Nyhart v. Kubach

• Decision Date: 08 June 1907
• Docket Number: 15,100
• Citation: 90 P. 796,76 Kan. 154
• Parties: SYLVESTER NYHART v. CHARLES KUBACH et al
• Court: Kansas Supreme Court

90 P. 796

76 Kan. 154

SYLVESTER NYHART v. CHARLES KUBACH et al

No. 15,100

Supreme Court of Kansas

June 8, 1907

Decided January, 1907.

Error from Dickinson district court; OSCAR L. MOORE, judge.

Judgment reversed and cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1. PATENT-RIGHT--Sale--Registration. A contract by which the owner of a patent-right conveys to another the exclusive right to sell the patented article within certain prescribed territory for a term of years is a sale of such an interest in a patent-right as brings the transaction within the provisions of the act relating to the registration and sale of patent-rights and prescribing a penalty for the violation thereof.

2. PATENT-RIGHT -- Territorial Lease--Agency--Sale Effected. A so-called territorial lease and appointment of agency held to be a contract for the sale of a patent-right within the provisions of sections 4356, 4357 and 4358 of the General Statutes of 1901.

3. PROMISSORY NOTES--Want of Consideration--Rights of Maker. Promissory notes given as a consideration for the sale of a patent-right, where the owner of the patent-right failed to comply with the provisions of the statute relating to the registration and sale of patent-rights, are void as between the parties, and where they have passed into the hands of innocent purchasers the maker may maintain an action to recover from the payee the amount of such notes and interest.

E. C Little, and Waggener, Orr & Challiss, for plaintiff in error.

C. S. Crawford, for defendants in error except Louis Nyhart.

OPINION

PORTER, J.:

Plaintiff brought this action to recover damages in the sum of $ 600, and interest, being the amount of three promissory notes which he claims to have executed and delivered to defendants in consideration of a void contract for an interest in a patent-right, and which notes it is claimed defendants transferred to innocent holders. The court sustained a general demurrer to the petition, and plaintiff, having elected to stand upon his petition, brings error.

The petition alleges that the National Fence Machine Company is a corporation with its principal place of business at Abilene, Kan.; that defendant Charles Kubach is its general manager; that in July, 1903, plaintiff and defendants entered into the following written contract:

"NATIONAL FENCE MACHINE COMPANY OF ABILENE, KAN.,

SOLE OWNERS AND MANUFACTURERS OF THE NATIONAL FENCE MACHINE,

PATENTED JANUARY 3, 1903, No. 489,139.

"TERRITORIAL LEASE.

"Know All Men by These Presents: That the National Fence Machine Company of Abilene, Kan., has this day, July 31, 1903, appointed Sylvester Nyhart and son of Atchison, Kan., their true and lawful general agent to sell their national fence machine, at wholesale and retail, in the following territory, to wit: Doniphan, Brown, Nemaha, Marshall, Pottawatomie and Jackson counties, state of Kansas.

"This Indenture Witnesseth: That for the sum of $ 600, receipt of which is hereby acknowledged, the National Fence Machine Company of Abilene, Kan., hereby agrees to give, and does give the party of the second part six sample machines and the agency for the sale of the national fence machine for the term of six years in the above territory. The company hereby agrees to furnish all machines ordered by said agent at two dollars and fifty cents ($ 2.50) each on board cars at factory, when ordered each machine to be made in a good, substantial and workmanlike manner. The agent shall make a report to the company at the end of each month. The company hereby further agrees to take notes for machines when same are quoted good by local bank.

Ship machine to order.

By CHAS. KUBACH, Mgr.

Address all correspondence to

SYLVESTER NYHART.

The National Fence Machine Co., Abilene, Kan.

LOUIS NYHART."

The petition alleges the execution of the notes and their transfer to innocent holders; that Louis Nyhart, plaintiff's son, was only nominally interested in the contract; that the so-called territorial lease was a mere scheme for the purpose of avoiding the provisions of the statute making unlawful a sale of a patent-right in any county unless the person selling the same shall first file with the clerk of the district court of the county where the sale is made duly authenticated copies of the letters patent, with an affidavit showing that the letters patent are genuine and have not been revoked or annulled and that such person has the right to convey, and for the further purpose of avoiding the requirement of the statute that the person taking any obligation in writing in payment for such sale shall insert therein, before the same is signed, the words "given for a patent-right." The failure of defendants to comply with any of the provisions of the statute is alleged. Plaintiff in his petition offered to return the six sample machines referred to in the contract.

The theory upon which the petition is drawn is that the contract constituted a sale of a patent-right within the words of the statute (Gen. Stat. 1901, §§ 4356-4358), and, being in violation of the statute, the contract is void.

Defendants contend, first, that the contract is not for the sale of a patent-right, but merely a sale of six sample machines and the appointment of plaintiff as agent with the right to sell under defendants' direction and control.

The only suggestion of direction or control over the conduct of plaintiff is the provision that he shall report to the company at the end of each month,...