
    Taylor, &c. vs. Craig.
    
    'Petition, &c.
    Appeal from the Fayette Circuit; Thomas M. IIickeY, Judge.
    
      •Deeds. Escrow. Unseaicd writings. Non esl factum. Bills of exchange-. Endorsement or signature 'in blank.
    
    October 23.
    'Petition for it te-hpa'ring.
   The court,

by parol opinion in this case, affirmed the judgment below, with costs and damages.

Mr. Loughborough, as counsellor Taylor,presented the following petition for a re-heuring.

This case was taken up by thé court, üp'oft the suggestion of the appellee, íhát it had been brought into this court, only for purposes of delay, and without calling the appellants or giving notice to his attorneys, and before the errors had been assigned, the court examined the case and affirmed the judgment of the inferior Court. And his calise hás b'één decided, and he never heat’d.

The counsel for Taylor indulges thé hope that the court, upon a ré-examination of the cause, ánd a view* of the authorities that apply* Will order a re-hearing. Especially when it is recollected that in another case, between the same parties, and Upon a record precisely similar* a like motion was overruled;

Craig instituted his petition and summbns against Parker and Taylor, upon their joint and several promissory note. Taylor* who was the security of Par* ker, at the time of signing the obligation, wrote upon it that he did so upon condition* that the note was not to be transferred to the Bank of the United States* nor put into any of its branches for collection;

To the action of Craig, Taylor filed three pleas* in which he set forth, substantially, these facts, by proper averments, and it is believed in apt form, viz; That Craig and Parker Were residents in Fayette county, and he, himself, a resident in Campbell; that, being ignorant of thé pecuniary situation of Parker, he signed his name as security upon the nóte, and placed it in the hands of J. W. Tibbatts, as his agent* to carry to Lexington; that when there, he directed Tibbatts to consult Richard Higgins about the situation of Parker, and if Higgins should say that he would be safe in becoming the security of Parker, then and in that eVent only, he directed said agent, Tibbatts, to deliver, for him, the obligation siied on, to the obligee; that Tibbatts carried the obligation to Lexington, and without consulting with Higgins as directed, and without Higgins having pronounced a favorable opinion of the solvency of Parker, handed the note to Parker, from whom the obligee obtained it, contrary to the express directions of Taylor and in violation of the limits of the authority conferred by him; wherefore, the pleas conclude the writing sued on is not the defendant’s act and deed.

The plaintiff demurred to these pleas, and the court below sustained the demurrer.

This court having affirmed the decision below, the counsel for Taylor feels it a duty incumbent upon him, as well from a consideration of what is due to the defence set up below, as under the particular circumstances attending the disposal of the cause in this court, to call the attention of the court to the precedents and decisions, within the operation of which the case falls.

The delivery of a deed is an essential requisite to itf! legal efficacy. It is the consummation of the instrument. Without it, whatever else the parties may have done, is ineffectual. The delivery may be made to the qbligee himself, or to some person for him. In either case it shall be good. But it is only good in the latter case, where the third person to whom the delivery is made, can be considered as representing the obligee in accepting the delivery. Indeed, from the nature of things, a delivery of a deed to a third person, could not, upon any other principle, be held valid..'* The law requires that a deed to be operative, should be delivered by the grantor or obligor, to the grantee or obligee, by the person who passes the right or incurs the responsibility to the person who is, by the contract, to receive the right or accept the stipulation. ¿f*The solemn act of delivery, is the perfection of the contract, and common sense, as well as law, dictates, that to make one a party to a contract. be musí have participated in the performance of that part of it, without which the whole is a nullity. Accordingly, an examination of the adjudicated involving questions as to the delivery of deeds, will show, that where there has been even an absolute delivery'to a third person, it is good only in those instances in which that person has, quoad hoc, represented the grantee or obligee. XIII. Viner. Faits, k.; Touchstone, 57, 58; III. Cruise’s Digest, 28.

The courts seem to have had more difficulty in cases where the delivery to a stranger had been conditional. In England, many refinements and subtleties have, at times, been indulged in, upon this subject. Sometimes the only distinction taken, was between absolute and conditional deliveries. At others, the judges distinguished conditional deliveries into several kinds, as into deliveries upon conditions subsequent and upon conditions precedent. In this way', many seeming contradictions were procured.

The distinction anciently observed, was between those cases in which the delivery to the stranger was a delivery of the instrument as the deed of the obligor, to be delivered to the obligee upon performance of. certain conditions; and those in which it was deposited with or delivered to the stranger" as an escrow, not to be delivered or parted with, unless upon a certain event.. in the former class of cases, it has been held, that if the party to whom the deed is made, obtain it before conditions performed, yet it shall be a good deed, because the obligor hath delivered it as such, and the law regarding, in this matter, more the acts than the words of the party, will not suffer the solemn act of delivery to be qualified or restrained by the declarations of the obligor. XIII. Viner, title Faits, n. a. 3.

~~*ff it be delivered as his deed,-to a stranger, to be delivered to the party, upon performance of a condition, it shall be his deed presently, and if the party obtains it, he may sue before- conditions IV. Comyn’s Digest, title Faits, a. 3.

So, if it be delivered as his deed, into the hands of a stranger. II. Roll. 24, I. 42.

Jf a man seals a writing and delivers it to a stran,-geras his deed, to deliver to the party to whom it is after certain conditions performed, if the stranger delivers it to him before the conditions per* formed, yet it is his deed, and he is put to his remedy against the bailíee. XIII. Viner. title Faits, m.

Similar authorities might be multiplied, from all of wh>c.h, it would appear, that in no case where there was a conditional delivery to a third person, has the party obtaining the deed before conditions performed, been permitted to treat it as valid, except where it had been solemnly delivered to the stranger,, as the act and deed of the obligor. v

When the delivery to a third person was not absolute, nor as thp deed of the obligor, to be passed to the obligee, upon a contingency, but as an escrow, it has never, so, far as the authorities have been consulted,, been obligatory upon the obligor, until the conditions have been performed, and the instrument has beep delivered as a deed to the other party. Had the adjudications been otherwise, the consistency of the law in requiring a delivery of deeds, would not have been preserved, since, in these cases, the putting of the instrument in the hands of a stranger,cannot be considered a delivery; and, therefore, something is yet wanting to makb the deed efficacious. The perform-ance of conditions is necessary, inasmuch as the stranger hasp limited authority conferred upon him, to deliver upop such performance. The delivery, without the performance, is a nullity, since in making it, the agent exceeds the authority delegated,

“If I make a writing to A, and deliver it to another, as an escrow, and after A gets the deed, yet this is not my deed, for the bailee, has not any authority, to deliver it as my deed.” XIII. Viner, title Faits, m.

“So, it seems it should be, by this reason, if the bailee had delivered it over as his deed,,/?»- this is out of his authority, it not being appointed.” Ib.

“If I make a writing to A, and deliver it to another, io deliver to A, after certain conditions performed, if A takes the deed, out of the possession of the bai-lee, before the conditions performed, this is not his deed, because be does not deliver it as bis deed, but as an escrow. Ib. See also Coke, Litt. 36 a. Comyn’s Dig. Faits, a. 4. So, if bailee, delivers the before the conditions performed, it is not his deed. lb. ’

If I make a deed, and deliver the same, unto J. S, a stranger, as an escrow, to keep, until such a day, &c. upon condition, that if before that day, B to whom it is made, shall pay me £10, &c. then J. S. shall deliver the escrow unto B, as my deed; in this case if J. S. deliver the same unto B, as my deed, before the conditions performed, it is not my deed simplicilcr, XIII. Viner, Faits, m.

In Taw vs. Basey, II. Dyer, 167, b. this doctrine was recognized, and admitted.

Pinschar brought debt against Gerves, &c. execu. tors of Northgate, upon his land, for £100; defendants pleaded a deed of release to Northgate, .and plaintiff replied, that being a layman, and unable to read, he had deposited the deed of release, with Gerves, now one of the executors, upon the condition that if the deed, was in fact, such as it was read to him, he should deliver it to Northgate, if not, it should be returned to plaintiff. The deed was not such as plaintiff had supposed. It was held by the judges, that the plaintiff might safely deny the deed, unless defendants would shew, that the conditions had been performed. See Pigot’s case, XI. Coke, 28.

Gilbert, in his evidence, 164, says, “if a man seals an obligation, and commands another to keep it, until certain conditions are performed, and the bond is delivered to the obligee before they are performed, this could never be his bond till those conditions were performed; and, therefore, this special matter may be given in evidence to prove non est factum? And he cites divers authorities.

When tested by the rules which have governed in the cases above referred to, it is confidently believed that the pleas of Taylor, in these cases, show a sufficient legal defence. There was no delivery by Taylor to the obligee. The delivery to Tibbatts, the baillee, was not absolute as the delivery of a deed. Even if it had been sc?, it could not enure tp the benefit of Craig, since we cannot consider Tibbatts as representing him. On the contrary, he acted as agent of Taylor, and as to Craig and other persons, his possession of the bond must be considered the possession of Taylor. Placing the obligation in his hands, therefore, was no delivery to Craig, nor to one representing Craig, but to the obligor’s own agent, which was no delivery in law. This only con» ferred an authority on Tibbatts, upon certain terms, to consummate the instrument by delivery. Jf Tibbatts had retained the obligation, could Craig have maintained detinue for it? It will scarcely be contended that he could. And yet this was the only act done by Taylor, which approached a delivery in character. But Tibbatts passing the limits of his authority, hands the deed to Parker or to Craig. Shall, the obligor be bound by this act? If so, it is the first case of-the kind. The pleas aver that the obligor placed the writing in the hands of the bailee, to be delivered as his act and deed, to Craig, upon a certain event. If when Tib-batts received the obligation, it was yet to be deliv--ered as a deed, will it be urged that this act had been already performed? Tibbatts had the obligation as an escrow, if the definitions of that term, in the books,. are correct, and not as a deed delivered but made, and with verbal qualifications of the act which the law disregards. The non-performance of. the condition is set forth with certainty and precision, and an averment made of Parker’s insolvency, which shows the propriety of defendant’s cause.

It will be said that Tibbatts was the agent of Tay* lor, and he was bound by his acts. That Craig could not know the condition upon which the agent was to act, which was a matter wholly between him and his principal. And that, having accepted the bqnd as Taylor’s deed, and abided by that acceptance, .treating it as valid; he. should not now be injured, by the, fact, that Tibbatts had exceeded his authority.. To aii this the answer is plain, and we think,,c.oncliisive., The signingof the bond by. Taylor, and entering into the obligation, was a, voluntary act. on his part. He was not enforced to it by any pre-existing obligation-Being a gratuity, he had a perfect right to choose whether he would become bound in any event, or whether upon a certain contingency $ which he had the right to designate. He did designate the event and the only event upon which he would be He conferred upon the bailee of the instrument, a limited, authority. Surely the acts of Tibbatts, not warranted by the authority conferred, shall not bind Taylor. If so, special agency is at an end’; and no man can have an agent, however strictly he may limit his power, who will not be bound by all bis acts touch" ing the matter entrusted to his agency. See Coke, 298, b.; Palcy on agency; Sugden on Powers, 209; Chitty oil bills, 31.

XIII. Tiner, title Faits,- m. shows that when the bailee has a limited avfthority, and he exceeds it, in delivering the deed, it shall not bind.

The Touchstone says that when the delivery is by another, who hath a good authority and doth pursue it.¡ it is as good a deed as if it were delivered by tbé party himself. But if he do not pursile his authority, then it is otherwise. Page 57. See also, the case of Pinschar vs. Northgate’s executors, before cited from Coke. .

This was a joint and several bond, and it appears that Craig received it from Parker, with his own and Taylor’s signature to it. This delivery by Parker cannot bind Taylor. . To make it Taylor’s deed, it is essential that there should be a delivery of it by him or his duly authorized agent. Where there are several obligors in a bond, there should be a delivery by each-, to make it the deed of all. '

In Pawling vs. United States, IV. Cranch, 219, it was held that a bond might be delivered as an escrow,by the security to the principal obligor. In that case as in this, the security had signed it conditionally, and the principal, in whose hands it was placed, had passed it to the agent of the obligees. Yet it was held that this should not preclude the security from showing and relying upon the specific matter.

■ In form, the pleas are correct. They commence properly and conclude in the manner pointed out by precedent. “If a man delivers an obligation to J. S. upon certain conditions, to be performed, to deliver i0 the obligee as a deed, and if not, to keep it as ah escrow. If the obligee gets it contrary to the condition, and brings debt, the other cannot show this matter and conclude judgment, si actio, but shall con-elude, and so non est factum.”

Judge Robertson

delivered the foJJondDir response of the court to the petition for a re-heaiing.

This is the only case, between these parties, which was ever submitted to us, as a delay casfe. The other case, alluded to in the petition, was not submitted to us, for any purpose, until it was regularly called, and beard.

The suit, in this case, is brought on the following note:

“Two years after date, we, Or either of us, promise to pay to Elijah W. Craig br order, nine hundred and eighty-two dollars, in gold and silver, for vaiufe received, this 7th day of January, 1826.

“ALEXANDER PARKER.

“This note is signed by me, as security for Alexander Parker Esq., on condition, that it is, not to bfe transferred to the Bank of the United States, or put into any of its branches, for collection.

“JAMES TAYLOR.”

Taylor filed three pleas: all of which aver that he signed the note, at his residence near Newport, and sent it by J. W. Tibbatts, his agent, to Lexington, where Parker and Craig, lived, with instructions to inquire of Richard Higgins, as to the solvency of Parker; and not to deliver the note to Crrig, unless Higgins should be of opinion, that Parker was solvent; and (hat Tibbatts did deliver it without obtaining the advice of Higgins.

The first plea avers, that the note was “handed to Tibbatts,” to be delivered only on the foregoing condition.

The other pleas allege, that the note “was delivered to Tibbatts,” to be delivered or not, to Craig, according to the opinion of Higgins. The third plea is the only one which affirms that Parker was insolvent.

Beed takes rfe"

But unsealed writings, as notes^&o. t-keeffect fr<"a «going fegfemen?'

AH the pleas conclude that, “the writing is not the uct and deed” of Taylor. Demurrers to these pleas were sustained by the court, and judgment e.d on the note against Parker and Taylor.

Although, by an act of the legislature of this state* executory writings without seal, are entitled to the same consideration, and have the same effect, as specialties or deeds, yet, the mode of executing, unsealed writings,- has not been changed. That which was not necessary to their validity, before the act of -1812, is not necessary now. And that which made them obligatory, when they were considered as only parol, will make them so still.

f A deed passes by delivery. A delivery was always necessary to give effect to a deed, and render it obligatory on the party signing it. A delivery may be actual, or only constructive; or it may be by words, or by acts. ^

But writings without seals, did not-, and d'o ndt how, take effect from delivery. They were, and are, obligatory from the signing, and acknowledging of them. The technical doctrine of delivery; applies only to deeds. in them, the date is not essential-, As delivery was not material • to the effectiveness °f unsealed writings, before their dignity was made equal to that of deeds, it cannot be indispensiblc now-. This is not only the inference of reason, but the established law; by express authority. Sec the bank of Limestone vs. Penick, V. Mon. 25.

The authorities in relation to the delivery of deeds, ¿is, therefore, not directly applicable in this case. /'These authorities are, apparently, contradictory. Many of them seem to be arbitrary. Many distinctions, attempted to be maintained by them, are subtle and artificial. They are distinctions in form, without a difference in substance or principle, as will have been seetrby’the cases cited in the petition; and may be more satisfactorily ascertained, by a more accurate and extensive analysis-of all the cases which have been reported. • *

Perhaps, the most clear and sensible rule is laid ‘down in Shephard’s Touchstone, 58-9.

Deed delivered , as a deed to stranger, to bo delivered to the party on condition, is binding, tho’ condition be not 'performed. '•Otherwise, if delivered, as ■im escrow.

“The delivery of a deed,as an escrow, is said lobe where one doth make and seal a deed, and deliver it unto a stranger, until cerlain conditions be performed; and then to bo delivered to him, to whom the deed is made, to take effect as his deed. But, in this case, two cautions must be-heeded.

“1st. That the form of the words, used in the delivery of a deed, in this manner, be apt and proper.

“2d. That the deed be delivered to one who is a stranger to-it, and not to the party himsqlf, to whom it is made.

“The word*, therefore, that are used in the delivery, must be after this manner: I deliver this ló you, as an escrow, to deliver to the party, as my deed, vpon condition that he do deliver to you, $20, for me., &c. &c. For if, when [ shall deliver the deed to the stranger, I shall use these, or the like words: I deliver'this to you, as my deed, and that you shall deliver it to the. party, upon certain conditions, &c., the deed doth take effect presently, and the party is not bound to perform-any of the conditions.”

in the one case, the instrument cannot take effect, as a deed, until the condition shall be performed, on which it is delivered, as an escrow. In the other, it i* a deed tromitstlrst delivery to thestranger,.and cannot he invalidated hy the non-performancc of any condition, subsequent; because, having been delivered as a deed, to be delivered to (lie party, on a subsequent 'condition, it is a deed, and cannot be affected by •matter which may occur afterwards.

If a party deliver his deed as a deed, to a stranger, to be delivered to the party, on condition, it is binding, though the condition be not performed. II. Ral. 24; I. 42; Starkie, 476, Otherwise, if he deliver it as an escrow, Co. Lilt. 36, a.; II. Johnson’s Rep. 243.

Now, according to these authorities, it is at least, doubtful, whether the 2d. and 3d. pleas be good, even if the note in this case, were a deed, and required a delivery. For these two pleas, allege simply that the note was '•'•delivered?'’ to Ti'bbatts, “to he delivered” to Craig, on a certain contingency. How was it delivered, asan escrow, or as his deed, to be delivered .is such, to Craig, if Higgins should approve? It is not pleaded expressly, as an escrow; and we are inclined to the opinion, that the proper construction the two last pleas, would he, that the note was delivered as the note of Taylor; hut not to he surrendered to Craig, unless Higgins should advise it ns prudent. •■Delivered,'’ without any qualifying or explanatory adjunct, has a peculiar technical import, it means that the writing is delivered as the act of the party delivering. Other parts of the plems might, however, shew that Taylor intended to plead the writing, as an escrow; but we are not of the opinion that they do.

p¡oaj whioh amounts to ence’, must state such facts and in a”°t0 doubt, if facts be true, that got of party?*

And if it be uncertain, from the language and ten' or of the pleas, whether the writing was an escrow, or a deed, to be delivered on condition, the demurrer ought to have been sustained; because, a special non est factum,, must slate such facts, and in such a manner, as to leave? no doubt that, if the facts be true, the writing is not the act of the party. “A plea, which amounts to a non e.st factum by inference, ought to be held to considerable strictness; and the facts set out to be alleged so certainly and positively, that no other conclusion could be drawn from them.” M‘Coy et al. vs. Hill, II. Lilt’s. Rep. 375.

Tested by this rule, these two picas could not well be sustained.

The first plea does not use the same language, and, therefore, might probably be fairly construed to mean that the writing was handed to Tibbatts as an escrow. But there is another objection to this plea, as well as to the second. Neither of them avers that Parker was oris insolvent. If he had been insolvent, nevertheless, according to the pleas, the note would have been obligatory, if Higgins had expressed the opinion that ho was solvent, and that there would be no danger in- being his security. If he were solvent, therefore, the note is binding, although Higgins was not consulted. The pleas show that Taylor-was willing to be security, not only if Parker were solvent, but even if Higgins should be of opinion that he W4S. If he were willing to hazard Higgins’s opinion of the fact, surely he intended to be bound, if the fact itself of solvency existed. A plea, therefore, denying that the opinion was given, is not good, if it admit or do not deny, that the fact existed, about the opinion was desired.

/doc-hi)”8 <0S ’ ;>ry V|N iaHy ' sof

The iast plea is the only one which avers that Parker was insolvent, and that is liable to the first objection which has been suggested to the second and third pleas. Wherefore, if the doctrine of delivery applied to this case, we should be strongly inclined to affirm the opinion sustaining the demurrer to all the pleas. It is even dqubtful, whether a deed can be delivered as an escrow, on a condition, to lie performed by any other than the party who is to receive the deed. Touchstone supra, and Austin vs. Hall, XIII. Johnson, 286,

But as the authorities as to the delivery of deeds are inapplicable to the note in this case, our decision cannot be influenced by the arguments or cases stated in the petition. We must consider the case on other grounds, without regard to the question of delivery.

And if the pleas would not be sustained by consid-t ering the note as a deed taking effect only from deliv-cry, they certainly would not furnish a bar to the action, on a paper which may be binding without delivery. ;

Promissory notes are, “quasi,” mercantile. They are transferable by endorsement, but are not in this country as ^ey have been in England, since the. statute of- Anne, negotiable precisely as bills of cx-change. But for many purposes, the doctrine of bills of exchange applies to promissory notes, because the reason of it, applies equally to both kinds of paper. We suppose the law in relation to the execution of both, is the same. And justice and the exigencies of commerce require that the drawer of a bill or obligor in a note, should be bound, sometimes, when, if the instrument had been a deed, he would not be liable.

Frequently the maxim “he who ,trusts most, shall lose,” applies to the parties to bills and notes; and it is often better that a negligent drawer should be held responsible, than that an innocent holder or obligee should suffer.

j/rP®"°“s*isn biifinWonfr, he is bound for whatever tho» he signed his name on [N^Tsum should be less ^

Hence, if A sign or endorsen bill in blank, he is bound for whatever sum may be inserted, although be shall have signed his name on the parol condition that the sum should be less than that inserted. The reason is, that having affixed his signature to a blank bill, without any written condition or reservation, he has given an implied authority to fill up the blank with any sum, and if he were allowed to escape by pleading that his secret instructions were violated or his parol authority transcended, such frauds might be practised as to destroy the peculiar value and defeat the purposes of such paper.

The same doctrine, (whether right or wrong) has been applied to promissory notes.

It would, therefore, be at least questionable, whether Taylor, after signing the note and delivering it to his agent, can evade the payment of it, by showing that the agent exceeded his secret and confidential instructions, when he delivered it to Craig. If he could, his agent would be responsible- to Craig. But it seems to us, that Craig is not bound to look to Tibbatts. He had a right to suppose that, the signature being genuine, whenever the note was delivered to him, without any condition, it would be obligatory on Taylor.

Besides, the endorsement on the note, that it was signed on the condition that it was not to be transferred to the United States’ Bank, was eminently calculated to lull and deceive Craig.

It is true that this condition may be considered a part of the note, and which, therefore, was not to be shown until the note was delivered according to the parol instructions; still, when it was showrn to Craig, he had a right to take it for granted, that it contained the only condition reserved hy Taylor, and that, if he,-(Craig; should take the note on that condition, Taylor would be bound as security.

If Taylor intended to be bound only on the condition set forth in his pleas, it would have been prudent to have said so in his endorsement, or’in a letter to Craig. Moreover, it can scarcely- be doubted, that when Tibbatts returned, Taylor ascertained what he had done. If he did, he ought not to have acquios- and thereby affirmed the act, but should have notified Craig, so that he might have been able to secure himself in some other way, if he should choose to do so. The pleas do not intimate that Tibbatts practised any fraud on Taylor, or concealed from him what he had done. They do not show that he has not affirmed or approved Tibbatts’s act. This presumption, from the lapse of time and other circumstances, is, that he had acquiesced in what was done, after obtaining a full knowledge of it, and is, therefore, bound. See Cairnes and Lord vs. Blucker, XII. Johnson, 305-6.

These circumstances are not conclusive. If the note was not binding when it was delivered to Craig, they, alone, migh tnot make it so, “expost fado.''’ Bet when combined with the other facis and with the general doctrine and policy of the law, they are entitled to influence.

If Tibbatts exceeded his authority, it is better that Taylor should seek indemnity from him, than that Craig should lose his debt, or look to Tibbatts for it. If Taylor has been wronged, his own inadvertance, negligence or misplaced confidence has occasioned the injury. Craig has done nothing that he ought not to have done. Ho omitted nothing that he ought, to have done. It was not his duty’ to refuse the note until Tibbatts should exhibit to him a power of attorney to deliver it; no such power was necessary. A delivery in form was not necessary. Tibbatts was not the agent of Craig. Taylor signed the note on a specified, written condition. His agent delivered the note, with this condition endorsed on it, to Craig. Taylor then placed the note in the hands of Craig, through the agency of another, to whom he delivered it; and did not, by the agent or otherwise, notify him of any other condition. Under such circumstances, non est factum cannot be sustained. *

Whether, therefore, the note be considered as a deed or not, the judgment should be affirmed. If it should be affirmed, even on the doctrine of delivery a fortiori, it should be affirmed when that doctrine is shown to bo inapplicable.

Hoggin, IVickliffe, Depew and Loughborough, for appellant; Mills, Brovin and Chinn, for appellee.

The petition, therefore, is overruled.  