The comet. (Johnson City, Tenn.) 1884-1916, 1888-09-13
TRUSTS Condemned In Court.


subject OF trusts. The first decision n
comes from Tennessee and it is a
against the legality of such combines.
1t is rendered by the Supreme Court
of that State. $50 ..a
The cottonseed oil companies at
Memphis formed trust. 1t differed
in some respects from the notorious p
Standard Oil trust and those formed
on the model OF the Standard Oil.
Blu: it was trust all the same-with
all which that implies. Its purpose
and effect were those of the familiar
combine.
The Supreme Court holds that the
trust was species OF partnership
that its constituent members had no
right as corporations to enter into it
that by doing so they went beyond
their powers and violated their char
tiers.
In characterizing the concern as II
partnership the Court says -
A careful examination OF this agree
ment discloses every essential element |
to a contract OF partnership. The alb
solute ownership of the corporate
property, the mills, machinery, &c, is
not conveyed to the partnership, nor
is this necessary. The beneficial use
Of all such property is surrendered to
the common purpose. The provisions
= tor the complete possession, control
and use OF the properties OF the sever
J al corporations by the partnership or
syndicate is perfect,
Nothing is lett to the several copart-
ners but the right to receive n share
> OF the profits and participate in the
management of the consolidated in
terest as one OF the new associations.
9 The contract is both technically and
in its essential character partnership,
~ in so far as it is possible for corpora
y tons to form such an association.
" The Court then proceeds to show
y that corporation has neither express
~ nor implied power to enter into such
an agreement, and to do so is a viola.
ton OF its charter 1t says
OF Such contract is wholly inconsist
n emit with the scope and tenor OF the
es' powers expressly enjoined upon a cor
m poration, whether it be strictly bust
Iii ness and private corporation or ont
M owing duties to the public, such as 1
IT. common carrier
ed The whole policy Of the law creating
and regulating corporations looks t.
ng the exclusive management of the al
on fairs of each corporation by the officer
provided for or authorized by its char
oil ter. This management must he sepa
ac- rate and exclusive, and any arrange
IN ment by which the control of the a
Iol- fairs OF the corportion should be take
nee from its stockholders and the author
all lied officers and agents of the corpor'
In ton would be hostile to the policy (
the our general incorporation acts.
l'iy That is strong, plain and to I'll
bat point. The case decided was not a
IN action against the trust itself, If
had been the Court would doubtle
have held the trust illegal. 1t was n
,on- an action to annul the charter OF
for corporation joining the trust. If
sal had been the Court would doubtle
have annuled the charter.
rom The controversy was between Il
,nse combine and one Of the corporatio
onal in it, The question was whether IL
hers corporation could be kept in the trr
port against its will whether it could aha
in don the combine and repudiate t
APP agreement.
inst The Court holds that it was free
M repudiate the trust, because it h
lred, no authority to enter INTO such aco
state bine.
u of This decision sustains the positi
be- taken by the Attorney General in t
EN-. State, that corporation which joins
and trust violates its charter and FORTE
and the right to its franchise ~. Y. II
fects aid.