| N.H. | Jun 5, 1880
The note was given by the defendant to the payees for the right to manufacture, sell, and use, in Minnesota, a patent mop-wringer, and by them, for value, indorsed and delivered to the plaintiff before maturity. The evidence tended to show that the wringer was not a new or useful invention, but worthless; and that the defendant was induced to buy it and give the note on the vendors' fraudulent representations. The only evidence that the wringer was patented was the recital of the fact in the deed from the vendors to the defendant. The defendant requested the instruction to the jury that there was no competent evidence of a patent, and therefore no evidence of a consideration for the note. The court refused this request, and gave the instruction that a note given for a patent right for an invention neither new nor useful, or obtained by fraudulent representations of its validity, was without sufficient consideration, and void in the hands of the payees or of an indorsee with notice.
The action being by an indorsee of the note transferred for value before maturity, want of consideration was not a defence unless known to the plaintiff, or he was put upon inquiry in regard to it at the time of the transfer. If the plaintiff had notice of the defect in the note, and the consideration was not wanting, in the absence of fraud he still might recover. The signature of the note being unquestioned, the note itself was prima facie evidence of a consideration. Horn v. Fully,
Whether the plaintiff at the time of the transfer had notice of or was put upon inquiry as to the character of the notes, was a question in controversy. The plaintiff's evidence was, that he knew the note was given for the patent right, and before taking it be saw the defendant, who did not want him to purchase this and another note given at the same time for the same consideration, because, if he should, he would have to pay both in money, whereas he had an agreement with the payees to pay one of them in another way. The defendant gave him no information about any defence to the notes, and told him they would be paid, and the plaintiff had no knowledge or suspicion of any defect or want of consideration in the notes. On this evidence the defendant requested the instruction that the plaintiff could not stand any better than the payees. The court refused the request, and instructed the jury that the plaintiff could not recover if he had notice, at the time, of the want of consideration of the note, or of its fraudulent procurement, or of facts which put him upon inquiry about any infirmity in the note.
It is not easy to see from the evidence how the court could have told the jury, as matter of law. that the plaintiff was chargeable with notice of any want of consideration or defect in the note. The sale of a patent right is not, as a matter of law, fraudulent and without legal consideration. Though the business of selling patents and patented articles may be sometimes accompanied by and intermixed with fraud, and promissory notes given in such sales may frequently be the subject of suspicion, mere suspicion of a defect in a note is not notice of the defect, and does not put one, who seasonably takes it by indorsement, upon inquiry. Perkins v. Challis,
Judgment on the verdict.
SMITH, J., did not sit: the others concurred.