favor of plaintiff in an action to recover dam-, ages for breach of contract. Affirmed.

The case is sufficiently stated in the opinion. Messrs. John S. Bays and Beasley & Williams, for appellants:

Where one contracts merely as an agent, and the fact of the agency is disclosed to those with whom he deals, his contracts will be deemed the contracts of his principal only.

Robeson v. Chapman, 6 Ind. 352.

If the instrument be delivered to an agent of the obligee or payee, then such delivery is in law complete and absolute.

Madison & I. Pl. Road Co. v. Stevens, 10 Ind. 1; Stewart v. Anderson, 59 Ind. 375; 1 Randolph, Com. Paper, § 227.

Effect of the delivery.

The effect of the delivery and the extent of the operation of the instrument may be limited by the conditions with which the delivery is made. Benton v. Martin, 52 N.Y. 574; Tiedeman, Com.Paper, 93. Where the person with whom the deed remained was not otherwise authorized to act for either party than to draw the deed, retain it in his possession and place it upon the record, when that might be directed according to the terms of either of the agreements, without authority to accept or receive an actual delivery of the deed, his retention of the deed is attended by no other effect than that stipulated for by the parties. Payne v. Smith, 28 Hun, 106.

When escrow takes effect.

Such an instrument takes effect, so far as the capacity of the grantor is concerned, from the time of its original delivery, and not from the time of the happening of the event or fulfillment of the condition. Foster v. Mansfield, 3 Met 412; Black v. Hoyt, 33 Ohio St. 203; Crooks v. Crooks, 34 Ohio St., 610.

So where the grantee, a woman, after delivering a bond on condition, and before the happening of the condition, married, the bond was held valid. Graham v. Graham, 1 Ves. Jr. 275.

An instrument may be deposited to take effect on the maker's death. Latham v. Udell, 38 Mich. 238; Stephens v. Rinehart, 72 Pa. 434; Foster v. Mansfield, 3 Met. 412.

Where either party dies after the depositing of an escrow, and before the happening of the condition, the contract takes effect from the time of the deposit. Hunter v. Hunter, 17 Barb. 25; Jackson v. Rowland, 6 Wend. 666; Kirkman v. Bank of America, 2 Coldw. 397.

Parol evidence excluded.

The reason for the rule excluding parol evidence of a conditional delivery to the grantee applies to all cases where the delivery is designed to give effect to the deed in any event, without the further act of the grantor. Braman v. Bingham, 26 N. Y.

Second delivery; when ineffectual.

If the person in whose custody it is, delivers it without fulfillment of the condition, or if in any other way it comes into the hands of the grantee surreptitiously, it passes nothing. Cressinger y. Dessenburg, 42 Mich. 580; People v. Bostwick, 32 N. Y. 445; Robbins v. Magee, 76 Ind. 381; Skinner v. Baker, 79 Ill. 496; White v. Core, 20 W. Va. 272; Peter v., Wright, 6 Ind. 183; Jackson v. Rowland, 6 Wend. 666; Everts v. Agnes, 4 Wis. 343; Ogden v. Ogden, 4 Ohio St. 182; Bishop, Cont. 137.

If an escrow is fraudulently delivered, equity may interfere by injunction. Wyckoff v. Victor Sewing Mach. Co. 43 Mich. 309; Bishop, Cont. 137.

Commercial paper as an escrow.

A bill or note as well as a deed may be delivered to a third party to hold until a certain event happens or certain conditions are complied with, and the liability of the parties will commence as soon as the event happens or the conditions are fulfilled, even without actual delivery by the depositary. Couch v. Meeker, 2 Conn. 302; 1 Parsons, Notes and Bills, 51; 1 Daniel, Neg. Inst. 54.

But an action cannot be maintained on an escrow until the contingency transpires or the conditions are fulfilled. Prutsman v. Baker, 30 Wis. 644; Bowker v. Burdekin, 11 Mees. & W. 147; Gudgen v. Besset, 6 El. & Bl. 986; Furness v. Meek, 27 L. J. N. S. Exch. 34; Millership v. Brookes, 5 Hurl. & N. 797; Johnson v. Baker, 4 Barn. & Ald. 440; Murray v. Earl of Stair, 2 Barn. & C. 82.

Delivery of commercial paper may be made upon condition, not to take effect until such condition be fulfilled. 1 Daniel, Neg. Inst. 78; Story, Prom. Notes, $56, note 4; Bell v. Ingestre, 12 Q. B. 317: Benton v. Martin, 52 N. Y. 570; Seymour v. Cowing, 4 Abb. App. Dec. 200; Miller v. Gambie, 4 Barb. 146; Sweet v. Stevens, 7 R. I. 375; Ward v. Churn, 18 Gratt. 801; 1 Randolph, Com. Paper, 345.

In such case the maker is only liable upon the happening of the contingency. 1 Daniel, Neg. Inst. 78; 1 Parsons, Notes and Bills, 51; Couch v. Meeker, 2 Conn. 302; Taylor v. Thomas, 13 Kan. 217.

A parol condition in a written contract that its operation shall commence only on the transpiring of a future event will be good. Bishop, Cont. 137, citing Westman v. Krumweide, 30 Minn. 313; Alexander v. Wilkes, 11 Lea, 221. See Stewart v. Anderson, 59 Ind. 375; Michels v. Olmstead, 14 Fed. Rep.

219.

While a negotiable instrument remains in the maker's hands, or in the hands of his agent, to whom it has been given for the purpose of deliyery, it is still undelivered and incomplete. Brind v. Hampshire, 1 Mees. & W. 365.

A note delivered to A, to deliver after the maker's death to the payee, was sufficiently delivered, A being regarded in this case as the agent of the payee. Giddings v. Giddings, 51 Vt. 227.

The distinction between a conditional delivery to the payee and the delivery of an escrow to a third person, is not recognized as to commercial paper. In both instances the innocent purchaser for value gets a good title whether the conditions have been performed or not. 1 Parsons, Notes and Bills, 51; Badcock v. Steadman, 1 Root, 87; Massmann v. Holscher, 49 Mo. 87; Jones v. Shaw, 67 Mo. 667; Scott v. State Bank, 9 Ark. 36. See, contra, Chipman v. Tucker, 38 Wis. 43; Roberts v. McGrath, 38 Wis. 52; Roberts v. Wood, 38 Wis. 60; Tiedeman, Com. Paper, 94.

ås real-estate brokers. Swain employed them | dorsee, for it was by his act that the appellants to sell his farm, and they did sell it to the ap- were enabled to put the note in circulation, and pellee for $4,000. As part of the purchase price he must suffer rather than the innocent third the appellee assumed and agreed to pay the person. The principle which rules here is the principal, but not the interest, of a mortgage same as that which prevailed in Quick v. Mil executed to an insurance company to secure ligan, 108 Ind. 419, 6 West. Rep. 883. $1,800. A like amount was paid in cash, and One who places in another's hands his proma note for the remainder was executed by the issory note, perfect in all its parts, cannot deappellee, and to secure its payment he executed feat the note in the hands of a bona fide holder. a mortgage upon the land bought of Swain. The rule, indeed, in cases of promissory notes The note was payable in bank, and was placed negotiable under the law-merchant, extends in the hands of the appellants By the terms much further, but we need do no more than of the contract between the parties the note apply the principle we have indicated as the gov was to be held by the appellants until an ab- erning one, although a much broader rule might stract of title was furnished to the appellee, and be applied. The appellants violated their conall liens against the land paid and discharged. tract, and must respond in damages. It is no The note was not placed in the hands of the defense for them to assert that in law the deappellants for the purpose of passing the title livery to them was absolute, and transferred to it, but for the purpose of delivering it to title to Swain at once; for, whatever may be Swain, and closing the sale as soon as he had the rule as between payor and payee, it is quite complied with his agreement and paid the liens clear that the appellants, having agreed to reon the land. The appellants, notwithstanding tain the note, were bound to keep their contheir agreement to retain possession of the note tract. The assumption that the appellants were and mortgage, delivered them, without the con- the agents of Swain is unfounded, for they unsent of the appellee, to Swain. The note was dertook to retain the notes under an agreement transferred by indorsement to a person for a with the appellee, and not as Swain's agent. valuable consideration, before maturity, and But if they had received the notes as the agents the indorsee received it without notice of any of Swain, they had no right to violate their defense. At the time the contract of sale was agreement with the appellee. If Swain himmade there were liens on the lands to the amount self had made such an agreement, and it was of $108 above the amount of the incumbrance properly evidenced by writing, he would have assumed by the appellee. Swain is insolvent, no right to violate it. and is not a resident of the State.

The appellee could not have successfully defended against the note in the hands of the in

Judgment affirmed, with 10 per cent damages, and costs.

UNITED STATES CIRCUIT COURT, NORTHERN DISTRICT OF ILLINOIS.

NOTE.-Accommodation paper; nature of the con- is to enable the parties thereto, by sale or other

tract.

One who draws, accepts or indorses commercial paper for the accommodation of another is not liable on it to the accommodated party, whatever their apparent relation upon the paper may be. Story, Bills, § 187: Story, Prom. Notes, § 190; Thomp. son v. Clubley, 1 Mees. & W. 212; Patten v. Pearson, 55 Me. 39; Macy v. Kendall, 33 Mo. 164; 2 Randolph, Com. Paper, 41.

Such paper has no validity, until it is discounted or comes into the hands of a holder for value. Tufts v. Shepherd, 49 Me. 312; Macy v. Kendall, supra.

Until then the contract is revocable (1 Daniel, Neg. Inst. 192; 1 Edwards, Bills and Notes, § 452; Dogan v. Dubois, 2 Rich. Eq. 85; Smith v. Wyckoff, 3 Sandf. Ch. 77); even though security has been given to the accommodation party for the use of his name. May v. Boisseau, 8 Leigh, 164.

The contract is, in fact, a loan of credit, and in general is made without restriction as to its use. Lenheim v. Wilmarding, 55 Pa. 75; 1 Parsons, Notes and Bills, 184.

It will be presumed that the object of such paper

wise, to obtain a free credit and circulation thereof. Montross v. Clark, 2 Sandf. 115; Story, Bills, § 191. That accommodation paper is made payable to a particular person does not prevent the person for whose accommodation it is made from obtaining the money from another. Meeker v. Shanks, 11 West. Rep. 241, 112 Ind. 207.

Where he lends his name without any restriction as to the manner in which the indorsed note or bill is to be used, he becomes liable thereon to the holder, even where the holder receives it from the maker in payment. Powell v. Waters, 17 Johns 176; Edwards, Bills and Notes, 298.

Where an accommodation note was made payable to the accommodation indorser, to be discounted at a particular bank, but it was not discounted at this bank, but sold to a private indi vidual, it was held that the indorsers were liable, although the sale was made without their knowl edge. Parker v. McDowell, 95 N. C. 219; Powell v. Waters, supra; Bank of Chenango v. Hyde, 4 Cow. 567; Montross v. Clark, supra.

If the holder gave a bona fide consideration for it, he is entitled to recover the amount, though he

ACTION by indorsers of a bill of exchange tiffs at the time that the acceptance by the de

bill, were co-sureties for the drawer; that therefore the plaintiffs can maintain no action on the bill as such, and may only recover in separate actions, and upon the equitable principle of contribution, such an amount as each has paid in excess of the one-third part of the bill. With respect to business paper, the parties thereto are liable to each other in succession, as their names appear. The acceptor of a bill is the principal debtor. As between successive indorsers, the writing imports a several and successive, not a joint, obligation. In this respect there is no distinction between accommodation and other paper. They are both governed by the same rules. 3 Kent, Com. 86.

It is competent for the accommodation parties to a bill, as between themselves, to contract for a liability different from that evidenced by the paper itself, and parol evidence thereof is receivable. Phillips v. Preston, 46 U. S. 5 How. 278 [12 L. ed. 152].

curred and met his obligation upon the faith of the acceptance, and stands in the light of a holder for value.

The principle was established by the Supreme Court in 1830, in the case of McDonald v. Magruder, 28 U. S. 3 Pet. 470 [7 L. ed. 744], the opinion of the court being delivered by Chief Justice Marshall. There the first accommoda tion indorser sought to recover contribution of a second accommodation indorser of a note. The court held that, to authorize contribution, the undertaking must be joint, not separate and successive; that the second indorser, incurring liability upon the faith of the first indorser, as well as of the maker, and meeting that liability, stands as a holder for value, and the contract as between him and his immediate indorser cannot be said to be without consideration. This ruling was followed and approved in Phillips v. Preston, 46 U. S. 5 How. 278 [12 L. ed. 152], and in McCarty v. Roots, 62 U. S. 21 How. 437, 441 [16 L. ed. 164, 165].

But, wanting such independent agreement, the several successive parties to accommoda- The principle established has never since tion paper are bound to those succeeding them, been questioned in the federal courts. If these who have been compelled to meet the obliga- cases stood alone, and in antagonism to the tion. In such case parties are not bound to general current of authority, they would of contribution. The principle upon which the course be binding upon this court. The docrule is founded, is this: The indorser has in- trine of these decisions has, however, been suscurred a contingent liability upon the faith of tained in most courts of the States of the Union the antecedent names to the paper, and by pay- speaking to the question. Smith v. Morrill, 54 ment becomes entitled to all the rights of an Me. 48; Coolidge v. Wiggin, 62 Me. 568; Johnindorser for value, with remedy over for the son v. Crane, 16 N. H. 63; Church v. Barlow, whole amount paid against the prior parties. 9 Pick. 547; Clapp v. Rice, 13 Gray, 403; WoodThe obligation of the one is primary; of the ward v. Severance, 7 Allen, 340; Shaw v. Knox, other, secondary. It is of no moment that the 98 Mass. 214; Kirschner v. Conk'in, 40 Conn. accommodation indorser knew that the accept- 77; Brown v. Mott, 7 Johns. 361; Suydam v. ance was without consideration. He has in-Westfall, 2 Denio, 205; Kelly v. Burroughs, 102

One indorsing a note merely for the accommoda- | tion of another is surety for the latter; and any defense which would avail him is available to the former when sued on the note. Gunnis v. Weigley, 5 Cent. Rep. 729, 114 Pa. 191; Noll v. Oberhellmann, 2 West. Rep. 616, 20 Mo. App. 336.

The fact that the payee of a note indorsed it purely for the accommodation of the maker, and to enable him to get it discounted for his own benefit, which he did, is no defense to an action against him as first indorser, brought by a subsequent indorser, also for maker's accommodation, who, after dishonor of the note, has been compelled to take it up. Kelly v. Burroughs, 3 Cent. Rep. 187, 102 N. Y. 93.

An accommodation indorser may defend by showing that without his knowledge the note was fraudulently used for another purpose than that for which it was indorsed. Cozens v. Middleton, 11 Cent. Rep. 411, 118 Pa. 622, 21 W. N. C. 15.

maker of it, indorsed by the payee, has been paid. Callahan v. Bank of Kentucky, 82 Ky. 231.

If the indorsement has been made for the accommodation of the maker by the payee, in order to enable the former to have it discounted, this presumption does not apply. Callahan v. Bank of Kentucky, 82 Ky. 231.

Where a note is indorsed for the accommodation of the maker, to be discounted at a particular bank, it is not a fraudulent misapplication of the note, if it is discounted at another bank, or used in the payment of a debt, or in any other way for the credit of the maker. Parker v. McDowell, 95 N. C. 219.

Accommodation bill of exchange.

An accommodation bill is a bill to which the accommodating party has put his name without consideration, for the purpose of benefit or accommodation to some other party. Byles, Bills, 131. An accommodation indorser of a promissory The drawer cannot maintain an action thereon note, who received no benefit therefrom, may de-against the drawee who has accepted the same for fend against a bona fide holder without notice his accommodation. Sparrow v. Chisman, 9 Barn. on the ground that he was non compos mentis at the & C. 241. time of the indorsement. Hull v. Louth, 7 West. Rep. 576, 109 Ind. 315.

The various indorsers to an accommodation bill or note are not, unless by special agreement, bound to pay in equal proportions as co-sureties. McCarty v. Roots, 62 U. S. 21 How. 432 (16 L. ed. 162); McDonald v. Magruder, 28 U. S. 3 Pet. 470 (7 L. ed. 744).

Where one indorsed for the accommodation of joint makers, in the absence of countervailing evidence it must be held that both stood to him substantially as principals. Hoffman v. Butler, 2 West. Rep. 638, 105 Ind. 371.

If the acceptor puts the bill in circulation, he is estopped from showing it was then paid. Hinton v. Bank of Columbus, 9 Port. (Ala.) 463; 1 Daniel, Neg. Inst. 395.

If the acceptance be for the drawer's accommodation, the acceptor does not thereby become entitled to sue the drawer upon the bill; but when he has paid the bill, and not before, he may recover back the amount from the drawer in an action for money had and received. Planters Bank v. Doug. lass, 2 Head, 699.

The effect of the acceptance of a bill is to constitute the acceptor the principal debtor. Thom

The law presumes that a note in the hands of a son, Bills, 229.

N. Y. 93, 3 Cent. Rep. 187; Youngs v. Ball, 9 | the same rules as parties are governed whose Watts, 141; Ross v. Espy, 66 Pa. 481; Wood v. names are on other or business paper. It may Repold, 3 Har. & J. 125; Pomeroy v. Clark, 1 therefore fairly be said that the few decisions MacArth. 606; Bank of U. S. v. Beirne, 1 in this country upholding the contention of the Gratt. 234, 265; Hogue v. Davis, 8 Gratt. 4; defendant have been repudiated and shorn of Farmers Bank v. Vanmeter, 4 Rand. (Va.) 553; their authority within their respective jurisdicMarr v. Johnson, 9 Yerg. 1; Brahan v. Rag- tions, and that the courts of the States, so far land, 3 Stew. (Ala.) 247; Spence v. Barclay, 8 as they have spoken, approve and follow the Ala. 581; Moody v. Findley, 43 Ala. 167; Cath- decisions of the supreme federal tribunal. cart v. Gibson, 1 Rich. L. 10; Aiken v. Barkley, 2 Speers, L. 747; Weir v. Cox, 7 Mart. N. S. (La.) 368; Connely v. Bourg, 16 La. Ann. 108; Stiles v. Eastman, 1 Ga. 205; Hixon v. Reed, 2 Litt. (Ky.) 176; McNeilly v. Patchin, 23 Mo. 40; McCune v. Belt, 45 Mo. 174; Stillwell v. How, 46 Mo. 589; Druhe v. Christy, 10 Mo. App. 566; Wilson v. Stanton, 6 Blackf. 507; Woodworth v. Bowes, 5 Ind. 277; Core v. Wilson, 40 Ind. 204; McGurk v. Huggett, 56 Mich. 187. But two American cases were cited to the contrary, and these may be readily disposed of. The case of Douglas v. Waddle, 1 Ohio, 413, arose upon a note, and, if there be no distinction in this respect between a note and a bill (and I can conceive of none), sustains the defendant's position. The authority of this case is denied in McDonald v. Magruder, supra.

In Williams v. Bosson, 11 Ohio, 62, the case of Douglas v. Waddle is said to have been founded upon and to recognize and establish as law a local usage or understanding that accommodation indorsers of nctes were joint sureties, and not liable to each other in the order of their coming on the note. Without directly overruling the case, the court refused to extend the rule to bills of exchange, and held that accommodation indorsers of such paper are not joint sureties, but are separately liable to each other in their order. This decision is approved in Kelley v. Few, 18 Ohio, 441. The case relied upon is consequently without weight. The case of Paulin v. Kaighn, 27 N. J. L. 503, was one for contribution between two co-obligors on a joint bond. The right of contribution in such a case is not doubted. Nor is it disputed that the obligation to contribute arises, not from mutual engagement, but from principles of equity and morality.

In addition to the foregoing, I have fallen upon decisions in two other States sustaining the contention of the defendant, which it may be well to notice. Flint v. Day, 9 Vt. 345, and Pitkin v. Flanagan, 23 Vt. 160, 166, both sustain the theory of the defense, but they are doubted in Keith v. Goodwin, 31 Vt. 268, 276, and would seem to be of no present, or at least of doubtful, authority in that State. In Daniel v. McRae, 2 Hawks, 590, by a divided court, accommodation parties to commercial paper are held to be co-sureties in whatever order or character they are placed upon the paper.

The doctrine declared came for review before the Supreme Court of North Carolina in Richards v. Simms, 1 Dev. & B. L. 48, 51. The court states that the rule in that State had been so generally acquiesced in that, upon the principle of stare decisis, it felt bound to follow it as established law; but the judges unanimously declared that, were the question res integra, the principle could not be sanctioned; and they "should say, as has been said by the rest of the mercantile world, that the parties to accommodation paper were to be governed by

The case of Reynolds v. Wheeler, 10 C. B. N. S. 561, undoubtedly sustains the defense here. It sanctions the right of an accommodation acceptor to contribution from an accommodation indorser. The decision is based upon general principles of suretyship, overlooking the presumption of the mercantile law that subsequent accommodation parties signed in reliance upon the responsibility of the prior accommodation parties. The case was decided in 1861, and appears not to have been reviewed in any court. It would seem to be opposed to the principle upon which Fentum v. Pocock, 5 Taunt. 192, was decided, wherein Lord Chief Justice Mansfield remarked: "And I never before knew that there was any difference between an acceptance given for accommodation, and an acceptance for value."

I am referred to and can find no other case in England directly to the question. The absence of other authority in that country is somewhat remarkable. The case stands alone, citing no authority to sustain, in opposition to the general current of authority, and in antagonism to the ruling in McDonald v. Magruder, which may not be disregarded in this court.

In Dering v. Earl of Winchelsea, 1 Cox, Ch. 318, 2 Bos. & P. 270, 1 White & T. Lead. Cas. Eq. *100, contribution was enforced between sureties on different bonds for the same debt! But in Coope v. Twynam, 1 Turn. & R. 426, the Lord Chancellor stated that that decision had been doubted at Westminster Hall, and that contribution was dependent upon whether the transaction was separate and distinct, or the same transaction split into different parts. The case, however, received the approval of the Supreme Court in McDonald v. Magruder,supra, and was distinguished for the reason that in the one case the parties stood in the same relation to the obligee of the bond and to each other, while in the other the relation of the parties is dissimilar, the indorser giving his name on the faith of the precedent parties to the bill.

In Mr. Hare's notes to this case (1 Lead. Cas. Eq. 3d Am. from 2d London ed. 157) he asserts that "where successive indorsers all indorse for accommodation of the maker, though at different times, and without communication or mutual understanding, they are in equity cosureties, subject to common contribution; and evidence is admissible to show that successive indorsers sign for accommodation, and thus to render them subject to contribution."

The author cites to sustain the statement Daniel v. McRae, 2 Hawks, 590, which, as shown supra, has been repudiated as authority by the court in which it was decided. The statement by the author is contrary to established law.

It may not be denied that there is an engag ing, persuasive equity in the principle that all sureties should share equally the burden assumed; and that in general is the law. "Equal