or "C. D., Agent for A. B." 81 If, however, C. D. had not authority, no person is bound on the instrument, for C. D., in the cases put, did not undertake to be bound. C. D. would, indeed, be liable, but only upon an implied warranty of authority, to the person to whom he delivered the instrument or the assignee of the latter's right of action, for the damages resulting from the breach.82 In cases of simple contract an undisclosed principal may take advantage of the act of an agent who has made a contract in his behalf, and may sue or be sued thereon; but this doctrine does not extend to instruments under seal, or to bills and notes. No person can be a party to a negotiable instrument unless he appears thereon to be such.8 Therefore, if the signature be "C. D.," although he was in fact agent for A. B., evidence is not admissible to show that C. D. intended to bind A. B. And even if, under the same circumstances, the signature was written "C. D., Agent," the name of the principal being undisclosed, the word "Agent" is regarded as descriptio personæ, and C. D. is bound personally. In many jurisdictions, however, in such a case, if the action were by one not a holder in due course against C. D., it would be a defense that C. D. and his transferee intended the signature "C. D., Agent," to

84

81 Daniel, Neg. Inst. § 298.

83

82 Bartlett v. Tucker, 104 Mass. 336, 6 Am. Rep. 240; White v. Madison, 26 N. Y. 117; Taylor v. Shelton, 30 Conn. 122. It seems that by Neg. Inst. L. § 20, the holder in such cases may sue the agent on the instrument, if he was not authorized to sign for the principal. Crawford, Anno. N. I. L. (3d Ed.) pp. 32, 33.

83 N. I. L. § 18; Siffkin v. Walker, 2 Camp. 308; In re Adansonia Co., L. R. 9 Ch. 635; Grist v. Backhouse, 20 N. C. 496; Arnold v. Sprague, 34 Vt. 409; Pease v. Pease, 35 Conn. 131, 95 Am. Dec. 225; Texas Land & Cattle Co. v. Carroll, 63 Tex. 51; Stackpole v. Arnold, 11 Mass. 27, 6 Am. Dec. 150; Hyde v. Paige, 9 Barb. (N. Y.) 150; Nash v. Towne, 5 Wall. (U. S.) 689, 18 L. Ed. 527; Mineral Belt Bank v. Elking Lead & Zinc Co., 173 Mo. App. 634, 158 S. W. 1066 (N. I. L.).

64 N. I. L. § 20; Dayries v. Lindsly, 128 La. 259, 54 South. 791 (N. I. L.); Schumacher v. Dolan, 154 Iowa, 207, 134 N. W. 624 (N. I. L.) semble; Williams v. Robbins, 16 Gray (Mass.) 77, 77 Am. Dec. 396, semble; Anderton v. Shoup, 17 Ohio St. 125, semble; Anderson v.

bind C. D.'s principal. But the word "Agent" following C. D.'s signature is not notice of such an intention.85

DELIVERY OF INSTRUMENTS

35. A bill or note is inoperative as against the drawer or maker until delivery.

36. Delivery means transfer of possession with intent to transfer title,86 and is of two kinds:

(a) Actual delivery, which is effected by the manual passing of the instrument itself to the payee or his agent.

Pearce, 36 Ark. 293, 38 Am. Rep. 39; Stinson v. Lee, 68 Miss. 113, 8 South. 272, 9 L. R. A. 830, 24 Am. St. Rep. 257. But by custom the title, or name and title, of the fiscal or other officer of a bank or corporation, may be the name of the corporation. See p. 84, note 45, supra; N. I. L. § 42. Where that is the case, the writing with authority of such name and title is the signature of the corporation. Bank of Genesee v. Patchin Bank, 13 N. Y. 309; Johnson v. Buffalo Center State Bank, 134 Iowa, 731, 112 N. W. 165 (N. I. L.); Citizens' Savings Bank v. City of Newburyport, 169 Fed. 766, 95 C. C. A. 232 (N. I. L.); La Normandie Hotel Co. v. Security Trust Co., 38 App. D. C. 187 (N. I. L.). Where the names of the agent and the principal both appear on the instrument, it is a question of construction whose signature it is. See Chipman v. Foster, 119 Mass. 189; Hitchcock v. Buchanan, 105 U. S. 416, 26 L. Ed. 1078; First Nat. Bank of Brooklyn v. Wallis, 150 N. Y. 455, 44 N. E. 1038; Dorris v. Cronan, 149 Mo. App. 177, 129 S. W. 1014; Citizens' Nat. Bank of Los Angeles, Cal., v. Ariss. 68 Wash. 448, 123 Pac. 593; Daniel v. Glidden, 38 Wash. 556, 80 Pac. 811 (N. I. L.); Western Grocer Co. v. Lackman, 75 Kan. 34, 88 Pac. 527 (N. I. L.); Dunbar Box & Lumber Co. v. Martin, 53 Misc. Rep. 312, 103 N. Y. Supp. 91 (N. I. L.); Germania Nat. Bank of Milwaukee v. Mariner, 129 Wis. 544, 109 N. W. 574 (N. I. L.); International Trust Co. v. Caroline, 78 Misc. Rep. 179, 137 N. Y. Supp. 932 (N. I. L.); Peabody School Furniture Co. v. Whitman, 6 Ala. App. 182, 60 South. 470.

85 Mechem, Agency, & 443; Keidan v. Winegar, 95 Mich. 430, 54 N. W. 901, 20 L. R. A. 705. N. I. L. § 20, does not change the law in such jurisdictions. Megowan v. Peterson, 173 N. Y. 1, 65 N. E. 738 (N. I. L.); Kerby v. Ruegamer, 107 App. Div. 491, 95 N. Y. Supp. 408 (N. I. L.).

86 See p. 96, note 90, infra.

(b) Constructive delivery, which is effected by direction to a third person in actual possession of the instrument to deliver it to, or to hold it for, the payee.

37. Delivery in escrow means delivery to a third person to hold until a certain event happens, or a certain condition is fulfilled. A bill or note delivered in escrow becomes absolute in the hands of a bona fide purchaser for value, whether or not the event happens or the condition is fulfilled.

The inception of a note is defined by Judge Platt to mean "when it was first given, or when it first became the evidence of an existing contract." 87 It has no legal inception until it is delivered. The mere writing and signing of a bill or note, which the drawer or maker retains in his hands, forms no contract.88 No person has then a right of action upon it any more than if it were blank paper. The inception of the paper is when there came into existence a right of action upon it. This is because while the note or bill is in the maker's hands, it can be erased, canceled, or revoked. It cannot, therefore, be an evidence of indebtedness until it is beyond such possibility. The decisive step for this is the delivery.89

87 Marvin v. McCullum, 20 Johns. (N. Y.) 288.

88 N. I. L. § 16; Gale v. Miller, 54 N. Y. 536; Bayley v. Taber, 5 Mass. 286, 4 Am. Dec. 57; Freeman v. Ellison, 37 Mich. 459; Woodford v. Dorwin, 3 Vt. 82, 21 Am. Dec. 573; Ward v. Churn, 18 Grat. (Va.) 801, 98 Am. Dec. 749; Michigan Ins. Co. v. Leavenworth's Estate, 30 Vt. 11; Purviance v. Jones, 120 Ind. 162, 21 N. E. 1099, 16 Am. St. Rep. 319; Morris v. Butler, 138 Mo. App. 378, 122 S. W. 377 (N. I. L.); Barry v. Mutual Life Ins. Co. of New York, 211 Mass. 306, 97 N. E. 779 (N. I. L.); Atwood v. Atwood, 86 Conn. 579, 86 Atl. 29; Baker v. Hahn (Tex. Civ. App.) 161 S. W. 443. Compare Lysaght v. Bryant, 9 C. B. 45. See Irwin v. Deming, 142 Iowa, 299, 120 N. W. 645 (N. I. L.).

62 Am. Dec. 113;

89 N. I. L. § 16; Catlin v. Gunter, 11 N. Y. 368, Cowing v. Altman, 71 N. Y. 435, 27 Am. Rep. 70; Id., 79 N. Y. 167;

Two things must concur in a delivery. The first is the transfer, actual or constructive, of the possession of the instrument; the second, an intent to transfer the title on the part of the transferrer." The minds of both parties, to this extent, must concur. This is the law laid down 91 in a case where the question was whether a check for $10,000 in gold left upon a clerk's desk, unknown to him, and without his consciously accepting it, was a delivery of it, and the court said it was not. And in a case where 92 it was the intention to deliver the instrument left in escrow on the 1st of May, but on April 30th the transferrer died, it was held that there could have been no actual delivery nor intention to deliver the instrument. The necessary elements to a delivery were wanting. So where the payee of

Kinzie v. Farmers' & Mechanics' Bank, 2 Doug. (Mich.) 105; Vinton v. Peck, 14 Mich. 287; Viets v. Silver, 15 N. D. 51, 106 N. W. 35 (N. I. L.).

90 The first and third sentences of section 16, N. I. L., provide: "Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. * * But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed." Under the sentence last quoted a holder in due course may recover upon a bill or note, although the instrument was stolen from the party sought to be charged. Massachusetts Nat. Bank v. Snow, 187 Mass. 159, 72 N. E. 959 (N. I. L.); Greeser v. Sugarman, 37 Misc. Rep. 799, 76 N. Y. Supp. 922 (N. I. L.); Poess v. Twelfth Ward Bank of City of New York, 43 Misc. Rep. 45, 86 N. Y. Supp. 857 (N. I. L.), semble. This sentence has changed the law in some jurisdictions where it has been adopted. Burson v. Huntington, 21 Mich. 415, 4 Am. Rep. 497; Sheffer v. Fleischer, 158 Mich. 270, 122 N. W. 543. A fortiori, a holder in due course may recover, although the instrument was transferred to him in breach of faith by one to whom the party sought to be charged delivered the instrument as a bailee for safe keeping. Borough of Montvale v. People's Bank, 74 N. J. Law, 464, 67 Atl. 67 (N. I. L.); Buzzell v. Tobin, 201 Mass. 1, 86 N. E. 923 (N. I. L.). In this respect also the sentence has changed in the law in a few jurisdictions where it has been adopted. Chipman v. Tucker, 38 Wis. 43, 20 Am. Rep. 1.

91 Kinne v. Ford, 52 Barb. (N. Y.) 196, affirmed 43 N. Y. 587. Compare Barry v. Mutual Life Ins. Co. of New York, 211 Mass. 306, 97 N. E. 779 (N. I. L.).

92 Artcher v. Whalen, 1 Wend. (N. Y.) 179.

93

a bill indorsed it, but died before delivering it, it was held that his executor, finding it among his papers, could not consummate the transfer by delivering it. On the other hand, such acts as handing completed notes to the payee, who, though objecting to the form, retained them; 4 or depositing completed notes, properly addressed, in the post office; 95 or giving a duplicate bill in place of one lost, which the payee treated as an original,-have been held to constitute sufficient deliveries. It is to be noted, however, that the delivery need not be to the payee, nor need the intent of the transferrer to transfer title be communicated to him. For, as will be seen, a bill or note may be delivered in escrow, and take effect on performance of the condition, without knowledge or actual assent of the payee; and a note delivered in a sealed envelope, to be opened after the maker's death, is operative, although the payee does not become aware of the existence of the note until after the death occurs.97 The outward and visible indication of delivery is possession, because, in nine cases out of ten, where a man holds. paper, he has a right to hold it. And the courts have, as we shall see, confirmed this business view accordingly, declaring that, when a bill or note is found in the hands of a payee, it will be presumed.

96

93 Bromage v. Lloyd, 1 Exch. 32. This action was in assumpsit on a note in writing, made by defendants, indorsed in blank by the payee, and, after the death of the latter, delivered to the plaintiffs by the payee's executrix, without her indorsement. It was held that those to whom the note was so delivered had no right to sue upon it, for a "transfer" was not effected thereby. In the case of a note signed in Florence, and mailed to the maker's brother in London, who there delivered it to the payee, it was contended that the cause of action arose in the former place, but it was held that no contract arose until its delivery, and that consequently the cause of action arose within the jurisdiction of such place of delivery. Chapman v. Cottrell, 13 Wkly. Rep. 843.

94 Bodley v. Higgins, 73 Ill. 375.

95 Rex v. Lambton, 5 Price, 428; Kirkman v. Bank of America, 2 Cold. (Tenn.) 397.

96 WORTH v. CASE, 42 N. Y. 362, 2 Ames Cas. Bills & N. 878, Moore Cases Bills and Notes, 84.

97 WORTH v. CASE, supra; Dean v. Carruth, 108 Mass. 242.

NORT.B.& N. (4TH ED.)-7