Court Opinion

ID: 3624413
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:05:22.747565+00
Date Added: 2024-06-11T14:00:26.704088
License: Public Domain

In December, 1855, the commissioners of the canal fund loaned to the Bank of Corning twenty-five thousand dollars. The bond in suit was executed by the defendants as sureties — undertaking and agreeing that the bank should repay the money borrowed. The bond was signed and acknowledged at Corning, and was handed over to Bostwick, who was the president of the bank, with the distinct understanding that it was not to be used until it should be signed by one Andrew B. Dickinson as co-surety. The bond would not have been signed by any of the defendants except *Page 446 
Bostwick and Laurin Mallory, the president and cashier of the bank, except upon the express condition that Dickinson was also to execute it. The bond was never signed by Dickinson. It was taken by Bostwick to Albany and the money obtained from the commissioners. The bond was perfect and complete on its face and no insertion of Dickinson's name as one of the obligors. The judge who tried the cause ordered judgment for the plaintiff; this judgment was reversed at General Term and the plaintiff appeals to this court.
The defendants claim that the contract is not binding on them, inasmuch as the condition has not been complied with; in other words, Dickinson not having signed, the instrument or writing was never delivered and was but a mere scroll and no bond.
In the case of Lovett v. Adams (3 Wend., 380), the defense was, that the bond had never been delivered by the obligors and the fact was offered to be proved by a co-obligor. The witness was rejected. Chief Justice SAVAGE said: "If a bond be signed and put into the hands of the obligee, or a third person, on the condition that it shall become obligatory upon the performance of some act by the obligee or any other person, the paper signed does not become the bond of the party signing the same until the condition precedent be performed. Until then there is no contract." In Bronson v. Noyes (7 Wend., 188,) a bond was given to the sheriff on an arrest. The sheriff said to the party signing, "sign the bond and he will get some other person to sign with you, or get other bail in the morning." By the court, NELSON, Justice: "If it was the agreement of the parties at the time it was put into the hands of the officer, that it was not to be delivered to take effect until additional bail was procured, then, whatever might be the intention of the defendant, the bond would be inoperative and have no legal existence." In both the foregoing cases, the bonds were handed over to the obligees, but were not in fact delivered so as to make them valid and binding. The rule is different with deeds. If the grantor does not intend that his deed shall take effect until some condition *Page 447 
is performed, he must keep it himself or leave it with a third person — a stranger to the transaction in escrow. "For," says BRONSON, Justice, in Gillett v. North America Fire InsuranceCo. (23 Wend., 43), "if he deliver it as his deed to the grantee it will operate immediately and without any reference to the performance of the condition, although such a result may be contrary to the express stipulations of the parties at the time of the delivery." And the reason is manifest. On the delivery of the deed of the grantor to the grantee, as and for the deed of the former, no matter what the verbal conditions, the title, eoinstanti, vests in the grantee, and can only be divested by process of law or by the voluntary execution of a deed by the grantee. A deed once delivered and accepted, its redelivery by the grantee will not revest the legal title in the grantor. (4 Wend., 585; 2 Johns., 84.) But a bond carries no title; it gives on its face only a right of action if the condition contained in it is not performed. Its return to the obligor, as a matter of course, destroys such right of action. While, therefore, a deed may not be given to a grantee in escrow, with verbal conditions on the performance of which it is to take effect, a bond may be given with conditions to the obligee, because the obligee takes nothing by his bond but a right of action, which, to render available to him, he must enforce by action, and which may be resisted by the obligor, showing that the condition had not been performed and therefore there was no debt — not urging the written contract, but showing that it never had any legal existence, having never, in fact, been delivered. If this view be correct, then it matters not in what relation Bostwick, the president of the bank, stood to the other defendants, whether as their agent or the agent of the State, or as the agent of neither. He had this bond in his hands as co-obligor and held it under an express agreement not to deliver it unless it was signed by Dickinson. It was transferred to the commissioners of the canal fund in violation of that agreement. So far as the defendants are concerned, except Bostwick and Laurin Mallory, this bond never had a legal existence. As to them it was never delivered, and unless we can convert *Page 448 
the bond into a bill of exchange or promissory note, the defense of the defendants must prevail. I have not deemed it necessary to go over the cases in other States, so numerously cited and ably commented on by the learned justices in the court below. With one or two exceptions, the authorities seem to be with the defendants. But if the principle is not settled by direct adjudication in this State, it certainly has been, I think, uniformly declared and recognized.
I am of opinion this judgment must be affirmed.