You started writing a string literal: everything between
' and the next
' is treated as a single "thing" by the shell, including newlines, spaces, and any other characters. Here you wrote a string containing two newlines.
That meant that the first thing on the line was
\n\n (two newlines). Because the first thing on a line is always the command to run, the shell looked for a command by that name. Because there's no command called
\n\n, you got the "command not found" error.
> prompt at the start of the second and third lines means that the shell is waiting for you to finish writing the quoted string, and letting you know it isn't done yet. The shell prints out the value of
$PS3 in that situation, which is
> by default.