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4 Barn. & Ald. 672; 6 Eng. Com. Law Rep. 560; Hall v. Chandless, 4 Bing. 123; 13 Eng. Com. Law Rep. 369.
7. Instrument fully written, and sealed, may be delivered as
an escrow to a stranger.
When the instrument has been not only sealed, but fully written before its delivery by the party, the rule in respect to its delivery as an escrow to a stranger, is universally conceded. Cabell, J., in Hicks &c. v. Goode, 12 Leigh 490; Pawling dc. v. U. States, 4 Cranch 219; Murray v. Earl of Stair, 2 Barn. & Cress. 82; 9 Eng. Com. Law Rep. 35. Thus, if the grantor make a writing, and seal it and deliver it to a third person as his writing or escrow, to be by him delivered to the grantee, upon some future event, as his the grantor's deed, and it be delivered to the grantee accordingly, it is not the grantor's deed until the second delivery. And if the grantee obtain the possession of it before the event happen, yet it is not the grantor's deed, and he may avoid it by pleading non est factum. Perkins 137, 138, 142; Wheelwright foc. v. Wheelwright, 2 Mass. 452; Bodwell v. Webster, 13 Pick. 414, 15.
Where it was alleged by one that he agreed to join the principal obligor as his surety in a bond, and executed and delivered the same as an escrow, upon condition that a second person should also join in and execute the bond as co-surety; and that person alleged that he agreed to join as surety in the bond and execute and deliver the same as an escrow, upon condition that a particular individual should join in and execute the bond as co-stirety, and that individual never executed the bond; the court of appeals of Virginia held that if these allegations were proved, neither of the parties making them was liable on the bond. King v. Smith &'c. 2 Leigh 157.
Generally, a deed delivered as an escrow, to be delivered over as the deed of the party making it, on a future event, takes its effect from the second delivery, and will be considered as the deed of the party from that time. Perk. 143, 144; 3 Co. 356, 36a; Wheelwright sc. v. Wheelwright, 2 Mass. 453. Yet there are excepted cases in which it takes its effect and is considered the deed of the maker from the first deli. very. The exception is founded on necessity, ut res valeat. Thus, according to Perk. 139, 140, if a feme sole seal a writing, and deliver it as an escrow, to be delivered over on condition, and she afterwards marry, and the writing be then delivered over on performance of the condition, it shall be her deed from the first delivery; otherwise her marriage would defeat it. In Brooks' Reading, on the statute of limitations, p. 150, there is another exception. A. delivers a deed, as an escrow, to J. S., to deliver over on condition performed, before which A. becomes non compos mentis; the condition is then performed, and the deed delivered over; it is good, for it shall be A.'s deed from the first delivery. Another exception is in 3 Co. 356, 36a. Lessor makes a lease by deed, and delivers it as an escrow, to be delivered over on condition performed, before which lessor dics, and after it is delivered over on condition performed; the lease shall be the deed of the lessor from the first delivery. There is also a strong excep
a tion in 5 Co. 85. If a man deliver a bond as an escrow, to be delivered on condition performed, before which the obligor or obligee dies, and the condition is after performed: here there could be no second delivery, yet it is the deed of the obligor from the first delivery, although it was only inchoate : but it shall be deemed consummate by the performance of the condition. Parsons, C. J., in Wheelwright foc. v. Wheelwright, 2 Mass. 454. Therefore, with respect to the deeds in this case, it was held that if they were delivered to a person as escrows, and by him delivered over on the death of the grantor, they must take their effect and be considered as the deeds of the grantor from the first delivery, he being dead at the second delivery; and the cases in 3 Co. 36a, and 5 Co. 85, were deemed in point. The same rule is recognized in Hatch &c. v. Hatch dc. 9 Mass. 310, and Bodwell v. Webster, 13 Pick. 414.
8. Whether there may not be a conditional delivery of a bond
to the obligee.
In a case before the supreme court of the United States it was admitted by the counsel that a bond cannot be delivered to the obligee as an escrow; and upon its being contended that where there are several obligees constituting a copartnership it may be delivered as an escrow to one of the firm, this was overruled; the court being of opinion that a delivery to one is a delivery to all. Moss v. Riddle, 5 Cranch 357.
In this case the counsel for the parties who had sealed the instrument admitted the doctrine against them to be more stringent than appears to be established by the weight of authority.
True it is, that in Com. Dig. Tit. Fait A 3, we find this said : “so if it be once delivered as his deed, it is sufficient though he afterwards by words explains his intent otherwise ; as if an obligation be made to A and delivered to A himself as an escrow, to be his deed upon performance of a condition, this is an absolute delivery, and the subsequent words are void and repugnant.” And in support of this position, authorities are referred to. “But these," Best, C. J. observes, “are at least conflicting." Hudson v. Revett, 5 Bingh. 368; 15 Eng. Com.
, Law Rep. 472. Though a deed is delivered to a party, there are cases to shew that it may not be a perfect and complete deed. S. C. Indeed the next division of Comyn (Fait A 4) shews that his position about delivery to the obligee himself as an escrow is merely a technical subtlety; for while stating that a delivery cannot be to the obligee as an escrow, he yet lays down that if it be delivered to the party as his deed upon performance of a condition, it is not his deed till the condition is performed, though the party happen to have it before. The English courts have approved this position of Comyn. S. C. ; and they have disapproved the passage (Fait A 3) wherein it is said, “if it be delivered as his deed to a stranger, to be delivered to the party upon performance of condition, it shall be his deed presently, and if the party obtains it, he may sue before the condition performed.”
The authority quoted for this is Degory and Roe's case, 1 Leon. 152. There it is so stated by some of the judges. But the matter does not appear in Leonard to have been finally decided ; and upon looking to the report of the same case in Moore 360, it appears that the case was ultimately decided the other way. Therefore it was deemed an authority in Johnson foc. v. Baker, 4 Barn. & Ald. 410; 6 Eng. Com. Law Rep. 479. The defence in this case being that the deed was delivered as an escrow and on condition that certain specified creditors of the defendant should sign it, it appeared that at the meeting at which the deed was executed by the defendant there was a conversation respecting the difficulty which might arise in case all the defendant's creditors did not execute the deed. The plaintiffs were not present at this conversation ; but it was then stated that the deed should be void unless all the creditors executed it; the defendant subsequently but at the same interview executed the deed in the ordinary way, and without saying any thing at the time of the execution ; and the deed was then delivered to one of the creditors who was to get it executed by others. The court of king's bench regarding the conversation which took place immediately previous to the execution of this deed as part of the whole transaction, considered the subsequent delivery of the deed by the defendant as not absolute on his part but conditional ; and the condition not having been complied with, the plaintiff was nonsuited.
I take it, says Parke, B. to be now settled, though the law was otherwise in ancient times, as appears by Sheppard's Touchstone, that in order to constitute the delivery of a writing as an escrow, it is not necessary it should be done by express words but you are to look at all the facts attending the execution to all that took place at the time and to the result of the transaction; and therefore, though it is in form an absolute delivery, if it can reasonably be inferred that it was delivered not to take effect as a deed till a certain condition was performed, it will nevertheless operate as an escrow. Bouker v. Burdekin, 11 M. & W. 146.
In the United States decisions have been made on this principle.
The state of North Carolina guarantied bonds of the Raleigh and Gaston railroad company, to the amount of $500,000, and authorized the stockholders of the company to give bonds to the amount of their stock, and individuals who might be disposed to assist them, their bonds to any amount they pleased for the purpose of further indemnity of the state, over and above the property of the company already conveyed for that purpose, “provided such bond or bonds shall in the whole amount to the said sum of $ 500,000.” The construction of this act was, that the state did not intend to receive the bonds of the stockholders or of individuals unless altogether they should amount to the sum guarantied by her ; and on the other hand that the several obligors did not intend that their several bonds should be obligatory upon them but upon the same condition. And though the bond of an individual was delivered to the treasurer, who was the agent of the state to receive it. yet that delivery was regarded as conditional; and it was held that to enable the state to recover on the bond, it must appear that before bringing the action there were bonds amounting in the whole to $ 500,000. Bennehan v. Webb S'c. 6 Iredell 57.
In a case in New York in which lands of an individual were divided into 23 shares, of $ 5000 each, and sold at that price to such persons as should subscribe for said shares, Walworth, C. held, in an action against a subscriber upon his coyenant in the agreement, that even if the parties contemplated that the execution and delivery of the instrument should not be complete until the whole number of shares was subscribed, they might subsequently consent to an absolute delivery upon the subscription of 19 shares only, so as to make it a binding agreement as to these 19 shares. Sandford v. Halsey, 2 Denio 253.
Sometimes a bond appears on its face to have been prepared for more obligors than have executed it. Keyzer v. Keen, 5 Harris 327. It was in respect to a case of this sort that the court of appeals of Virginia had to consider the old rule, where a deed is sealed and delivered to the party himself to whom it is made as an escrow, but to become the deed of him who sealed it, on certain conditions, that in such case let the form of the words be what it may the delivery is absolute, and the deed shall take effect presently as his deed, and the party is not bound to perform the conditions. Co. Lit. 36a ; Shep. Touch. 58, 9; Williams v. Green, Cro. Eliz. 884. Adverting to the distinction between a deed delivered as an escrow to the party to the deed and one that is delivered to a stranger, Cabell, J. declared the reasoning on which it is founded to be not only very technical but unsatisfactory to his mind, and said he was not disposed to carry the doctrine farther than it had already been carried, and he had observed no case in which it had been applied to a deed not on its face perfect and complete, according to the intention of the parties as gathered from the instrument itself. Hicks fc. v. Goode, 12 Leigh 491. In this case the instrument commenced, “We, John C. Goode and Benjamin B. Jones, are held and firmly bound, &c.," and concluded, "witness our hands and seals, &c." It had the signature of Goode with a seal, and under that seal another, but no signature besides Goodle's, and it was attested by J. C. Rice as to J. C. Goode. The fact that the delivery by Goode was on condition of the instrument being executed by Jones, being not contrary to but consistent with the face of the instrument, and this fact being admitted and sworn to by that one of the obligees to whom the delivery was made, who though one of the plaintiff's became a voluntary witness for the defendant,-a verdict was found and judgment given for the defendant.
In a case in Massachusetts it appeared that indentures were prepared and executed at Lexington by the parties then present, with an understanding that one part should be taken to Watertown to be executed by two persons, composing a firm there, and then exchanged; the part thus executed to be taken by the plaintiffs instead of the one which they retained. The part so taken was executed by one of the firm in the name of the firm ; but the parts were never exchanged. The supreme court of Massachusetts was of opinion that there was no sufficient delivery of the instrument to make it the deed of the defendants. For the part held by the plaintiffs bore the names of two persons as obligors who had not executed it, shewing it to be imperfect and incomplete on the face of it until some