Court Opinion

ID: 6950737
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:31:21.651299+00
Date Added: 2024-06-11T16:08:04.137365
License: Public Domain

Caton, C. J. This is an application by the auditor, for a mandamus to the treasurer, commanding him to deliver to the auditor ninety-three Illinois and Michigan canal bonds, being numbers nine hundred to nine hundred and ninety-two, inclusive, for the purpose of being disposed of by him, under the banking law for the redemption of the circulation of the State Bank of Illinois. Tim question presented is, whether these bonds are valid and binding obligations against the State. They were issued by the proper officers of the State, who were authorized by law to issue such bonds for the purpose of taking up canal indebtedness, and were deposited with the auditor, and accepted by him, for the purpose of securing the circulation of this bank, according to the provisions of the banking law. It afterwards turned out, that the canal indebtedness for which these bonds were issued had been paid and taken up by the canal commissioners, notwithstanding which, in some way, this canal indebtedness surreptitiously got into circulation, and was presented for redemption a second time. It is unnecessary now to decide, whether bonds thus issued and thus deposited for the security of the circulation of the bank, were legally binding upon the State, or not. If they were void before, the State, by the passage of the law of the 19th of February, 1859, assumed their payment and rendered them obligatory and valid, upon condition that Matteson should give certain securities, which he did give. The first section provides, that these bonds, naming them, shall remain with the auditor, “and when the security hereinafter mentioned shall have been given, said bonds shall be held as security for the purposes for which they were deposited with him, and be disposed of by him in the same manner as is now by law provided for the disposition of bonds in similar cases; ” Provided, certain specified securities should be given, which should be approved of by the governor, auditor and treasurer. The securities mentioned were given, and approved • by those officers. As the condition expressed in the proviso was complied with, the enacting clause of the statute may be read as if it were a positive enactment, without any provision or condition, annexed. It leaves in full force the enacting clause, which provides that the bonds shall be and-remain with the auditor, and shall be held as security for the purposes for which they were deposited, and in the same manner as other bonds deposited for the same purpose. Here, then, the State has directed these bonds to be sold in open market, as and for genuine bonds. For that purpose, most undoubtedly, this makes them good and genuine bonds, and waives any objection as to the consideration for which they were originally executed. This distinctly pledges the faith of the State for the ultimate payment of these bonds. But the treasurer bases his objection, for the purpose of bringing the question before this court, upon the following clause of the same section of the law: “ It shall be lawful for the governor, auditor and treasurer, if at any time they shall believe the security to be given has depreciated and that the same has become inadequate, to require of the said Joel A. Matteson to give additional security; and in case the said Matteson shall not give such additional security within sixty days after notice in writing shall have been given him by the governor, auditor and treasurer, so to dp, then the sum of money secured to be paid to the State, as aforesaid, shall immediately become and be deemed due and payable from the time of such default, and the State shall pay no interest upon any of the aforesaid bonds, until otherwise provided by law, but the amount of interest which is retained shall not be required to be paid by said Matteson; and the State shall pay neither interest nor principal hereafter upon any of the last mentioned bonds not on deposit, unless otherwise provided by law.” The governor, auditor and treasurer did require additional security, as contemplated by the clause quoted, which requisition was not complied with by Matteson, and the treasurer asks us to determine what effect this has upon the enacting clause of the statute first quoted. The effect of his failure to give further security, is, first, to make his bond and mortgage due and payable at once, while by its terms it was on five years’ time, and also, to suspend the payment of interest on the bonds until authorized by further legislation. These are the consequences flowing from the non-compliance with the requisition by Matteson, and none other. The duty of the auditor to sell these bonds, the same as other genuine bonds, for the redemption of the circulation of the bank, and the pledge of the faith of the State to pay them, remain as provided for in the enacting clause of the statute, except that the interest should not be paid till otherwise provided by law. Even if it should be construed that the faith of the State is not pledged to pass a law authorizing the payment of this interest thus retained, and which Matteson is not required to pay, for the principal, at least, the faith of the State is most solemnly pledged. The bonds mentioned in the conclusion of the section, and quoted above, are other bonds not deposited with the auditor for the redemption of bank circulation. The judgment of the Circuit Court, awarding the mandamus, is affirmed. Judgment affirmed.