Hogg v. Thurman

• Citation: 117 S.W. 1070,90 Ark. 93
• Parties: HOGG v. THURMAN
• Decision Date: 29 March 1909
• Court: Arkansas Supreme Court

117 S.W. 1070

90 Ark. 93

HOGG v. THURMAN

Supreme Court of Arkansas

March 29, 1909

Appeal from Union Circuit Court; George W. Hays, Judge; reversed.

Judgment reversed and cause remanded.

Marsh & Flenniken, Thornton & Thornton, and Warren, Hamiter & Smith for appellants.

1. If the notes were purchased for a merely nominal sum, appellees were not innocent purchasers. 1 Daniel, Neg. Instruments § 777; 79 Ark. 152.

2. Appellants offered to prove that Harman, with whom the trade was made, told them at the time that the thing they were buying was a patented article, to introduce the contract on the faith of which they executed the notes, and also the title page of the book for the purpose of showing that it was a patented instrument. All this was competent, and should have been admitted. Kirby's Dig., §§ 512, 513; 67 Ark. 575.

OPINION

FRAUENTHAL, J.

The appellees, who were the plaintiffs below, instituted this suit against the defendants upon two promissory notes. They alleged that they had purchased said notes in the ordinary course of business before maturity and for a valuable consideration, and were bona fide holders thereof. The notes were dated April 8, 1907, and were due, respectively, six and eight months after date, and each was for the sum of $ 150.

The defendants denied that the plaintiffs were the owners of the notes, or that same were transferred to them before maturity. They alleged that the notes were executed for the right to sell certain patented articles, and were not executed on a printed form in manner prescribed by the statute; that the consideration for which the notes had been executed had entirely failed; that the original payee had executed to defendants a bill of sale for the right to sell such patented article and agreed to deliver to defendants 120 copies of said articles; and they alleged that the said original payee of said notes failed to deliver any of said articles, and that there was an entire failure of the consideration of said notes.

At the time of the institution of the suit the plaintiffs sued out a writ of attachment against defendants upon the ground that defendants were about to sell, convey and otherwise dispose of their property with the fraudulent intent to cheat, hinder and delay their creditors. And the defendants in proper manner denied these allegations for attachment.

Upon a trial of the cause, the court instructed the jury peremptorily to return a verdict in favor of the plaintiffs for the amount of the notes. The attachment branch of the case was submitted to the court sitting as a jury, and the attachment was sustained. Thereupon judgment was rendered in favor of plaintiffs for the amount of said notes and sustaining the attachment, and from this judgment the defendants now prosecute this appeal.

On April 8, 1907, the defendants executed to one M. F. Brown the two notes sued on, and these notes were negotiable instruments. On June 7, 1907, and before the maturity of the notes, the payee transferred the notes to plaintiffs without recourse; and plaintiffs testified that they were transferred to them for a valuable consideration, but named no amount.

Upon the trial of the case below, the defendants offered to prove the consideration for which the notes were executed, and, by testimony duly presented, offered to prove that the sole consideration of the execution of said notes was a certain written contract given by M. F. Brown, the payee of the notes, granting to defendants the right to sell certain books or articles in White County, Arkansas, and also that said Brown was to deliver them 120 books, which were to be used in effecting the sale of such books in the territory covered by the right, and the books were also to be sold by them; that these books had never been delivered, and that they had not been able to proceed with the work in the territory on that account; that no books had ever been shipped to them, and that defendants had not received any consideration for the execution of the notes. In substance, the defendants offered to prove by evidence that there was no consideration for the notes, and that the original payee had fraudulently obtained from them the execution of the notes.

The court refused to permit the introduction of any evidence tending to prove the above alleged facts.

In the trial of the cause, one of the plaintiffs was a witness on his own behalf and testified that the plaintiffs bought the notes in June, 1907, but in his direct examination he was not asked and did not state what consideration was paid by them for the notes. Upon his cross examination he was asked the following:

"Q. You got this note at a reduced price? A. Yes, sir. Q. What did you give for it?" To which plaintiffs objected, which objection was by the court sustained. To which ruling of the court the defendants at the time saved their exceptions. "Q. Didn't you buy these notes for a mere nominal sum?" To which the plaintiffs objected, which objection was by the court sustained. To which ruling of the court the defendants saved their exceptions. "Q. Isn't it a fact that this man had tried all over the neighborhood to sell these same notes and had failed? A. I don't know whether he did or not. I heard it. That was only hearsay. Q. How far do you live from these defendants? A. About a mile. Q. Have you ever notified them that you held these notes? A. Not before they became due."

The lower court refused to permit the introduction of the above testimony, presumably on the ground that the plaintiffs were bona fide and innocent purchasers and holders of the negotiable promissory notes, and on that account the defendants could not make a defense of want or failure of consideration, and could not, as against plaintiffs, present any fraud or equities which they might set up as against the original payee, and could not inquire into the amount of the price paid by plaintiffs for the notes. The defendants contend that the original payee of the note was a vendor of a patented article or a patent right, and that the notes were not executed in conformity with section 513 of Kirby's Digest, and on that account plaintiffs could not be considered innocent holders of the notes, even though they had given value therefor before maturity.

But the testimony offered by the defendants would not show that the consideration of the notes was a patented article or a patent right. The consideration of the notes which they attempted to prove was a contract for the right to sell books in a certain territory and 120 books. Now, the subject-matter which is patentable consists of any new and useful art, machine manufacture, or composition of matter, or any new and useful improvement thereof, or any new, original and ornamental design of any article of manufacture. The art that is patentable is a process or act performed upon the subject-matter to be transformed and reduced to a different state or thing. U.S. Rev. St. (1878) § 4886; 30 Cyc. 820. And so books and the right to sell books are not patents or patented rights, within the provisions of sections 513 and 514 of Kirby's Digest, which require the note given...