Plaintiff vs Hodge Defendant - Case Study Example

The Court had to determine whether the contract was null and void for the illegality or whether the contractual obligation was merely voidable, in which case the defense would fail. The drawer of the check was Defendant Beulah M Hodge, the payee was Fred Fentress – A-OK Plumbing. The firm that cashed the check was Kedzie and 103 rd Exchange, which would qualify as a holder in due course. Under the Uniform Commercial Code, all commercial instruments including checks are meant to be freely negotiable, therefore a valid holder in due course should be able to accept the instrument free of all defenses of all parties with whom the holder has not dealt with.

Hodge presented the defense of illegality of the transaction, stating that Fred Fentress was not a licensed plumber in Illinois or Chicago and in accordance with the Plumbers Licensing Act.1 Hence the plumbing contract between Hodge and Fentress was illegal and void. This defense was effective against enforcement of the negotiable instrument – the check since the contract against which such payment to be made was itself illegal. The plaintiff cited the cases of Town of Eagle v. Kohn2 and Pope v.

Hanke3 in which the defense of illegality was not deemed to be a defense. However, the Court supported the defendant’s position that Illinois statute4 expressly states that the defense of illegality will be valid against a holder in due course. Moreover, the tort of interfering with contractual relations requires the existence of a legally enforceable contract (Cheeseman 2003), which did not exist in this case. The Court did not support the Plaintiff’s position that before the defense of illegality can be used against a holder of due course, “there must be an express statutory provision that declares a particular category of contracts or negotiable instruments void.”