This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Whether an instrument can be delivered to the obligee, to hold until some event or contingency occurs, not appearing on its face, and then to take effect, is a question, upon which there is a great divergence of authority. The weight of authority in cases of simple contracts is that they may be delivered to the adversary party to take effect only upon some other and further condition.1 Thus a promissory note2 or an insurance policy3 may be so delivered. A contract executed by some of the parties of one part and delivered to the party of the other part, to take effect only if the rest of the parties of the one part sign it, is, according to this view, of no effect until such parties sign it.4 A promissory note delivered to payee but not to take effect until another party signs it is ineffective till then.5 Thus if a contract signed by a surety is delivered upon condition that such contract shall take effect only if some additional surety signs it, the weight of authority treats this as a delivery which is conditional only, and not absolute; and the surety thus signing is not bound unless the additional surety signs. Thus a promissory note, delivered to payee upon condition that it shall take effect only when signed by an additional security, is held not to take effect tiable instrument is delivered to the payee to take effect, only if some other person signs such instrument, such condition is invalid and the instrument takes effect at once, even if such additional party does not sign it.3 A surety who signed an instrument which was delivered to an obligee to take effect only if additional sureties signed it, may, in jurisdictions where such instrument is held to take effect at once, maintain an action against, such obligee for damages which he has suffered by reason of the breach of such agreement.4
8 See ante this section.
1 Wilson v. Powers, 131 Mass. 539; Blewit v. Boorum, 142 N. Y. 357; 40 Am. St. Rep. 600; 37 N. E. 119; Benton v. Martin, 52 N. Y. 570.
2 Burke v. Dailaney, 153 U. S. 228; MacFarland v. Sikes, 54 Conn. 250; 1 Am. St. Rep. Ill; 7 Atl. 408; Watkins v. Bowers, 119 Mass 383; Brown v. St. Charles, 66 Mich. 71; 32 N. W. 926; Westman v. Krumweide, 30 Minn. 313; 15 N. W. 255; Reynolds v. Robinson, 110
N. Y. 654; 18 N. E. 127; Jordan v. Jordan, 10 Lea. (Tenn.) 124; 43 Am. Rep. 294.
3 Westerfleld v. Ins. Co., 129 Cal. 68; 61 Pac. 667; 58 Pac. 92.
4Flinn v. Mowry, 131 Cal. 481; 63 Pac. 724; modified 63 Pac. 1006; Packer v. Benton, 35 Conn. 343; 95 Am. Dec. 246.
5 Belleville Savings Bank v. Bornman. 124 Ill. 200; 16 N. E. 210; German-American National Bank v. Peoples Gas Co., 63 Minn. 12; 65 N. W. 90; McCormick Haruntil such additional surety signs.0 This principle has been applied to delivery of a bond which was required by law, to public officers, to take effect only if some additional party signs such bond.7 So where a surety signed a bond in replevin and delivered it to a deputy sheriff to be by him delivered to the clerk of court only in case an additional surety signed, delivery by the deputy sheriff without the signature of such additional surety does not make the instrument effective.8 The obligee must, however, have notice of the conditions upon which the instrument was delivered. An officer of the school district asked A to sign the bond of X, the district treasurer. A signed, upon an understanding that such bond should only take effect if B also signed it. The bond was delivered. It was held that the bond took effect, even if B did not sign it, since the officer was not acting in his official capacity in asking A to sign such bond, and notice to him was not notice to the public corporation.9