bank cOuld not assume,' without thJ return ·ofthe check and demand of payment, that the government intended to pay, or to hold the bank responsible. 2 Pars. Notes & B. 598; Redingtonv. Woods, 45 Cal. 406; 3 Amer. & Eng. Ene. Law, 224"and cases cited; Cooke v. U. S., 91 U. S. 396; U. S. v. Bank, 6 Fed. Rep. 134; Gloucester Bank v. Salem Bank, 17 Mass. 33. Judgment tor defendant.
v. TOWN OF AMBOY.
(Cf.rcuitCourt, No D. lllbiois. :J!'ebruary 9,
, Under the Illinois denying. interest on the overdue interest coupons of railroad aid bonds, such interest is not recoverable in the fltderal courts.
OVERDUE' COUPONs-FoLLOWING STATE DECISION.
At Law. M01dS S. P. Thomas,' for plaintiff. J. K. Edsall, for defendant. GRESHAM, C. J. The Chicago & Rock River Ra.ilroad Company was chartered by the legislature of Illinolsl\1arch 24, 1869. The act authorized incorporated cities, towns, and townships along or near the route to aid the'coJlstruction of the road by subscribing for the capital stock, and paying far the same by executing arid delivering to the company, bonds beai'iriginterest at a rate not exceeding 10 per cent. per annum. On April 5, 1872, the tuwn of Amboy executed and delivered to the company:its (}Qupon bonds in satisfaction of a subscription to the capital stock', and this action was brought to recover the amount dile on 30 COll,pons detacbed from those bonds, representing interest at the rate of 10 per cent. per annum, one of which, all being alike except in number and date of payment, reads as follows: "$50. No. 28. "INTEREST WARRANT..:.-ToWN OF AMBOY. "The Town of Amboy, state of lIlinois. will pay the bearer on the 1st of July. A. D.1880. fifty dollars, at theotfice of the treasurer of Lee county, being one year's interest on the bond numbered above. "F. R. DUTCHER, Supervisor. "J. T. 'rATE, Town-Clerk." It is not claimed that the coupons draw interest by the mere terms or force of tne act, or that the general statute of the state, allowing interest on money dl,le, expressly includes the state or any of its municipalities. When the coupons were executed, it was the settleu law in Illinois that such instruments did not draw interest. City of Pekin v. Reynolds, 31 Ill. 529, deoided in 1863, was a suit on coupons detached from bonds executed and delivered by the city of Pekin in payment of a subscription'to the capital stock of the Illinois River Railroad Company, and the
TOWN OF AMBOY.
court held that neither the state, nor municipalities created by it, were oound to interest, unless there was an express agreement authorized by statute to pay interest. In legal effect, the coupons in that suit were not unlike the coupons which" are the subject of this suit,and whether or not the latter bear interest is a question of local law. In Holden V.Tr"l.Lst Co., 100 U.S. 72,it was held that where a statute scribes a given rate of interest for money due, but permits a higher rate to be specially contracted for, such higher rate can be recovered only until the maturity of the debt, and thereafter the statutory rate. Butin Phinney v. Baldwin, 16 Ill. 108, it was held that an instrument bearing interest, not at the usual rate, but at a higher authorized rate, hore the latterrate until the debt was paid; and in Ohio v. Frank, 103 U. S. 697, which went from this court Qn writ, o,f the Illinois rule was observed and enforced on the 'ground that interest was a matter of purely local regulation. In discussing this question, the court said: "The plaintiff in error relies upon the case of Holden v. Trust Co., 100 l)'. the claim that only six per cent. interest should have been compute4.onthe bonds after their maturity. That case, arose in the District of Columbia" where sUbstantially the same regUlations on the subject of interest were.prescribed by statute as in Illinois. The court' In tbatcase said: · The rule heretofore applied by this court, under the circumstances of this case, has been to give the contract rate up to the maturity of the contfllct. for cases parties and fixed no rate.' But the court added:' When a different rule has Hshed; it governs. of course, In that locality. The question is always one of locallaw,' A different rule has been established in Illinois by the decisions of the $upreme court of that state. In Phinney v. Baldwin, 16 Ill. it was held, that a note given for a sum of money, bearing interest at a given rate per In()nth., continues bear that rate of interest as 10ng.liS the principal remains unpaid." .
This ruling was made in a suit on town bonds, issued under an Illinois statute, whichauthori2;ed cities and towns to subscribe, for the'capital stock ofarailrdad company; and pay for the same by delivering to the company bonds drawing interest at a rate not e;cceeding 10 per cent. per annum. Bonds drawing 10 percent. were executed and delivered in payment of the town's subscription for stock, and the supreme court of the United States held that although, under the federal rule, these bonds would draw but 6 per cent. ti.fter maturity, the plaintiff was entitled, under the state or local rule,to 10 per cent. until the principal was paid. If interest is always a question of local law, the recovery in this' suit must be for the amount of the coupons without interest, for it is settled law in Dlinois that such instruments do not draw interest. , It is true that the supreme court of the United States has affirmed menta rendered by this and other circuit courts against counties, cities, and towns in which interest was allowed on interest coupons; butit does not appear that in any of the cases which originated in Illinois the court's attention was directly drawn to the established rule in that state. In Ohio v. Prank, BUpra, the creditor was allowed to invoke the benefitof the local law to increase the amount of his recovery, and a debtor cannot
he del).ied the right to invoke the same law to reduce the amount of recovery against him. federal couz:ts., allow the fllil amount of inteifest which a creditor .under t4e .l",ws of Illinois solely on the ground that interest is a,mattel' ofstate reglllation, those courts cannot consistently al· low interest on which, under the well-esta1:>lished law of that .state, do not draw interest. and judgnlent for the plaintiff for the amount of his coupons, wit,hqut interest. . ; ,
In 're BftLIN et ale
D. NeW' :J?-ork.··
, J _'
, ' . ,of tbe May 9, 1890" «An act providing fOr the elassifilllLtiGn of worsted cloths 8S woolens;iI',Under this 'act tbe 'Secretary of the treasury must finally clasaifJ"the merchandise'thereiil named, and that power is vested in no,,Qther ojJlcer. ' : , '"
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'I. t ,,' "'
At 'Law.: :.Jl 'The ()fBallin,'l()$eph& Co;jItip()rted of RichmoIld, 21, .1890, into the;port .Of "New, X?rkcertaip'wO,fsted cloths, .posed.enhrely: ,w hlcb, returned by, tbe I1Ppraisers On the invoice:Q.s'fwwlen cloths," 80 cents, Rnd dutywas.thereupon assessed on aaidmerchandise by the collector at the rate of 35 cents per ofthe tariff pound and' sa 7per cen'tum:ad valorem, under act of March 3, 1883, (Tariff Ind. par. 362,) and the'act' of May 9; 1890 : ac; p/.'oviding fw:the classification. of worsted cloths $8 II, ':The duly appealed fromtbis Iil:$sessment of duty to the qf United States general appraisers, in of .section 14 ,of theaet of June 10, 1890, .entitled" An act to ,simplify the laws in relation to the collection the revl3nues.", The ,board of United States general.appraisefs affirmed ,the decision of the collector. The, importers thereupon, and under th!'l provisions Q( section,15 of tlle said act of June 10, 1890, took the for a review of the decision of the board Qfgeneral appraisers I:>y:the Vnited States circuit court upon tbeir return"nd the reC\:Il·d. Th,eimpp,rters, in their. protest" alleged: (1) That the said act of 9, 1899, ;\Yaanever passed according to law, because no quorum wRspresent in th,e house (2) .Said act was tleV:er passed accordingjo law, and never: became a law; because, whel). pa.ssed, a ml;'jorityof membersof'thebptlse of represep.tatives aqdit was ,certified to4!lve'peen passed when it had not of section 5"atit,! l.! ofthe constituBecause 'a quorun;q)f the house of reption of the United resentatives .didnot,voterupon,said act. (4) Because said act confers no power or authorit)" ,upon the collector, I;tssessAondtaked\lties upon