This isn't "normally" possible. PHP is executed by the server before the page is served to the client. The client doesn't understand your PHP code.
That being said, there is a way to achieve this with PHP. Using Ajax, it's possible to query the server with the email and get a response back from the server. Typically you'll get a response back in JSON.
With jQuery, the following code would do just that:
$(document).ready( function() {
$("#email").mouseup(function() {
var email = $(this).val(),
url = "api/myfunction?email=" + email;
$.get(url, function(data) {
// We succeeded! data contains your response.
});
});
});