Case Name: Middleboro National Bank et al., appellants, v. James Richards et al., appellees
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1898-09-23
Citations: 55 Neb. 682
Docket Number: No. 8292
Parties: Middleboro National Bank et al., appellants, v. James Richards et al., appellees.
Judges: 
Reporter: Nebraska Reports
Volume: 55
Pages: 682–687

Head Matter:
Middleboro National Bank et al., appellants, v. James Richards et al., appellees.
Filed September 23, 1898.
No. 8292.
1. Bonds: Conditional- Signature: Principal and Surety. If a "bond in form a joint obligation is signed by a surety on condition that others are to become parties to the instrument in the same capacity, and delivery of the bond occurs without a compliance with the condition, the instrument is ineffective as to the party who so signed it, unless the oblig'ee, prior to- the delivery, was not apprised of the condition, or the signer, subsequent to execution of the bond, waived the condition.
2. -: -: ■--. If, when delivery of such bond is made, there apxiears on its face that which discloses or sug'gests an infirmity or irregularity relative to one of the requisite signatures sufficient to cast the duty of an inquiry on the obligee, and no investigation follows, the condition and its lack of fulfillment may be potent matter of defense for the party who signed the bond conditionally in an action thereon.
3. --: -: —-. A surety may insist on a compliance with the plain import of his contract, inclusive, in a case like the present, of the condition which accompanied his signature; and, where the condition exacted the signature to the instrument of another party, it will not be satisfied with a subsequent x'atifi-cation of the signature which had been, at the time of execution thereof, written on the paper by an unauthorized person.
Appeal from the district court of Douglas county. Heard below before Dufpie, J.
Affirmed.
Byron Q. Burbank, for appellants.
E. Walceley and W. FI. De France, contra.

Opinion:
Harrison, C. J.
On September 10, 1889, Richards & Company contracted with Washington county to erect for it a building — a court house — and to furnish the material therefor, and in connection with the contract, executed and delivered to the county a bond conditioned for the due and full performance of the contract. The contractor purchased of the Bohn Sash & Door Company articles nee- essary for use in tbe erection of tbe building, and wbicb were used in, on, .and about it, of tbe value in tbe aggregate of $4,032.43; and tbe plaintiffs and appellants herein assert ownership, respectively, of a portion of tbe account, by assignment, and, to effect its recovery, instituted actions on tbe bond to which we have hereinbefore referred, the basis of tbe rights oí actions being in substance that by tbe terms and conditions of tbe contract and bond, connectedly, tbe bondsmen became obligated in the capacity of sureties for tbe contractor for tbe payment of tbe accounts for material purchased and employed in tbe performance of tbe contract. The plaintiffs were unsuccessful as to some of tbe defendants and have perfected an appeal from tbe judgment of tbe trial court. That tbe points of discussion and decision may be more clearly understood, it seems proper to insert here a statement of some of the facts and circumstances relative to tbe form, substance, and execution of tbe bond involved in tbe litigation. In tbe body of tbe bond appeared tbe names of the sureties, and in tbe order as follows: "J. II. Hulbert, James Morton, John Epeneter, and Albert Fall." After it bad been signed by tbe principal, Richards & Company, it. was presented to Morton for bis signature. He objected to being tbe first of tbe sureties to sign tbe bond, and stated that it should have been taken to Hulbert, whose name was first as surety in the body of tbe instrument, and when signed by said party it would be in proper shape to request Morton's signature. Finally this objection was waived, and Morton signed tbe bond with tbe agreement and condition that it was not to be considered complete or to be delivered until signed by all tbe sureties named in it, and, if not so signed, it should be returned to him. The signature of Hulbert was next obtained, on the same condition and agreement as with Morton; and tbe party who bad tbe matter in charge went to tbe office or place of business of John Epeneter, who was then in Europe, and procured tbe name of John Epeneter to be written thereon by Ep- eneter's son, Oscar E. Epeneter, wlio was then "bookkeeper and cashier" for his father. The signature was as follows: "John Epeneter; O. E. E." The bond was subsequently signed by the other sureties, and delivered to the clerk of Washington county, and by him given to the county commissioners when in session, on the 12th of the same month- — September—and. urns by them approved. It appears that prior to approval of the bond the attention of the commissioners was attracted to the signature as it purported to be attached for Epeneter, and there was some discussion of the matter, and during the course thereof it was suggested, if not concluded, that the instrument was sufficient or good as a security or bond, regardless of whether Epeneter's name had been signed b,y some person who had authority so to do or not, or of whether Epeneter could be held bounden by the action, which ostensibly, at least, some one had taken for him. No inquiries were made relative to the matter, and it received, no further attention from the county or its officers. It is also of the evidence that the son had no- authority to sign this or any like instrument for the father; and it follows that the signature on the bond was without significance- — had no force or effect. That John Ep-eneter had not himself signed the bond was a patent fact —was disclosed on the face of the instrument. This was sufficient notice to put the commissioners on inquiry, to charge them with the ascertainment of the authorization of the party who wrote it, to learn of the weight of the act or the want of it. Investigation would have developed that John Epeneter had not signed the bond, and it had not been signed in his name by any person who possessed the requisite authority for such action, or would have disclosed that he was not a party to the instrument.
On the subject of the obligation of a person signing a bond as surety with a like agreement or condition as the appellee herein, it was stated in the decision in the case of Mullen v. Morris, 43 Neb. 596: "Where one signs as surety a bond, which in form is a joint obligation, upon condition that others are to sign the same with him, and it is delivered without the condition having been complied with, the instrument is invalid as to the one so signing as surety, unless the obligee, prior to the delivery, had no notice of such condition, or the surety, after signing, waived the condition." And further: "Where such a bond is delivered to the obligee without being executed by all the persons named in the body thereof as obligors, it is sufficient to put the obligee upon inquiry whether those who signed consented to its being delivered without the signatures of the others." We will add that where, as in the case at bar, the signature discloses that it was not written by the party, but by some other person, and a performance of the duty which devolved on the persons who were to approve or. disapprove it- — of inquiry of the authority with which it was written — would have disclosed that it was wholly without such power and of none effect, the lack of such inquiry renders allowable and potent, in an action on the bond, the defense of a surety that he signed the instrument on the condition that it should also be signed by all the sureties whose names appear in the body of the bond, inclusive of the one as to whose signature a query appears. There was a doubt suggested by the face of the bond, which cast on the commissioners the duty of inquiry. This was sufficient notice of the infirmity to make the defense presented available.
The conclusion from the foregoing would be that the signature of John Epeneter was never in fact placed on the bond in a manner effectual to bind him, and the defense of a conditional signing or an execution of the bond with the agreement that all sureties named therein should sign before it should be operative would be sufficient for any and all as to whom it was applicable.
It is not contended that if Epeneter was not bound, the other sureties were; but it is asserted that if the instrument in question at any time after the signature became of force as to him, the condition which was interposed as a defense to the action was fulfilled, and the bond effective, as to ail; and in this connection it is farther urged that Epeneter returned from Europe within about two months subsequent to the time his son attached the signature to the bond, and was immediately informed of such action, and allowed it to stand — never took any steps to discredit or repudiate his son's action,— that this amounted to an affirmance of what had been done, or a ratification by the father with retroactive effect, and the signature became as if made with authority given prior thereto, not only as to Epeneter and his rights and liabilities, but with reference to the other sureties, and their relations to the bond. It was of the evidence that Epeneter was informed within two months of the date of the act that his name had been signed to the bond, and, further, that lie took no steps to disaffirm it. But onr inquiry here is not whether Epeneter became in some; manner or for some reason liable on the bond; it is whether it was signed by him, or he became a party to it, as contemplated or required in the condition with which others of the sureties executed it. The obligation of a surety is the subject of strict construction, and will not be extended beyond its plain import, and this is applicable to a condition such as is herein involved, attendant on the assumption of the obligation. The sureties who signed this bond conditionally required that'it be signed by Epeneter, not that his signature written by some other person unauthorized to do so be ratified at some time subsequent. The condition was for the signature,- not for an after ratification of Avhat purported to be it, but was not. The sureties who signed on condition could demand a strict compliance therewith, and in default thereof were not bound. On the proposition that sureties who signed on condition such as is herein invoked in the defense will not be bound where an incompleteness in the conditional requirement is shown or plainly suggested on the face of the. bond, see St. Louis Plattdeutscher Club v. Tegeler, 17 Mo. App. 569; Hall v. Parker, 37 Mich. 590; Sharp v. United States, 4 Watts [Pa.] 21; Fletcher v. Austin, 11 Vt. 447; Commonwealth v. Magoffin, 25 S. W. Rep. [Ky.] 599; People v. Bostwick, 82 N. Y. 445; People v. Hartley, 21 Cal. 585. That subsequent ratification was not efficacious, see Hall v. Parker, 37 Mich. 590; Fletcher v. Austin, 11 Vt. 447; Taylor v. Robinson, 14 Cal. 396; Wood v. McCain, 7 Ala. 800; McMahan v. McMahan, 13 Pa. St. 376; Fislce v. Holmes, 41 Me. 441.
The judgment of the district count must be
Affirmed.