Case Name: East Tennessee University v. Mayor and Aldermen of Knoxville
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1873-09
Citations: 65 Tenn. 166
Docket Number: 
Parties: East Tennessee University v. Mayor and Aldermen of Knoxville.
Judges: Judges Freeman and McFarland dissenting.
Reporter: Tennessee Reports
Volume: 65
Pages: 166–198

Head Matter:
East Tennessee University v. Mayor and Aldermen of Knoxville.
1. MimcrpAl, Corporation. Power of to appropriate money. A municipal corporation in this State may, if authorized by its charter, approjDriate-money for corporation purposes.
2. Same. Same. Corporation purpose. What is a corporation purpose is a question to be determined from the facts and circumstances of each particular case, -but -where it is clear that the purpose itself is a legitimate one, the corporation may do every thing necessary and proper to carry it into execution.
3. Same. Same. Same. To make an appropriation of money by a corporation lawful, it must be to an object not only beneficial to the interests of its inhabitants, but it must also be directly connected with the local government therepf; qnd where, by its charter, a city is vested with the power to establish and regulate schools, this provision is not inconsistent with the limitation prescribed by the constitution confining appropriations by a corporation to corporation purposes, although the money so appropriated may be in aid of a college which, though situated on land adjoining the corporation and in full view of it, is not embraced within its limits.
Case cited: Nichol v. Nashville, 9 Hum., 252.
4. Same. Contract consideration. Mutual promises of money, property, or ■ services in the furtherance of' a common object from which common benefits are derived constitute a contract between the parties making such promises capable of enforcement at the instance of the party complying with the same. Therefore, where an ordinance of the city of Knoxville contributed a certain sum for the purchase of a library for a neighboring university, to be paid upon the consolidation therewith of the Agricultural College of the State, and upon the faith of this ordinance the university undertook to bring about the consolidation, and succeeded in doing so upon terms with which it had fully complied : Held, upon performance of the condition of the ordinance the university was entitled to the amount of the sum appropriated thereby for the purpose indicated.
PROM KNOX.
From the Chancery Court at Knoxville.
Baxter & Sons for complainant.
Jas. R. Cooke for defendant.
STATEMENT OP CASE.
The complainant, a college incorporated in this State under the laws thereof, has been exercising its franchise for a long time past as an institution of learning with its. college buildings on a lot of ground just outside of and adjoining the corporate bounds of the city of Knoxville, and in full view of the city, under an act of Congress of July 2, 1862. A large amount. of the ' public lands were donated to this and other States for the endowment of educational institutions in which pupils are required by the act to be instructed in agriculture, the mechanic arts, and military tactics, in addition to the other branches of learning usually taught in the schools and colleges of the country. The amount received under this benefaction by the State of Tennessee realized in its investment in State bonds, as authorized by the statute, the large sum of three hundred and seventy-five thousand dollars, and this amount of principal is required by the act to remain forever undiminished, “except that a sum not exceeding ten per centum upon the amount received by any State under the provisions of the act may be expended for the purchase of land for sites or experimental farms whenever authorized by the respective Legislatures of said States, and no portion of said fund, nor the interest thereon, shall be applied directly or indirectly under any pretence whatever to the purchase, erection, preservation, or repairs of any building or buildings,” and the interest on said fund shall be inviolably appropriated by each State which may take and claim the benefit of this act to the endowment, support, and maintenance of at least one college when the leading object shall be without excluding other scientific and classical studies and including military tactics, to teach such branches of learning as are related to agriculture and the mechanic arts in such manner as the Legislatures of the State may prescribe in order to provide the liberal and practical education of the individual classes in the several pursuits and professions of life.
At the time, the State determined to accept this bounty of the general government, and both the complainant and defendant appreciated the importance of securing the location of the college at Knoxville, and its consolidation with the East Tennessee University. Negotiations were entered into for that purpose, and as its location and control was entrusted to the State Legislature by the act of Congress pending' the question of its location before that body, the Mayor and Aldermen of the City of Knoxville met in council and adopted the following preamble and ordinance:
Whereas, At a very large meeting of the property-holders of Knoxville, held at the court-house on January 4, 1786, a resolution was unanimously adopted urging the Common Council of the city to take suitable action to insure the location of the Agricultural College of the State of Tennessee at Knoxville; and whereas', the act of Congress making an appropriation to the State contemplates liberal action on the part of the citizens in furnishing all facilities for the establishment of said college, so far as land, buildings, and school furniture are concerned, and forbids the. use of any part of the agricultural college fund for such purposes ; therefore,
Be it ordained by the Board of Mayor and Aider-men of the City of Knoxville, that the city of Knoxville hereby appropriates, for the purchase of a library for the East Tennessee University, the sum of $15,000, said sum to be paid to the trustees of said university in three equal instalments, and for the sole purpose herein mentioned. The first payment to be made when the Agricultural College of Tennessee shall have been permanently located at Knoxville, and the remaining instalments one and two years thereafter. ThL ordinance was adopted January 4, 1869, and a certified copy thereof furnished to an agent of the university, employed by the university at its own cost, who proceeded to the State capitol to represent to the Legislature the advantages of consolidating the college with the university at Knoxville, and as a persuasive argument to influence their favorable action, exhibited a certified copy of this ordinance. The Legislature passed an act January 16, 1869, donating the entire fund to the East Tennessee University upon the condition, however, that the complainant should erect, buildings for the accommodation of two hundred and seventy-five students; furnish the same with appropriate school furniture; provide suitable lands, not less in extent than two hundred acres, so that the whole property shall be worth, at a fair estimation, not less than one hundred and twenty-five thousand dollars: Act of 1869, ch. 12, sec. 4.
The- location being thus effected, and the conditions imposed fulfilled by the university, and the institution being in full and successful operation, the university demanded of the city the amount of the appropriation authorized by the ordinance, and the payment thereof was refused. Thereupon the university filed this bill to enforce its payment, and upon hearing in the Chancery Court at Knoxville, a decree was rendered in favor of the city, and complainant’s bill dismissed, from which an appeal was taken to this court.

Opinion:
Nicholson, C. J.,
delivered the opinion of the court.
Judges Freeman and McFarland dissenting.
The controlling question in this case is, whether or not the corporation of Knoxville. has the constitutional power to levy taxes and appropriate money to aid in-procuring a large sum of money as an endorsement, in-enlarging the operations and giving permanent prosperity to the East Tennessee University, located on the margin of the city. If the accomplishment of such an object is a corporation purpose of the coporation of Knoxville, as contemplated by the constitution, which authorizes the Legislature to. grant the power of taxation to incorporated towns for corporation purposes, then the appropriation can be legally made, otherwise not.
It is the settled law that the powers of corporation of all kinds are to be strictly construed; but this-strict construction has never confined the construction of the power to its word and letter, but every thing necessary and proper for carrying into execution the-granted power, has always been conceded by the strictest constructionists.
A municipal corporation is a body corporate and politic, established by law, to share in the civil government of * the country, but chiefly to regulate and administer the local or internal affairs of the city, town, or district incorporated: Dillon, sec. 9; or, as-defined in "VrneFs Abr., " an investing the people of a place with the local government thereof."
The • charter of incorporation is the constitution of this local government, granted by the Legislature, with powers which must be consistent with the condition of the State.
The city of Knoxville is incorporated, with the powers necessary for the local government of the people within its limits, and among these is the specific power to establish and regulate schools. It is conceded that the establishment of schools is properly classed among the legitimate purposes of a municipal corporation, and it is the well established principle, that in the execution of this power, the governing body in the city can lawfully do any and every thing necessary and proper in the execution of this granted power.
This brings us to the exact question to be determined. Is the appropriation of money by the Mayor and Aldermen of Knoxville to the trustees of East Tennessee University, to enable them to secure a rich endowment of the university, such a necessary or proper exercise of the power to establish and regulate schools for the benefit of the inhabitants of Knoxville, as is contemplated by the constitution ?
It is admitted, without hesitation, that an appropriation of money by a corporation, to be lawful, must be to an object or for a purpose that is not only beneficial to the interests of the inhabitants of the city, but it must also be to an object and for a purpose which belongs to, or is directly connected with the local government thereof. Hence, it is readily conceded, that the numerous cases to be found in the books, holding that appropriations of money by mu nicipal corporations to private enterprises, having no connection with the local government of the city or town, but incidentally beneficial to its inhabitants, are correctly decided to be unconstitutional. And upon the same principle, the decision in the case of Nichol v. Mayor and Aldermen of Nashville, 9 Hum., 252, holding that the building of a railroad from Nashville to Chattanooga was a corporation purpose; not because it was a matter of necessity, but of great convenience and advantage to the various interests of the city, while it rests upon the very verge of the law, still was correctly decided, because it was a necessary and proper mode of carrying out a corporation purpose. If the city could not build the road herself, it was legitimate for her to unite with another corporation to effect the object.
The principle that governs in determining whether an appropriation is for a corporation purpose or not, may be clearly illustrated by reference to what corporations may do in the preservation of health of its inhabitants. The preservation of health is universally conceded to be a legitimate corporation purpose. To carry out the power to preserve the health of a city, money may be appropriated to secure a constant supply of wholesome water; hence, water-works outside of the city, from which good water may be conveyed into the city, may be erected and operated either in whole by the city or in connection with others.- In like manner, it is now well understood, that public parks in the vicinity of cities, contribute essentially to the health and comfort of its inhabitants, and hence- money may be legitimately appropriated for these purposes. So, likewise, as to the erection of hospitals and pesthouses outside of a city.
The preservation of peace and order within the limits of a city, is a clear corporation purpose. To effect this object as well as for the comfort and convenience of the inhabitants in the night-time, the lighting of the streets is a proper object or corporation purpose; and if this can be done more cheaply or more efficiently by gas than by lights from oil in lamp-posts, it is within the legitimate province of the corporation to obtain gas from works located out of the city, either erected - by the city corporation or by a gas company.
In all these cases the appropriations are justified upon the principle that the object to be accomplished is a legitimate corporation purpose, and the means adopted for their accomplishment are the necessary and proper means for carrying them out.
The question before us must be determined ' upon the application of the same principle. The establishment and regulation of schools of every grade, constitute legitimate corporation purposes. It is an axiom that knowledge, learning, and virtue are essential to the preservation of republican institutions. The establishment and regulation of schools are, therefore, corporation purposes of the local government of a town or city of the highest order. If schools can be established and regulated within the corporate limits of the city or town, then they should be. there located. But if it is impracticable. to find locations within the city or town, or if locations can be had more cheaply and equally accessible and convenient for the accommodation of the inhabitants of the town - or city, the fact that the school-houses are outside of the corporation cannot effect the question of power. The education of the children of the town or city is the purpose for which the local government may lawfully appropriate money. If the money appropriated secures the purpose, it can make no difference whether the houses where the schools are taught are located on one side or the other of an imaginary line. Nor can the principle be affected by the fact that the money is appropriated to a school already located and in operation outside of but adjoining the corporation boundaries. If in the judgment of the local government the appropriation is necessary and proper to prevent the discontinuance of the school, or to give wider extent to its usefulness, and to secure to it permanency, the purpose is as much .a corporation purpose as if the money was appropriated in founding a new school either in the city or outside of it. The controlling question is, was. the appropriation made to secure to the inhabitants of the city the benefits and advantages of education ?
Nor is the principle affected by the fact that pupils from every other county or State or country, have the same privilege of going to the school with the pupils whose parents are members of the corporation of Knoxville, The appropriation is made not to secure to the inhabitants of Knoxville either superior rights or privileges over the inhabitants of other portions of the country, but to secure the advantages resulting from their proximity to the school. The object is to secure the permanent location of the school at a point so near to Knoxville that the facilities for and benefits of a thorough education can- be enjoyed by the , children of its inhabitants without the expense and inconvenience to which those are subjected who are sit uated at a distance from the school. It does not secure superior rights in the school, but superior advantages in enjoying common rights.
The incidental benefits to the inhabitants of Knoxville in the way of extending and increasing their trade by the expenditure of large amounts of money among them, in consequence of the location of the school in their vicinity, are not sufficient of themselves to establish the power of the corporation to make the appropriation; but when it is seen that the appropriation is for a legitimate corporation purpose, then the incidental advantages may be looked to on the question whether the local government have exercised their power of appropriation wisely or not.
We conclude that the corporation of Knoxville had the power under the constitution, and under their charter, to make the appropriation, and as the university accepted the offer and acted upon it, and secured the endowment contemplated, and thus secured to the inhabitants of Knoxville the permanent location of a school at which the advantages of a thorough education can be enjoyed by their children in all time without the expense of being -sent abroad to be educated. We are of opinion that the corporation is. bound by its act of appropriation.