dissenting:
I concur in the views expressed in this opinion, except the holding that appellants were obliged to prove that the amount of the credit had not been drawn out before the trial. I cannot subscribe to the correctness of this ruling, and therefore do not agree to the conclusion reached. It is claimed by the appellee, that it was the duty of the appellants in this case not merely to prove that credit was given to the Diamond Rubber Company by the appellee when the notes were discounted, but to go further and prove that the amount of the discount, as credited, was not drawm out by the rubber company before the beginning of this suit, because, when it was drawn out before notice to the bank of the defense, the bank had paid a valuable consideration. Under the circumstances of this case such proof, if it could be made, should have come from the appellee. The officers of the appellee' bank could more easily prove, whether or not the amount had been drawn out by the rubber company, than the appellants. The books of the bank were within the control of the bank itself, and not within the co.ntrol of the appellants. It was difficult for the appellants to prove a negative.
It is true that, when the appellee introduced its notes upon the trial below, its mere possession of them imported prima facie that the bank had acquired the notes in good faith for full value in the usual course of business before maturity, and without notice of any circumstances impeaching their validity; and that the bank was the owner of'the notes and entitled to recover the full amount due thereon. The production of the notes prima facie established the bank’s case, and it was entitled to rest after such production. (Daniel on Neg. Inst, sec. 812; Palmer v. Nassau Bank, 78 Ill. 380). When notes are thus produced, nothing short of fraud, not even gross negligence, if unattended yith bad faith, is sufficient to avert the effect of the evidence, or to invalidate the title of the holder. (Collins v. Gilbert, 94 U. S. 753; Hodson v. Eugene Glass Co. 156 Ill. 397). Where the maker of the note shows that it was obtained from him by fraud, the burden of proof is shifted from him to the holder, and the latter must show that he acquired it in good faith for value in the usual course of business, and in such a way .as not to create a presumption of knowledge of its invalidity. (Hodson v. Eugene Glass Co. supra).
But, in the case at bar, although the defendants did not offer to prove fraud in the execution of the notes, yet they did prove, under the issue whether or not the appellee was purchaser of the notes in good faith before maturity for value, that the appellee actually paid no money for the notes, but merely gave the rubber company a credit upon its books for the amount, for which the notes were discounted. When the defendants introduced this proof, it was natural to assume that the credit, given to the rubber company on account of the notes, had not been paid by the bank when this action was commenced. (Manufacturers’ Nat. Bank of Racine v. Newell, 71 Wis. 315). After the proof, thus made by the appellants, the bank could not be regarded as a tona fide purchaser for value of the notes by reason of the mere discount and credit. The defense, which it was sougfht to prove, was substantial, and went to the merits, and was sufficient to bar any recovery under the circumstances. It was, therefore, error for the court below to refuse to receive evidence in support of the pleas, which set up a failure of consideration. It was within the discretion of ‘the court to require from the appellee evidence, if'such evidence existed, that the amount of the -credit had been drawn out prior to the maturity of the notes, or prior to the beginning of the present suit, before the introduction of evidence by the appellants impeaching the consideration of the notes. If appellee had produced such proof, the action of the court, here complained of, would have been correct. Or, the court mig'ht have permitted the appellants to introduce their proof as to the failure of the consideration, and then allowed the appellee upon rebuttal to show, if it could, that the amount of the credit had been drawn out of the bank. But the court should have pursued the one course or the other. (Drovers’ Nat. Bank v. Blue, 110 Mich. 31).
For the error thus indicated, I think that the judgments of the Appellate Court and circuit court should be reversed, and that the cause should be remanded to the circuit court for further proceedings.