
    *George C. Gebhart et al. v. Margaret Sorrels, Administratrix of William Sorrels, et al.
    Ar. answer stating a defense under the 5th section of the act to restrain banks from taking usury, which omits to disclose the facts and circumstances showing a reason to believe that the drawers of a bill of exchange discounted would not be prepared to pay the same at the time of payment, is not defective upon general demurrer. If the purpose of justice should so .require, the court would have a discretion, upon a motion for the purpose, to require the facts and circumstances relied on to be disclosed in the pleading.
    'When an answer to an action on a bill of exchange, brought by an indorser, relies on an illegality in the contract between the original parties, ordinarily some statement affecting the title of the plaintiff is required; but when the petition itself discloses facts from which it might be inferred that the plaintiff was not a holder for value in the usual course of trade, the defendant is entitled to the benefit of the admissions in the petition, to sustain his answer against a general demurrer.
    In error to the district court of Pickaway county.
    An action was brought in the common pleas of Pickaway county by William Sorrels against George C. Gebhart, Augustus D. Perrill, .and Peter K. Hull, upon a bill of exchange for $1,400, drawn by them, directed to Geo. S. Coe, New York, and payable to the order of H. R. Lawrence, cashier of the Bank of Circleville, four months .after date, .“ or whenever thereafter presented at the office of the American Exchange Bank in New York.” A copy of the bill witb its indorsement was set out. The bill was connected with a warrant of attorney to confess a judgment, and was sealed by the parties. It contained on its face a waiver of acceptance, and of demand, notice, and protest. The indorsement was as follows: “Pay to Wm..Sorrels, Esq., or order, without recourse. H. K. Lawrence, cashier of Bank of Circleville.” The petition stated that the bill was indorsed before its maturity to the plaintiff, and was held by him as owner.
    To the petition of the plaintiff an answer was filed, which *stated: that the defendants borrowed of the Bank of-Circle- [462 ville, an incorporated bank in Ohio and then doing business, the sum of $2,500, and gave said bank a bill on New York for that sum, payable in ninety days; “ the said Gebhart was principal on said bill, and said Perrill and Hull were sureties, and their suretyship was knowD to the bank. Said Gebhart paid the bank at the time of borrowing said money, as the interest for the same, $38.75 for said bill of $2,500; he received only $2,461.25 of said bank. At that date exchange was in favor of New York and against the ■county of Pickaway, in which county said bank did business, and where said bill was given and said money was borrowed; said •Gebhart gave the bank a bill of exchange because said bank would not lend money on promissory notes, but habitually loaned money on bills of exchange, in order to obtain a greater rate of interest than six per cent. The bill sued on in this case was given to renew the bill first above named, said Gebhart having made payments-thereon to the bank. At the time of said renewal, and at the time-of drawing said original bill, said bank, by its officers, had reason to know and believe that the drawers were not prepared and did not intend to pay said bills, and would not be prepared to pay said bills at New York, and had no funds there, and did not intend to-place any funds there, to meet said bills. The officers of said bank had reason to know this. New York, at which place said bill was-payable, is a place without the State of Ohio. The said bank at Circleville was a banking institution in this state, and said bills of exchange on New York were devices resorted to in order to secure-to said bank a greater rate of interest and profit than it could realize from the discount or purchase of such paper if made payable at its own counter. The said bank charged $1.25 for three days of grace at the time of drawing said bills. The defendants say said bill is void for usury.”
    The plaintiff excepted to the answer of defendants as insufficient; and this exception, upon a hearing by the *court was sustained, and the answer set aside as insufficient; and no further answer being offered, a judgment was rendered in favor of the-plaintiff. An appeal was taken to the district court, and the same question as to the sufficiency of the answer was made in that court, and decided in the same way. To this decision of the district court an exception was taken ; and upon a petition in error, filed in this court, this action of the district court is the error assigned.
    
      Page & Benick, for plaintiffs in error.
    
      G. N. Olds, for defendant in error.
   Gholson, J.

No point has been made in this court as to the-form in which the court below passed upon the sufficiency of the-answer. The exception to the answer appears to have been regarded by the parties as a proper substitute for a demurrer, which-was not then allowed by the code, but which, by a now provision,, is now permitted. We-shall proceed to consider the case as if a. general demurrer had then been allowed and had been filed.

It is claimed by the counsel for the defendant in error that the-answer was framed to make out a defense under the fifth section of an act of the 19th of March, 1850, “to restrain banks from ■taking usury,” and that its sufficiency must be determined in view of that section. The fifth section of the act provides that “the kliscount or purchase by any banking institution in this state of any note or bill of exchange on time, or other evidence of debt on time, payable at a place without the state, when the officer or agent of such bank knows, or has reason to believe, that the partios to such paper will not bo prepared, or do not intend to pay the same at the place of payment, or when any device is resorted to in order to secure to said bank a greater profit than it could realize from the discount or purchase of such paper if made payable at its own counter, *shall be deemed usurious and unlawful within the meaning of this act.”

It is argued that to bring a defense within this section, there must be a positive averment that the parties, at the time of the discount, were not prepared, and did not intend to pay.. Now, as to the preparation for payment, wo do not think the language sustains this argument. It is “will not be prepared,” and contemplates a ■state of preparation at the time and place of payment, and not at the time and place of discount. Thus understood, the fact that the parties were not prepared to pay is sufficiently clear from the pleadings. In an action upon the bill, which they certainly did not pay, a formal allegation that they were not prepared to pay at the time and place of payment can hardly be deemed proper, much less essential.

It is stated in the language of the statute that the officers of the bank had reason to believe that the parties would not be prepared to pay the bill. It is claimed that the facts or circumstances showing this reason to believe, must be disclosed and set forth in the .answer, or it is fatally defective upon a general demurrer. The facts and circumstances, from a which a reason to believe that the parties would not be prepared to pay the bill might be infei’red, must necessarily be such as were known to the officers of the bank. Facts or circumstances not known could furnish no reason to believe. The general allegation points to the subject-matter as to which a belief is to be entertained, and as the facts and circumstances might verjr probably be numerous and more or less minute and detailed, the rule which dispenses, in many instances, with the setting forth such facts and circumstances, when in the knowledge of the other party, may properly apply in this case. The defendants may know all the facts and circumstances bearing upon their preparation to pay the bill, bnt they can not be supposed, to know as well as the officers of the bank which of them had come to the knowledge of those officers. In ordinary cases, no surprise would(be likely *to result from a general allegation; and in particular cases, if the purposes of justice should so require, the court would have a discretion, upon a motion for the purpose, to require-the facts and circumstances relied on to be disclosed in the pleading..

It is also claimed that the bank, having been incorporated previous to the act of the 19th of M.arch, 1850, can not be affected by that act; that it had the right to discount bills of exchange upon-banking principles and usages, subject only to the restriction, that,, on such discounting, it shall not take more-than six per cent, interest in advance. Admitting this position to be otherwise tenable,, it necessarily assumes that the transaction- disclosed in the answer was a discounting upon banking principles and usages, and not, as is alleged, a device to exact usurious interest. The statements in the answer are quite general and indefinite, and a motion to make them definite and certain ought, probably, to bo sustained. But being liberally and favorably construed, and taken in connection with the form of the instrument upon which the action is brought,, and particularly in view of the stipulation that a judgment might, be entered for statutory damages at the rate of six per cent., on the failure to pay, an event shown to be in the contemplation of the parties, we do not think the assumption upon which the argument is based can be sustained.

The statements in the answer showing a defense as against the-Bank of Circleville, is any further statement required to constitute-a defense against the claim of the plaintiff, as indorsee of the bill of exchange? Where the illegality alleged affects both the consideration and the security, and there is no saving of the rights of an innocent holder of the security, the statements of a defense-need go no further than to show such illegality. But, if the holder of the security may recover in an action upon it, notwithstanding an illegality in the consideration, the statements might be true and yet show no defense; and, ^according to the established rules of pleading, there must be some averment affecting the title-of the the plaintiff. This averment is sometimes negative in its character, as a want of consideration, and does not affect the order or burden of proof. A party may thus be required to allege, in his pleading, a fact as to which the order of proof would require evidence to be first adduced on the other side.

It is not necessary to decide whether the illegal act of a bank in taking more than six per cent, interest, contrary to its charter, affects both the contract of loan and the negotiable security taken as the evidence of indebtedness. Eor, considered either way, we are satisfied that, although the answer is silent as to the title of the plaintiff, and the mode in which it was acquired, there is enough in the petition itself to authorize an inference that the plaintiff was not the holder of a bill of exchange, taken for value and in the usual course of trade, and that of this inference the defendants may avail themselves to sustain their answer against a general demurrer.

The instrument upon which the action is brought is not in the ordinary form of a bill of exchange, intended for negotiation in the market. It is under seal — it embodies a power of attorney to confess a judgment, in itself not negotiable, and on the face of the instrument there is not only a waiver of acceptance, but an agreement to dispense with demand, notice, and protest. And this instrument is indorsed to the plaintiff by a bank without recourse. We think these circumstances shown by the petition, being taken in connection with the statements in the answer, a court or a jury might well say that the plaintiff was not a holder for value in the usual course of trade. Roxborough v. Messick, 6 Ohio St. 448-458. And, therefore, a court would not be able to say, with the clearness and certainty required to strike out an answer for insufficiency, or to sustain a general demurrer, that, in no view of the statement in the pleadings was there a defense to the action.

*It has been suggested that since the petition in error was filed, and during its pendency in this court, the defendant in error, the administratrix of William Sorrels, has married, and her powers as administratrix have ceased, and. that one of the plaintiffs in error, A. P. Perrill, has been appointed administrator de bonis non of William Sorrels, and now represents his estate. We do not think this change of parties precludes a disposition of the petition in error. A. P. Perrill is a party in the case, and the position he has taken during its pendency ought not to affect the right of the other plaintiffs in error to the judgment of the court. The judgment of the court below being reversed, and the case remanded for further proceedings, what effect the present position of A. P. Perrill will have on the further prosecution of the case, we need not decide.

The judgment must be reversed.

Biiinkerhoee, C. J., and Scott, Sutliee, and Peck, JJ., concurred.  