Court Opinion

ID: 7002989
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:45:26.792626+00
Date Added: 2024-06-11T16:09:58.664607
License: Public Domain

Me. Presiding Justice Windes delivered the opinion of the court. A preliminary question is presented because of the ruling of the trial court in excluding certain private acts of the legislature of this State of 1867 and 1869, which respectively authorized appellant to issue said bonds in payment of a subscription for stock of the Murphysboro & Shawneetown E. E. Co., thereafter changed to the Carbondale & Shawneetown E. E. Co., and made valid and binding certain acts of Williamson county done in preparation for the issuing of the bonds, and provided that the interest coupons thereof should be paid at the county treasury of appellant, or in the city of New York, as might be desired by the holder or holders thereof. This evidence we regard as immaterial to any issue in the case. The basis of the appellees’ claim is the contract of sale of the new, or four and one-half per cent bonds, set out in the statement, and its alleged breach. Ho question is made as to the yalidity of any of the bonds in any respect. The only question that, in our opinion, could arise on which this evidence would throw any light, is as to the place of payment of the bonds and interest. In the absence of statutory authority, the bonds would be payable at the county treasury of Williamson county. Pekin v. Reynolds, 31 Ill. 529; Johnson v. Stark Co., 24 Ill. 75. This evidence shows that the place of payment mentioned in the bonds was authorized by statute, but since no question is made in that regard, we are unable to see wherein it is material. The real question to be determined is what damage, if any, has appellant suffered by reason of the failure of appellees to deposit the money they agreed to place with the American Exchange Rational Bank, the place where the bonds and interest thereon were made payable. For a determination of this question we must'look to the contract of the parties and what they 'did under it. If appellant has not been damaged by appellees’ breach of their agreement, then it can not recover. The agreement shows that appellees purchased the new four and one-half per cent bonds of appellant—-not the old eight per cent bonds. The new bonds were placed in escrow with the Rational Bank of Illinois to be delivered to appellees when the old bonds were paid. Appellees agreed to deposit with the Exchange Bank $100,666.67 to pay for the old bonds, and of this amount they received $666.67 from appellant, being for one month’s interest from January 1 to February 1, 1895. They also paid a premium of $370 for the new bonds. Appellant agreed to call in the old bonds for payment and cancellation. Appellees made no agreement to get in the old bonds, but in that regard agreed only that they would see to the publication of the notice calling them in, the appellant to pay the expense thereof. The old bonds, bearing interest at eight per cent per annum until the principal should be paid, were legal obligations of appellant which were in no wise assumed by appellees. The payment of the January, 1895, interest by appellant to appellees was a recognition of appellant’s liability to pay this interest, and inferentially any other interest which might thereafter accrue. Certainly there was no undertaking by appellees to pay any interest than for the one month which they received from appellant. Appellees did not deposit the money as agreed, but instead notified the Exchange Bank to refer any holders of bonds presented to it for payment to them at their New York office. They kept funds on hand at all times at their office for the payment of the bonds and, so far as any evidence in this record shows, paid every bond which was presented to the Exchange Bank or to them for payment. Whenever a bond was presented to the Exchange Bank for payment, the holder was referred to appellees, and it was paid. Appellees have taken up all the old bonds and they have been duly canceled, and have thus, in effect, done all that would have been accomplished by depositing their money with the Exchange Bank. Thirty-nine bonds, for some reason not explained by the evidence, were not presented to the Exchange Bank until on or after July 1, 1895, and these, it seems, were presented to the collection department only—not to the coupon department, where the holders would have been directed to appellees. Of this number the collection department of the bank collected from the state treasurer of Illinois the interest on seventeen bonds, or $680. Either the bank, through its collection department, or the holders of the other twenty-two of these bonds, collected of said treasurer the interest on them in July, 1895, amounting to $880. It is not shown that any of these thirty-nine bonds was ever presented to the Exchange Bank or to appellees at any time for payment until after this interest was paid, or that the holders thereof had any notice - of the calling in of the bonds before this interest was paid. There is no evidence.that appellent gave the state treasurer of Illinois any notice that the bonds were called in or that he should not pay them. It should be borne in mind that the interest on these bonds became due January 1st and July 1st; that when the notice was given calling them in, nearly one month had elapsed from the time when the January interest was due, and that, considering the large number of the bonds and the many different holders, it is not surprising that thirty-nine of the bonds were not presented for payment until after July 1, 1895. There is in the evidence no explanation as to why these bonds were not presented for payment until after this interest was paid. The only reasonable explanation would seem to be that the holders either did not see the call, or thought they could collect another five months’ interest by not presenting them until the next interest day. If such was the case, appellees are in no way to blame. They held themselves in readiness to pay, and did take up and cause to be canceled all the bonds as fast as they were presented. If any one was in fault it was appellant, either in failing to get actual notice to the bondholders, or in failing to notify the state treasurer that the bonds had been called in, and not to pay the interest on them after February 1, 1895. It is, however, contended by appellant that if the deposit of money had been made with' the Exchange Bank, as agreed by appellees, and reasonable notice given of that fact, then interest on the bonds would have ceased to run after February 1, 1895. The trial court refused to hold propositions of law to that effect, and we are not prepared to hold that the ruling was not right. The learned counsel for appellant cites no authority to sustain the contention, nor have we been able, in the time at our disposal, to find any such authority. What is reasonaable notice, counsel does not undertake to inform the court, and it might well be held that the publication three times in a daily newspaper, the first publication being only six days before, and the last one day before, February 1, 1895, the date when counsel claims the interest would have ceased, was not reasonable notice. If the notice was not reasonable, and we think it was not, then assuming that the law is as claimed, appellant was not injured by the failure of appellees to make the deposit, because it was clearly liable to pay the extra five months’ interest, which was paid by the state treasurer, by the terms of the bonds. From such examination as we have been able to make of the question, the authorities seem to be that if no actual notice is given to the holder of an interest-bearing munic: ipal bond, which is overdue, to present it for payment and surrender, and there is no statutory method provided for the calling in of such bond and fixing a day beyond which interest will not run, interest will continue to accrue on such an obligation in the same manner as upon an ordinary promissory note of any private person. Dillon on Municipal Corp’ns, Sec. 506 and note; 2 Beach on Pub. Corp’ns, Sec. 921; Hummel v. Brown, 24 Pa. St. 310; Read v. City of Buffalo, 74 N. Y. 463. As has been shown, these bonds were legal obligations of appellant, and by their terms were interest-bearing until the principal should be paid, the interest being payable January 1st and July 1st of each year. The interest had been paid to January 1, 1895, when the contract with appellees was made. Appellant recognized its liability to pay interest by paying the interest for the month of January, 1895, to appellees, and we can perceive no reason, either in morals or under the law, why it was not liable to pay all interest which accrued on these bonds up to July, 1895, without a showing that actual notice of their being called in came to the holders before that date. The rule seems to be settled that a municipal corporation in this State is not required to seek its creditors in order to discharge its debts (People v. Tazewell Co., 22 Ill. 147, and Pekin v. Reynolds, 31 Ill. 529), and that the creditor must make demand, when payment is desired, at its treasury. This rule, however, as we view it, does not relieve the corporation from the payment of its legal obligations according to their terms and at the time and place thereby provided. The holders of the bonds were not required to present them, unless they received actual notice, until the interest dajq July 1st, when the interest was in fact paid. In the Bead case, supra, city warrants which bore interest three months from date, were held to continue to bear interest for nearly four years after the date fixed by resolution of the city council for their payment, and publication of notice in the official paper of the city to holders that interest would cease on the date fixed, although the necessary funds for payment were ready prior to and on the date fixed, and that the fact that the money was ready at all times, to make payment, did not relieve the city from the obligation to pay interest. There being no proof that any of the holders of these thirty-nine bonds ever had actual notice of the calling in of the bonds, and there being no statute in this State on the subject, then clearly, under the evidence in this record, appellant was liable for the six months’ interest paid by the state treasurer, and can not look to appellees to refund to it any part thereof except the interest for January, 1895; which was paid to appellees. As to this month’s interest, the evidence is clear that the state treasurer paid it on the thirty-nine bonds, and the only evidence which would indicate that it was paid by appellees is that of F. W. Leach, who says appellees did pay all these bonds on presentation. The evidence also shows that appellees received forty-two of the old bonds on and after August 6, 1895. It is quite improbable that they paid any interest which had already been paid by the state treasurer. Appellees were bound by their contract with appellant to pay this month’s interest. They received the money from appellant for that purpose, and in equity and good conscience should refund it to appellant. The judgment of the Circuit Court is reversed and judgment will be entered in this court in favor of appellant and against appellees for the January, 1895, interest on said thirty-nine bonds paid by the state treasurer of Illinois, being the sum of $260. Appellant will also recover its costs in this court and in the Circuit Court. Eeversed, and judgment here.