Court Opinion

ID: 3547959
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:00:32.904909+00
Date Added: 2024-06-11T14:22:26.712231
License: Public Domain

The facts sufficiently appear in the opinion.
Plaintiff claimed to recover judgment upon twelve promissory notes, of the aggregate value of $1,472.03, made payable to the order of V. O. Rosser, and by him indorsed to plaintiff for value before maturity. The answer admits the execution of the notes, but alleges want of consideration, by reason of fraudulent representations by Rosser and one G. H. Sherman, and charges fraud and conspiracy by plaintiff, Rosser, Sherman, and others, in obtaining them. A jury found for defendant. Plaintiff appeals.
The evidence showed that plaintiff had sent the following letter to Mr. C. T. Bender, cashier of the Washoe County Bank, at Reno:
"Kansas City, Mo., July 19th, 1897. C. P. Bender, Esq., Cashier, Reno, Nevada — Dear Sir: I herewith hand you our *Page 418 
check on New York for $1,000, for the credit of Mr. V. O. Rosser, who will be in your place some time soon, representing the Calendar Clock Safe Co., and there may be some inquiry as to his company. I beg to advise that the same is owned by Mr. J. M. Curtice, of this city, who is amply able to carry to completion any contract he proposes to make. In fact, he stands first-class here, and is one of our most enterprising citizens. If you should see fit to examine the safe which Mr. Rosser is placing before your people, I am sure you will agree with me that it is a piece of kitchen furniture which almost any family could well afford to have. Mr. Rosser is a first-class gentleman, and I bespeak for him and the parties with him your best treatment. Yours very truly, E. F. Swinney, Cashier."
Soon after the receipt of this letter by Mr. Bender, Rosser, the payee of the notes, and Sherman appeared in Reno, where they were unacquainted, and established themselves in the business of selling calendar clock safes and territorial rights thereto; representing to defendant and others that the calendar clock safe was a patented article, in its entirety, and new to the markets of the Pacific Coast. By reason of representations of this nature, they obtained the promissory notes of the defendant and other citizens of Reno and its vicinity, in exchange for calendar clock safes and territorial rights for their sale, of the aggregate amount of about $10,000. Before the purchase of the notes, Rosser gave to appellant the following paper writing:
"Received of the Calendar Clock Safe Co. four calendar clock safes, for samples, together with order blanks; being everything promised in a transaction had with them wherein I executed notes payable to the order of V. O. Rosser, which will be paid when due. W. H. Patterson."
Appellant ascertained to his satisfaction, before purchasing, that defendant and all others that had signed similar notes at about the same time, and for a similar consideration, were entirely solvent. Upon these facts appellant purchased of Rosser all of these notes, amounting to about $10,000 in value, at a discount of 25 per cent, taking at the same time an assurance similar to the receipt above set forth from each signer. It was shown that the calendar clock *Page 419 
safe was not a patented article, in its entirety; that a mechanical patent had issued therefor, embracing only the receptacle for an ordinary clock; that a design patent had been issued for it; that the word "patented" was marked upon all calendar clock safes; that appellant had one in his home in Kansas City; that the calendar clock safe was not new to the markets of the Pacific Coast.
According to the testimony, it must be admitted that Rosser's representations to defendant were fraudulent, and as between them the notes would be voidable. Appellant, however, claims that he is an innocent purchaser, without notice of any equities existing between the original parties. The question is whether the testimony supports the contention. The letter to Mr. Bender was intended and used as a general and favorable introduction of Rosser, and the scheme which he and Sherman afterwards presented to defendant and others, and tended to show appellant's interest in their operations — not necessarily a guilty interest; but, when appellant's subsequent ownership of the notes is coupled with the statements of the letter, there was sufficient testimony to support the verdict.
Further support may be found in the reiteration of the promise to pay the notes at maturity. This paper was signed by defendant at the request of Rosser and Sherman in their hurried departure for Missouri. The reiteration of the promise occurred a few days after the execution of the notes, and before the discovery of the falsity of the representations. Under the circumstances, it was an unusual act, and so unnecessary to support a transaction that up to that time had not been questioned, that it may have excited suspicion, and been considered evidence tending to support the defense. The further fact may be noticed that neither Rosser nor Sherman appeared at the trial. A commission to take Rosser's testimony was issued at the instance of defendant, but the notary to whom it was directed returned that Rosser could not be found.
A question made at the trial was whether the defendant had the right to rely upon representations of the vendor that the calendar clock safe was patented in its entirety.
The rule of law governing this question is well stated by *Page 420 
the court of appeals of New York in Mead v. Bunn,32 N.Y. 280, as follows: "Every contracting party has an absolute right to rely on the express statement of an existing fact, the truth of which is known to the opposite party and unknown to him, as the basis of a mutual engagement; and he is under no obligation to investigate and verify statements, to the truth of which the other party to the contract, with full means of knowledge, has deliberately pledged his faith."
Under this rule it has been decided that the representations of the seller of a patent right are admissible to show what is covered by the patent, although by searching the records of the patent office the buyer might have discovered the fraud. (David v. Park,103 Mass. 502; Rose v. Hurley, 39 Ind. 77;Tabor v. Peters, 74 Ala. 90; Gaty
v. Holcomb, 44 Ark. 216; Page v.Dickerson, 28 Wis. 694.)
It is claimed, however, that this objection is obviated by the issuance of a design patent.
The authority for patents for designs is found in section 4929, Rev. St. U. S., which provides that: "Any person who, by his own industry, genius, efforts, and expense, has invented and produced any new and original design for a manufacture, bust, statue, alto-relievo, or bas-relief; any new and original design for the printing of woolen, silk, cotton, or other fabrics; any new and original impression, ornament, patent, print, or picture to be printed, painted, cast, or otherwise placed on or worked into any article of manufacture; or any new, useful, and original shape or configuration of any article of manufacture, the same not having been known or used by others before his invention or production thereof, or patented or described in any printed publication, may, upon payment of the fee prescribed, and other due proceedings had the same as in cases of inventions or discoveries, obtain a patent therefor."
The difference between patents for designs and those for inventions or discoveries is stated by Judge Nixon inTheberath v. Trimming Co., 15 Fed. 246, as follows: "Patents for designs differ from patents for inventions or discoveries in this respect: That they have reference to appearance, rather than utility. Their object is to encourage the arts of decoration, more than the invention of useful *Page 421 
products. A picture or design that merely pleases the eye is a proper subject for such a patent, without regard to the question of utility, which is always an essential ingredient in an invention or discovery patent."
There is, therefore, no foundation for the claim that a design patent fulfills the representations made by the vendor that the article was patented in its entirety.
For the purpose of showing the fraudulent representations made by the vendors, testimony was admitted showing that, at about the same time they represented to other persons in or about Reno that the calendar clock safe was a patented article in its entirety, they were empowered to sell county rights in the counties of the State of California, and that the invention was entirely new to the Pacific Coast. These representations were so closely connected with those made to the defendant that it was proper for the jury to consider the intention actuating the vendors, and for that purpose the evidence was admissible.
"It is generally true that contemporaneous frauds may be proved when they tend to show a fraudulent intent in the particular transaction under investigation. In the numerous cases in which this question has been considered, there may be slight differences in result, not entire uniformity in deciding in what cases one fraud may properly be said to make manifest the intention which pervades another transaction; but the rule of evidence certainly goes to this extent, as stated in Jordan v. Osgood, 109 Mass. 461: That another act of fraud is admissible to prove the fraud charged, when there is evidence that the two are parts of one scheme of fraud, committed in pursuance of a common purpose." (Nichols v. Baker, 75 Me. 337.)
  Judgment and order denying motion for new trial affirmed. *Page 422