Hunter & Drennen v. Henninger

Mr. Justice Gokdon delivered the opinion of court, May 8d 1880. The Act of 12th April 1872 was intended to destroy the negotiable character of notes given in whole or part for “ the right to make, use or vend any patent invention,” in order that the makers thereof might have the right to defend, as well when said notes were passed to third parties as when in the hands of the original payees. In furtherance of this intent, the act requires the endorsement, “ Given for a patent right,” to be made across the face of such notes, and this, in order that no one may ignorantly purchase paper of this kind. Without this, of course, the innocent purchaser for value would not he affected; he would hold as the endorser of any other negotiable paper. Not so, however, as to one knowing the consideration of a note given for a patent right, for such an one is, by the act, guilty of a misdemeanor, if he receives this kind of paper without having the words above stated written upon its face. It follows that if the plaintiffs, through Drennen, received the note in suit, knowing that it was given for the right to vend, or use, these patent grinders, they received it in fraud of the statute, and wore, for that reason, not entitled to recover. Whether they ■had such knowledge or not was, under the evidence, properly submitted to the jury. Under the circumstances of this case, the plaintiffs were loft without ground of reasonable complaint, when the court put upon the defendant the burthen of proving that a fraud had been perpetrated upon him by the payees of the note, and that they, the plaintiffs, had notice of such fraud. The exceptions to the evidence cannot be sustained; first, for the reason that they are based upon the assumption that Hunter & Drennen were bona fide purchasers for value ; whereas, if Drennen himself is to be believed, he knew that the note had been given for the right to vend or use a patented article, and, as we have before said, he compromised the good faith of his firm by taking that note without first having it endorsed as required by the statute; and, second, the evidence complained of was proper and pertinent to the issue then being tried. According to the holding of the court, Henninger must first prove that he was defrauded in the giving of the note, and then that the plaintiffs had notice thereof, and this proof must be either direct or circumstantial. Had he failed in [376] the latter, then the defendant would have had no case, and so, no doubt, the court would have instructed the jury. That there was an admission of an offer to prove a fraud on the defendant, unaccompanied by an offer to prove notice to the plaintiffs, proved to he, in the end, a harmless error, since, in fact, the requisite evidence to prove notice was introduced during the trial. Enough has already been said to show that the remaining exceptions are without merit. Judgment affirmed.