Foulks Accelerating Air Motor Co. v. Thies

• Decision Date: 21 June 1901
• Docket Number: 1,528.
• Parties: FOULKS ACCELERATING AIR MOTOR CO. v. THIES.
• Court: Nevada Supreme Court

65 P. 373

26 Nev. 158

FOULKS ACCELERATING AIR MOTOR CO. v. THIES.

No. 1,528.

Supreme Court of Nevada

June 21, 1901

Appeal from district court, Washoe county; A. E. Cheney, Judge.

Action by the Foulks Accelerating Air-Motor Company against J. H Thies. From a judgment in favor of plaintiff, defendant appeals. Reversed.

Torreyson & Summerfield and F. H. Norcross, for appellant.

Edmund Tauszky, George H. Foulks, and Curler & Curler, for respondent.

BELKNAP J.

Action to collect a call upon a subscription to plaintiff's stock. In his answer defendant, among other things, sets up as an equitable defense to the action, that during the month of February, 1893, and prior to the 25th day of March, John P. Foulks falsely represented to the defendant and others that he was the inventor and the owner of a certain patent for an improvement in windmills, the letters patent of which had not been issued, but would shortly be issued, and when issued would cover all the mechanical features described in the answer in this case; that defendant, relying upon said representations, subscribed for a certain number of shares of the capital stock of the plaintiff; that defendant first learned upon the dates mentioned in the answer that the letters patent issued to Foulks, and subsequently assigned to plaintiff, did not embrace the mechanical principles claimed for it by Foulks in his representations or in his application for a patent. At the trial the district court found that upon March 9, 1892, Mr. Foulks filed his application for a patent for an improvement in air motors, and appointed Dewey & Co. of San Francisco, Cal. and A. H. Evans & Co., of Washington D C., his attorneys to prosecute the same, and to alter or amend his specifications, to receive the letters patent when issued, and to transact all business in the patent office connected therewith; that upon December 27, 1892, the attorneys of Mr. Foulks transmitted to him a copy of a notice from the patent office to the effect that his application for a patent had been examined and allowed; that while his application was pending several amendments were made by his attorneys, but no reference thereto was made by the notice, and Mr. Foulks was not informed of the particulars in which his application had been amended until after the patent was granted. It was also found that until subsequent to July 15, 1893, Mr. Foulks believed, and did not have any reason for not believing, that his application for patent had not been allowed by the patent office as originally made and filed; that he believed his representations to the defendant as to the scope of the patent were true, and without any knowledge that they were untrue, and without intent to deceive. It was also found that the contents of the patent materially differed from the representations made concerning it by Mr. Foulks. Upon these facts, the question is whether or not the representations were fraudulent in law.

The notification to Mr. Foulks that his application had been approved should be considered in connection with his authorization of Dewey & Co., of San Francisco, and A. H. Evans & Co., of Washington, to alter or amend the specifications. Under the authority given his attorneys, no one could have known, prior to final action by the patent office, the extent to which the specifications had been altered or amended. He knew that amendments had been made. That fact may well have excited his inquiry,...