Coquard v. Vill. of Oquawka

• Decision Date: 24 October 1901
• Citation: 61 N.E. 660,192 Ill. 355
• Parties: COQUARD v. VILLAGE OF OQUAWKA.
• Court: Illinois Supreme Court

192 Ill. 355

61 N.E. 660

COQUARD

v.VILLAGE OF OQUAWKA.

Supreme Court of Illinois.

Oct. 24, 1901.

Error to appellate court, Second district.

Assumpsit by Louis A. Coquard against the village of Oquawka. From a judgment of the appellate court (91 Ill. App. 648) affirming a judgment for defendant, plaintiff brings error. Affirmed.Franklin A. McConaughy, for plaintiff in error.

Raus Cooper and Kirkpatrick & Alexander, for defendant in error.

The plaintiff in error brought assumpsit against the defendant in error in the circuit court of Henderson county to recover on five bonds, of $1,000 each, issued by the city of Oquawka in 1871, together with unpaid interest. The declaration consisted of one special court and the common money counts. A demurrer was sustained to the special count. Pleas of the general issue and the statute of limitations were filed to the common counts, and issue thereon taken. The cause was tried by the court, a jury having been waived, and judgment was renderedfor the defendant. The judgment was on writ of error affirmed by the appellate court, and the plaintiff then sued out this writ of error to reverse the judgments of the appellate and circuit courts.

The plaintiff's cause of action is set forth in the special count, in substance and effect, that ‘the plaintiff complains of the village of Oquawka, a body politic and corporate, organized and existing under the laws of the state of Illinois, the defendant, of a plea of trespass on the case on promises; for that whereas, heretofore, to wit, at the county aforesaid, the defendant, on the 1st day of January, A. D. 1871, was organized as a town under and by virtue of the laws of the state of Illinois, and had then and there, in pursuance of an act of the general assembly of the said state of Illinois entitled ‘An act to authorize the town of Oquawka to subscribe to the capital stock of certain corporations therein named,’ approved June 1, 1852, and also an act of the said general assembly of the said state of Illinois entitled ‘An act to incorporate the town of Oquawka,’ approved February 11, 1857 (reference to which acts is hereby expressly made), issued certain bonds of the said town of Oquawka, as the defendant was then known and named, which said bonds, to wit, on the day aforesaid, were due and payable, and with interest then and there amounted to, to wit, the sum of $60,000; that on, to wit, the 1st day of July, 1871, for the purpose of compromising, settling, and refunding said indebtedness, and ridding said defendant of certain suits then and there pending against the said defendant under the name aforesaid, theretofore commenced against the said defendant named and known as aforesaid, and in pursuance of a certain act of the general assembly of the said state of Illinois entitled ‘An act relating to county and city debts, and to provide for the payment thereof by taxation in such counties and cities,’ approved February 13, 1865, and in further pursuance and by virtue of the laws of the state of Illinois as they then existed, at the county aforesaid, under the name and style of the city of Oquawka, the town having theretofore changed to that of a city in form, made, executed, and issued, in exchange for and upon the surrender of the said bonds theretofore issued, at the rate of fifty cents upon the dollar of the amount due on the said bonds theretofore issued, its certain five bonds in writing, each one signed by its then mayor and city clerk, and sealed with its corporate seal, and numbered, respectively, 10, 11, 12, 13, and 14, whereby, and in each and by each of the said bonds numbered as aforesaid, the said defendant, by the name and style of the said city of Oquawka, promised to pay the bearer thereof, twenty years after the date thereof, the sum of $1,000, with interest at the rate of six per cent. per annum, payable annually, on the 1st day of July in each year, at the agency of the treasurer of the state of Illinois, in the city of New York, on presentation and surrender of the annexed coupons as they severally became due; and the said defendant then and there, on, to wit, the 1st day of July, 1871, at, to wit, the county aforesaid, delivered all of said bonds to the holders and owners of the said other matured bonds at the rate aforesaid, and thereby then and there became liable to pay the said five bonds to the bearer and holder thereof when due, according to their tenor and effect, and being so liable then and thereon, etc., promised to pay to the bearer the sums of money in said bonds, respectively, mentioned, together with said rate of interest therein specified, when due, according to the tenor and effect of said bonds.' There was printed on the face of each of these bonds this statement: ‘Issued under an act of the general assembly of the state of Illinois entitled ‘An act relative to county and city debts, and to provide for payment thereof by taxation in such counties and cities,’ approved February 13, 1865;' and said act was printed in full on the back of each of said bonds, together with the certificate of the auditor of public accounts that said bonds were duly registered in his office on November 29, 1871, in pursuance of said act of 1865.

When the defendant in error contracted the original indebtedness, and issued the original bonds, to take up and cancel which the refunding bonds sued on were issued, it was incorporated and organized as a town, but shortly before the refunding bonds were issued it has undertaken to change its form of government to that of a city, and so assumed to act. Afterwards it organized as a village under the act for the incorporation of cities and villages. Said original bonds were in part issued in payment of a subscription to a plank road company, and the rest to reimburse certain persons for money and labor expended in construction of a railroad neal said town of Oquawka.

CARTER J. (after stating the facts).

The question is presented by this record whether the defendant, as a municipal corporation, had any power to make and issue the bonds sued on. The question is not one of mere irregularity, but of power, and consequently it is immaterial to the decision of the case what was the consideration of the bonds or what the status of the holder; for it must be conceded that municipal corporations, organized, as they are, for restricted governmental purposes, have no power to issue commercial paper unless such power has been conferred by statute, and without such power such paper is void, even in the hands of an innocent holder for value before maturity. These bonds were issued, and so purported on their face, under an act of the legislature entitled ‘An act relating to county and city debts, and to provide for the payment thereof by taxation in such counties and cities.’ Rev. St. 1874, p. 789. Section 1 provides: ‘In all cases where counties or cities have heretofore, under any law of this state, issued bonds or securities for money on account of any subscription to the capital stock of any railroad company, or on account of, or in aid of, any public improvement, and the same remain outstanding, or any debt arising thereout remains unpaid, the board of supervisors or county court of such county, and the city council or municipal authority of such city, as the case may be, having issued such bonds or securities, may, upon due surrender of any such bonds or securities, or cancellation of such debt, issue in place thereof to the holder or owner, new bonds, in such form, for such amount, upon such time, and drawing such interest as may be agreed upon with the holder or owner: provided, such new bonds shall not be for a greater sum than the principal and accrued or earned interest unpaid of the bonds or debts in place of which they shall be given, nor bear a greater rate of interest than six per cent. per annum, payable on the first day of July in each year; and such bonds shall show on their face that they are issued under this act, and, if so agreed, may provide for payment of five per cent. of the principal thereof, annually, until fully paid.’ Section 9 provides: ‘If it shall be deemed advisable, any such county or city may issue such new bonds for the purpose alone of satisfying or taking up their respective bonds or debts.’

It will be observed that the act, by section 1, was limited by its terms to counties and cities which had before its passage issued bonds, etc., and section 9 does not broaden the act so as to include any municipal corporation other than such counties and cities as had theretofore become indebted. When passed it had no application to towns or to villages, nor to cities generally, but was confined to counties and cities which had theretofore become indebted. No municipality could be brought within its provision by changing its from to that of a city. Without considering the alleged illegality of the incorporation of the town in 1871 as a city, the act no more applied to the city so organized after the act went into force than it did to the town superseded by such city. This court said in People v. Lippincott, 81 Ill. 193, that ‘the first section of the act by express terms limits its operation to debts created previously to the passage of the act’; and, further, that the act limited the right to refund to counties and cities; that it ‘applies to only a comparatively small class of bonds,-those issued by counties and cities prior to February 13, 1865.’ This is apparent from the language of the act. No room is left for interpretation or construction. The same conclusion was reached by the United States circuit court of appeals for the Seventh circuit, in Village...