City of Quincy v. Warfield

25 Ill. 317

• Court: Illinois Supreme Court
• Decided: January 15, 1861
• Status: Published

Opinion

Breese, J.

Express authority is given to the city council of the city of Quincy, to issue bonds to an amount not exceeding, at any one time, in the aggregate, the sum of seventy-five thousand dollars, and not bearing a rate of interest higher than eight per cent, per annum, to be paid annually or semi-annually, at the option of the city council. (Priv. Laws, 1857, page 1052.)

The bond in question, was issued -in August, 1858, in lieu of another bond issued by the city, and the accumulated interest thereon, and then overdue, and made to bear interest at the rate of twelve per cent, per annum.

The case went to the jury on the plea of non est factum, and that no presentation for payment was made before suit brought, both which issues were found for the plaintiff Warfield. The court ruled out, on demurrer, two other pleas filed by the city, and properly, because neither of them set up any defense that could not be available under the general issue. They are both wanting in nearly all the essentials of a plea of usury.

It is urged now here on this appeal, that the city is not liable on this bond, because it stipulated for the payment of twelve per cent, interest per annum-; that it is void because the city had no power to execute bonds for bond indebtedness, for the purpose of procuring an extension of time for payment, or for any other purpose, and no power to issue a bond for any purpose, bearing more than eight per cent, interest per annum.

A reference to the various charters, amendatory and otherwise, of the city of Quincy, to be found in Laws of Special Session of 1839, page 113 — in the Private Laws of 1857, at pages 163 to 175, and 1052, will show that no express power is granted to issue a bond for.and in lieu of an overdue bond, but the general power to issue them within a fixed limit as to amount, is expressly given, as we have stated, and without any regard to the purpose. It is true, the provisions of the charter, authorizing the issuing of bonds,. do contemplate that the city council will provide by taxation for their payment when due, being required to establish a sinking fund for such purpose, and doubtless this is the true policy. But in the judgment of the city council, it may not be expedient or wise to levy the annual tax necessary for such purpose. Such may be the condition of the tax payers as to render it extremely difficult to raise the taxes, added to their various other heavy burdens, and it might be, for the exigency, good policy, to pay interest for further time. Of this, the city council should judge, and as the original bond was issued in pursuance of their chartered powers, we are not satisfied that they could not issue another in renewal of it, if not prepared to pay it. Individuals and all corporations so act, and in such a matter, a municipal corporation should not be an exception, unless the charter of their powers expressly restrains them, which is not pretended in this case.

But it is said the bond is void, because it stipulates for a greater rate of interest than eight per cent, per annum. In the case of Johnson v. Stark County, 24 Ill. 75, we recognized the doctrine that in exercising a power, all acts performed in excess of, or beyond the power delegated, must be rejected as unwarranted ; but if, after the rejection of such acts, there has been enough done to show a proper execution of the power, the act will be sustained, irrespective of the acts performed beyond the power delegated. In other words, so much of the act done as is within the power granted, shall be upheld, whilst all beyond the power shall be rejected as an excess of power.

Upon this ruling in this case, we must decide, and do decide that the bond is valid and binding on the city, with interest, to be calculated at eight per cent, per annum. It is not vitiated by the excess, but only pro tanto, and the court trying the case should have made the deduction, and given judgment for the bond, with interest at eight per cent, per annum, the city having no power to stipulate for interest beyond that rate.

As to the other objection, that it is not shown the resolve of the city council of July 12, 1858, under which this bond was issued, was based upon the recommendation of the finance committee, we can only say, we will so intend, there being nothing averred or shown against such an intendment.

For the excess of interest adjudged against the city, the judgment is reversed, and the cause remanded for other proceedings not inconsistent with this opinion.

Judgment reversed.

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This case is in all material respects the same as the preceding case. The demurrer to the third, fourth and fifth pleas was properly sustained, for the reason they present no defense which could not be made under the general issue, and are not formally or substantially pleas of usury.

The judgment, for the reasons given in the case of the City of Quincy v. Warfield, ante, is reversed, and the cause remanded.