State with authority to grant pri
l. vate characters of incorporation by an act
published as ch. 2j4 of the printed acts Of
: that session of the General Assembly, and
j. entitled "An act to authorize the forma'
# ton of companies, and regulate private
i and local affairs, and retrench the expen'
d ses of legislation" This act did expressly
g undertake to do what it is now supposed
d has been done under the new constitution
> 1t provided that any number of persons
not less than three, might associate them
a selves together for the purpose of pursuing
Y or carrying on any branch or branches o.
e mSnufactory, mining, mechanical, chemi
z, cal or other business for promoting edu'
d cation science or art for erecting ferries
l. or mill dams for establishing insurance
j. fire, savings, navigation, commercial, ol
agricultural business or any other pursuit
r. business, or occupation, by calling, 1Chtch
o may be idWfttLy carried on, or engaged IN
If IN this State, or priUdtc, social, pu6Hc 0i
: municipal purposes The act further eX'
: pressly provided that the persons desiring
e to be incorporated might file petition IL
i the Circuit Court, "where the company o.
n the principal office of the company is 10
g Gated or kept,n setting forth, among othe
n things, 1.-The powers, duties, liabilities
rights and privileges" urged, and If j
v should appear to the Court these provis
). ions were not repugnant TO the provision
If of the act, or to the Constitution and Law
.e of the State, and the United States, tn
d Court was to order the company to b
e formed accordingly. If the Court could b
e clothed with legislative authority to Great
corporations. this act was certainly broa
l. enough for all particular purposes.
Ie This extraordinary act, as II was yer
l. appropriately styled by Judge Mckinney
D. came up for judicial consideration by ou