Exemption of Corporations from General Interest Statutes
In Pekin v. Reynolds, 31 Ill. 529, 531-32 (1863), the supreme court explained the rationale for exempting the State, counties, and municipal corporations from general interest statutes as follows:
"At the common law, interest was allowed in no case.
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 powers of taxation for the payment of their debts." Pekin, 31 Ill. at 532.