Town of Eagle v. Kohn

Citations

• 84 Ill. 292

Syllabus

<p>1. Municipal subscription and bonds—conditional subscription. Under the act of April 16, 1869, authorizing municipal subscriptions to railroads, upon conditions, and providing such bonds or subscription “ shall not be valid and binding until such conditions precedent shall have been complied with,” it is not essential to the validity of the subscription, or bonds issued thereunder, that the conditions annexed shall have first been performed. If performed afterwards the bonds will be valid.</p> <p>2. Same—commercial quality of coupons. Municipal bonds issued in aid of railroads are to be treated as commercial paper, and the coupons attached thereto are negotiable by delivery only, without indorsement. Being of such character, unless the statute declares otherwise, a bona fide holder of such paper will he protected, and is-not required to take notice of the conditions upon which they were issued, or the resolutions upon the records of the railway company.</p> <p>8. Same—not valid until conditions complied with. Municipal bonds issued upon a subscription to a railway company, with conditions annexed, upon which the bonds were to'be issued under the act of April 16, 1869, are not valid and binding, even in the hands of an innocent holder, for value, where the conditions named have not been complied with.</p> <p>4. Negotiable paper—when void in hands of innocent purchaser. Where a statute expressly declares that negotiable securities, given under certain circumstances, shall be void, the court will bold them void, even in the hands of a bona fide indorsee without notice.</p> <p>5. Same—illegality of consideration as against bona fide holder. But, unless it has been so expressly declared by the legislature, illegality of consideration will be no defense in an action upon negotiable paper, by a bona fide holder without notice, unless he obtained the note or hill after its maturity.</p>