Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-02-21
CONSTITUTIONAL Law.

lmportant Decision Of the Supreme
Court-The Power of Chancery
Courts TO Grant Letters Of IncOr-
poration.
The constitutionality of the act Of Jan.
80, 1871, authorizing Chaneery Courts to
grant letters Of incorporation, has, since its
passage, been constantly mooted ques-
ton. Chancellor Cooper recently, in 8
very elaborate opinion, held the act uncon-
stitutiohai. Chancellor Key had formerly
taken the same ground. The Supreme
Court of the State, during its sitting at
Knoxville, delivered an opinion, which we
subjoin, sustaining the constitutionality Of
the act of Jan. 80, 1871, and thus over
ruling the opinions of the Chancellors.
The decision was rendered in the case of
CIV. HALL ct al. uS, JOS. A. MABRY,
and is as follows:
C. w. Hall and eight other citizens of
Knox county filed their petition in the
Chancery Court at Knoxville, praying that
certain amendments, specified in the petit
ton, be made TO the charter of the "Rut-
ledge Turnpike Company" The act of in
corporation was passed May "a, 1865, ard
is entitled Gan act to incorporate the Ten
nessee Pacific Railroad Company and for
other purposes" ts
By The 18th section of said act Thomas
E. Champion, Samuel Shields, and Samuel
Il Rogers, and their associates and success:
ors were incorporated by the style of the
"Rutledge Turnpike Company" and for
the purpose of constructing McAdam
turnpike road from Knoxville to Rutledge;
and BY section so of said act $50, 900 of the
stock of East Tennessee and Georgia Rail-
road Company was appropriated to aid in
the construction of the said turnpike road.
The petition alleges that Rogers died, and
Shields and Champion, having failed to
take any action as commissioners, the Gov
ernor appointed Joseph A. Mabry, NJ. Bran
ner, and John Waisman as commissioners
in their stead.
1t is alleged that these last named COM
missoners have disposed Of the $4,000 OF
said railroad stock, and commenced the
construction of said turnpike road, and
have erected toll gate and collect toll, but
the road is only completed to thu toll gate,
| II miles from Knoxville, except for short
| distances from the gate, In several places
some stone has been put upon the road,
and that the railroad stock has been ex-
hausted, and the road is made not over II
miles from Knoxville, and scarcely wide
enough for vehicles to pass each other, and
| that no books, for private subscription OF
stock, have been opened. Upon these facts
and others stated in the petition, the peu.
TONERS pray for an amendment Of the char
ter Of said company under the provisions Of
sections l and of the act Of the Legisla-
ture approved Jan. 80, 1871.
TIE first amendment proposed is that
petitioners who are toll payers to the road
| be appointed commissioners and corpora
tors with said Mabry, Branner and Wais-
man. Other amendments are prayed for
and specified in the petition.
The petitioners pray further that in the
event the amendments cannot be made, as
proposed by them, that said commissioners
be made defendants and required to take
down said toll gate and throw the said road
open, and the forfeiture of the charter be
declared.
Publication was made, and Joseph A.
Mabry came and by leave of the court was
made party defendant in the cause. And
thereupOn be fled demurrer 10 the petition
showing come eight causes of demurrer.
The substance, however, of each separate
cause assigned, is on the second, which Is
as follows
THAT under the Constitution of the State
of Tennessee, the General Assembly has no
power to delegate authority TO the Chan
Gerry Courts of this State, to grant charters
of incorporation, or TO amend charters of
incorporated companies as prayed in the
petition in his cause"
The act under which the power in the
Chancery Court is claimed to grant and
amend charters of the kind in question, was
passed 30th of January, 1871. Shank, stat.
43, Thorn ard Steger stat. 8. 1907 &C.
The authority Gained for the passage Of
the act is found in the Constitution of 1870,
Art. XI. sec. s., that latter clause of which
provides "no corporation shall be created
or its powers increased or dimin-
ished by special laws; but the
General Assembly shall provide by general
laws for the organization of all corporations
hereafter created, which laws may at any
time be altered or repealed; and no such
alteration or repeal shall interfere with or
divest rights which have become vested"
This language very explicitly prohibits
the Legislature from creating corporation
by any special law, and quite as clearly d.
reefs that it shall s'provide by general laws
for the organization of all corporations" to
be thereafter created. rs-asE
This provision has been made by the
general law which directs the organization
of corporations, under it, by the Chancery
Court, and prescribes the mode OF procedure
in such cases. The law is general one
extending to every case in which an appli-
cation may or can be made for corporate
privileges.
In 1856 an act was passed by the Legis-
lature comforting power upon the Circuit
Court to grant charters of incorporation.
This act was declared unconstitutional by
this Court upon The ground that this power
was vested by the Constitution Of Tennes-
see in the Legislature alone, and that the
powers conferred upon one department Of
the government could not be deVolved upon
or delegated to another department unless
by special authority of the Constitution it
self. State VS.. Armstrong. 8 Sneed, 634.
It was sought to uphold The power in
that case by the 18th and 9Th sections of Ar
ticle XII of the Constitution of 1884. The
7th section in its first sentence is identical
with the first sentence of the Sth section of
Lie NOuSblltitlOn Va 4Otp, O0e AhSSS"N "a VIZ
clause already quoted Of the 9Th section of
the Constitution of 1870, the It'll section of
the Constitution Of 1884 concludes
in these words, ';proUided al1odys, that
the Legislature shall have power to grant
such charters of Interpretations as they may
deem expedient for the public good"
Then follows the eighth section in these
words: "The Legislature shall have the
right TO vest such powers in the courts of
justice, with regard to private and local at
fairs, as may be deemed expedient."
1t was rightly held in 3 Sneed that
neither of these sections conferred on the
Legislature the power to delegate author
ity to grant charters of Incorporation.
The I'd proviso to the It'll section con-
fers on the Legislature power to grant
charters, while the Sth section only author
ICES the Legislature to vest powers in the
courts with regard to private and local
affairs not extending to the power of grant
ing charters of incorporation.
But the last clause of the Sth section of
the Constitution of 1870, prohibits the ex-
ercise of this power by the Legislature by
special laws, but authorizes, by general
laws, provision for the organization of
corporations.
This power has been conferred upon the
Chancery Court, by a general law, and we
can see no objection to the fundamentally
of that court in carrying out the constitu-