provides for the imposition of the following duties: "Paper, sized or glued, suitable only for printing paper, twenty-five per centum ad valorem; printing, unsized, used for books and newspapers exclusively, twenty per centum ad valorem; manufactured of, or of which paper is a component material, not otherwise provided for, thirty-five per centum ad valorem; sheathing paper, ten per centum ad valorem." The collector classified the paper under the following clause on the same page: "Paper hangings and paper for screens or fire-boards; paper, antiquarian, demy, drawing, elephant, foolscap, imperial letter, and all other paper not otherwise provided for,-thirty-five per centum ad valorem." The plaintiffs thereupon protested that the paper which they had imported, instead of being assessed as it was by the collector, under this latter clause, at 35 per cent. ad valorem, should have been assessed under the former clause as "paper, * * * printing, unsized, used for books and newspapers exclusively," at 20 per cent. ad valorem. From the testimony it appears that it was what is generally called "tissue paper," and was mainly, if not exclusively, used for making letter-press copies of letters or written matter. This is a well-known process, by which, after a letter has been written on ordinary paper, it is placed between the leaves of a book filled with this kind of paper; the pages upon which the copy is desired being usually dampened somewhat for that purpose, after which such book is subject to great pressure by means of a hand or other press. One or more impressions may thus be made of the written matter upon the leaves of this tissue paper. The judge of the circuit court, in speaking of the character of this paper, said to the jury: "I do not think that the words used in the statute have any technical meaning. You must take the statute as you find it, and a commonsense view of the case, and say whether or not this paper which has been produced here is paper which is used exclusively for books and newspapers; and whether the law-makers intended, when they used this language, that such paper as has been described to you should come in and pay duty under that clause of the statute which provides for paper used exclusively for books and newspapers." He also said that if they found that it was not printing paper used exclusively for books and newspapers, and should not come under this clause, then their verdict should be for the defendant. At the request of the attorney for the defendant he also charged the jury that if they found upon the evidence that the phrase "printing paper," as used in the trade, has a technical signification, and if the plaintiffs' importation in this case does not come within that signification, they should find a verdict for the defendant. The verdict and the judgment were for the defendant.

We are of opinion that the charge of the court was correct, and that the verdict and judgment which followed it are without error. It is very obvious from the face of the statute that "printing paper, unsized, used for books and newspapers exclusively," does not include the kind of paper in question in this case, and that it therefore falls within the class of manufactures of paper not otherwise provided for, so that it was properly chargeable with a duty of 35 per centum ad valorem. An ingenious argument is made by plaintiffs' counsel to show that the process of transferring the writing made upon sheets of the ordinary writing paper used for that purpose, by causing the ink with which it was written to soak or penetrate through one or more thicknesses of the kind of tissue paper which this is said to be, after the same have been properly dampened, is printing within the meaning of the statute, and therefore this paper, being used for that purpose, is "printing paper." We, however, think it is perfectly clear that this process is not printing, and that the use of this kind of paper, which is in controversy here, for that purpose, does not make it "printing paper." The words of the statute, "paper, sized or glued, suitable only for printing paper," and "printing, unsized, used for books and newspapers exclusively," evidently have reference to the various kinds of paper which are used for printing by means of type or plates, which

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make an impression only upon the face of the paper presented to them, and not to these kinds of tissue paper, so characterized on account of their thinness, used for the purpose of transferring writing by the penetration or soaking through of the liquid used therefor, so that the copy is read upon the side of the paper opposite to that presented to the original writing. The words of the statute cannot comprehend this species of tissue paper, which is merely used for the multiplication or copying of letters or other writings. Not being included within the true meaning of these phrases above quoted, it must then belong to that other and larger class of "all other paper not otherwise provided for." This is taxable at the rate of 35 per centum ad valorem, the amount which was actually levied and collected in this case.

We think the charge of the circuit judge on this subject, in connection with the testimony, was sound, and that it cannot be made much clearer by amplification. The judgment of the circuit court is therefore affirmed.

KELLEY et al. v. Town OF MILAN.1
(April 23, 1888.)


Code Tenn. 1857-58, §§ 1142-1161, authorizes any county or incorporated town to subscribe for stock, to a specified amount of its taxable property, "in railroads running to or contiguous thereto, " on certain conditions; such subscription being payable by means of taxes to meet the installments. Act Jan. 23, 1871, § 1, prescribes the vote in pursuance of which counties and incorporated towns may loan their credit, take stock, and impose taxes for county and corporation purposes. Act March 23, 1872, § 1, authorizes the mayor and aldermen of any incorporated city or town of between 1,000 and 20,000 population, to issue bonds for the purpose of paying outstanding and matured liabilities. Held, that under none of these statutes was an incorporated town authorized to issue negotiable bonds in aid of a railroad enterprise, either directly or in payment of subscriptions to its capital stock.


Defendant is not estopped from setting up a want of legislative authority to issue bonds in aid of a railroad by the fact that, certain tax-payers and the mayor and aldermen having filed a bill stating the want of power, and enjoining the original holder from negotiating the bonds, to which suit the railroad company demurred, the parties compromised and agreed that the town should take the stock and issue the bonds; that the court should declare them valid, overrule the demurrer, and dismiss the bill; and that in pursuance of the agreement, a decree was, by consent of parties, entered on the minutes of the court reciting the agreement, and decreeing according to its terms.

In Error to the Circuit Court of the United States for the Western District of Tennessee.

Holmes Cummins and John B. Henderson, for plaintiffs in error. Sparrel Hill, for defendant in error.

BLATCHFORD, J. This is an action at law, brought in the circuit court of the United States for the Western district of Tennessee, by Albert Kelley and Lawrence D. Alexander, copartners under the firm name of Kelley & Alexander, citizens of New York, against the mayor and aldermen of Milan, a municipal corporation organized under the laws of Tennessee, to recover the sum of $5,040, being the amount of 144 coupons, for $35 each, cut from 12 bonds purporting to have been issued by the defendant, bearing date July 1, 1873, each for the payment of the sum of $1,000, payable to -, or bearer, on the 1st of July, 1893, 24 of which coupons matured on the 1st of July, 1876, 24 on the 1st of July, 1877, 24 on the 1st of July, 1878, 24 on the 1st of July, 1879, 24 on the 1st of July, 1880, and 24 on the 1st of July, 1881. In

'Affirming 21 Fed. Rep. 842.

terest was claimed on each coupon from its maturity. Each of the bonds was in the following form, all being alike except as to the numbers: "No. 1. State of Tennessee, Town of Milan.


"Be it known that the town of Milan, by its mayor and aldermen, in consideration of the location of the Mississippi Central Railroad by said town, the citizens thereof, in pursuance of the laws of Tennessee authorizing the same, having agreed to issue bonds, payable on twenty years' time, to the amount of twelve thousand dollars, with annual interest at seven per cent., with coupons attached, in bonds of one thousand dollars each. And whereas, the people of Milan voted the same by a majority and in the form required by law, the vote being in pursuance of due notice, and in all respects according to the laws of Tennessee, said bonds to be payable to the Mississippi Central Railroad, under lease and control of the Southern Railroad Association, now, be it known that the town of Milan, by its mayor and aldermen, in pursuance of the authority given by the people thereof, and in obedience to the duty required of them, issues and delivers this bond, being one of twelve; and said town of Milan hereby acknowledges itself to owe and be indebted to or bearer, in the sum of one thousand dollars, which sum said town of Milan binds itself to pay, in lawful money of the United States, to the Mississippi Central Railroad Company, or to the order of the Southern Railroad Association, or bearer, in the city of New York, on or before the 1st day of July, in the year of our Lord 1893, with interest at the rate of seven per cent. per annum, payable annually on the 1st day of July of each year, on presentation of the proper coupons hereto annexed. And the town of Milan, by its mayor and aldermen, hereby pledges the legal responsibility and the faith of said town for the payment of said coupons and bond according to the terms and effect hereof.

"In testimony whereof, the mayor and aldermen of the town of Milan have caused the signature of the mayor to be hereto set, and the seal of the corporation to be affixed, this 1st day of July, 1873, A. D. [L. S.] A. JORDAN, Mayor of the Town of Milan." The declaration alleged that the 12 bonds constituted the entire number of the issue by the defendant, and that the plaintiffs owned the bonds and coupons by the purchase of them in good faith. The defendant, for plea, averred that it did not make the bonds or the coupons, nor was any person authorized to make the same for it, and that the coupons were not its act and deed. The plaintiffs, for replication to the plea, averred that theretofore, in the chancery court for the county of Gibson, in Tennessee, the defendant instituted suit against the payee of the bonds, and certain other persons, holders thereof, by filing its bill in said chancery court against the Mississippi Central Railroad Company, H. S. McComb, and others, alleging that the bonds were invalid, and praying to have the same so adjudged, and to be surrendered to the defendant and canceled; that thereafter, in January, 1875, in said chancery court, a final decree was rendered adjudging that the bonds and coupons were valid obligations against the town of Milan; and that, therefore, the matter was res adjudicata. The defendant put in a rejoinder to the replication, averring that the decree referred to was produced by combination and fraud between the vice-president of the New Orleans, St. Louis & Chicago Railroad Company, and the agents and attorneys of the defendant, by which a decision of the court in the cause, upon the matters involved, was prevented, and the decree was consented to for the purpose of giving it effect as res adjudicata upon points in litigation not honestly contested; that the decree was not the judgment of the court on the issues involved, but was founded upon the unauthorized consent of certain agents and attorneys of the defendant, who had no power to give such consent or to bind the defendant in the premises; that the court had no power to bind the defendant by the decree; that the decree was not rendered in favor of a party to the record, but

in the interest of a stranger thereto; and that the plaintiffs were not bona fide holders, without notice, of the bonds or the coupons. The plaintiffs demurred to the rejoinder, alleging various causes of demurrer. The demurrer was overruled, and the plaintiffs then took issue upon the rejoinder. The case was then tried by the court on due waiver in writing of a jury. At the trial, the coupons sued on, and the bonds from which they were detached, were offered in evidence by the plaintiffs; the genuineness of the signatures being admitted. Each coupon was in the following form:

"Town of Milan.

"$35. Warrant for thirty-five dollars, being for six months' interest, payable on the 1st day of July, 1880, in the city of New York, on bond No.-. "A. JORDAN, Mayor of the Town of Milan, Tenn."

The defendant objected to the admissibility of the coupons and bonds, on the ground that they were signed, sealed, and delivered by the constituted authorities of Milan, without any legislative power having been given to them, or to the defendant or its agents, to sign, seal, deliver, or issue the coupons or the bonds. The court, being of opinion that such objection was well taken, sustained it, and excluded the coupons and the bonds, and the plaintiffs excepted.

There was a stipulation of facts made by the parties, which is set forth in the bill of exceptions, stipulating (1) that the bonds in question were issued by the defendant in payment of a stock subscription made by it to the Mississippi Central Railroad Company, the subscription being for the sum of $12,000; (2) that, at the time of making the subscription, the railroad company was about to extend its line from Jackson, Tenn., to Cairo, Ill., and the subscription was to aid in making such extension, and to secure its location through the defendant's town; (3) that such extension was completed in 1873, the same running through the town limits of the defendant, as it stipulated for, and the extension had been operated ever since that time. The following facts also appeared by the stipulation: On the 10th of July, 1874, A. Jordan and six other persons, residents and tax-payers of the town, instituted proceedings in the chancery court at Humboldt, in Gibson county, Tenn., against the Mississippi Central Railroad Company and others, for the purpose of avoiding the liability of the town upon the bonds; the complainants constituting the board of mayor and aldermen of the town. The bill alleged that, in the record of proceedings of the board, of the date of May 11, 1872, there was the following entry: "The board was convened by order of the mayor. Present: A. Jordan, mayor; W. M. McCall, M. B. Harris, J. H. Dickinson, J. M. Douglas, W. E. Reeves, W. H. Algea, aldermen. On motion, it was ordered that 12 bonds of $1,000 each, with coupons attached, payable 20 years after issuance, bearing interest at 7 per cent. per annum, be issued by the corporation of the town of Milan, Tenn., to the Mississippi Central Railroad Company, upon the following conditions, namely: That the Mississippi Central Railroad be extended from Jackson, Tenn., to the town of Milan, and intersect or cross the Memphis and Louisville Railroad at the point agreed upon by Col. Read, chief engineer of the Mississippi Central Railroad, and the committee on behalf of the corporate authorities of the town of Milan, near S. P. Clark's residence, the interest on said bonds to be paid annually; and that the town. marshal open and hold an election on the 12th day of June, 1872, within the corporate limits of said town, for a ratification or rejection of said proposition." That in such record were entered the following proceedings as having taken place at a meeting of said board on the 17th of June, 1872: "The board met pursuant to adjournment. Present: A. Jordan, mayor; W. M. McCall, M. B. Harris, J. M. Douglas, W. H. Algea, and W. E. Reeves, aldermen. The minutes of the former meeting were then read and adopted. The election was held on the 12th day of June, 1872, for the ratification or rejection of the action of the board of mayor and aldermen of the town of Milan

in regard to the issuance of the $12,000 in bonds to the Mississippi Central Railroad Company upon certain conditions. The returns of said election show a vote of 117 for subscription, and 2 no subscription." "W. M. McCall and W. H. Algea were appointed a committee to correspond with Judge Milton Brown, of Jackson, Tenn., in regard to the proposition of Milan corporation in regard to issuing the $12,000 in bonds to the Mississippi Central Railroad Company." That the foregoing entries constitute all the proceedings in regard to the subscription of the $12,000 in bonds, and in regard to the election held for ratifying or rejecting the action of the board in directing the issue of the bonds. That there was nothing to show the manner in which the election was held, or by whom the returns were made, or that the required number of votes was polled in favor of the proposition, as required by law. That the order of the board directing the issue of the bonds was without authority, (1) because the order was adopted and the election ordered without any application in writing, or otherwise, to the board for the purpose, as required by section 1144 of the Code of Tennessee; (2) because the election was ordered to be held, and was held, by the town marshal or constable, and not by the sheriff of the county of Gibson, as required by section 1143 of the Code; (3) because the marshal, after the polls were opened, and before they were closed, suffered the box in which the votes were deposited to be removed from the place in the town fixed for receiving ballots, to various other places in the town, and put into the ballot-box votes offered at such places not fixed by law as a place of voting, and without authority; and (4) because, at the time, the entire line of the contemplated road in which the stock was to be taken had not been surveyed by a competent engineer, and substantially located by designating the termini, and approximating the general direction of the road, and no estimate of the grading, embankment, and masonry had been made by any one authorized to make it, and no such estimate as was required by section 1145 of the Code had ever been filed. That, at the time of ordering and holding such election, the population of Milan was less than 1,000 inhabitants, and therefore it was not authorized by law to take stock in railroads, issue bonds, or levy a tax for their payment; that on the 23d of June, 1873, the said board made the following order: "On motion of W. M. McCall, the mayor was instructed to issue twelve bonds to the said Mississippi Central Railroad Company, of the denomination of $1,000 each, with interest from date of issuance at the rate of 7 per cent. per annum." That thereupon said mayor prepared 12 bonds, designated as the "Bonds of the Town of Milan," of $1,000 each, payable to the Mississippi Central Railroad Company, or bearer, 20 years from the date of issue, and dated July 1, 1873, bearing 7 per cent. interest per annum, to which bonds were attached coupons for the payment of such interest on the 1st of July of each year the bonds had to run; each one of the bonds and coupons being signed by A. Jordan, mayor and recorder, and being made payable in the city of New York. That on the 4th of August, 1883, the bonds and coupons were delivered to the Mississippi Central Railroad Company, through one Hall, its treasurer and cashier. That the bonds, with the coupons, one year's interest being due on July 1, 1874, were still in the possession of Hall, or some other officer or agent of the company, and the company was attempting to collect the interest due on the bonus. That the town was not bound to pay the bonds, their issue being made contrary to law; but, if the company should sell them to innocent purchasers, the town would be bound in law to pay them. That the officers of the company would sell and assign the bonds, with a view to making the town liable, if they had not already done so in part, and that they were attempting to negotiate them, and would do so unless restrained by injunction. The bill prayed that the company and its officers be enjoined perpetually from transferring or disposing of the bonds and coupons, and from collecting the same, and that they be delivered up and canceled. On the 10th of July, 1874, (the

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