The Milan exchange. (Milan, Gibson County, Tenn.) 1874-1978, 1884-10-25
MhAN's VOID RAILROAD BONDS.
The United States Court Decides that
They Cannot be Made Valid by
Consent Decree.
Cities and Towns of tennessee Require
Special Power to Issue Bonds
to- Railroads.


In the suit of Kelly and Alexan>
der against the town of Milan in the
United States Court, Judge Ham,
mond yesterday read the opinion of
the court, the case having been tried
by Justice Matthews and Judge Ham.
mond upon re.argument ordered be-
fore full bench.
In 1873 the town of Milan agreed
to give the New Orleans, St. Louis
ami Chicago Railway Company S12,>
600 of its bonds to build the railroad
by that town, which was done.
While the bonds were in the hands of
II. 5. McComb, the original holder,
certain of the tax payers and the town
authorities came to the conclusion
that they would not stand the tax.
They filed bill before Chancellor
Somers, at Humboldt, denying the
power OF the town to issue the bonds
for want of Legislative authority.
The railroad company demurred to
the bill. and subsequently the parties
compromised the litigation. By their
agreement the railroad company was
to issue to the town $4,000 of its
stock and the court was to decree in
favor of the bonds by
DECLARING THEM VALID.
A decree was entered reciting this
agreements, overruling the demurrer,
dissolving the injunction and dismiss
ing the bill. The bonds having been
negotiated, are now held by Kelly q
Alexander, New York capitalists,
who brought this suit upon the cou-
pons, theinterest not having been paid.
The defense of want of authority was
again set up by the authorities of the
town and the plaintiff claimed that
that question had already been adju,
dicated by the Chancery Court at
Humboldt, and it was no longer open
to the town to make the defense. The
court decides that there was not any
law, general or special, in Tennessee
authorizing the town of Milan to
ISSUE IT'S BONDS
in aid of railroad company or in
payment ofsubscriptions to stocks and
that neither the act of 1871, chapter
30, nor the act of 1872. chapter 20,
nor the code of Tennessee, sections
1142 to 1165, conferred such author
ity; that the town of Milan did not
have 1000 inhabitants, as required by
the act of 1872, and was not estopped
by recitals in the bond; that the town
was acting according to law, because
there was no law of tennessee impos-
ing the duty upon the town authorc
tiles of deciding the question of popu-
lation, which was as much within the
knowledge of the holders of the bonds
as of the town authorities, and that
the holders Of the bonds
TOOK THEM AT THEIR PERIL.
Nor is the town estopped from mak>
ing the defense of want of legisla-
tive power by reason Of the fact that
certain tax payers and the Board of
Mayor and Aldermen filed a bill in
Chancery setting up the want of pow
er and enjoining the original holders
from negotiating the bonds, when the
decree showed upon the face of it that
there was compromise agreement
between the parties that the bonds
should be declared valid by the court.
Such DEGREES, when pleaded as res
adjudicata, are not binding, and The
town cannot by such process either
valify its void bonds or preclude il
self ir IN making the defense when