Court Opinion

ID: 6578541
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:36:25.583899+00
Date Added: 2024-06-11T15:57:11.637677
License: Public Domain

Hinman, C. J.
The action is debt upon a bond. Two of the defendants, Edwards and Phelps, defend upon the ground *102that the instrument was never delivered as their bond. The other defendants make no defense. Other questions were made and argued, but the conclusion to which we have arrived on this question renders them unimportant; and they have not therefore been considered.
The instrument was intended as a guaranty to the bank for contemplated advances to be made to the North Middlesex Quarry Company, of Cromwell, on notes and other securities of the company to be discounted by the bank. The defendants were members and directors of the company; and at and before the execution of the instrument, it was intended and arranged by the directors of the quarry company between themselves, that they should all execute the. bond before it was to be delivered. And the instrument itself recites “ that the above obligors are the members of and compose the North Middlesex Quarry Company, of Cromwell; ” and had it been also executed by Elisha Bloomer of New York, this recital would have been true ; but, as it was not executed by him, it was not true. Besides, the finding is direct, that at the time it was presented to Edwards and Phelps for their signatures they objected to signing it, when they were told by Wilbur, one of the obligors, that it would not be good unless signed by all the parties. ' And they then signed it, upon the express condition and understanding between them and Wilbur, that the instrument was not to be delivered to the bank, or in any other manner to be used as a valid instrument, or as their bond, until it had been signed by all the directors ; and Wilbur was not at any time authorized to deliver the bond as the bond of Edwards and Phelps, except upon this condition ; and Wilbur received the instrument after it was so signed by them for the purpose of procuring the signatures of the other parties and then delivering it to the bank. But Elisha Bloomer, one of the directors, and whose name had been inserted- in the body of the bond as one of the obligors, refused to sign it, whereupon his name was erased, and in that condition it was delivered to the bank. The bank had no knowledge of the condition upon which Edwards and Phelps had signed it, and the latter had no knowledge that Bloomer *103had not signed it until after the failure of the quarry company; and although they knew that the writing was delivered to the bank, and that the bank was discounting the company paper upon its credit, yet they supposed that Bloomer had signed it.
It. is elementary law that a bond is of no validity until there is a delivery of it to the use of the obligee. It is true the delivery may be inferred or implied from circumstances, but it can never take effect as a deed until the obligor delivers it as such, or the terms and conditions upon which it was to be delivered have been performed. In this case the finding is clear to the effect that there was never any intention on the part of either Edwards or Phelps that this instrument should be delivered, or take effect as their deed, until it was •also executed by Bloomer; and as it never was executed by him, the holding of it as a valid instrument against them would practically subject them to a different and much heavier obligation than they éver contemplated as possible under any circumstances. Before we should feel justified in adopting a principle which would lead to this result, we should require a clear preponderance in the weight of authority to sustain us. But we are referred to nothing which will justify such a decision. We are told indeed that the text writers say that “ an esctow is a delivery to a third person to hold until some condition be performed,” and as Wilbur was one of the obligors it is claimed that he could not be such a third person, and therefore that his co-obligors are bound by his acts, however contrary to the instructions given him. But that this expression has never been understood as excluding a co-obligor from holding an instrument as an escrow is evident from the numerous cases in which it has been held that a deed left in the hands of a co-obligor, to be delivered to the obligee on the performance of some condition, has been held to be an escrow, and a delivery without the perfoi’mance of such condition has been held to be inoperative and void. Johnson v. Baker, 4 Barn. & Ald., 440 ; Pawling v. The United States, 4 Cranch, 219 ; Duncan v. The United States, 7 Peters, 435 ; Jackson v. Rowland, 6 Wend., 666. *104Other-cases to the same effect might be cited. The plaintiffs however dó not deny that the current of authority upon the point-is-against them. It is claimed, however, that the cases have-, generally arisen upon official bonds, which depend to some extent upon statutes authorizing such bonds to be taken. ■If'this were so, we do not see that it could make any difference in the principle upon which they rest, the want of a delivery, which must always have been made in the case of a binding instrument. Tho facts in some of the cases are very similar to those in this case, and in the absence of any countervailing authority they must be held to be decisive of it.
We are of opinion therefore that the defendants, Edwards and Phelps, are not liable upon the bond in suit, and we advise-the superior court that they are entitled to judgment in their favor.
In this opinion the other judges concurred.