Case Name: Waddle and McCoy v. Bank of the United States
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1826-12
Citations: 2 Ohio 336
Docket Number: 
Parties: *Waddle and McCoy v. Bank of the United States.
Judges: 
Reporter: Cases decided in the supreme court of ohio : upon the circuit at the special sessions in Columbus
Volume: 2
Pages: 310–313

Head Matter:
*Waddle and McCoy v. Bank of the United States.
Application in chancery for a new trial at law, refused, hy difference of opinion among the judges.
This ease was reserved for decision at Columbus, by the Supreme Court in Ross county. It was a bill in chancery, to obtain a new trial at law, under the following circumstances :
The complainants indorsed a note for M. W., which was discounted and renewed for some time at the office of discount of the Bank of the United States, at Chillicothe. It was at length protested for nonpayment, and suit brought against the indorsers. At the trial of that suit, the bank made no proof of demand of the drawer, and notice of nonpayment to the indorsers. But in the place of this proof, gave in evidence a deed of trust from. M. W., made for the security of the indorsers, upon a tract of land equal in value to the debt. And upon this evidence the bank recovered a verdict and judgment against the indorsers.
Subsequent to this recovery, J. H. prosecuted a bill in chancery against Waddle and McCoy, upon a previous mortgage given by M. W. to him, on the same land, charging Waddle and McCoy with notice of such previous mortgage. In their answers, they denied notice. But on the hearing of the bill, the court decided that they were chargeable with notice, and decreed against them. The mortgaged premises were subjected to the payment of the debt to J. H., and nothing was left for the indemnity of Waddle and McCoy. The bill was filed to obtain a new trial, upon the ground that facts of subsequent occurrence, and which could not have been proved at the trial, rendered the verdict iniquitous and unjust. ■
Leonard and Atkinson, for complainants,
argued that complainants were entitled to the relief prayed by the bill.
The case at law was decided upon the authority of 5 Mass. 170. That was a case where the maker of the note had assigned all his property to the indorsers, and was himself insolvent. Notice could avail the indorsers nothing. The rule, as now settled, seems to be, that to charge the ^indorsers, without notice of demand and nonpayment, the indemnity must be a complete and sufficient one.
If the indemnity was really worth nothing, the indorsers were erroneously and wrongfully charged. And the fact of the insufficiency being subsequently established, entitles the party to a new trial, which can only be had in equity. They cited and examined the numerous cases where relief had been granted and refused. 1 Mad. Ch. 64; 9 Ves. 275; 2 P. Wms. 424; 7 Term, 265; 1 Scho. & Lef. 201; 1 Johns. Ch. 91; 14 Johns. 63; 1 Johns. Cas. 436; 1 Johns. Ch. 320; 1 Chan. Cas. 43, 63; 2 Johns. Ch. 228; 2 Johns. Cas. 319; 5 Johns. 249; 9 Johns. 78; 2 Binn. 582; 1 Wash. 8; 2 Wash. 36, 255; 2 Hen. & Man. 139; 4 Hen. & Mun. 369; 1 Bibb, 73, 252, 354; 2 Bibb, 550; 2 Ver. 146.
They contended that relief ought to be granted by way of new trial at law, in all eases where bill of review would be allowed in equity, in relation to matters of fact; and cited to these points. 3 Johns. Ch. 124; 1 Johns. Cas. 502.
They argued that the decree between J. H. and Waddle and McCoy was admissible evidence in this case, and prima facia proof of the invalidity of the indemnity. That although this decree might be impeached by the bank, who was no party to it, for fraud and collusion, yet not being so impeached in the answer, the bank was bound by it.
The insufficiency of the indemnity resting upon the fact of notice, the complainants could not prove that fact upon the trial at law. Their own admissions could not be received for their own defense ; and besides, as trustees, they could not be permitted to do an act that would prejudice the cestuy que trusts. The.indemnity would, in equity, be made subject to the use of the bank, and, therefore, the complainants were bound to silence.
What notice would be sufficient to charge a party, when that notice is implied and not direct, is a nice question, and one which could not properly be tried in the case between the bank and the indorsers.
The previous mortgagee was no party, and no decision of the case would preclude him. The jury, upon the evidence before them, might find there was no notice. A court of chancery, at the suit of the previous mortgagee, *might find differently. It was, therefore, not competent to try the value of the indemnity in the case of the bank against the indorsers; and it being subsequently taken away entitled complainants to relief.
G-rimke, for respondents, insisted:
That the record of the case of J. H. v. Waddle and McCoy was not admissible evidence against the bank, who were neither parties nor privies; but that if admitted, then it proved that the complainants, at the time of the trial, had notice of the invalidity of the indemnity. That the decree against them was predicated upon the fact that they had notice when indemnity was taken; consequently their failure to avail themselves of it in th'eir defense was a neglect against which equity can not relieve.
He examined the cases cited by complainants’ counsel, and cited in addition 1 Johns. Ch. 49, 324, 465; 3 Atk. 223; Pre. Chan. 193; 1 Ver. 176; 2 Chan. Cas. 95; 2 Atk. 319; 9 Wheat. 532.
The complainants ought to have disclosed the fact of notice that invalidated their indemnity at the time of trial. Had they done so, the bank, no longer looking to the indorsers or the indemnity, might otherwise have secured themselves, it being in proof that M. W. had other property. The failure to make this disclosure works a prejudice to the bank, and properly casts the loss upon the complainants.

Opinion:
The Court were equally divided upon the question of relief, so the bill was dismissed, but no opinion given.
Note by the Editor. — For discharge of sureties hy principal, see McDowel v. Buttles, ii. 303, and cases cited in note to that case. When records of former recovery evidence in subsequent suit, see Gibles v. Eulton, ii. 180, and note to that case.