Court Opinion

ID: 6739189
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:42.263795+00
Date Added: 2024-06-11T16:01:54.285479
License: Public Domain

Bronson, J.
I dissent. This is an appeal from a judgment rendered by the trial court without a jury, in favor of the plaintiff, upon two promissory notes. The record is short; the facts are not disputed; questions of law alone are concerned. Two promissory notes involved were made by the defendant to the plaintiff, the sole consideration therefore being a patent right for a seed disinfector. The notes bear the date, “State of North Dakota, Dec. 7, 1917.” Such notes contain no marks of any kind thereupon to indicate that they were given for such patent right.
At the trial in May, 1919, the plaintiff introduced the notes, proved *338their execution, and nonpayment, and rested. The defendants thereupon moved for dismissal of the action upon the ground that the notes violated § 10,251, Comp. Laws 1913, and could not be used to sustain any judgment in a court of justice. The defendant then rested and renewed the motion.
The record discloses that thereupon the court, in May, 1919, made its findings of fact and conclusions of law, in favor of the plaintiff without making any specific finding of fact concerning the place of execution of such notes or of the application of § 10,251, Comp. Laws 1913, thereto. Judgment, accordingly, was entered in favor of the plaintiff for the total amount of $1,503.63, from which this appeal has been prosecuted. The appellant specifies error in the action of the trial court in overruling the objections made and in finding in favor of the plaintiff.
See. 10,251, Comp. Laws 1913, provides that every person who takes any obligation in writing for any patent right or claimed to be a patent right shall, before it is signed by the maker, stamp or write in red ink, across the face of such written obligation, in plain legible writing, or print, the words “given for a patent right;” that such obligation so stamped shall not be negotiable, but shall be subject to the defenses in the hands of every holder or owner thereof; that any person who shall violate the provisions of such section is guilty of a misdemeanor, and shall be liable in a civil action, to the party injured, for all damages sustained by him. The substance of the above statute applicable herein has been stated.
It is presumed that these notes dated in North Dakota were executed and delivered in this state. 8 C. J. 88. Two questions of law are presented :
(1) Is the statute quoted valid and applicable?
(2) If such statute be valid and applicable, are the notes enforceable in the courts of this state ?
On the part of the respondent, it is contended, in part, that the statute is unconstitutional and void for the reason that it serves to interfere with rights granted by the Federal statutes concerning patents and the sale and assignability thereof. The statute involved does not prohibit an action or a recovery upon a note given for a patent right. It does not prohibit any contract for, or any sale or assignment of, a patent right. This action is not brought upon notes bearing the indorsement provided *339by statute where the question might arise concerning the validity of the statute restricting the negotiability of such notes. This action is brought upon notes which pretend to be, and might be, based upon some consideration other than that required by the statute to be expressly stated in such cases. Nor purposes of this case, the statute has simply required that, in addition to the words, “for value received,” in such notes, there shall also be a specific statement, further concerning the consideration, namely “given for a patent right.” There appears no legal reason why, in this regard, the state may not legislate properly by requiring a statement of the specific consideration in a note as well as by legislating concerning a general consideration required in a note through the words “for value received.” See 10 Fed. Stat. Anno. 2d ed. 646, 647; Patterson v. Kentucky, 97 U. S. 501, 24 L. ed. 1115; notes in 20 L.R.A. 606, and 29 L.R.A. 788; New v. Walker, 108 Ind. 365, 368, 58 Am. Rep. 40, 9 N. E. 386. The statute is held valid. Concerning the right to enforce this obligation in the courts of . this state, irrespective of the provisions of the statute, the respondent contends that the notes, being payable in Wyoming, are governed by the laws of that state, and, in the absence of proof to the contrary, that the law merchant obtains: Nurther, that the statute, in any event, simply takes from such notes the character of negotiability, giving a right of action for damages sustained by the maker, and not prohibiting an action upon such notes, as subject to all defenses. The notes in question were executed in this state, as the respondent in his brief admits. They are sought to be enforced in this state. The law of Wyoming cannot be used as an instrumentality in defeating the penal provisions of a statute applicable to a contract made and sought to be enforced in this state. 8 C. J. 86. The statute is applicable. The statute makes it unlawful to issue notes of this character without a statement thereon of the specific consideration. It makes it unlawful to put into circulation a note which might be presumed on its face to be for some other consideration than that which the statute prescribes. The respondent seeks to enforce not the notes which the statute permits, but notes intended to be different than those prescribed by the statute, and which give an opportunity to the payee to perpetrate wrong and injustice by their circulation. See Smith v. Wood, 111 Ga. 221, 36 S. E. 649; Parr v. Erickson, 115 Ga. 873, 42 S. E. 240; Heard v. National Bank, 143 Ga. 48, 84 S. E. 129; *340Roth v. Merchants’ & Planters’ Bank, 70 Ark. 200, 91 Am. St. Rep. 80, 66 S. W. 918. It is no answer to state that a remedy exists by prosecution of the payee. The statute was enacted for the protection of the public, whether it be maker, or, possibly, subsequent holders of such notes.
The respondent seeks to recover on the specific note; not the obligation or contract, if any, upon which the notes were given. As stated in Wald v. Wheelan, 27 N. D. 624, 631, 147 N. W. 402: “Contracts to perform acts forbidden by express statute, or which subject the parties to punishment, are unenforceable. . . . Would not the enforcement of such contracts by courts be lending the processes of law to promote and encourage disobedience to law ?”
The statute being applicable, these notes are unenforceable, as such, in the courts of this state. Norbeck & N. Co. v. State, 32 S. D. 189, 142 N. W. 847, Ann. Cas. 1916A, 229; Citizens’ State Bank v. Rowe, 36 S. D. 151, 153 N. W. 939; Sandage v. Studabaker Bros. Mfg. Co. 142 Ind. 148, 156, 34 L.R.A. 363, 51 Am. St. Rep. 165, 41 N. E. 380; Nyhart v. Kubach, 76 Kan. 154, 90 Pac. 796.
The judgment should be reversed and the action ordered dismissed.
Grace, J., concurs.