Hall v. Jackson County.

• Decision Date: 14 June 1880
• Citation: 1880 WL 10043,95 Ill. 352
• Parties: JAMES W. HALLv.JACKSON COUNTY.
• Court: Illinois Supreme Court

95 Ill. 352

1880 WL 10043 (Ill.)

JAMES W. HALL

v.JACKSON COUNTY.

Supreme Court of Illinois.

Filed at Mt. Vernon, Jun. 14, 1880.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the Fourth District;--heard in that court on appeal from the Circuit Court of Jackson county, the Hon. M. C. CRAWFORD, Judge, presiding.

Mr. A. R. PUGH, for the appellant:

In the light of authorities, in the absence of an express prohibition, counties have the right to make original contracts to pay interest, and to evidence that contract by its warrants. City of Galena v. Corwith, 48 Ill. 423.

And if it is admitted that corporations, like counties, have the right to enter into contracts which involve the payment of money, and have the power, as is asserted in the cases of Madison County v. Bartlett, 1 Scam. 67, County of Pike v. Hosford, 11 Ill. 170, and City of Galena v. Corwith, 48 Id. 423, to make original contracts to pay interest, then the presumption of law would be that this was a legitimate contract, and an original undertaking to pay interest, and this presumption will prevail until the contrary would be shown, which has not been done in this case.

It can not be contradicted that the county authorities have the right to issue county warrants. This power is expressly given to them by statute.

Does the insertion of the word interest, etc., make them void? Interest is an incident to all indebtedness. McConnel v. Thomas, 2 Scam. 313.

Counties have the power to enter into contracts--to contract and be contracted with. Gross' Statutes, chap. 34, secs. 24 and 30.

The presumption is that these orders were regularly issued and according to the command of the county board, as they appear and were countersigned by the county treasurer. See Gross' Stat. 1869, chap. 26, sec. 31; also, see Rev. Stat. 1874, chap. 36, secs. 7 and 8.

And the fact that this board afterwards paid interest on the same is evidence complete that the original contract was, that in consideration of forbearance they would pay interest.

The appellee also says the county records introduced failed to show that the clerk was authorized to issue interest bearing orders. The presumption must be that the clerk and treasurer acted according to their instructions. But this is not all. Appellant in this case introduced as a witness a member of the county court to prove the county clerk's authority, which was objected to by appellee and the objection sustained by the court and excepted to by appellant, and it now comes with bad grace to say these orders were only to be “ordinary warrants.”

That this evidence was proper to show what was the original contract, when the records fail to disclose it, we cite County of Vermilion v. Knight, 1 Scam. 97.

Besides all this, there is no plea of nul tiel record filed by appellee, and in order to deny that these orders were to be interest bearing orders, such fact should be put in issue specially.

We respectfully submit that the court erred when, by its decision, it allowed the appellee credits in reduction of the amount due on these orders of certain sums which were paid as interest.

Granting, for the time being, that the county of Jackson exceeded its power when it issued these orders as interest bearing, it was only an irregular exercise of power at most, and therefore voidable--not altogether void--as it can not be denied it had the power to issue the orders without the insertion of the words “bearing interest at the rate of ten per cent per annum.” This being so, we insist that each subsequent payment of interest was a ratification, at least, of the payment of interest, and binding to that extent, and which it had the right to cease doing at any time it saw proper. Clark v. Board of Supervisors of Hancock County, 27 Ill. 310 and 311.

It has never been denied that these payments were made voluntarily, and where payments of money are made under a misapprehension of the law, without compulsion and without fraud, it can not be recovered back. 5 Gilm. 517.

We protest against the doctrine that the sums paid as interest on these orders under a mistake of the law or misapprehension of the legal effect of the contract, can now be changed, and applied as payments upon the original indebtedness pro tanto, even though the contract is in fieri. Goltra et al. v. Sansack et al. 53 Ill. 456; Sibert v. McAvoy, 15 Id. 109; Pomeroy on Contracts, secs. 232-233, p. 316-317.

Mr. WILLIAM A. LEMMA, State's attorney, and Mr. W. W. BARR, for the appellee:

If the court can see that an erroneous ruling of the court below has worked no injury to the party appealing, such ruling is no ground for the reversal of the judgment. Coursen v. Ely, 38 Ill. 339; Pratt v. Tucker, 67 Id. 346; Milliken v. Jones, 77 Id. 373.

Did the county authorities of Jackson county have power to issue these interest bearing orders?

Counties are involuntary political organizations, created by general statute to aid in the administration of the government. The statute confers upon them all the powers they possess, prescribes all the duties which they owe, and imposes all the liabilities to which they are subject. Soper v. Henry County, 26 Iowa, 264.

Counties are involuntary political or civil divisions of the State, created by general law. The county, the school district, the road district, are purely auxiliaries of the State. Considered with respect to the limited number of their corporate powers they rank low down in the scale of corporate existence, and hence have been frequently termed quasi corporations. 1 Dillon on Municipal Corporations, sec. 10.

We insist that the county court had no power to issue a warrant bearing interest. To make the order or warrant bear interest presupposed that it would not be paid upon demand, and was a method of funding the outstanding debts of the county in a manner not authorized by law. See Whitewell v. Pulaski County, reported in 2 Dillon's Circuit Court Repts. p. 251; Britton v. Police Jury, 15 Wall. 566; The County of Hardin v. McFarlan, 82 Ill. 138.

Appellant says that appellee is estopped from setting up ultra vires,--a position that, in our opinion, can not be maintained by authority. A corporation is not estopped after a warrant upon its treasury has been issued to set up the defence of ultra vires. 1 Dillon on Municipal Corporations, sec. 412.

County orders are liable to equities in hands of holders. 1 Dill. on Munic. Cor. sec. 406.

Invalid contract is no estoppel. Herman's Law of Estoppel, sec. 224.

It could not be ratified by act of the county board. Nothing less than the action of the electors in their corporate capacity would amount to a ratification. Taylor v. The District Township of Wayne, 25 Iowa, 447.

Can the interest paid on these orders be deducted from the principal? We believe by the analogies of the law the deduction was properly made, if it was illegal to contract for interest, and we instance the contracting for and taking of usurious interest. While, if usurious interest is voluntarily paid, it can not be recovered back, yet if the matter is unsettled and suit is brought, the illegal interest, though paid, may be deducted from the principal. “So long as any part of the original debt remains unpaid, though evidenced by a new note, with new parties as securities, the principal debtor may insist that all payments of usurious interest shall be deducted from the principal of the new note.” Mitchell v. Lyman et al. 77 Ill. 526; Saylor v. Daniels, 37 Id. 377; Sanner v. Smith, 89 Id. 124.

Mr. JUSTICE SCHOLFIELD delivered the opinion of the Court:

Appellant sued appellee, in assumpsit, in the circuit court of Jackson county, to recover the amount claimed to be due on the following county orders:

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                ¦STATE OF ILLINOIS,¦)¦Adjourned December County Court¦
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                ¦JACKSON COUNTY.   ¦)¦Term, 1871.                    ¦
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Treasurer of said County:

Pay James W. Hall, or bearer, $1592.52, for making collector's book, and interest on the following county orders: Nos. 5048, 4966, 3597, 4950, 125, and 3598, with ten per cent interest from January 2, 1872, out of moneys in the treasury not otherwise appropriated.

JAMES W....