propriety in the application of the doctrine contended for. But to permit a secret agreement of that kind between a principal and surety to have the effect of destroying the validity of the note as to the surety, after it had been used by the principal, and belonged to the person to whom it was made payable or his assignee, would be to encourage the perpetration of fraud pon innocent individuals. As the surety placed it in the power of the principal to commit a fraud, the naked question is, Shall he be the sufferer by the fraud, or shall the loss fall upon others, who had no notice of the condition upon which he signed the writing.

There would seem to be no difficulty in the solution of this question. The delivery of the note by Scales to the person to whom it was made payable was, under the circumstances, clearly a fraud upon Smith; but neither Mock nor Moberly had any participation in the fraud, and should not be injured by it. Smith having left the note in the possession of Scales, his principal, and having failed to apprise Mock, to whom it was made payable, that the execution of it by him was conditional, and having thereby given to Scales the power to use it as a valid note, must bc regarded, so far as Mock is concerned, as in effect vesting him with a right to do so. Smith can not, therefore, on this ground avoid the liability imposed on him by the execution of the note, and the loss, if any, must be borne by him and not by Mock or his assignee. This is, undoubtedly, the equity of the case; and if, as contended, the execution of the note by Smith being only conditional, made it but an imperfect and partially executed writing, and therefore not obligatory upon him as his act and deed, this matter constituted a purely legal defense, and is not a proper subject of equitable cognizance.

But a delivery of a writing of this character under such circumstances, to the principal, does not have the effect of characterizing it as a mere escrow, but on the contrary, the principal should be considered as the agent of the surety, and empowered by him to pass the writing to the person to whom it may be made payable, and his delivery as being sufficient to make it effectual unless the payee had notice of tho special terms upon which it was signed. The implied discretionary authority to use the note, crising out of its possession by the principal, uncontradicted by its terms or anything apparent on its face, can not be restricted by any agreement between the payors themselves, of which the payee had no notice. The same principle is substantially de

AM. DEO. VOL. LII-35

cided in the case of The Bank of the Commonwealth v. Curry, 2 Dana, 142.

The law in relation to the execution of deeds and specialties is not applicable to promissory notes. In the language of this court, in the case of Taylor etc. v. Craig, 2 J. J. Marsh. 460, "promissory notes are quasi mercantile, but are not in this country, as they are in England, since the statute of Anne, negotiable precisely as bills of exchange. But for many purposes, the doctrine of bills of exchange applies to promissory notes, because the reason of it applies equally to both kinds of paper. The law in relation to the execution of both is the same. And justice and the exigencies of commerce require that the drawer of a bill, or payor in a note, should be bound sometimes, when, if the instrument were a deed, he would not be liable. Frequently the maxim, 'He who trusts most shall lose,' applies to bills and notes; and it is often better that a negligent drawer should be held responsible than that an innocent holder or obligee should suffer."

Upon this principle it has been repeatedly decided, that if a note is signed in blank, the maker will be bound for whatever sum may be inserted, although he may have signed his name upon the express parol condition that the sum should be less than that which was afterwards inserted. For the same reason the surety should be liable for the amount of a note, which he signs and leaves with the principal, to be used upon the condition, known to themselves alone, that it shall be signed by another person, whether the condition be complied with or not.

Another ground upon which Smith's right to equitable relief is claimed is, that the note as drawn being payable to Mock, Scales had no authority to deliver it to any other person, and the arrangement by which Moberly obtained it was virtually a delivery of it to him and not to Mock, and a fraud upon Smith in which all the parties to the arrangement participated, and which consequently entitles Smith to be discharged from the payment of the debt.

The note was made by Scales for the purpose of procuring money to discharge the debts in Moberly's hands. Whether that design was made known to Smith does not appear. The note was used to accomplish the object for which it was originally intended, not, it is true, in the manner contemplated, but in one that did not alter or increase on the liability of the Burety. Had the money been obtained on the note by the prin

cipal, it would not have been to the advantage of the surety, or placed him in a better position. It can not, therefore, be material, so far as he is concerned, whether the note was passed directly to Mock, or indirectly to Moberly.

But it is argued that Smith might have been willing to have been the debtor of Mock, and still have been unwilling to have been the debtor of Moberly. And as he executed the note to enable Scales to obtain money, it was a perversion of the object of its execution to apply it to the payment of pre-existing debts.

As the note was assignable under the statute, Mock, had he advanced the money upon it, might have transferred it to Moberly, or any other person. A surety, therefore, in executing a writing assignable in its character, can not be considered as intending to limit its use to the payee, and to be his debtor alone, and not the debtor of his assignee, if he should transfer the paper. And as the principal intended to apply the money, had he obtained it from Mock, to the payment of the debts in the hands of Moberly, the application of the note itself to the same purpose, upon his failure to procure the money, is not more prejudicial to the surety; nor can it be regarded as a perversion of the object for which the paper was originally designated, being in effect an accomplishment of the same object. This doctrine has been recognized as applicable to promissory notes in analogous cases in the state of New York: Bank of Rutland v. Buck, 5 Wend. 66; Utica Bank v. Ganson et al., 10 Id. 314.

Nor is the legality of the transaction affected by the fact that the transfer by Mock, the payee, was merely formal, and that he never had any beneficial interest in the paper. Had Mock indorsed the note in blank to have enabled Scales to negotiate it, and to procure the money from some other person, and it had thereby passed into the hands of an innocent holder for a valuable consideration, Smith, the surety, would certainly have remained liable. The transfer by Mock without recourse does not essentially alter the case. Moberly did not commit a fraud in receiving tho note instead of the money. As Mock was unable to accommodate Scales by loaning him the money, it was not fraudulent upon his part to transfer the note to Moberly to effect the same object that would have been attained by the loan of the money. The whole arrangement was for the benefit of Scales, for whose use and accommodation Smith executed the paper. There does not, therefore, seem to be any reason for characterizing the transaction as fraudulent.

Wherefore, the decree is affirmed.

SIGNING AS SURETY ON CONDITION THAT ANOTHER SIGNS constitutes delivery in escrow where the note is delivered to the maker for the purpose of obtaining the other signature; and a court of equity will enjoin a suit at law upon it if it is delivered to the payee or his agent without the second signature. And it makes no difference whether the payee knew of the condition or not: Ferry v. Patterson, 42 Am. Dec. 424, and note 426.

PAROL CONDITION TO PROMISSORY NOTE: See Jones v. Shorter, 44 Am. Dec. 649, and note.

THE PRINCIPAL CASE IS CITED to the point that where a writing is signed by a surety with an agreement that it shall not be delivered as an obligation without the names of additional obligors thereto, the question of the sureties' responsibility depends on whether the payee accepts the writing with or without knowledge of such agreement, in Garvin & Co. v. Mobley etc., 1 Bush, 52; Jones etc. v. Selbyville Fire, Life, and Marine Ins. Co., 1 Metc. 60; Millett v. Parker, 2 Id. 615; Hubble v. Murphy, 1 Duv. 280; S. P. Bivins v. Helsley, 4 Metc. 78. And to the point that a surety is bound by his signature though a secret agreement exist, in Ward v. Northern Bank of Kentucky, 14 B. Mon. 355.

VIOLETT V. POWELL'S ADM'RS.

[10 B. MONROE, 347.]

CONTRACT BY AGENT IN HIS OWN NAME binds his principal though he appeared to act wholly for himself.

ON WRITTEN CONTRACT IN AGENT'S NAME the principal can only sue in the name of the party having the legal title.

ASSUMPSIT LIES AGAINST PRINCIPAL THOUGH THERE IS WRITTEN CONTRACT IN AGENT'S NAME, if he has recognized the agent's acts done for him; and the written contract may be used to show the terms of the contract. ASSUMPSIT. The opinion states the facts.

H. Marshall, for the plaintiff.

Lindsey, for the defendant.

By Court, GRAHAM, J. Powell, Baker & Whitaker were jointly concerned and interested in the purchase of hogs in the year 1847. About the first of June, 1847, E. B. Stratton was employed by Powell, one of the firm, to purchase hogs for the firm, but was requested by Powell that he (the witness) should deal in his own name, and should not disclose the names of the principals, on account of the effect of a knowledge that they were in the market might have on prices in the county. Under this employment and arrangement, Stratton on the seventh of June, purchased hogs of the plaintiff and delivered to him a writing, showing the terms of the contract, which read thus: "I have this day bought of Joseph W. Violett all the hogs he may fatten for market. I am bound to take as many as one hun

dred head. He is bound to furnish as many as seventy-five head, to weigh two hundred pounds and upwards, well fatted, to be delivered between the twentieth of November and the tenth of December next, at three cents per pound gross, payable on the first of March next. Given under my hand this seventh day of June, 1847." Signed by Stratton. Some time after this contract was thus made by Stratton in his own name, he disclosed to Violett the fact that he had made the contract as the agent of Powell, Baker & Whitaker, and not for his own benefit. Powell and Whitaker both died before December, 1847.

In September, 1848, Violett instituted this action of assumpit against Bishop and Ransdell, administrators of the estate of Powell, deceased. The declaration contains several counts in the usual form, stating a contract for the purchase of hogs by Stratton as agent for said firm. The contract is stated substantially as it is contained in the writing, but is laid as in parol, no reference being had to the writing executed by Stratton. The breach of this contract, as laid in the declaration, consists in the failure of the firm and each member thereof and of the defendants, to take from the plaintiff about ninety hogs which he had ready for delivery according to his contract.

The court believing that the proof did not sustain the declaration, so instructed the jury, who accordingly found a verdict for the defendants. The court having overruled the plaintiff's motion for a new trial, he has brought the case to this court for revision.

The reason why the court gave the instruction to the jury does not appear in the record, but we suppose as the other facts charged were clearly established by the proof, the judge believed that the execution and delivery of the written agreement, by Stratton in his own name, precluded a recovery against his principal. The counsel for the defendants rely on that ground of defense in this court.

"There can be no doubt in a parol contract that the principal is personally liable upon any contract of his agent, if made within the scope of his authority given or subsequently recognized, although the agent made the bargain in his own name, and appeared at the time to act for himself, so that in fact the principal could not have been trusted, or his credit or responsibility regarded or required at the time of the bargain:" Chit. Con., last ed., 224, note 3; Paley on Agency, 248, 249. On the other hand, if the seller knows who the principal is, but gives credit to the agent instead of the principal, the rule is dif