City of Pekin v. Reynolds

Mr. Justioe WalKee

delivered the opinion of the Court.

There was no averment of a demand upon the city treasurer for payment of these coupons, in this declaration. If such instruments could, in any event, draw interest without an express agreement, it could only be after a proper demand of payment. TJntil a demand is made, such a body is not in default. They are not like individuals, bound to seek their creditors, to make payment of their indebtedness. It was held, in the case of the People ex rel. v. Tazewell County, 22 Ill. 147, that municipal corporations could not even bind themselves to pay their indebtedness at any other place than at their treasury, unless specially authorized by legislative enactment. That their debts were payable at the treasury of the body. The same rule was adhered to in the case of Johnson v. Stark County, 24 Ill. 75. And we see no reason for overruling or modifying the rule. This declaration was insufficient, therefore, to authorize the recovery of interest on these coupons, if they could even, in any event, bear interest. But we may go further, as it was held in the case of Madison County v. Bartlett, 1 Scam. 67, that the State and counties were not liable to pay interest upon their warrants or orders. The court placed it upon the ground that counties were corporations, with limited powers, and it must be presumed that they had employed all their means to cancel their indebtedness. That only being authorized to levy taxes to a limited extent, the presumption would be, that they had exhausted their power of taxation without producing the necessary means to pay the debt. That, as States and counties are not named in the statute regulating interest, the inference is, that they were not designed to be required to pay interest on their indebtedness.

At the common law, interest was allowed in no case. 6 Jacob Law Dic. 373. It is the creature of the statute alone, and to it we must look for authority for its allowance. If not authorized by the statute it cannot be recovered. It seems to us that all the reasons why a State or county should not be liable for interest, apply with equal force to a city or town. They are municipal bodies created for public purposes, and with limited powers of taxation. And must be presumed to have exhausted all of their power's of taxation for the payment of their debts, and are not in default when they fail to pay. Nor are they named in the act regulating interest on indebtedness. Whatever power they may possess to contract for the payment of interest, in the absence of express legislation on the subject, we are of the opinion that their indebtedness, in the absence of such agreement, does not bear interest.

The judgment of the court below must be reversed, and the cause remanded.

Judgment reversed.