
    The Knox County Bank of Mount Vernon v. David Lloyd’s Administrators.
    1. An accommodation drawer of a bill of exchange made payable to a. particular bank, for the purpose of being discounted by the bank named, can not be held liable on the bill to a third person, who, after discount by the bank had been refused, took the bill from the principal for value; nor can he be held liable to the bank, where it subsequently discounts the bill for such third person, with notice of the suretyship of the drawer.
    2. Where it is sought to charge a party as drawer of a bill of exchange, the-facts above stated constitute new matter, and to be made available to effect his discharge from liability, ought to bo pleaded.
    3. A pleading, in answer to a statement of facts constituting a cause of action, which merely denies that anything is due the adverse party, is the statement of a mere legal conclusion embodying no matter of fact, and, as a pleading, it has no legal effect.
    á. Where a reply, which sets up new matter sufficient in law to avoid the defense, is, on demurrer, erroneously held insufficient, and the case is finally disposed of by a finding against the plaintiff on issues of fact, under which, the special matter in the reply is not available to the plaintiff, the error of the court in sustaining the demurrer constitutes a good ground for reversing the final judgment, and awarding a new trial, unless the record shows such error to have been otherwise waived.
    Error to the district court of Knox county.
    On the 24th of January, 1861, David Lloyd, then in full life, commenced an action in the court of common pleas of Knox county against the Knox County Bank of Mount Vernon, in which. be demanded judgment against the bank for the sum of $278.69, ¿as money had and received by the defendant for the use of the ¡plaintiff, with interest from October 1, 1855.
    '354] *For cause of action, the plaintiff alleges that on the 24th day of September, 1855, the defendant procured a judgment to be rendered by the court of common pleas of Morrow county, in favor of the bank, against Stephen Doty, Morgan B. Doty, Robert Thompson, and the plaintiff, for the sum of six hundred and seventy dollars and twenty cents damages, and two dollars and fifty-eight cents costs of suit, on what purported to be a bill of exchange drawn by said parties in favor of the bank, with a power of attorney attached, authorizing the bank to take judgment upon the bill, without notice to the drawers thereof; that the judgment was ta-been without the knowledge or consent of the plaintiff; and that the bill of exchange and the power of attorney, on which the judgment was taken, were neither of them executed by the plaintiff; that on the day of the rendition of the judgment, the bank caused an ■execution to issue thereon, and that the sheriff levied the same on the personal property of the plaintiff; that the plaintiff was then 'ignorant of the fact that he had not executed the bill or power of ¿attorney, and was not liable on the same; and that being thus in ignorance of the fact that he bad not executed the bill, he, on the 1st day of October, 1855, for the purpose of releasing his property ‘levied on as aforesaid, paid to the bank the sum of $278.69, which •sum the bank received on the judgment, and released the property .so levied on, the said Stephen Doty and Morgan B. Doty being insolvent. The plaintiff further alleges, that, on motion, the court •of common pleas of Morrow county afterward vacated the judgment, and gave him leave to defend; and that the bank subsequently dismissed its action.
    The bank answered the petition, and set forth that on the 24th •day of September, 1855, it was the owner and holder of a bill of ■exchange drawn by Stephen Doty, Morgan B. Doty, and the said David Lloyd, on J. E Miles, New York city, dated Mount Yernon, ■Ohio, May 28, 1855, payable to the order of the bank twenty days after the date thereof, at the office of Atwood & Co., New York city, for the sum of $2,500, which bill was discounted at the bank ■on the 9th day of June, 1855; that at the maturity of the bill it was duly presented at the office of Atwood & Co., where it was ■355] made payable, %nd joayment demanded, which was refused ; and that thereupon the bill was duly protested and notice given t'o the drawers thereof; that on the' 24th day of September, 1855, there was due the bank on the bill the sum of $670'.20, the balance •having been previously paid; that at the date last mentioned the bank, by virtue of a warrant of attorney executed and delivered by the drawers of the bill, proceeded to take judgment against • them in the court of common pleas of Morrow county, for the balance so due, which judgment was accordingly so taken, and is the same judgment referred to in the petition of the plaintiff; that in preparing the papers for the taking of the judgment, the bill of exchange was erroneously described, as being drawn on Atwood & Co. (at whose office it was made payable) instead of J. E. Miles, but in all •other respects it was correctly described; that it was by reason of this misdescription, and that alone, upon which the plaintiff predicated his allegation that he had never executed the bill upon which the judgment was taken; that after the taking of the judgment, and on the 1st day of October, 1855, the plaintiff met the officers of the bank in their banking-office in Mount Vernon, and then and there paid to them for the bank the sum of $278.69, as and for one-half the amount then due upon the judgment, the bank making a •considerable deduction, and releasing the plaintiff from all further liability thereon; that this was the same payment referred to in the petition; that the money so paid was paid and received as and for the payment of the share and proportion of the plaintiff, of the amount then due upon the bill, it being then supposed, as well by the bank as by the plaintiff, that the bill was correctly described in the proceeding and judgment. And the bank insisted, that the payment having been made and received in good faith, upon a debt actually due from the plaintiff, he was not entitled, by reason of the misdescription, to recover back the amount so paid.
    To this answer, there was a demurrer by the plaintiff, which was overruled by the court. The plaintiff excepted and afterward ■| replied.
    In the first reply, the plaintiff denies that on the 24th of September, 1855, or at any other time, the bank was the legal *owner [356 and holder of the bill of exchange in the answer set forth ; or that the hank, on the 9th of June, 1855, or at any other time, discounted ■the bill for either of the drawers thereof, or with the knowledge or •consent of the plaintiff. He further denies that any notice was given of the protest of the bill, or that, on the 24th of September, 1855, there was anything due the bank on the bill from the plaintiff. And he alleges that said payment was made to the bank for-the purposes set forth in the petition, and denied that it was made-in the manner and for the purpose alleged in the answer; or that the bank released him from all further liability on the bill.
    In the second reply, the plaintiff alleges that Stephen Doty, who,, with Moi-gan B. Doty, was principal in the bill of exchange set forth in the answer, and for whom Robert Thompson and the-plaintiff wers sureties, on the 23d day of May, 1855, procured the firm of J. 0. Ramsey & Co., then private bankers, in the town of Mount Yernon, to discount the bill, and that this firm did then and' there discount the same, and paid therefor to Stephen Doty the sum of $2,480 ; that the discount was made without the knowledge or-consent of the plaintiff; that said Ramsey & Co., on the 11th of June, 1855, took the bill to the Knox County Bank, and received; credit therefor in the sum of twenty-five hundred dollars, and indorsed the bill to the bank; that all these facts were unknown to-the plaintiff at the time he made the payment to the bank in the-petition set forth.
    To the second reply, the defendant demurred. The court sustained the demurrer. ■ The plaintiff excepted, and took leave to-amend.
    An additional reply, number three, was filed, the averments of which are the same, in substance, as those contained in the fourth reply, except it does not contain the averment that when the plaintiff executed the bill as a surety, he did so with the understanding that it was to be discounted at the Knox County Bank, and not elsewhere.
    A demurrer to.this third reply was sustained, and the plaintiff excepted, and took leave to amend, and filed replies numbers four- and five.
    In the fourth reply, the plaintiff denies that the bank discounted 357] *the bill on the 9th of June, 1855, or at any other time ; and says that Stephen Doty and Morgan B. Doty were the principals in the bill, and that the plaintiff and Thompson were sureties for the Dotys; that this relation of the plaintiff to the bill was well known to the bank; that the plaintiff, when ho executed the-bill as surety, did so with the understanding that it was to be discounted at this bank, and not elsewhere; that on May 23, 1855,.. Stephen Doty presented the bill to the bank for discount; that. -the bank declined to discount the same, and thereupon Stephen Doty, on the same day, procured the firm of J. C. Ramsey & Co., then private bankers in Mount. Yornon, to purchase the bill, and that Ramsey & Co. did then and there purchase the same, and paid therefor to Stephen Doty the sum of two thousand four hundred and eighty dollars ; that this purchase of the bill was made without the knowledge or consent of the plaintiff; that on the 11th day of June, 1855, the bank purchased the bill of Ramsey ■& Co., who indorsed the same to the bank ; that all these facts in reference to the history of the bill after its execution by the plaintiff, were unknown to him at the time he paid to the bank the money set forth in the petition. Plaintiff denies that he paid this money for the purpose of satisfying- the bill, but, on the contrary, says that the same was paid involuntarily, and for the purpose of releasing his property, which .hacl been levied upon and was about to ho sold, as set forth in the petition. Avers that plaintiff is ■ignorant as to whether the bank, at the time the money was paid to it, did not know that the bill had been misdescribed in the proceedings in Morrow common pleas, and therefore denies the same, ■and requires proof. Denies that the money was received by the bank in good faith, and says that at the time the money was paid to it, the bank knew that the same was not legally due to it, and ■that the plaintiff was ignorant of that fact.’
    A demurrer to this reply was sustained, and exception taken.
    In the fifth reply, the plaintiff denies that on the 24th day of ‘September, 1855, there was due to the bank on the bill the sum *of six hundred and seventy dollars and.twenty cents, or [358 any other sum.
    After various continuances, the case was submitted to the court, at the April term, 1866, “upon the issues joined. And thereupon the court, being fully advised in the premises, doth find that the •things set up in the answer of the defendant are true; and that the matters and things set up in the petition, amended petitions, .and reply of the plaintiff, inconsistent therewith, are untrue. It is therefore considered that the defendant go hence without day,” etc.
    A petition in error was filed in the district court by the personal representatives of the plaintiff, who had died during the pendency ■of the action. The errors assigned were the rulings of the court upon the various demurrers interposed during the progress of the •case. The petition in error was heard at the June term, 1866, of the district court, and the judgment of the common pleas reversed, upon the ground that that court “ erred in sustaining the demurrer of defendant to the fourth reply of the plaintiff.”
    To reverse this judgment of reversal the present petition in. error was filed.
    
      Curtis & Scribner, for plaintiff in error :
    
      First. The plaintiff below is not in a condition to insist upon any objections to the action of the court upon the demurrers. He did not submit to a final judgment thereon. By amending or filing additional replies, and going to trial upon the issues joined,, he waived all exceptions to the rulings of the court upon the demurrers.
    
      Second. The plaintiff had every opportunity, under the denials and averments contained in his first and fifth replies, to prove the same matters set up specially in replies two, three, and four. He could have made the proof as fully under the general replies asunder the special replies; and the record shows that the court, found against him on all the matters in relation to which issue was joined. Having had the opportunity to make his proof under the-general replies, he can not complain of the action of the court iu sustaining demurrers to the special replies.
    359] * Third. The rulings of the court upon the demurrers were correct, and in accordance with the rules of law.
    1. If the plaintiff desired to have the benefit of any exception or question on the demurrers, he should have submitted to final judgment, thereon. This proposition appears to be well settled by the authorities. Ellison v. Allen, 8 Florida, 206; Hooker v. Johnson, Ib. 453; Sheppard v. Shelton, 34 Ala. 652; Duncan v. Hobart, 8 Clarke, 337; United States v. Boyd, 5 How. 29, 51; Palleys v. Swope, 4 Ind. 217; Harbert v. Dumont, 3 Ind. 346; Stallings v. Newman, 1 Minn. 134; Becker v. Sandusky, etc., Bank, Ib. 314 ; Moore v. Ress, 1 Morris, 401; Frink v. The State, 1 Eng. 141; Veeder v. Wrights, Ib. 416 ; Smith v. Taylor, 41 Iowa, 214; Warner v. McGoon, 2 Scam. 74.
    There is nothing in the statutes of Ohio changing this wellfiettled rule of the common law. The act of March 12, 1845 (43 Ohio L. 80, sec. 4), was repealed on the adoption of the code. S. & C. 1143. See Holbrook v. Connelly, 6 Ohio St. 199.
    2. The plaintiff below had every opportunity to prove, under replies 1 and 5, the same matters set up in the sjmcial replies. We= maintain, therefore, with great confidence, that he can take no'exception to the decision of the court upon the demurrers. Stein v. Ashley, 24 Ala. 521; Conner v. Swain, 32 Miss. 245; Rakes v. Pope, 7 Ala. 161; Barron v. Vandverts, 13 Ib. 232; Goodwin v. McCoy. Ib. 271; Pelham v. Page, 1 Eng. 535 ; Bellows v. Forsythe, 2 How. 183; Harris v. Harris, 36 Barb. 38; Simes v. Zane, 12 Harris, 242 ; Kilheffer v. Herr, 17 S. & R. 319, 321; 2 Smith’s Lead. Cas. (6 Am. ed.) 788.
    3. The court did not err in sustaining the demurrer to the fourth reply, because:
    (1.) The matter therein alleged did not constitute a legal reply to, nor avoid the facts set up in, the answer. 10 Wend. 515 ; 5 Ib. 66; 4 Cowen 567 ; 17 Johns. 176 ; 10 Ib. 198. In the principal case in Ohio (16 Ohio, 282), it was a fact in the case, upon which groat stress was laid, that the bank had refused to discount or advance money in any form on the note, and, that they had never discounted or advanced money on it, nor had any interest in it (p. 283). This material phase *of the reported case is negatived by the reply in the [360 case at bar, which shows that the bank did advance money on the bill, and become the holder of it. Another material fact in the reported case was, that the party taking the note had received it in payment of a precedent debt due from the principal. In the present case, the principal received the money on the bill.
    It is a fact material to be borne in mind, that it is not averred in the reply that the bank had any knowledge of the previous discount by Ramsey & Co.
    See Moses v. Macfarland, 2 Bur. 1009; 3 Bla. Com. 163; Douglas, 138; Duncan v. Ware, 5 Stew. & Port. 119 ; Dupuy v. Roebuck, 7 Ala. 484; Stewart v. Conner, 9 Ib. 803.
    (2.) We insist that the plaintiff, by way of reply, can not bring forward a new and independent cause of action. Durbin v. Risk, 16 Ohio St. 523.
    The petition goes for a recovery upon the ground that the defendant, by legal coercion, had compelled payment of a bill of exchange which the plaintiff, in fact, had never executed. The answer removes that ground of recovery by showing that there was a mere misdescription in the proceeding and judgment upon the bill which the plaintiff had executed, and that the payment was in truth made as a payment of that bill. This the. plaintiff admits, but in reply .avers that he had a good defense to that bill also, and is therefore ■entitled to recover back the money, although paid thereon. This is a departure from the cause of action set forth in the petition.
    If a recovery is had against us in the ease, will the judgment bo founded on the petition which has been avoided by the answer, or for the cause and upon the new matter sot out in the reply?
    
      W. H. Smith, for defendants in error:
    The money paid to the bank, under the circumstances stated in the original petition, may bo recovered back. The payment is involuntary. Mays v. Cincinnati, 1 Ohio St. 268, 278; Knox County Bank v. Doty et al., 9 Ohio St. 505, 509; Baker v. Cincinnati, 11 Ohio St. 534.
    861] *The facts set out in the fourth reply, which was demurred to, discharged the sureties. Clinton Bank v. Ayres, 16 Ohio, 282.
    The right of defendants in error to review the decision of the •common pleas has not in any way been waived. It was not necessary to submit to a final judgment on the demurrer; and going to trial on the other issues, did not waive the right to review the de■cision on the demurrer. A party has a right to the benefit of all his defenses; if a demurrer is sustained to one, he need not abandon the others and submit to a final judgment. Although the act of March 12, 1845, was repealed bj^ the code, its section 513 provides for the same thing — that a judgment or final order might bo reviewed “for errors appearing on the record." The section does not ■say “for errors appearing in the final judgment."
    
    This has been the practical construction put upon the law by this Court. Williams v. West, 2 Ohio St. 82; The State v. Newman’s Ex’rs, Ib. 567; Clinton Bank v. Hunt, 5 Ohio St. 33; Ohio for Use, etc., v. Cowles, Ib. 83; Connelly v. Connelly, 6 Ohio St. 199; Davis v. Hines, 6 Ohio St. 473; Maxwell v. Campbell, 8 Ohio St. 265; Lewis v. Coulter, 10 Ohio St. 451; Bartges v. Neil et al., 13 Ohio St. 72.
    I deny that plaintiff below had the opportunity of giving the evidence under the first and fifth replies. That he did not do it I know. These two replies amount simply to a denial of the allegations of the answer. Any matters admissible under a general issue or denial might have been given in evidence, but the matter contained in the fourth reply could not have been given under that issue. It contained new matter. It confessed the matters set forth an the answer, and avoided them by the new facts it contained, which were then for the first time brought into the record. Such now matter could not be given in evidence under the general denial without violating all established rules of pleading.
    The fourth reply is not a departure from the petition. The action is to recover back money paid to release property wrongfully taken in execution on a judgment upon which the plaintiff in the action was never liable. The answer concedes all these facts, but says that plaintiff was liable on another *cause of action which the • [362 bank then hold, and on which it intended to take the judgment. 'The reply admits the existence of that claim, but avoids it by showing that, for good reasons, the plaintiff was never liable on that ■claim. It merely confesses and avoids the answer.
   White, J.

The judgment of the district court is sought to be reversed on one of two grounds: - '

1. That the matter set up in the fourth reply is not sufficient, in law, to overcome the defense contained in the answer.

2. If the fourth reply should be held sufficient, that the ruling of -the court in sustaining the demurrer to it can not be re-examined cn error, because of the findings of the court on the issues joined by the first and fifth replies.

The first proposition, in' our opinion, can not be maintained. The facts set up in the reply brought the bill of exchange, on which the bank sought to retain the money, within the principle decided in the case of Clinton Bank of Columbus, for the use of Rhodes, v. Ayres & Neil, 16 Ohio, 282; and if the facts were true, the bill imposed no obligation on the surety.

In that case it was held, that where a note made payable to a bank, and signed by a surety, is presented to the bank fordiseount, which is refused, and it is afterward discounted by a third person, without the knowledge of the surety, no action will lie at the suit •of the bank (for the use of the persons discounting the noto) against the surety.

It is very clear that Rhodes, for whose use the suit was brought, ■could not have maintained an action on the note in his own name; and it is equally clear, that if he had acquired a beneficial interest in the note as against the surety, the action would have been upheld for his benefit. His right to maintain the action in the name of the bank against Ayres, the principal, from whom he had obtained the note for value, is distinctly recognized.

The principle of the ease is, that the misuse of the note was such as to discharge the non-assenting surety, but that the principal, 863] who received the benefit of the considcratioii ^arising frum the use made of the note, was estopped from questioning its validity -

From the principle of this case we are not inclined to depart. It gives the surety no more than he stipulated for; less than this ought not to be allowed him.

On the bill of exchange now in question, it appears, from the fourth reply, that the plaintiff below, David Lloyd, was a surety (being an accommodation drawer) for Stephen and Morgan Doty ; that the bill was drawn May 23,1855, payable to the Knox County Bank, for the purpose of being discounted at that bank, and not elsewhere; that after discount had been refused by the bank, and on the day of the date of the bill, it was purchased of one of the principals by Eamsey & Co., private bankers, at a much higher rate of discount than was allowable to the bank; and that aftérward, and within a few days of its maturity, the bank, with notice that Lloyd was a surety, purchased the bill of Eamsey & Co., who assigned the same to the bank.

It thus appears that Eamsey & Co., who were strangers to the the bill, with full notice on its face that it was intended for discount at the bank, consummated an arrangement for its purchase on their own account. Whatever rights this may have given them against the principals, it gave them none against the surety; and, upon the principle of the case referred to, they could, in no event, cither directly or through the bank, have charged Lloyd with its payment. And as the purchase by the bank from Eamsey & Co. was with notice, it can occupy no better position.

It is true this case differs from that of The Clinton Bank v. Ayres et al., in the fact that here the bank had acquired an interest in the bill; but we do not regard this fact, under the circumstances, as affecting the liability of the surety. The bank had refused to discount the bill as contemplated by the drawers. When it did so for Eamsey & Co., the surety was no party to the arrangement, and no new liability was thereby imposed on him. ' ■

The rule was designed for the protection of sureties, and, if it could thus easily be evaded, its object would, in a great measure, be defeated.

*It is also claimed that the facts stated in the reply do not [364 constitute matter proper for a reply, but for a new cause of action -

We think otherwise. The petition seeks to recover back money involuntarily paid. The defendant, the bank, sets up facts showing its right to retain the money in payment of the bill of exchange-in question. The reply shows the plaintiff is not liable on the bill. This is clearly matter in avoidance of the new matter set up in-defense.

The remaining question is, whether the error in sustaining the demurrer to this reply, lays the foundation for reversing the judgment.

This depends upon whether the facts set up in the reply were-available to the plaintiff below, in evidence, on the issues of fact, which were tried and found against him. He claims that no evidence was in fact offered, under these issues, to prove the facts set up in the reply to which the demurrer had been sustained, for the-reason that they had been previously adjudged by the court insufficient, on the demurrer.

We think, however, he must be presumed to have given evidence-of all the facts it was competent for him to prove under the issues, and that the finding was properly against him; or, that he abandoned the right to give the evidence, which would have the same effect.

But, in our opinion, it was not competent to prove the special matter in question under the issues of fact upon which the case-was finally disposed of. These issues were raised by the first and fifth replies. Neither of these replies set up new matter. The first, so far as its allegations were material, in effect, consisted of denials of the new matter contained in the answer. By it the plaintiff denies: 1. That the bank, at any time, was the legal owner and holder of the bill; 2. That the bank, at any time, discounted the bill for either of the makers thereof, or with the knowledge or consent of the plaintiff; 3. That there was, on the 24th of September, 1855, anything due the bank on the bill from the plaintiff.

The last is not a material or substantive allegation. It is the-denial of a mere conclusion, or the statement of a conclusion drawn from the preceding denials of fact.

*The first of the above allegations only puts in issue the [365 title of the bank to the bill. True, the legal ownership of the bill by the bank is denied; but the operation of the averment without the term legal, would have been the same as with it. The bank, in ■its answer, had alleged itself to be the owner of the bill, and the ■effect of this averment was to deny that fact.

The third allegation denied that the bank discounted the bill for either of the drawers, or with the knowledge or assent of the plaintiff. .

If they were all principals the effect of this allegation, like the .preceding one, would seem to be to put in issue the title of the bank to the bill. The fact that the plaintiff was a surety is not stated. This is a material and issuable fact, upon proof of which ■the discharge of the plaintiff from liability on the bill depended; .and the fact not being averred, the plaintiff would have had no right to prove it under this reply.

What is called the fifth reply, like an allegation in the first .reply, already noticed, merely denied that anything was due the bank on the bill set up in the answer. It neither denied a material fact stated in the answer, nor set up any new matter by way of .avoidance; and it might well have been stricken from the files as of no legal significance. It was the statement of a mere legal conclusion, embodying no matter of fact. To tolerate and give • effect to this form of- allegation as a pleading, would defeat one of the beneficial objects of the code, which aims to narrow issues of fact to such matters as the parties, on their oaths, can deny. But ■if on error, as it was allowed to remain on file, effect is presumed to have been given to it, on the trial, as a pleading, yet in no view could it have been considered as setting up new matter. The utmost effect that could have been allowed to it was that of ■traversing the facts alleged in the answer.

Judgment of district court affirmed.

Day, C. J., and Brinkerhoff, Scott, and Welch, JJ., concurred.  