Hawthorne Park Dist. v. Seipp, Princell & Co.

• Citation: 4 N.E.2d 117,286 Ill.App. 599
• Decision Date: 13 October 1936
• Docket Number: Gen. No. 38932.
• Court: United States Appellate Court of Illinois
• Parties: HAWTHORNE PARK DIST. v. SEIPP, PRINCELL & CO.

286 Ill.App. 599

4 N.E.2d 117

HAWTHORNE PARK DIST.

v.SEIPP, PRINCELL & CO.

Gen. No. 38932.

Appellate Court of Illinois, First District, First Division.

Oct. 13, 1936.

Appeal from Municipal Court of Chicago; John H. Lyle, Judge.

Suit by the Hawthorne Park District against Seipp, Princell & Company. From an adverse judgment, the defendant appeals.

Affirmed. Poppenhusen, Johnston, Thompson & Raymond, of Chicago (Edward J. Fleming, of Chicago, of counsel), for appellant.

Julius T. Skrydlewski, of Cicero, for appellee.

O'CONNOR, Justice.

Plaintiff, a municipal corporation, brought suit against defendant to recover $626.45, claiming that this amount was the compound interest it had paid defendant on overdue interest coupons. There was a trial before the court without a jury, a finding and judgment in plaintiff's favor for the amount of its claim, and defendant appeals.

The record discloses that plaintiff, a municipal corporation, issued its bonds to raise money for municipal improvements, in accordance with the statute. The interest on the bonds was payable semiannually, evidenced by coupons. The coupons were not paid on the date the interest fell due, and interest was computed at 5 per cent. on the face amount of the coupons. Plaintiff's position is that the statute authorized it to issue bonds which should “bear interest at not exceeding five per cent. per annum, payable semi-annually” (section 33 of the act, Smith-Hurd Ill.Stats., c. 105, § 288; c. 105, par. 327, Ill.Rev.Stat.1935), and that the payment of compound interest, being in contravention of the statute, was illegal and void.

It seems to be agreed by the parties that the compound interest involved was freely and voluntarily paid by plaintiff and without fraud, duress, or misrepresentation; and defendant's position is that in these circumstances the law will not permit a recovery of the compound interest so paid. On the other hand, plaintiff's position is that there is an exception to the general rule of law which permits a recovery on behalf of a municipal corporation under the facts disclosed.

There is no provision in the interest coupons that if not paid at maturity they will draw interest thereafter. Interest is a creature of the statute alone (City of Pekin v. Reynolds, 31 Ill. 529, 83 Am.Dec. 244), and does not run against a municipality except by express agreement (South Park Commissioners v. Dunlevy, 91 Ill. 49;Central Lime & Cement Co. v. Leyden-Ortseifen Co., 245 Ill.App. 48), and except where money is “wrongfully obtained, or where it is lawfully obtained and unlawfully and wrongfully withheld,” by a municipality. Conway v. City of Chicago, 237 Ill. 128, 86 N.E. 619, 623; Vider v. City of Chicago, 164 Ill. 354, 45 N.E. 720;City of Danville v. Danville Water Co., 180 Ill. 235, 54 N.E. 224.

In People v. McCord, 143 Ill.App. 28, at page 34, where an action of debt was brought for the use of the county of Vermilion against a former county treasurer and the sureties on his official bond on the ground that the treasurer had been paid a salary in excess of that provided by law, the court said:

“In Cumberland County v. Edwards, 76 Ill. 544, it was held that a county was not estopped by the action of the county board in passing upon and approving a collector's account, containing charges for illegal fees, and that the...