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 Under Section 3-305 '[A] holder in due course * * * takes the instrument free from (2) all defenses of any party to the instrument with whom the holder has not dealt except (b) * * * illegality of the transaction, as renders the obligation of the party a nullity.' (Ill. Rev. Stat. 1989, ch. 26, par. 3-305.)

Historically, courts have recognized 'illegality' to arise only in view of legislative declaration affecting both the underlying contract or transaction and the instrument exchanged upon it. (Pope v. Hanke (1894), 155 Ill. 617, 628-30, 40 N.E. 839; Town of Eagle v. Kohn ...