HOWARD INS. CO. V. SILVERBERG.
921
it fell due, the city was indebted in an amount largely in excess of the statutory limit. As the judgment must be reversed upon this ground, it becomes unnecessary to consider the other question which the record presents. The judgment is reversed, and the ('ause ill remanded for further proceedings not inconsistent with the forl'going opinion.
HOWARD INS. CO. DE' NEW YORK v. SILVERBERG et'al. (Circuit Court of Appeals, Ninth Circuit. No. 490. An undertaking on appeal given to stay proceedings pending the appeal is not delivered, so as to become effective, until filed, and hence, though signed in another state, is "executed" in the state where filed. 2. LI M(TATION OF ACT IONS-ApPEAL U NDERTAKING-EFFECT OF FURTHER ApPEAl,. The running of the statute against an action on an appeal undertaking gi\'en on appeal to the general term of the superior COUl't of the city of New York is not affected by the taking of a further appeal from the judgment of the general term to the court of appeals. 1. ApPEAl, BOND-PI,ACE OF EXECUTION.
May 2, 1899.)
In EnOl' to the Circuit Court of the United States for the Northern ] listrict of California. This action was commenced in the circuit court of the Northern district of California to recover upon an undertaking on appeal which had been executed the defendants in error on August 9, 1892, in a case then pending in the superior COUl't of the city of New York, in which the Howard Insurance Company of ]'I;ew York lVas the plaintiff, and Julius Jacobs and George Easton were the defendants, and in which a judgment had been rendered for the plaintiff in the sum of $i,485.83. A condition of the undertaking on appeal was that the defendants in the action should pay all costs and damages which might be awarded upon the appeal, and that, if the judgment appealed from should be amrmed. they would pay the amount thereof. The appeal was taken to the gpneral term of the superior court of the city of l'\ew York. On January 15, 1894, the appellate court affirmed the jUdgment. 26 N. Y. Supp. 1133. On December 13, 1894, Jacobs and Easton appealed from the judgment of affirmance to the court of appeals of the state of New York, and in 1896 the latter comt affirmed the judgment so appealed from. 45 N. E. 1132. On December :.!:.!, 1897, the present action was brougbt against the sureties on the appeal bonel. The circumstances under which the undertaking was executed, as they are sN forth in tile complaint, are as follows: Jacobs and Easton, the defendants in the actiOn In the superior court, desiring to appeal from the judgment of that ('OUrt, requested the plaintiff in the action to accept a bond on appeal, to be signed by Silverberg and Pease, who were, residents of California, as sureties. The plaintiff acceded to the request, an undertaking was signed by Silverberg and Pease in San Francisco on August 9, 1892, and on the following day both sureties verified the undertaking before a commissioner for New York in San Francisco. before whom, on tlle same day, they also acknowledged the instrument. On September 10, 1892, the undertaking was filed in the superior court {)f the city of New Yorl;:, together with a written stipulation between the parties to the actioil to the effect that the plaintiff would not except to the sureties on said undertaking, and that such undertaking might be filed, and that no ('xeeption should be taken to its form, or to the time of its filing, or to the justification of its sureties. and that such undertaking should operate as a stay ()f proceedi)lgs. The parties were permitted to enter into such a stiplllatiO"l IIIH]er section 1305 of the Code of Civil Procedure of New York. A deumrrer
94' FEDERAL REPOR';I'ER.
was interposed to the complaint, onfthJground that the cause Of action was barred by ,subdivision 1 of section 839 of the Code of Civil Procedure of Calif\lrwa,wbicl!Provides that an action. On a contract, obligation, oJ; liability founded .on ll,ll.lnstrument of writing out of the state must be commenced withint\Vo years after the cause of action has accrued. The circuit court sustained the demUI'l'er, and' a jUdgment was entered dismissing the action. 89 Fed. 1G8. This ruling is assigned as error. Abraham C. Freeman, for plaintiff in error. Edmund Tauszky, Lester H. Jacobs, and W. E. F. Deal, for defl'ndants in error. , ' GII.B;ERT and ROSS, Judges, and HA.WLEY, Distrid Judge. ;, " , GILBERT, Circuit Judge) after stating the facts as above, deJivere,d the opinion of the ,court.' ' " The controlling question presented in this case is whether the 'llldertaking on appeal was executed without the state, ,of CaliforniaJNo instrument is executed until it is delivered. To constitute' ;tJlelivery, the obligor must places the bepnd his control and his of revocation. Duel' v. Jaines, 42 }fd. 492; FIsher v. Hall, 41,N. Y. 416; Younge v. GUilbeau, 3 Wall. 636. The delivery need not always be madeto,the obligeepersonllH'Yl ';,It may be made toa third person in his behalf. Hatch v. Bates, 54 }fe. 136; Cooper v. Jackson, 4 Wis. 538; Sneathen v. Sneathen) 104 Mo. 201, 16 S. W. 497. A bond cJn':;tppeal is not delivered to the opposite party to the suit. It is to th,e c.lerk of the court, who files it and holds it on bQ1:uilfof the:oQHgee for whQlilebenefi,t it is given" Code N. Y.,:provides that ,an undertakingf'must be filed withtb,e'Clerk wi'th"whom the judgment or order appealed from is b,f*o Mneral 1lling of ,aiL llllQ.ertaking, btl a.ppeal 4elivery. 'the. propo,sitlon that the place ofthedelivery of such an instrument will,in,the absence of an agreement to the contrary, to be the place of its the pll:tce''w4er,e it a.nd that a contrllct 'is matjle in 'iii 'which it 'first takes' effect as a hiJJ.ding obligation, is susta.hied by the In Bell v. Packard, 69. Me. 105, it was hel,d that a promissory note written in )Iaine) but signed in Mitssacb'l'lsetts', by dtizenE\ living there, and then returned by mail I living in Maine, is a note made .in Maine, and to .J:)econstrued by the laws thereof. 'fhe eourt said: "For, although it was"signed in Cambridge, it was delh"eI;ed to the payeeiilSkowhegaIi, and it was'llot a completed eontract until' delivered." IIi' Lawrence' v.Bassett; '5 Allen, 140, the defendant had put his nameou,rtpe' back of a, note in another state while it was in the hands of the original maker, and before it was delivered to thel?ayee. It wasStlbseqUently passed to the payee in. Massachusetta' fora' va] consideration. The cotlrt held that it then for tbe first time a valid promise to pay the money, and said: "Until such delivery, it was not a binding and opel'ijtive contract;'upon which'the'defendant could have been held as a party to the note. It was' therefore the delivery to the
HOWARD INS. CO. V. SILVER;BERG.
923
plaintiff which completed and consummated the contract." In v. Pratt, 125 Mass. 37il, the court held that a contract of guaranty· signed in Massachusetts, and sent by mail to another state, and assented to and acted on there, for the price of goods sold there, is made in that state. The court said: "If the contract is completed in another state, it makes no difference in principle whether the citizen of this state goes in person, or sends an agent, or writes a letter, across the boundary line between the two states." In Forstv. Leonard (Ala.) 22 South. 481, it was held that, although a bond may be signed at one time, its execution does not occur until itl;1 delivery. Said the court: "The bond * * * speaks from the time of delivery,-from its execution, and not from its signing." So, in Tilden v. Blair, 21 Wall. 241, it was said: "It has been settled that the liability of an acceptor does not arise from merely writing his name on a bill, but that it commences with the subsequent delivery." In State v. Young, 23 Minn. 551, the court. said: "It is almost an elementary principle, laid down in all the books, that a bond is not 'executed' until it is delivered, for nce delivery is of the esS of a deed." But it is urged that the undertaking in the present case must be held to have been executed in the state of California, for the reason that there the final assent thereto was given. It is said that the plaintiff in the action had agreed to accept the defendants in error as sureties; that thereafter no further act was required than that they should attach their signatures to the undertaking; and that when they signed the same, and parted with its possession, the transaction was complete. We are unable to assent to this view of the facts or of the law applicable to them. Up to the date of the filing of the undertaking, there was no binding agreement of any kind between the parties. There had been a request on the part of the defendants in the action that the plaintiff accept sureties residing in California, and the request had been assented to. But there was no stipulation in writing, and theI'e was nothing to hold either party to the agreement. It was nudum pactum. l'he first and only agreement that had binding force was the stipulation that was entered into when the bond was filed in the state of.New York. The plaintiff in the action had not bound itself to accept as an undertaking .on appeal any instrument that might come from California bearing the signatures of the .sureties named. The final act was not the signing of such an instrument by the sureties, but its acceptance by the opposite party and its delivery. This is evidenced by the stipulation which accompanied it when it was filed.. Up to that time the sureties on the bond had the right to recall the instrument. They could have revoked it at any time before it left the possession of the defemlants in the action. There was nO consideration for their liability as sureties before the bond was actually used on the appeal. The stipulation by which it was accepted was made between the parties to an action pending in the state of New York, and 'with reference to an appeal to a court of that state, and with reference to an undertaking which had been signed, verified, and ac-
924
D4 FEDERAL REPORTER.
knowledged, but not The complaint, 'after referring to the execution of the stipulation, contains this averment: "That therea.fter,! onrthesame day, the' said undertaking on appeal was filed by the said Jacobs and Easton in the office of the clerk of said superior court last named, and a copy thereof served upon this pla.intiff; A:ild the appeal of said Jacobs and Easton from the said judgment'was then perfected, and a stay of the execution thereof effected," The only inference to be drawn from the faets as they are stated in the complaint is that when the stipulation was entered into the undertaking was in the possession of the defendants in the action in the state of New, York, and that then they parted with its possession and delivered it to the clerk. We find nothing in the allegations of the complaint, construed, as they must be, in the light of the statutes of New York, so far as the latter are applicable, to indicate that it was the purpose of the parties to the action to regard the bond as an instrument executed in the state of California, or to dispense with any of the requirements of the law of New York with reference robonds on appeal, pxcept in the one specified particular, that the sureties on appeal might be residents of the state ofCalifoi'Dia. The case of Alcalda v. Morales, 3 Nev. 132, cited by the plaintiff in error, is not authority for its contention. In that case one of two partners doing'business in Nevada went to Sacramento, Cal., to borrow money for the firm. He negotiated a loan, signed a promissory note in sacramento, and obtained the money upon it. The note was then sent to the other partner, who executed it in Nevada, and returned it to the plaintiff, in Saerarmento. It was held that the note was executed 'in Nevada. It was so held for the reason that the form of the paper had been agreed upon in California, and there accepted, and there the money had. been obtained thereon, and nothing remained to be done except to obtain the signature of the other partner, and that when his signature was appended, and the note left his possession on its way to the plainti11', the transaction was closed. The vital poi.nts which distinguish that case from the case at bar have already been suggested. When the defendants in error signed the bond in California, the transaction was not closed. Their signature was but the first step. The undertaking had not been accepted. No stipulation had been made, as provided by statute, assenting to the undertaking or waiving the nonresidence of the sureties. There is nothing in the complaint to show that the plaintiff in the action had seen the instrument or knew its terms, or, indeed, to show that it was not drawn in California at the time when it was signed there. The plaintiff was under no obligation to accept the bond, nor to accept the defendants in error as sureties. It had parted with none of its rights. Execution upon its judgment had not been stayed. Payment of the judgment could have been enforced by process at any time before the undertaking and the stipulation were filed. How, then, can it be said that when the sureties signed the undertaking, and parted with its possession, the last act had been done and the transaction was closed?
BOWEN V. NEEDLES NAT. :BANK.
925
BOWEN v. NEEDLES NAT. BANK et al. (Circuit Court of Appeals, Ninth Circuit. No. 499. 1. j
May 15, 1899.)
NATIONAL BANKS-POWERS-CONTHACT OF GUARANTY.
A national bank has no power to lend its credit to any person or corporation, or to become guarantor of the obligations of another, except in the case of tl;le transfer of promissory notes discounted, which is in the ordinary course of Qanking. A contract entered into by a corporation, which is ultra vires of its charter, cannot be ratified or become binding on the ground of estoppel, and the only ground on which the corporation can become liable to the payment of
2. CORPOHATIONS-Co'NTHACTS ULTHA VIBES-ESTOPPEL.