First National Bank of Mount Vernon v. First National Bank of Lincoln

1 Ohio Law Rep. 73, 68 Ohio St. (N.S.) 43

• Court: Ohio Supreme Court
• Decided: March 2, 1903
• Status: Published

Opinion

Counsel for the plaintiff in error urge two propositions, cither of which, if sound, would require a reversal of the judgment of the circuit court. The first is that the indorsement of the Mt. Vernon b'ank, though unconditional and unrestricted, did not import a warranty of’ the genuineness of the signature of the prior indorser, Mrs. Rowley. It is elementary that one who even by mere ¡delivery transfers a nóte payable to bearer thereby undertakes that all signatures upon the note 'are genuine and that all whose names appear had legal capacity to enter into the contract indicated. Certainly the legal import of a transfer by indorsement and delivery can not be less. Dumont v. Williamson, 18 Ohio St., 515; Bank v. Bank, 58 Ohio St., 207.

The second proposition of counsel for the plaintiff in error is that it is not precluded by Erorer’s judgment against the Lincoln bank from asserting any defense which might have been originally interposed; against the claim founded upon the alleged forgery of Mrs. Rowley’s signature. The pertinency of this proposition is manifest in view of the allegation in the answer that Mrs. Rowley’s signature is genuine. The view urged in support of the judgment of the circuit court is that, although the Mt. Yernon bank was not, in fact, a party to the record in which Erorer recovered judgment against the Lincoln bank, nevertheless because of the notice given to it by that bank informing it of the bringing of said suit and requiring it ¡as the party liable over to the defendant therein to appear and interpose such defense as it might have, it is precluded from asserting such defense now. In Commrs. of Brown Co. v. Butt, 2 Ohio, 348, it was decided that a sheriff against whom a liability had been adjudged for permitting the escape of a prisoner, might have an action over 'against the commissioners of the county for failing to provide a jail wherein the prisoner could be securely kept, and that in an action brought by him against the commissioners of the county the measure of damages should be the amount of the judgment which had been recovered against' him. In a dissenting opinion the correctness, of the judgment was denied upon the ground that under the statute then in force the county was not liable over to the sheriff. The case was overruled in Commrs. v. Mighels, 7 Ohio St., 109, upon the ground taken in the dissenting opinion; but the doctrine of the case as to the effect of a former suit in an action against one liable over does not appear to have been questioned. In Miller v. Rhoades, 20 Ohio St., 494, an action upon a bond! given by a creditor to indemnify an officer for the sale of property held by him upon execution, but claimed by another, a judgment having been recovered against the officer, it was held that “the creditor having due notice of the action and an opportunity to defend against it, the judgment is conclusive evidence against the obligor of the amount of damages sustained.” We have become familiar with the application of this doctrine to one who is liable over to another on a warranty of title to land, it being accepted as the established law that the warrantee may charge the warrantor with the consequences of an action to evict by giving him timely notice of the suit with an offer of opportunity to defend. It is an extension of the doctrine that all who are parties to a judicial record are bound by the judgment, and it rests upon the same foundation; the necessity that there be an end of litigation. It was placed upon that ground in Robbins v. City of Chicago, 4 Wall., 657, where it was decided that a municipality which had been adjudged liable to one, injured in consequence of the dangerous condition of its street, might recover the amount of the judgment from the owner of abutting property by whom the dangerous condition had been created, such owner having had actual, though informal, notice of the pendency of the suit against it. The reason for the doctrine does not suggest that there should be any limit to its application because of the nature of the obligation over of the person notified. Upon examination of numerous decisions in other states and in the Federal courts, it appears that the doctrine is of general application without regard to the nature of the liability over of the person notified, whether it arises out of contract or by operation of law. Many cases illustrative of the varied applications of the doctrine are collected in Black on Judgments, Sec. 574, 'and) Bigelow on Estoppel, page 131. They seem to recognize no exception to the rule that in an action to recover from one liable over on account of a demand upon which there has been a judgment against the plaintiff, the defendant is bound by such judgment if he had due notice of the suit in which it was rendered and an opportunity to defend. Some differences of opinion appear-with respect to the character of the notice which should be given to the-person liable over, but none of the cases casts any doubt upon the sufficiency of such full notice and opportunity to defend as are set out in the untraversed allegations of the original petition in the present case.

Judgment affirmed.