Court Opinion

ID: 9740054
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:26:51.022281+00
Date Added: 2024-06-11T07:24:15.739298
License: Public Domain

PRESIDING JUSTICE JIGANTI, dissenting: This appeal brings into question the defense of illegality as asserted against the plaintiff, a holder in due course. The defendant was the drawer of a check. She issued the check as partial advance payment to a plumbing contractor. It is asserted on appeal that the plumbing contractor was unlicensed and the contract was therefore illegal and not merely voidable, but void. The majority holds that in fact it was void and not merely voidable. It reasons that the regulatory statute concerning plumbers enacts criminal sanctions for practicing plumbing without a license and that the contract therefore “violates a strongly expressed legislative policy, [and] would further no legal or equitable goal.” (234 Ill. App. 3d at 1024.) I suggest that a contrary result should prevail and respectfully dissent. Even as between the original parties criminal sanctions do not necessarily mean that a contract is void or unenforceable. (Charter Finance Co. v. Henderson (1975), 60 Ill. 2d 323, 326 N.E.2d 372.) The majority’s mechanical approach to this issue seems to suggest that even if the plumbing contractor had completed the work, it not only would not be entitled to the contract price but could not even bring a restitutionary action for the reasonable value of its services. Cf. Restatement (Second) of Contracts §§197, 198, 199 (Restitution) (1981). Whatever may be visited upon the original parties aside, this transaction involves a holder in due course. Bankers Trust Co. v. Litton Systems, Inc. (2d Cir. 1979), 599 F.2d 488, treats with the issue of the distinction between the original parties to the contract and holders in due course. In Bankers Trust, the court found that under New York law the alleged illegality in the situation before it, that is, a contract induced by bribery, rendered the contract between the parties void. However, as to a holder in due course it was merely voidable. The Bankers Trust court reasoned that the basic policy that would render a bribery induced contract void is discussed in section 598, Comment a, of the Restatement of Contracts, which states that courts deny relief because the plaintiff is a wrongdoer and not because they favor the defendant. Where an innocent third party, the holder in due course here, is suing on an illegal contract, the policy argument is inapplicable. Restatement of Contracts §598, Comment a (1932). Illinois addressed this issue in the case of McGregor v. Lamont (1922), 225 Ill. App. 451. There the defendant asserted that he was induced to enter into a contract for the purchase of stock by false and fraudulent representations and asserted this as a defense against a holder in due course. The court held in favor of the holder in due course, adopting the position of what it stated was the weight of authority that while the instrument might be void as between the parties, it was not void against the holder in due course. I believe that we should follow McGregor and Bankers Trust. The statement of the majority that to allow the holder in due course to recover “would further no legal or equitable goal” is not well taken. (234 Ill. App. 3d at 1024.) In my judgment, the holding unreasonably burdens commerce by inhibiting check cashers from freely accepting checks in an ostensible ordinary commercial transaction.