Preston v. Hull

• Decision Date: 07 July 1873
• Citation: 64 Va. 600
• Parties: PRESTON v. HULL.
• Court: Virginia Supreme Court

64 Va. 600

PRESTON v. HULL.

Supreme Court of Appeals of Virginia.

July 7, 1873

A paper perfect as a bond, except that there is a blank for the name of the obligee, is signed by P and M, and put into the hands of M for the purpose of borrowing money upon it. It is expected that F will lend the money, but if he does not it may be gotten from some other person. M obtains the money from H, and fills the blank in the paper with the name of H and delivers it to him. This is done in the absence of P and without his knowledge. It is not the bond of P.

This was an action of debt upon a bond in the Circuit court of Smyth county, brought in January 1870, by D. D. Hull against Charles H. C. Preston and B. F. Mantz. The suit was abated as to Mantz. The paper declared on was signed and sealed by Preston and Mantz, and bound them to pay to D. D. Hull sixty days after date, the sum of six hundred dollars.

Preston appeared and filed a plea of non est factum, accompanied by an affidavit stating the facts on which he relied to support the plea. He also pleaded payment by Mantz.

The facts material upon the question decided by this court, are substantially as follows: B. B. Mantz was indebted to Preston for the purchase of cattle to the amount of about six hundred dollars; and informed Preston that he did not have the money but that he could raise the amount in Marion if Preston would execute a note for that amount; Mantz said he thought he could get it from Governor Fayette McMullin. Preston and Mantz then singed the paper sued on, in which there was a blank left for the name of the payee; and it was left with Mantz for the purpose aforesaid. Preston said it was his impression that Mantz was to get the money from McMullin; but he was not instructed not to get it from any one else; and the blank was left in the paper for the name of the person from whom he should get the money. But Preston never did deliver the note to Hull, nor know that he had discounted it until after the failure of Mantz, and the execution of a deed of trust by him; when he was informed by Hull that he held the note shortly after it fell due. And Preston thought the note he had signed and handed to Mantz had been destroyed and he never received any money upon the bond or derived any benefit from it.

After the evidence had been heard, the plaintiff asked the court to instruct the jury as follows: If the jury shall believe from the evidence, that the defendant C. H. C. Preston, executed the single bill in the declaration in this cause mentioned and delivered the same to his co-obligor B. F. Mantz with a blank in said single bill, where the name of the obligee D. D. Hull the plaintiff, is now inserted, with the understanding that the said B. F. Mantz was to procure money on the said single bill, and to write the name of the person from whom the money should be procured, in said blank as obligee, and to deliver the said single bill to such obligee; and if the jury shall further believe from the evidence, that the said B. F. Mantz procured money from the said D. D. Hull, the obligee aforesaid in said single bill, and wrote the name of the said D. D. Hull in the single bill, and delivered the same to the said D. D. Hull; then the said single bill is binding upon the said Preston, and the jury must find the issue for the plaintiff.

The defendant objected to the courts giving this instruction: but the court overruled the objection and gave it: and the defendant excepted.

The defendant then moved the court to instruct the jury as follows:

If the jury shall believe from the evidence, that the paper sued on as the bond of the defendant Charles H. C. Preston, was placed in the hands of B. F. Mantz to raise money from F. McMullin on, and that when it was so placed in his hands, it was blank as to the name of the payee, and that it was afterwards filled up with the name of D. D. Hull, without the knowledge, consent or authority of the defendant Preston, then it is not his deed, and they should find for the defendant Preston.

The court refused to give this instruction in the form offered; but gave it with the insertion of the word " only" after the word " money." To which opinion and ruling of the court the defendant Preston excepted.

The defendant applied for another instruction, which was refused; and he excepted: but it is unnecessary to state it.

The jury found a verdict for the plaintiff for $600 and interest: And the court rendered a judgment accordingly; having overruled the motion of the defendant for a new trial; to which Preston excepted. And upon his application a writ of error and supersedeas was awarded by this court.

J. W. & J. P. Sheffey, for the appellant.

Gilmore, for the appellee.

STAPLES J.

A bond is a deed whereby the obligor promises to pay a certain sum of money to another at a day appointed. 2 Black. Com. 346. An obligor and obligee are essential to the existence and constitution of such an instrument. It is not indispensable that the party to whom the promise is made should be mentioned eo nomine, that his name of baptism and sir-name shall be given, but he must be in some unmistakable manner designated in the instrument. A writing, though executed with all the solemnities of a deed, without such obligee, is a mere nullity. It imposes no liability upon the party issuing it. It confers no rights upon him who receives or holds it. It is not simply an imperfect deed: it is no deed at all. It only becomes a deed when the name of an obligee is inserted, and delivery made by the obligee or by some one legally authorized by him. If the blank is filled by an agent, then the agent as certainly makes the deed as though the entire obligation had been written, signed, sealed and delivered by him. His act binds a principal not before bound. It creates a contract having no previous existence. It is true the act in question is merely the insertion of a name. Still, its effect is to impart vitality to a piece of waste paper. It calls new rights and obligations into existence. It is followed by all the consequences resulting from the execution of the most solemn instruments.

The argument sometimes advanced, that there can be no danger or difficulty in conferring the power by parol, when nothing remains to be done but the insertion of a name to render the instrument complete, does not meet the real issue. The question is not one of trust and confidence reposed, but of power conferred. In the numerous and diversified transactions of mankind agencies of the gravest character are often created by parol. A partner may bind his co-partner to any amount, for any matter within the scope of the partnership, by a note executed in the partnership name. The authority of an agent to sell the land of his principal may be conferred without writing, and the latter may thus be bound irrevocably for his entire estate. In the execution and endorsation of negotiable paper powers may be and are often conferred by parol upon agents involving liabilities to the amount of millions. The law recognizes such agencies as essential to the commerce of the world. Why may not the agent, in all these cases, impose the same liabilities by deed, in the name of his principal? If he may sell the land, fix the price, and agree upon all the terms of the contract, why may he not perform the more formal act of executing the conveyance? The answer is, the authority of the agent must be commensurate with the act he performs. The stream can never be higher than its source. If the act of the agent is the execution and delivery of a deed, his authority must be by deed. It does not matter how much of the instrument may have been written by the principal, if it is a mere nullity when it leaves his hands, and only becomes operative by act of the agent; upon every principle of sound legal reasoning the result must inevitably be the same. Whenever the agent undertakes to bind his principal by an act, his authority, in point of dignity, must be coequal with the act. The question is not, therefore, whether it is expedient that a mere parol agent shall have the power to fill the blank with the name of an obligee; but whether it can be done and sustained without violating well established principles of law.

A little reflection will show that these principles are not without substantial reasons to support them. At common law a sealed instrument imposed peculiar liabilities. It was not affected by any statute of limitations. It operated as an estoppel. The obligee was not permitted to aver any want of consideration to avoid it; nor could he defeat an action at law therein by showing any failure of title, or breach of contract, or mistake, or fraud in the procurement of the bond. It is true that some of these obstacles have been removed by statute, and parties may now defend themselves in the common law courts upon grounds purely equitable; but both in Virginia and in England sealed instruments confer rights and impose obligations, which can never grow out of the execution of any mere parol contracts. It is reasonable and just, therefore, that a party setting up a deed, and seeking to enforce it, shall be prepared to show, if necessary, that it is the act of the grantor himself, or of some one empowered by an instrument of equal dignity with the deed.

When the writing which is the subject of this controversy left the hands of Preston, it was not a deed. It certainly did not constitute a contract. It was, indeed, of no more value than the paper which contained it. When it passed into the possession of Hull it had in some way become a deed and a binding contract, according to the theory of counsel. How did it so become a deed? Certainly not by the act of Preston, as he was then absent, and was not even informed...