Mason v. McLeod

The opinion of the court was delivered by Johnston J. : No attempt was made by Mason to comply with the statutory requirements concerning the transfer of patent-rights, and for this reason the trial court held the contract to be invalid, and adjudged a rescission. The principal question discussed [108] by counsel relates to the validity of the statute in violation of which the contract was made. Among other things, it provides that it is unlawful for any person to sell a patent-right in any county of the state without filing with the clerk of the district court copies of the letters patent, and with them an affidavit that the letters patent are genuine, have not been revoked or annulled, and that he has full authority to sell. It is required that the affidavit shall give the name, age, occupation, and residence of the party proposing to sell, and he is required to exhibit a copy of the affidavit to any person on demand. There is a further provision that any person who takes a written obligation in consideration of a patent-right shall insert in the body of it in writing or print the words, “ Given for a patent-right.” A failure to compty with these provisions is declared to be a misdemeanor, and the penalty is a fine not exceeding $1,000 or imprisonment in the county jail not exceeding six months. (ch. 182, Laws of 1889; ¶ ¶ 4005-4007, Gen. Stat. 1889.) In our opinion, these provisions do not trench upon the federal power, nor interfere with the right secured to a patentee by the federal law. It is true that no state can interfere with the right of the patentee to sell and assign his patent, or take away any essential feature of his exclusive right. The provisions in question, however, have no such purpose or effect. They are in the nature of police regulations, designed for the protection of the people against imposition and fraud. There is great opportuity for imposition and fraud in the transfer of intangible property such as exists in a patent-right, and many states have prescribed regulations for the transfer of such property differing essentially from those which control the. [109] transfer of other property. There were some early decisions holding that such regulations trenched upon the federal power and the rights of the patentee, but recent authorities hold that reasonable police regulations may be enacted by the state without usurping any of the powers of the federal government or infringing upon the exclusive rights of the patentee. (Brechbill v. Randall et al., 102 Ind. 528; New v. Walker, 108 id. 365; Pape v. Wright, 116 id. 502; Sandage et al. v. The Studebaker Brothers Manufacturing Co., 142 id. 148; Tod v. Wick Brothers & Co., 36 Ohio St. 370; Herdic v. Roessler, 109 N. Y. 127; Haskell v. Jones, 86 Pa. St. 173; Patterson v. Kentucky, 97 U. S. 501; Webber v. Virginia, 103 id. 344.) The doctrine of these cases is that the patent laws do not prevent the state from enacting police regulations for the protection and security of its citizens, and that regulations like ours, which are mainly designed to protect the people from imposition. by those who have actually no authority to sell patent-rights or own patent-rights to sell, should be upheld. We think the statute is valid. The purpose of the statute, as we have seen, was to prevent and punish fraud, and noncompliance with its provisions is declared to be a misdemeanor, punishable by fine or imprisonment. The penalty implies a prohibition, and contracts made by a vendor of patent-rights in violation of the act are void as between the parties. The transfer of Mason, being illegal, did not constitute a valid consideration for the money or property obtained from McLeod. (New v. Walker, supra; Sandage et al. v. The Studebaker Brothers Manufacturing Co., supra.) It is contended by plantiffs in error that if the statute is bad all of. the parties are in pari delicto, and all should be left without remedy. It appears that the [110] contract finally made was not in fact closed up and completed. The $500 note previously delivered to Mason for the Texas territory was never delivered to McLeod. He had deposited the note as collateral in a bank at Le Roy, and it was not then under the control of himself or his wife. The return of this.note and its exchange for the $235 note was a part of the consideration .of the contract, and until these things were done it was not in fact executed. More than that, the general rule that courts will not enforce contracts prohibited by statute or allow the recovery of money or property paid or delivered in pursuance of them does not apply to McLeod. He cannot be held to be in pari delicto. The duties prescribed by the statute are imposed upon the vendor of patent-rights, and are provided for the protection of purchasers. The law was not violated by McLeod. It placed no burdens upon him, and, having committed no wrong, he is not precluded from asking and obtaining relief. We think the pleadings are sufficient to warrant the findings that were made, and that the judgment should be affirmed. All the Justices concurring.