Pike County IL Archives Court.....Pike, V Hosfort 1849
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Deb Haines http://www.genrecords.net/emailregistry/vols/00003.html#0000719 May 22, 2008, 8:23 am

Source: Reports Of Cases Illinois
Written: 1849

The County of Pike v. Lucius G. Hosfort.

Error to Pike.

1. County—pay interest only by express contract. Counties are not liable to 
pay interest on their contracts, except in pursuance of an express agreement 
to do so; aliter in actions originating in torts.(l)

This action was commenced March 7th, 1849. The form of the action was debt. 
The cause of the action was a contract made March 6th, 1848, between Hosford 
and the county of Pike, by which Hosford agreed to build a bridge for Pike 
county. In consideration of which, the county agreed to pay Hosford $779, when 
the bridge should be completed and received by the county; which was to be on 
or before the first day of January, 1849. A demurrer was filed to the 
declaration; and at the April term, 1849, by agreement, the matters of law and 
fact were tried by Minshall, judge, who found for the plaintiff.

The bill of exceptions, presents these facts: 1. The making of the contract, 
as alleged in the declaration. That the bridge was built according to the 
stipulations of the contract. 3. That two of the commissioners of Pike county 
received the bridge, November 9th, 1845, during a vacation of the county 
commissioners' court. 4. That on 7th November, 1848, the county paid Hosford 
$220, on the contract. 5. That at December term, 1848, commissioners' court of 
Pike county, by an order entered of record, directed their clerk to draw 
orders on the county treasurer, in favor of Hosford, for the sum of $559, the 
balance of principal on said contract. 6. That the clerk did accordingly draw 
said orders; but Hosford refused to receive them, "unless they were payable 
with legal interest." 7. That no demand was ever made by Hosford for said 
orders. 8. That on the 6th March, 1849, there was sufficient funds in the 
treasury to pay said orders.

E. S. Blackwell, for the county: 1. The revenue of counties is raised by 
taxation. R. S., 133, sec. 25. They have no power to borrow money. Law 1845, 
p. 352. The revenue of counties is received, kept and disbursed by the county 
treasurer. R. S., 138, sec. 4, 5, 7 and 9; E. S., 139, sec. 10. The county 
commissioners'court can reach the county funds in no other manner, than by 
appropriating the same and drawing an order on the treasury. R. S., 138, sec. 
6; 133, sec. 20, 26; 134, sec. 32. The power of the county to raise revenue, 
the extent of her means, and the manner in which her disbursements are made, 
are within the knowledge of persons contracting with the county, and they are 
presumed to contract with reference to those facts. 1 Scam., 72. Again, the 
law having pointed out the manner in which the county is to contract, and the 
manner in which she is to perform her engagements, this law enters into and 
forms a part of all contracts entered into with the county. Reynolds v. Hall, 
1 Scam., 35. And again, by the usage of counties, they draw orders on the 
treasury in payment of their debts, and this usage is to be regarded in the 
construction of all contracts entered into by a county. Eobinson v. Fiske, 25 
Maine E., 401; Vamer v. Nobleborough, 2 Greenleaf, 126. County orders are 
recognized by law as valid. R. S., 133, sec. 20 and 26; 134, sec. 32; 136, 
sec. 46-7; 138, sec. 4; 139, sec. 13; 141, sec. 23; 163, sec. 73; 438, sec. 9. 
If illegal, county commissioners are liable to indictment. R. S., 175, sec. 
136. Therefore, when a county tenders to her creditor an order on the 
treasury, this is all that can be reasonably required by the creditor. 2. It 
is then the duty of the creditor to present his order to the treasury; if 
payment is not made, the county is then in default, and he can recover 
interest on the order from the time of presentment. But in no other case is 
the county bound to pay interest on her outstanding orders. Madison County v. 
Bartlett, 1 Scam., 67; Bobbins v. Lincoln County, 3 Mo. E., 57; Varner v. 
Nobleborough, 2 Greenleaf, 121.

Williams & Lawrence, for Hosford: It is apparent from the record that the only 
question in litigation between the parties is, whether a county is liable to 
pay interest for money due from it, on a bond for the payment of money, from 
the time it becomes due till it is paid. This is a suit on such bond, and by 
its terms, the county was to pay the defendant $775, when a certain bridge 
should be completed by him, and received by the said commissioners; and it is 
admitted, that it was so completed and received on the 9th day of November, 
1848.

By the laws of the state, counties are made bodies politic and corporate, with 
the capacity to contract, and to sue and be sued. It is not contended that the 
contract sued on is not valid and binding. By its terms and legal effect, 
then, the county was bound to pay the defendant the price of the bridge, on 
the 9th day of November, 1848, and having failed to do so, the defendant's 
right of action accrued, unless the county can claim an exemption from the 
operation of those laws which are binding upon other delinquent debtors. It is 
subjected to suit, without any designation of the causes for which it may be 
sued; and of course these are left to be determined by the principles of the 
common law, and the general laws of the state. Nor do we find in those laws 
any thing exempting counties from the performance of their contracts. It is 
obvious, then, that the county was liable to bo sued for the money due by said 
bond, and the only remaining question is, whether it was bound to pay interest 
from the time the bond became due. The statute provides, that "creditors shall 
be allowed to receive interest at the rate of six per centum per annum, for 
all moneys after they become due on any bond, bill, promissory note, or other 
instrument of writing," etc. In this case the defendant is a "creditor; "the 
money sued for was due to him "on a bond," on the 9th day of November, 1848. 
His case, then, is within the express letter and spirit of the statute. There 
is no exception to the right of such a creditor to receive interest, unless it 
is to be raised by implication; and one authority is relied on, which, by a 
dictum of the judge in delivering the opinion, gives countenance to the idea 
that such exception is to be implied in cases like this, from the sovereign 
character of counties. Whilst it is conceded that the decision of that case 
may be corrected, it is respectfully submitted, that the dicta of the learned 
judge can not be sustained, either upon principle or authority. In Cohens v. 
Virginia, 5 Pet. Cond. R., 112, chief justice Marshall says: "it is a maxim 
not to be disregarded, that general expressions, in every opinion, are to be 
taken in connection with the case in which those expressions are used. If they 
go beyond the case, they may be respected, but ought not to control the 
judgment in a subsequent suit, when the very point is presented for decision." 
In this case it was also contended, that an exception was to be implied, on 
account of the character of one of the parties. Judge Marshall, in stating the 
point, says: "the first question to be considered is, whether the jurisdiction 
of this court is excluded by the character of the parties, one of them being a 
state, and the other a citizen of that state." 5 Pet. Con. R., 100. He 
proceeds to say, "the jurisdiction of the court, then, being extended by the 
letter of the constitution to all cases arising under it, or under the laws of 
the United States, it follows that those who would withdraw any case of this 
description from that jurisdiction, must sustain the exemption they claim, on 
the spirit and true meaning of the constitution; which spirit and true meaning 
must be so apparent as to overrule the words which its framers have 
employed." "After bestowing on this subject the most attentive consideration, 
the court can perceive no reason founded on the character of the parties for 
introducing an exception which the constitution has not made; and we think 
that the judicial power, as originally given, extends to all cases arising 
under the constitution or a law of the United States, whoever may be the 
parties." 5 Pet. Cond. R., 108. In the county of La Salle v. Simmons, 5 Gilman 
R., this court took the same sensible view of our interest law, and, by 
subjecting the county to the payment of interest, expressly repudiated its 
pretensions to an exemption from the operation of that law, on account of its 
supposed sovereign character. The supreme court of Missouri seem to have taken 
the same view. 3 Missouri R., 57; and there are many other cases the same way.

The plaintiff, it is admitted, owed the defendant the money sued for by bond; 
that it was due on the 9th of November, 1848; that they have not paid or 
offered to pay it. The law provides that every creditor may sue for and 
recover money when it is due, with interest from the time it becomes due. It 
does not exempt counties which fail to pay their debts from this liability; 
and there is nothing in their character from which such exemption can be 
implied.

Mr. Williams, in the course of his argument suggested that if the court 
intended to adhere to what was stated in the opinion of the court in the case 
of Barnes v. Barber et al., 1 Gilman, 401, he would ask the benefit of that 
opinion, and asked the court to refuse to entertain this cause for the reason 
that the defendant in the court below did not interpose a motion for a new 
trial. Mr. Blackwell was about to reply to this objection, and was stopped by 
the court. The chief justice stated that when a cause was submitted to the 
judge for trial, it was not necessary that a motion for a new trial should be 
interposed, in order to bring the cause to this court.

Teeat, C. J. In March, 1848, an agreement was entered into between Hosford, 
and the county commissioners of Pike county, by the terms of which, the former 
was to erect a bridge on or before the first of January thereafter, and the 
latter were to pay him $779, when the bridge should be finished and accepted. 
The sum of $220 was paid to Hosford on the 7th of November, 1848; and the 
bridge was completed by him, and accepted by two of the commissioners, on the 
9th of the same month.

At the December term, 1848, of the commissioners' court an order was entered 
of record, directing the clerk to draw orders on the county treasurer, in 
favor of Hosford, for the payment of $559; and the orders were issued by the 
clerk and tendered to Hosford, who refused to receive them, because they did 
not in terms bear interest.

In March, 1849, Hosford brought an action against the county of Pike, on the 
original contract; and the circuit court, on the foregoing state of facts, 
gave judgment in his favor for $559, and interest, from the day of the 
completion of the bridge.

This decision is assigned for error. The funds of a county are required to be 
kept in the county treasury, and are only to be paid out on the orders of the 
commissioners' court, or "by virtue of a law specifically directing such 
payment to be made." R. S., ch. 28, sec. 6. The commissioners have no 
authority to take funds from the treasury, and pay the same out directly to 
the creditors of the county. They may audit claims against the county, and 
direct warrants to be drawn on the treasurer for their payment. The creditor 
must procure an order from the court, and present it to the treasurer for 
payment. This is the only mode by which he is to receive payment of his debt. 
Even when he recovers judgment against the county, he can only obtain 
satisfaction, through the medium of an order on the treasurer. He is not 
entitled to execution on the judgment. R. S., ch. 27, sec. 20.

In no other way could Hosford obtain payment of the amount due him from the 
county. Before this suit was commenced, and at the first term of the 
commissioners' court held after the bridge was completed, warrants were issued 
and tendered him, for the balance due on the contract. He declined to receive 
them, because they did not bear interest on their face. The only point in the 
whole case is, whether the county is bound to pay interest on the balance 
after it became due. If it is liable to pay interest, the amount tendered was 
insufficient; if otherwise, the tender was sufficient and constituted a good 
bar to an action on the contract. This court, in the case of Madison County v. 
Bartlett, 1 Scammon, 67, decided that counties are not bound to pay interest 
on county orders, in the absence of an express agreement to pay it. That 
decision seems to be conclusive of this case. If an order drawn on the 
settlement of a demand against a county, does not bear interest unless it is 
so expressed in the order, it is very clear that interest will not run on an 
unadjusted cause of action, on which interest was not originally agreed to be 
paid. There is no provision of law, requiring county orders to be drawn 
payable with interest; and the contract between these parties did not provide 
that interest should be paid, after the money became due. The parties 
contracted with reference to the laws governing contracts made with counties, 
and prescribing the mode of obtaining payment. If they had designed to take 
this contract out of the operation of the general rule, they would have 
expressly stipulated for the payment of interest.

The plaintiff has no just cause of complaint against the county. The 
commissioners, at the earliest moment, complied with every legal obligation, 
for the performance of the contract, on the part of the county. They promptly 
tendered him all, that he had any legal right to demand all that he could 
obtain by a suit against the county. He ought therefore to have accepted the 
warrants in liquidation of his cause of action.

There is a clear distinction between the case of Madison county v. Bartlett, 
and that of La Salle county v. Simmons, 5 Gilman, 513. The former case, like 
the present, arose out of a contract made with a county in the course of its 
legitimate business transactions; and it was held, that the county was not to 
be charged with interest, in the absence of an agreement to pay it. In the 
latter case, the county had, without authority of law, or color of right, 
obtained the possession of money belonging to Simmons, and detaining it 
against equity and good conscience, it was required to make compensation for 
the injury inflicted on Simmons, by the payment of interest, in the way of 
damages. The conclusion to be drawn from these decisions is, that counties do 
not pay interest on their contracts, except in pursuance of an express 
agreement to do so; but that in actions originating in torts, they are liable 
to the same extent as private persons.

The judgment of the circuit court is reversed, with costs.

Judgment reversed.

-----------------
Cited — Hall v. Jackson Co., 5 Bradw., 609; Grundy Co. v. Hughes,8 Bradw., 34; 
Rendleman v. Jackson Co., 8 Bradw., 287.  
 
(1) Interest has been allowed against a county where plaintiff's money was 
tortiously obtained and withheld, LaSalle Co. v. Simmons, 5 Gilm., 513; but, 
where the cause of action arises upon a pure contract, a municipal corporation 
is liable for interest only upon its express agreement to pay it and then, 
only, when such corporation is expressly, or by necessary implication, 
authorized to make such agreement, Madison Co. v. Bartlett, 1 Scam., 67; South 
Park Comm'rs v. Dunlevy, 91 Ill., 49; Grundy Co. v. Hughes, 8 Bradw., 34. 
Thus, a county court has no power to issue interest bearing orders in 
settlement of an existing indebtedness against the county; nevertheless where 
it has fully paid and satisfied a claim with interest thereon, to the date of 
payment, such interest can not be recovered back, but, where money has been 
paid as interest on such contract and some part of the claim remains 
unsatisfied, the amount paid as interest will be applied in reduction of and 
as part payment on the principal or original claim, Hall v. Jackson Co., 5 
Bradw., 609; S. C., 95 Ill., 352. A county may, however, make a binding 
contract to pay interest when making an executory contract in regard to a 
matter with reference to which a duty is imposed on the county authorities, 
Rendleman v. Jackson Co., 8 Bradw., 379, as the reparation of its court house, 
etc., when the amount shall be paid or the mode of payment is not restricted. 
In such case interest bearing orders will be valid and collectible, Jackson 
Co. v. Rendleman, 100 Ill., 379. The same rule applies to cities and towns, 
Madison Co. v. Bartlett, 1 Scam., 67; Pekin v. Reynolds, 31 Ill., 529; Park 
Comm'rs v. Dunlevy, 91 Ill., 49; wherefore, in the absence of statute to that 
end, which does not exist,"towns are not authorized to pay interest and the 
board of auditors are without power to agree to pay it, Wells v. Whittaker, 4 
Bradw., 381; but if a city refuses to pay damages awarded to the owners of 
property which has been taken to open or extend a street, beyond a reasonable 
time, interest will be allowed, Chicago v. Wheeler, 25 Ill., 478.

Additional Comments:
Reports of Cases Argued and Determined in the Supreme Court of the State of 
Illinois, from November Term, 1849, to June Term, 1850, Both Inclusive. By 
Ebenezer Peck. Volume XI. Annotated by Henry Binmore, of the Chicago Bar. 
CHICAGO: CALLAGHAN & CO. 1886.

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