Case Name: Keener versus Crago et al.
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1874-11-21
Citations: 81 1/2 Pa. 166
Docket Number: 
Parties: Keener versus Crago et al.
Judges: Before Agnew, C. J., Sharswood, Williams, Mercur, and Gordon, JJ.
Reporter: Pennsylvania State Reports
Volume: 81 1/2
Pages: 166–171

Head Matter:
Keener versus Crago et al.
1. Pennington applied to Crago and another, to become his sureties in a bond, which was prepared \vith five seals and blank for obligee’s name; they, signed upon condition it should not be delivered until two others named, should" sign; these two put their names on the back. Pennington took it to the lender, inserted his name, told him the condition on which the two signed, and that the indorsers had refused, but were willing to indorse, and that it made no difference. Held, that there could be no recovery against those who signed.
2. The paper was not an escrow, but an unfinished instrument, to be binding only on its full signature. ,
3. In the case of an escrow, the operation is perfected by the delivery.
4. The execution by the first two being conditional, the obligee had no right to a delivery.
November 17th, 1874.
Before Agnew, C. J., Sharswood, Williams, Mercur, and Gordon, JJ.
Error to the Court of Common Pleas of Greene County, of October and November Term, 1874, No. 110.
This was an action of debt, commenced March 2d, 1870, by Joseph Keener against Jacob Pennington, Felix II. Crago, and Jonah F. Randolph. The appearance for Pennington was withdrawn. The pleas were 'non est factum, and payment, payment with leave, etc.
The jury were sworn March 20th, 1874, before Willson, P. J., against Crago and Randolph.
The cause of action was the following note:
“ April 5th, 1866.
“ One year after date, we, or either of us, promise to pay to the order of Joseph Keener, five hundred dollars, with 7 (now 6) per cent, interest, for value received.
“ Jacob A. Pennington, [seal.!
[seal.]
[SEAL.]
F. II. Crago, [seal.]
J. F. Randolph, [seal.]”
“ Indorsed,
“J'. F. Flenn’iken,
William H. Barclay.”
The plaintiff* gave the note in evidence and rested.
For defendants, Crago testified that Pennington was the principal debtor in the note ; after he signed it he left it in the hands of Pennington.
The defendants offered to prove that he placed the note in the hands of Pennington, with directions to deliver it only on condition that it should be signed by John S. Flenniken and John M. Harper, or by John S. Flenniken and William H. Barclay, before it should be delivered.
Plaintiff objected to the offer, because to make an escrow of such instrument, the law requires that such an agreement should be with the knowledge and consent of Joseph Keener, the plaintiff'; and without this the testimony is irrelevant.
The offer was admitted and a bill of exception sealed. .
Wi/nass: “Pennington was to get the signatures of two other persons and was to deliver it only on condition that the vacant seals were filled. The persons named by Pennington to sign were John S. Flenniken, John M. Harper, and W. H. Barclay, two of these men to sign before it was to be delivered to the person of whom Pennington was to get the money. The two were to sign next to Pennington ; on this condition I signed the note; had this agreement with Pennington and with Bandolph; don’t know if Keener’s name was mentioned; didn’t tell Keener about the condition with Pennington.”
Randolph under objection and exception testified: “ I signed this note at the request of Pennington ; I was surety; I signed after Crago, same morning; it was blank; Pennington didn’t know of whom he would get the money; after I signed the note it was in the hands of Pennington ; I told Pennington to get the seals filled before he took the note to get the money; there were three persons named — Flenniken, Harper, and Barclay — two of whom were to sign the note between Pennington’s and Crago’s ; it was to be signed by those two before it was delivered ; A had seen Crago about executing the note.”
Pennington testified: “When I took the note to plaintiff there was a blank for the name of the payee; didn’t know of whom I would get the money was the reason for the first blank; the blanks were filled in presence of plaintiff'; on the evening before I got the money I was at his house to see if I could get the money ; I pulled out the note and showed it to him ; talked about the liabilities of the parties ; showed him letter of recommendation; he asked questions about parties on back of note; I told him the understanding was that four persons were to put their names on the note as my sure ties ; we talked about the vacant seals ; I told him that it made no difference where they signed, as they were all liable; I explained to him that two of the parties had refused to sign the note, but had put their names on,the back of the note, and that it made no difference ; plaintiff" said he presumed it was right; I explained to plaintiff"; told him I had got advice from Mr. Downey; explained to him that two had refused to sign the note; one of them said he would rather sign in the usual way as indorser.”
The points of the plaintiff", with their answers, were as follows:
T. “ In the absence of statutory provisions requiring a certain number of sureties to a bond then its possession by the obligee is evidence of delivery, and makes it a valid instrument against all who sign it, regardless of the number of seals attached thereto.”
Answer: “Under the evidence in this case we refuse to charge the jury as requested in this point.”
2. “ It is the duty of the obligors of a joint and several bond, to see that all who agree to sign it have their names appended thereto in proper place before delivery, otherwise those who sign the bond contract for themselves and are responsible to the obligee, notwithstanding some may refuse or fail to sign it.”
Answer: “Under the evidence we refuse this point.”
8. “ The note in controversy having five seals attached, signed by the principal and two sureties, the other two having indorsed the note, instead of signing their names opposite the second and third seals in the body, the vacant space being subject to the examination of those who executed it is evidence of its delivery and of their consent to be bound by the contract, and therefore the plaintiff" is- entitled to your verdict.”
Answer: “This point is refused.”
The defendant’s points, with their answers, were as follows:
1. “ If Crago and Randolph placed the note in the hands of Pennington, signed by themselves, but with two seals above theirs to which no names were added, and with blanks for the rate of interest and name of the payee, and instructed him to deliver it only on condition that it should previously have been signed by Flenniken and Harper, or Flenniken and Barclay, and if Pennington filled the blanks in the presence of Keener, and delivered the note to him, without having performed the condition, such delivery would be void as to Crago and Randolph.”
Answer: “ This point is affirmed, provided the jury shall believe from tbe testimony that Keener had knowledge of said conditions.”
2. “ If Crago and Randolph signed the note, leaving the seals above theirs to which there were no names, and placed it in the hands of Pennington, with instructions to deliver it only on condition that it should previously have been signed by Flenniken and Harper, or Flenniken and Barclay, the indorsement of the note by Flenniken and Barclay would not be a substantial compliance with the conditions.”
4. “If it was the understanding between the defendants and Pennington that the other persons were to sign the note at the second and third seals before it was to be delivered, and if Pennington, at the time of delivering the note, told Keener that the understanding was that it was to be signed by four sureties, and that two of them had refused to sign the body of the note, but have put their names on .the back of it, this together with the appearances on the note was sufficient to put Keener on inquiry.”
Both these points were affirmed.
The verdict was for the defendants.
The plaintiff took a writ of error. He assigned for error, the answers to the points; and the admission of the evidence objected to.
JD. Crawford, for plaintiff in error.
If one, by his act, silence, or negligence, mislead another, or, in any manner effect a transaction whereby an innocent person suffers a loss, the blamable party must bear it: Story’s Equity, sect. 386 and 387; Garrard v. Hadden, 17 P. F. Smith, 82. As Crago and Randolph, the sureties to the bond in controversy, intrusted its delivery to Pennington, their agent, it was their duty to see that all who agreed to sign the note as sureties should have their names attached in proper place. The obligor, who was charged with the delivery of the note, according to Keener, the obligee, did not disclose the existence of any conditions precedent to its delivery. When a bond has been signed and delivered, without any conditions annexed, under the expectation that it would be sighed by others, it is no less the deed of the persons signing, though it should not be executed by all who were expected to sign, it: Haskins v. Lombard; 16 Maine, 140 ; The Passumpsic Bank v. Goss, 31 Vermont, 315. When the sureties intrust the bond to the obligor, with their names attached as sureties, they constitute the obligor their agent to deliver the same to the obligee; the surety giving confidence to his assurances must stand the hazard of their performance, and cannot throw any responsibility upon the obligee. Though a bond be written as if to be executed by two or more joint or several obligors, and is executed by part only, yet it is valid against those who execute it: Cutter v. Whittemore, 10 Mass., 442; Adams v. Bean, 12 Id., 137 ; Keyser v. Keen, 5 Harris, 330.
The possession by the obligee of a bond drawn for the signatures of four, signed only by the principal and two sureties, is prima facie evidence of delivery, and such bond is a complete instrument as regards any who signed it: Grim v. School Directors, 1 P. F. Smith, 219; Loew v. Stocker, 18 Id., 226.
Keener’s knowledge of the conditions on which the bond was to be delivered, was erroneously submitted to the jury, without any clear or sufficient testimony, and is, therefore, an error: Bradfords v. Kents, 7 Wright, 485; Haines v. Stouffer, 10 Barr, 363.
The answer to the defendant’s fourth point is in direct conflict with the ruling of the Supreme Court of this State in the case of Keyser v. Keen, and Grim v. School Directors, supra.
A surety cannot make a delivery of a bond to the principal as an escroto, upon condition that other names shall be procured before, its delivery to the obligee. A delivery as am escrow can only be made to a stranger; it cannot be made to the party. If made to the party, no matter what may be the form of the words, the delivery is absolute: Ward v. Lewis, 4 Pickering, 518; Fairbanks v. Metcalf, 8 Mass., 230. The law of escrow is the same in its application to notes and deeds. A bond cannot be delivered as an escrow by the obligor to the obligee : Foley v. Cowgill, 5 Blackford, 18 ; State v. Ohrisman, 2 Indiana, 126 ; Hiatt v. Simpson, 8 Id., 256 ; Shepherd’s Touchstone, 59; Millett v. Parker, 2 Met. Ky., 608.
Wyly and Buchanan, for defendants in error.

Opinion:
Judgment was entered in the Supreme Court, November 21st, 1874.
Per, Curiam :
This is not a case of an escrow of an executed instrument, left to be delivered on a certain condition ; but it is the case of an instrument not executed iii full, but executed by some of the parties on the condition that it should be executed by others. In the former case (an escrow) delivery was all that remained to be done to perfect the operation of the instrument; in the latter execution was not consummated, but depended upon the execution by others who were to be made parties before the instrument became perfect and ready for delivery.
The execution by the defendants being conditional only, the plaintiff had no right to a delivery.
Judgment affirmed.