Daniels v. Gower

Adams, J. 1. promtssurety^cis-1 Rvery. The note was given for a steam boiler and engine, sold to the defendant Gower. The sale was negotiated with Gower by one Reily. Whether Reily was acting for himself, or as the agent of t]ie plaintiffs, was a question raised upon the trial, and submitted specially to the jury. They found that he was acting for the plaintiffs. The correctness of this finding is questioned, but in the view which we take of the case it is not material. The principal question in the case arises upon the correctness of the eleventh instruction given by the court, which is in these words: “The defendants Eeem, Weaver and Sell say that they never delivered said note, and never authorized any person to deliver it for them, but allege they signed it and placed it in the hands of one Stoller, upon the express condition and understanding that said Stoller should retain the same until one Blajok should sign it with them, and that it was delivered by Stoller to one Roach, without the knowledge and consent of these defendants, who delivered the same to said Gower, from whom it was obtained by plaintiffs, and that said defendants had no knowledge of such delivery, and never gave' their assent thereto or ratified the same. On this subject you are instructed that if you believe from the evidence that Beem, Weaver and Sell signed and delivered said note to Stoller; that said Stoller was not the agent of the plaintiffs; that it was delivered to Stoller with the agreement and understanding that it should be retained by him, and not delivered until signed by Blajok, and if you further believe that it was not signed by Blajok, but was delivered to Roach, by Stoller, without the knowledge or consent of the defendants or any of them, and by him delivered to Gower without the knowledge or consent of the defendants, then the defendants, or such of them as signed and delivered said note under such circumstances, and with such understanding and agreements, will not be liable, and you will so find by your verdict.” . The giving of this instruction is assigned as error. [321] The evidence shows that the note was signed by Beem, Weaver and Sell while in the hands of Stoller as alleged, and with the condition as alleged. Considerable stress is laid in argument by the appellee upon the fact that the note was then in the hands of a stranger to it. This fact might be material if the payees had received the note from the hands of Stoller. We are inclined to think that they might properly have been required to take notice of the extent of Stoller’s authority even if the note had been made negotiable. But the note passed from Stoller to Gower before delivery, and the delivery was made by Gower, who was the principal upon the note. Where a negotiable note is delivered by the principal, it is, to say the least, doubtful whether the payees are bound to take notice of his authority. Upon this point see Passumpsic Bank v. Goss, 31 Vt., 315; Farmers, etc. v. Humphrey, 36 Vt., 554; Smith v. Moberly, 10 B. Mon., 269; Bank of Missouri v. Phillips, 17 Mo., 30. In one sense, it is true, there would be no delivery as to the sureties if the delivery was made without their authority, but some of the cases seem to hold that where the sureties allow the note to pass into the hands of the principal, who has power to bind himself by delivery, the payees. have a right to assume that the sureties authorized him to deliver it for them. But this doctrine, whether it is correct or not, is not, we think, applicable to a case where the note is not negotiable. The note in this case according to the amended abstract is not negotiable. There has been a long line of decisions to the effect that where the obligee in an official bond receives it from one of the obligors, he has no right to assume that the co-obligors signed it without condition. See Pepper v. The State, 22 Ind., 411, and cases cited. In some of the cases, it is true, there seems to have been enough upon the face of the instrument to put the obligee upon inquiry, but that does not appear to have been a controlling consideration. Now while cases arising upon official bonds may not be regarded as strictly [322] in point, the principle involved is very nearly the same. Besides, cases are not wanting which have arisen upon nonnegotiable instruments for the payment of money. People v. Bostwick, 32 N. Y., 445; Ayers v. Milroy, 53 Mo., 516. In the latter case the court, while recognizing the rule that sureties who sign a negotiable instrument, and leave it in the hands of the principal, who delivers it, cannot be heard to say that they signed it upon conditions which were not fulfilled, held that it had no application to instruments that were not negotiable. They say that “ in making this line of defense there is a clear distinction recognized between bonds, or other instruments that are not negotiable, and those which are negotiable.” In our opinion, the instrument in question, not being negotiable, and having been delivered in violation of conditions imposed by Beern, Weaver and Sell, they may properly claim that as to them the instrument was not delivered. The instruction given, we think, is correct. 2. —;-. II. As to Inech, who signed in just reliance upon the • sureties whose signatures preceded his, as the evidence shows, it seems clear that if they cannot be held he should not be. Pepper v. State, above cited. The judgment of the District Court is Aeeirmed.