Northern Trust Co. v. Vill. Of Wilmette

• Citation: 77 N.E. 169,220 Ill. 417
• Parties: NORTHERN TRUST CO. et al. v. VILLAGE OF WILMETTE et al.
• Decision Date: 05 April 1906
• Court: Supreme Court of Illinois

220 Ill. 417

77 N.E. 169

NORTHERN TRUST CO. et al.

v.VILLAGE OF WILMETTE et al.

Supreme Court of Illinois.

Feb. 21, 1906.

Rehearing Denied April 5, 1906.

Appeal from Circuit Court, Cook County; L. Honore, Judge.

Action by the Northern Trust Company and others against the village of Wilmette and others. Judgment for defendants, and plaintiffs appeal. Affirmed.

Ouster, Griffin & Cameron, and Wood & Oakley, for appellants.

J. L. McKittrick and George Gillette, for appellees.

On May 9, 1904, appellants, the Northern Trust Company, Calvin B. Beach, as trustee under the last will and testament of E. Kellogg Beach, deceased, and the First National Bank of Marengo, Ill., filed their petition in the circuit court of Cook county against the appellees, the village of Wilmette and its officers, for a writ of mandamus to compel the municipality, out of its general funds, to reconstruct a certain public improvement mentioned in the petition and to pay the improvement bonds held by appellants.

An ordinance was passed by the village of Wilmette for the improvement, by macadam, of Twelfth street between Center avenue and Chestnut avenue, and Chestnut avenue from Sheridan road west to the village limits. A special assessment for $27,788 was confirmed by the county court, $2,124.45 of which was assessed against the village as public benefits and the remainder against private property, payable in 10 installments, one for $3,488 and nine for $2,700 each. The contract was let and estimates issued from time to time by the village authorities as the work progressed. The work was finally accepted and bonds issued in payment thereof, amounting to $23,800. Of these bonds $2,900 was subsequently paid, and the balance ($20,900) remained outstanding and unpaid. Of this amount the appellants hold $19,600, and the balance is held by other parties. The bonds were originally issued by the village authorities to the contractor and subsequently assigned to appellants. At the june term, 1901, of the county court of Cook county application was made for judgment and order of sale against the property along the line of the improvement for installments of the assessments which had been returned delinquent. Objections were filed by the property owners on the ground that the improvement made was not the improvement provided for in the ordinance and contract. Upon a hearing the objections were overruled and judgment and order of sale entered against the property. This judgment was subsequently reversed by this court in such a way that the assessments are not collectible.

The ordinance provided that the streets should be graded, curbed, guttered, macadamized, and otherwise improved in accordance with plans and specifications therein contained. The specifications stated how the street should be excavated, how it should be rolled, what kind, quantity, and quality of material should be used, and in what condition it should be left when completed. The streets were not completed in accordance with these requirements, but, on the contrary, after grading the roadway to the grade line a considerable portion of it was not rolled, tamped, or otherwise made suitable, in form or grade, for a macadam pavement. Portions of the roadbed were filled with water and mud, in which wagons hauling material sank to the axies, and in these places the slag was dumped in the mud. After the slag was put on the roadway it was not rolled in some places. to recover for his injuries, that he did not know, it, but not sufficient to fill the interstices. On most of the roadway crushed limestone Limestone screenings were scattered on none was used. The top material was called ‘bank gravel,’ and was a mixture of loam, clay, and gravel, varying from 60 per cent. of clay and loam and 40 per cent. of gravel to 25 per cent. of clay and loam and 75 per cent. of gravel. An analysis of a portion of it showed 57.4 per cent. of gravel and 42.6 per cent. of clay and earthy matter. This top dressing, which was to be of gravel, was of such a nature that it could not be rolled when wet, as required by the ordinance, but would ball up and cover the roller with mud and clay. There was no uniformity in the depth of the materials which entered into the construction, and in many places the total depth was 2 1/2 to 3 inches less than required by the ordinance. There is no controversy as to the character of the improvement or the condition of the street after the improvement was completed. It was a mixture of clay, loam, gravel, limestone, and slag, which would not sustain an ordinary load in wet weather. Ordinary travel cut it up into deep ruts, and wagons cut down in it so as to bring up the slag from the bottom material. During wet weather the top worked up into slush and loaded teams were mired in the roadway. On September 4, 1900, as the work was going on, a communication was received by the board of local improvements from certain property owners complaining that the work was not being properly done in accordance with the specifications and contract, and giving instances of departure from the terms of the ordinance. Thereupon the president of the board examined the work, and certified that so far as accepted it was in substantial compliance with the contract, but that certain portions of it not in accordance with the specifications had not been accepted nor any estimates granted thereon.

All of these facts, together with others not material to be here recited, were set up by appellants in their petition for a mandamus, and they claim that they were innocent purchasers of the bonds for value without notice, and sought to compel the municipal authorities to proceed to reconstruct the improvement out of the general fund according to the ordinance, so the bonds might be collected. A demurrer was filed to the petition, and upon a hearing it was sustained and the petition dismissed. To reverse this judgment an appeal has been prosecuted to this court.

WILKIN, J. (after stating the facts).

It is claimed by appellants that the bonds in question were negotiable instruments, and that they were purchasers of the same in good faith for value, without notice, before any of the defenses arose; that the bonds thus issued and sold cannot be defeated by the subsequent acts of the village or the contractor, or both; that the village is liable to complete the improvement out of its general fund, because its officers were guilty of a flagrant breach of their obligation to the bondholders; that the village is estopped from claiming that the bonds are invalid, because of the false acts and representations of its officers in issuing the estimates, accepting the work, and issuing the bonds.

As we view the case, its disposition turns upon the question as to whether or not the bonds were negotiable instruments, so as to vest the holders with rights superior to those of the contractor and which can be enforced against the village. The bonds were issued in payment of a public improvement authorized by statute. The statutory provisions stamp upon this proceeding certain characteristics which must be taken into consideration in the determination of the case. Section 73 of chapter 24 of the local improvement act (Hurd's Rev. St. 1903, p. 408, § 579) provides that no person or body corporate taking any contract from a city, to be paid out of...