Kedzie & 103rd Currency Exchange, Inc. v. Hodge
Supreme Court of Illinois
619 N.E.2d 732 (1993)
Beulah Hodge and her husband (defendants) hired Fred Fentress (defendant), an unlicensed plumber, to install a flood-control system and gave him a $500 check, but stopped payment after he failed to complete the work. Fentress cashed the check at Kedzie & 103rd Street Currency Exchange (plaintiff), which then sought payment from Hodge's bank pursuant to the stop-payment order, but was refused. Currency Exchange sued Hodge and Fentress, claiming holder-in-due-course status. Hodge moved to dismiss based on illegality, arguing the underlying contract was void because Fentress lacked the plumbing license required by the Illinois Plumbing License Law. The circuit and appellate courts agreed with Hodge and dismissed the action, and Currency Exchange appealed.
Whether a holder in due course of a negotiable instrument is subject to the obligor's defense of illegality of the transaction under the Uniform Commercial Code only if the instrument itself is made void by statute.