some one else for his benefit, such delivery is sufficient.50 Mitchell, J., in the case of Purviance v. Jones,51 says: While it is not indispensable that there should have been an actual transfer of the instrument from the maker to the payee, yet, to constitute a delivery, it must appear that the maker, in some way, evidenced an intention to make it an enforceable obligation against himself, according to its terms, by surrendering control over it, and intentionally placing it under the power of the payee, or of some third person for his use. The acts which consummate the delivery of a promissory note are not essentially different from those required to complete the execution of a deed. Act and intention are the two elements essential to the delivery of a deed, which is ordinarily effected by the simple manual transfer of possession from the grantor to the grantee, with the intention of passing the title and relinquishing all power and control over the instrument itself. The final test is, Did the maker do such acts in reference to the deed or other instrument as evince an unmistakable intention to give it effect and operation, according to its terms, and to relinquish all power and control over it in favor of the grantee or obligee?" d. Mode of delivery.—(1) In general.— By depositing a note in the mail, with the intent that it shall be transmitted to the payee in the usual way, the maker parts with his dominion and control over it and the delivery is, in legal contemplation, complete.52 -- 50. Gordon v. Adams, 127 Ill. 223, of the note refused, when requested, to 19 N. E. 557. execute a mortgage to secure a debt, and assignd as a reason that he had signed a note and left it in the bank for plaintiff's benefit. There was no finding that the note had been left with the bank for the plaintiff's benefit or that the latter had taken any action respecting the same, but such a note was found among the intestate's private papers after his death, with the writing on the back stating that the note was explained in the statement signed by intestate. The court held that there was nothing in the facts found to indicate that the testator had ever surrendered control of the note. An intent to deliver is not sufficient. Drum v. Benton, 13 App. (D. C.) 245. Intent controls. In the case above cited, the court said: "In determining the question of delivery, the intent of the parties with respect thereof is the controlling element. This intention may be shown by direct proof, or by proof of the acts and declarations of the parties evincing such intent, or may be inferred from the circumstances shown, which are sufficient to create the presumption of delivery. Thus, if a deed or note is found in the possession of the grantee or payee, its delivery will be presumed.' See also Weber v. Christen, 121 Ill. 91, 11 N. E. 893, 2 Am. St. Rep. 68; Stone v. French, 37 Kan. 145, 14 Pac. 530, 1 Am. St. Rep. 257; Palmer v. Poor, 121 Ind. 135, 22 N. E. 984, 6 L. R. A. 469; Streissguth v. Kroll (Minn.), 90 N. W. 577. 51. 120 Ind. 162, 21 N. E. 1099, 16 Am. St. Rep. 319. In this case the maker 52. Barrett v. Dodge, 16 R. I. 740, 19 Atl. 530, 27 Am. St. Rep. 777. See also Kirkman v. Bank of America, 2 Coldw. (Tenn.) 397. In the case of Buhler v. Galt, 35 Ill. Where a note was made for a good consideration, without the knowledge of the payee, and delivered to him in a sealed envelope with instructions not to open it during the lifetime of the maker, and that it should be returned to the maker upon his request, it was held that upon the death of the maker the note became a valid claim against his estate. 53 A delivery to an agent of the payee constitutes a delivery to the payee. But it has been held that leaving a check upon the desk of a clerk without his knowledge is not a delivery to the clerk's employer, unless it is actually received by the clerk or his employer.55 54 (2) Conditional delivery. The doctrine of the Negotiable Instruments Law that a delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument, has been established both in this country and in England by a long line of authorities. In conformity with the general law of contracts, it has been settled, in most common-law jurisdictions, that as between the immediate parties and those having notice thereof, a negotiable instrument may be delivered upon conditions, the observation of which between the parties is essential to its validity, and that these conditions may be established by parol evidence where the agreement was oral.56 There are, however, a number of decisions which hold, App. 225, it was held that, where a drawer of a check, without the request of the payee, deposits such check in the mail for transmission to the payee, the title thereto remains in the drawer until it reaches the hands of the payee. 53. Worth v. Case, 42 N. Y. 362; North v. Case, 2 Lans. (N. Y.) 264. And where a note payable to a certain person is found among the maker's papers after his death, it cannot be sued on by the payee. Cann v. Cann's Heirs, 45 W. Va. 563, 31 S. E. 923. of delivery of the note. See also Security Co. v. Ball, 107 Ind. 165, 1 N. E. 567. 55. Kinne v. Ford, 52 Barb. (N. Y.) 194, affd. in 43 N. Y. 587. The reason was stated as that, if the clerk, for any reason, does not consent to the delivery of the check, either from mental infirmity or lack of attention, or any physical incapacity, there is no delivery to him. Delivery is a thing in which both parties must join. The minds of both parties must concur. 54. Scott v. State Bank, 9 Ark. 36. See also Chicopee Bank v. PhiladelDelivery to agent. In the case phia Bank, 8 Wall. (U. S.) 641; Shaw V. Camp, 160 Ill. 425, 43 N. E. 608, it appeared that, 56 Pac. 436; Gross v. Arnold, 177 Ill. Whyte v. Rosencrantz, 123 Cal. 634, while the payee of a note was absent, the maker delivered it, without conditions, to a banker and broker of the 56. Conditional delivery.- Marston V. Allen, 8 Mees. & W. payee, with directions to deliver it to (Eng.) the payee upon his return; such 494, 11 L. J. Exch. (Eng.) 122; Wake banker had in his possession other v. Harrop, 6 H. & N. (Eng.) 775, 30 papers of the payee for safe keeping; L. J. Exch. (Eng.) 273; Adams v. the note was placed by the banker in Jones, 12 Ad. & El. (Eng.) 455, the private envelope of the payee and 9 L. J. Q. B. (Eng.) 407; Bell v. Lord deposited in a safety box in the bank. Ingestre, 12 Q. B. (Eng.) 317, 18 It was held that there was a sufficient L. J. Q. B. (Eng.) 71, 4 Eng. Rul. Cas. 575, 52 N. E. 867. contrary to the decided weight of authority, that there can be no conditional delivery in escrow to the payee. These decisions proceed upon the theory that the proof of such conditional delivery 203; Quebec Benk v. Halman, 110 U. S. 178, 4 Sup. Ct. 76, 28 L. Ed. 111; Burke v. Dulaney, 153 U. S. 228, 14 Sup. Ct. 816, 38 L. Ed. 698; McFarland v. Sikes, 54 Conn. 250, 7 Atl. 408; Perley v. Perley, 144 Mass. 104, 10 N. E. 726; Sweet v. Stevens, 7 R. I. 375; Breeden v. Grigg, 8 Baxt. (Tenn.) 163; Alexander v. Wilkes, 11 Lea (Tenn.), 221. livery is not an oral contradiction of the written obligation, though negotiable, as betweer the parties to it, or others having notice. While this parol evidence is not admissible to vary the effect of the undertaking, or merely to show that it was to be renewed, yet, when the note does not contain the whole contract, and is made in pursuance of a contract, it is competent to show what the contract was, and the purpose for which it was made." In the case of Ware v. Allen, 128 U. S. 590, 9 Sup. Ct. 174, 32 L. Ed. 563, it was held that a note extended Where at the time a note was disin contemplation of a proposed trans- counted there was a distinct underaction, which could be valid only on standing between the maker and the condition of the approval of a certain bank discounting that the former attorney, becomes void upon his ad- should incur no liability by signing the vising the maker to have nothing to note, it was held that he was not do with it. See also Hooper v. Eiland, liable thereon to the bank that dis21 Ala. 714; Murray v. Kimball, 10 counted it. Garfield Nat. Bank v. ColInd. App. 184, 37 N. E. 734; Deveries well, 58 Hun (N. Y.), 169, 10 N. Y. v. Shumate, 53 Md. 211. Supp. 864. N. Y. 130, 47 N. E. 32, affg. 90 Hun (N. Y.), 398, to the same effect. A check was delivered to one person, The decision in that case was based with directions to deliver the same to upon that of Benton v. Martin, 52 another when a certain contract N. Y. 570, and Seymour v. Cowing, should be executed for the sale of 4 Abb. Ct. App. Dec. (N. Y.) 200, 1 land. The check was delivered, al- Keyes (N. Y.), 532. And see also though the contract was never drawn the case of Higgins v. Ridgway, 153 up. As soon as the defendant learned of the delivery, he notified the plaintiff that he would not pay the check. It appeared that the terms under which the check had been deposited were known to the plaintiff. It was held that the defendant was not liable on the check. Hoyt v. McIntire, 50 Minn. 466, 52 N. W. 918. Where a note and collateral security thereto were given by the maker under a mistake as to the personalty of the party receiving them, and were accepted by such person fraudulently, with knowledge of the maker's mistake and of the rights of a third perIn New York one of the leading son thereto, the note is void in its cases is that of Bookstaver v. Jayne, inception. Bergmann v. Salmon, 79 60 N. Y. 146, where, in an action upon Hun (N. Y.), 456, 29 N. Y. Supp. a promissory note against an indorser, 968, affd. in 150 N. Y. 575, 44 N. È. the defendant set up in his answer 1121. that he indorsed the same as security Where renewal notes are given, alfor a debt due from the maker to the though interest may be added and the plaintiff, upon the agreement of the time extended, such notes are subject, plaintiff to discontinue a suit brought in the hands of the original holders, by him for the recovery of the debt. to the same defenses as the original This agreement was violated. The debt. Earle v. Robinson, 91 Hun court, in discussing the question of the admissibility of parol evidence to vary the terms of the instrument, said: "An instrument not under seal may be delivered upon conditions, the observation of which, as between the parties, is essential to its validity. And the annexing of such conditions to the de (N. Y.), 363, 36 N. Y. Supp. 178. For a further discussion of the rules as to conditional delivery and proof of parol agreements, affecting the enforcement of unsealed contracts, see Chapin v. Dobson, 78 N. Y. 74; Eastman v. Shaw, 65 N. Y. 522; Englethorn v. Reitlinger, 122 N. Y. 76, 25 N. E. varies the terms of a written contract.57 Where a person signs the note under a condition that the signatures of other persons shall be obtained, he is liable thereon although such signatures are not obtained,58 if the payee or the holder has no knowledge that such was the agreement; but it is otherwise where the payee has knowledge of the agreement. 59 e. Presumption of valid delivery.—(1) Conclusive as to holder in due course. As a general rule possession of a promissory note or bill of exchange implies delivery. According to the pre 297; Bradley v. Washington, etc., gard to them which calls for special Packet Co., 13 Pet. (U. S.) 89; consideration." Juillard v. Chaffee, 92 N. Y. 529; Reynolds v. Robinson, 110 N. Y. 654, 18 N. E. 127. 57. In the case of Garner v. Fite, 93 Ala. 405, 9 South. 367, it was held that parol evidence could not be reIn the case of Washington Savings ceived to show that a promissory note, Bank v. Furguson, 43 App. Div. (Ñ. expressing on its face an unconditional Y.) 74, 59 N. Y. Supp. 295, the court promise to pay money, was delivered distinguishes between parol conditions to the payee in escrow, or subject to impeaching consideration entirely and a condition subsequent, which was like conditions limiting and postponing never performed. See also Hurt v. the liability of the person asserting Ford, 142 Mo. 283, 44 S. W. 228, 41 them, and says: "It is apparent that L. R. A. 823; Massmann v. Holscher, there is nothing in these cases which 49 Mo. 87; Henshaw v. Dutton, 59 militates against the general rule to Mo. 139; s. c., 67 Mo. 666; Jones v. which we have previously referred. In Shaw, 67 Mo. 667; Clanin v. Esterly all the other cases cited the real ques- Machine Co., 118 Ind. 374, 21 N. Ě. tion was as to the consideration." In 35; Carter v. Moulton, 51 Kan. 9, 32 none of them was it held that parol Pac. 633, 37 Am. St. Rep. 259. evidence could be given of a condition 58. Taber v. Mechanics' Nat. Bank, affecting the tenor of the contract 48 Ark. 454, 3 S. W. 805; Bonner v. obligation. Conditions relating to the Nelson, 57 Ga. 433; Clark v. Bryce, delivery of the note may be shown, 64 Ga. 486; Stricklin v. Cunningham, but not conditions affecting the char- 58 Ill. 203; Micklewait v. Noel, 69 acter of the delivered obligation. The Iowa, 344, 28 N. W. 630; Ward v. one goes to the existence and vitality Hackett, 30 Minn. 50, 14 N. W. 578; of the contract. The other, conceding its existence and vitality, would annex a parol condition thereto, varying its contract essence. Here the defendant admits the delivery of the note, and that it was so delivered for value. It is immaterial, under the circumstances, whether that value went to him or to the Arkell Company. When the note was so delivered for value it had upon it the defendant's indorsement, given for the accommodation of the Arkell Company. He even admits that that accommodation indorsement imported a qualified liability. The case is thus clearly reduced to an attempt by parol to vary and minimize the contract obligation. It is clear that it must fail. There is no merit whatever in either of the alleged counterclaims and no point is made with re Garvey v. Marks, 134 Mo. 1, 34 N. W. 1108; North Atchison Bank v. Gay, 114 Mo. 203, 21 S. W. 479; Miller v. Gambie, 4 Barb. (N. Y.) 146. 59. Jordan v. Lofton, 13 Ala. 547; Belleville Sav. Bank v. Bowman, 124 Ill. 200, 16 N. E. 210; Coffman v. Wilson, 2 Metc. (Ky.) 542; Perry v. Patterson, 5 Humph. (Tenn.) 132, 42 Am. Dec. 424. But the case of Clanin v. Esterly Machine Co., 118 Ind. 372, 21 N. E. 35, is opposed to this doctrine. 60. Mitchell v. Conley, 13 Ark. 114; Williams v. Williams, 13 Ark. 421; Garrigus v. Home, etc., Soc., 3 Ind. App. 91, 28 N. E. 1009; Bellows v. Folsom, 4 Rob. (N. Y.) 43; Napier v. Mayhew, 35 Ind. 276; Brooks v. Allen, 62 Ind. 401. Where a maker impliedly admits ponderance of authority, one who has purchased for value, in good faith, in the usual course of business, and before maturity, a negotiable instrument complete upon its face, and not avoided by forgery or statutory prohibition, has good title in the person from whom he took it, even though such person may have acquired it by fraud, by theft, or by robbery.61 The rule as declared in the Negotiable Instruments Law is clearly that of the law merchant; the rights of bona fide holders of commercial paper is a matter for consideration in another part of this work.62. 64 f. Presumption of intentional delivery by placing signature on instrument. The provision of the Negotiable Instruments Law relating to this subject is the same as that contained in the English Bills of Exchange Act.63 Where the signature of the maker of a note is impliedly admitted, the production of the note by a plaintiff in an action thereon, with proof of its indorsement by the payee, is prima facie proof of delivery. The inference that a note was delivered which arose from its possession by the payee may be counteracted by proof that the delivery was based on some contingency that had not yet happened. The right to the possession and full beneficial interest in an unindorsed negotiable paper may pass by manual delivery of the paper, and, in the absence of testimony tending to disprove that the notes were delivered, the presumption will obtain that one in the possession of such paper his signature, the production of the note by the plaintiff, with proof of the indorsement of the payee, is prima facie proof of delivery." Burson v. Huntington, 21 Mich. 415, 4 Am. Rep. 497. See also Hensel v. Chicago, St. P., M. & O. R. Co., 37 Minn. 87, 33 N. W. 329. Good Minn. 239: Goodman v. Simonds, 20 62. See chap. VI, post. 63. English Bills of Exchange Act, 1882, § 21(3), which provides that "where a bill is no longer in the possession of a party who has signed it as drawer, acceptor, or indorser, a valid and unconditional delivery by him is presumed until the contrary is proved." 64. Burson v. Huntington, 21 Mich. cago, 61. This proposition will be discussed hereafter. See post, chap. IV. The proposition of the text is maintained in the following cases: win v. Robarts, L. R., 10 Exch. (Eng.) 415, 4 Am. Rep. 497; Hensel v. Chi337 (where scrip had been dishonestly Minn. 87, 33 N. W. 329; Newcomb v. St. P., M. & O. R. Co., 37 pledged by agent of owner); Worces- Fox, 1 App. Div. 389, 37 N. Y. Supp. ter County Bank v. Dorchester, etc., 294, affd. in 154 N. Y. 754; Cox v. Bank, 10 Cush. (Mass.) 488 (case of Adams, 2 Ga. 158; Fairthorne v. Garstolen unissued bank bills); Cooke v. den, 1 Houst. (Del.) 197; McCallum United States, 91 U. S. 389 (case of v. Driggs, 37 Fla. 277; Dietrich v. acceptance of forged bills purporting Mitchell, 43 Ill. 40; Brooks v. Allen, to be acceptor's own); Gould v. Seger, 62 Ind. 401; Napier v. Mayhew, 35 5 Duer (N. Y.), 268 (note wrongfully Ind. 276. taken); Shipley v. Carroll, 45 II. 285 (note stolen); Kinyon v. Wohlford, 17 65. Hurt v. Ford (Mo.), 36 S. W. 671. |