95 Tenn. 203 | Tenn. | 1895
. These six cases may be disposed of by one opinion. The bills against the Planters’ Fire & Marine Insurance Company were filed to recover taxes claimed to be due the State, the City of Memphis, and the County of Shelby,
On March 24, -I860, the Energetic Insurance Company, of Nashville, was chartered, and by the sixtieth clause of the act, it was provided that said company should “pay to the State an annual tax, or bonus, of one-fourth of one per cent, of each share of its capital stock which shall. (should) be in lieu of all other taxes.” By an act passed March 27, 1885, the name was changed to the Planters’ Fire & Marine Insurance Company, and the -corporation was authorized to remove its .s\!tw to Memphis,. Tenn. There was no organization of the Energetic-Insurance Company from the date. of the charter, in 1860, to the year 1884, and, apparently, no acceptance of the charter by any of the incorporators until that year. It is by this defendant contended that complainants cannot question the regularity of its corporate existence in this collateral manner, and, ’to this we agree, as announced in the cases of the Mercantile and German Banks, also decided at the present term, but they may call in question the immunities claimed, and upon any legitimate grounds.
‘‘The acceptance of the charter or act . . is necessary in order to create a private corporation. In this respect a private corporation differs from a public one. ... A charter or legislative act of incorporation is usually a mere offer or tender of the corporate privileges contained in it. The sovereign authority cannot compel persons to become a private corporation. They can only become such by their voluntary consent. ... A charter or act of incorporation for private purposes and personal objects, if accepted, becomes a contract between the parties accepting and the State; and an offer of corporate privileges on the one side must be accepted on the other, in order to give the contract full force and virtue. This doctrine is established by -the uniform current of decisions of Courts of highest authority not only in this country, but in England.” Field on Corp., Sec. 28.
In Angelí & Ames on Corporations, Sec. 82, the authors say: “The terms offered by the government may, therefore, be acceded, to or refused by the intended body corporate, and, if not acceded to, they have no binding effect. It of course can have
In Falconer v. Higgins, Judge McLean says, page 202: “The creation of corporate existence can never take effect until the association be formed and the organization completed. . . . The organization being completed, existence is given to the artificial being, and its agency commences. It is now in esse, but before this it was not. Vitality is given to it by the voluntary association and organization of its members. Had they remained passive, the law could have had no effect.”
Morawetz on Corporations, Sec. 21, says: “The offer of a charter of incorporation by the State remains open for a reasonable time only, and, if not accepted within a reasonable time, its legal effect expires,” citing State v. Bull, 16 Conn., 179 and 191. This is a clear and well-reasoned case. The delay was less than eleven years. The charter was granted in 1833, and an attempted organization was promptly made, but which failed, and the money subscribed was returned, and eleven years afterwards-the books were again opened, but without notice (all of the stock being taken by a few parties). Upon a quo warranto proceeding, the reorganization was held to be invalid, and the charter was forfeited.
In the present case there was a delay of about twenty-four years between the time of the grant and the acceptance by the corporators, or by any of them. We think the incorporators had, prior to May 5, 1870, no vested right in the charter immunities which the State might not recall after a reasonable time; and wo further think that twenty-four years was an unreasonable time for the corporators to remain inactive without accepting the charter.
It is earnestly insisted by the defendant that the recognition of the corporation by the Legislature in the year 1885, and after its organization in 1884, by changing its name and sitas, relieves the question of difficulty.
We further think that the Constitution of 1870, Article 1., §8, and Article II., §28, was a withdrawal by the State of the offer of immunity from • general taxation, both as to the original corporators named in the act and as to all persons claiming under them. Nelson v. Haywood, 3 Pickle, 781-9; Norton v. Commissioners, 129 U. S., 479; Memphis v. Memphis City Bank, 7 Pickle, 574.
The decrees of the Chancellor in both cases are reversed. The defendant, Planters’ Eire & Marine Insurance Company, will pay the costs of this Court and of the Court below.
In the case against the Mechanics’ Savings Bank brought by the city, the Chancellor gave complainants a decree for the taxes of 1891, 1892, 1893, and 1894, but denied all relief for the years 1887, 1888, 1889, and 1890. All parties appealed.
In the other case, the county recovered the taxes for 1891. All relief to the State was denied, as it appeared the corporation had paid to the State annually a charter tax in excess of the State taxes. All parties appealed. The taxes claimed as to this defendant aggregate about $10,000.
The bank claims under a charter granting to it all the rights, privileges, and immunities of the Glayoso Savings Institution (it being the same as the charter of the Bank of Commerce), with, an added clause, as follows: “With the further privilege of buying and selling stock, notes, and other securities on commission, and subject to such taxes as the State may
The charter of 1867 was not accepted until the year 1885, and the opinion here delivered in the case of the Planters’ Fire & Marine Insurance Company controls this case. Complainants are entitled to a decree for the taxes claimed in the bills. The decrees of the Chancellor are modified.. Defendant, Mechanics’ Savings Bank, will pay the costs of this Court and of the Court below.
In the’ cases against the Memphis City Bank there were decrees for the taxes of certain years, but as to other years all relief w^s denied. The taxes involved, as to this bank, aggregate about $48,000. All parties appealed, and assign errors. This case, when on demurrer, was decided by this Court, and is reported in 7 Pickle, 574. No new questions are presented. By an Act passed since the Constitution of 1870, the corporation was authorized to change its business from that of insurance to banking, under which it has since done only a banking-business. The Court held that the Legislature had no power to so change the business and preserve an immunity from taxation. The question was then carefully considered, and the decision deliberately reached. We have again considered the case in the light of the very able and earnest appeal of counsel for the bank, both orally and in their briefs, but are constrained to adhere to our former decision. We are satisfied with its reasoning and with