ARK.] J. a COLT COMPANY V. MITCHAM. 55 J . B. COLT COMPANY V. MITCHAM. Opinion delivered November 8, 1926. 1. PATENTS—REGULATION BY STATE.—Const. of U. S., art. 1, § 8, giving Congress power to promote the progress of science and useful arts, held not to deprive the States of the right, under their police power, to regulate the form and prescribe the effect , of negotiable instruments given.for patented articles. 2. CONSTITUTIONAL LAW—VALIDITY OF STATUTE—UNLAWFUL , 0I5-- CRIMINATION.—Crawford & Moses' Dig., § 7956, making notes given in payment of patented articles or rights void Unless they show their consideration on their face, held not invalid as' discriminatory, in view' of § 7959, excepting merchants and dealers who sell patented things in the usual courieu p f businesa..- 3. COMMERCE—REGULATION OF SALE OF PATENTED ARTICLEs.—Ciaw-ford & Moses' Dig., § 7956, prescribing the form of a note to be given for patented articles, held not an unlawful interference with interstate commerce, in contravention of art. 1, § 8, of Cofist. of U. S.
56 . J. B. COLT COMPANY V. MITCHAM. [172 4. BILLS AND NOTES—CONSIDERATION—FORM OF NOTE.—A note given for a patented article, not executed in the form prescribed by Crawford & Moses' Dig. § 7956, is void. COMMERCE—PATENTS.—A State law which discriminates against goods outside the State, either in respect to the commerce clause or the patent clause of the Constitution of the United States, is unconstitutional. 6. BILLS AND NOTES—PATENTED ARTICLE—EFFECT OF NOTE. A note for a patented article which is void because not executed in the form pres . cribed by Crawford & Moses' Dig., § 7956, may be used in the evidence in arriving at the terms of the contract. 7. BILLS AND NOTES—PATENTED ARTICLE—EFFECT OF STATUTE.—CTaw-ford & Moses' Dig., § 7956, prescribing the form of a note for patented articles, limits the seller's right of recovery to the terms of the contract, and makes available to the purchaser any breach thereof. Appeal from Union Circuit Court ; S. Britt, Judge ; affirmed. STATEMENT OF FACTS. • J. B. Colt Company sued L. D.. Mitcham in tbe circuit cour,t to recover $234.10, alleged to be due on a promisSory note. The suit was defended on tbe ground that the note sued on was given for a patented carbide generator and appliances without showing upon its..face that it was executed in consideration of a patented article, ag required by statute. The record shows that J. B. Colt Company is a for-*eign corporation, and that L. D. Mitcham is a resident of :the State of Arkansas.. L. D. Mitcham executed a 'written order, addressed to J: B. Colt Company at its New York City office, for one carbide generator and appliances. The written order was transmitted by a traveling salesinan to the office of the. J. B. Colt Company in New York .City„ and there accepted in writing by it. The article specified in the order was shipped by the company from New York City to L. D. Mitcham in Union County, Arkansas, and the latter executed his note for $234.10 in payment tberefor. The note was not executed on a printed form, .and did not 'show on its face that it was executed in consideration of a patented article.
ARK.] r J. B. COLT COMPANY V. MITCHAM. 57 The circuit court, sitting as a jury, found that the note sued on was void, and that . the plaintiff was not entitled to recover thereon. From the judgment rendered, the plaintiff has duly prosecuted an appeal to this court. Stewart & Oliver, J. M. Shackleford, Jean & Jones and Wilfred C. Roszel, for appellant. S. E. Gilliam, for appellee. HART, J., (after stating the- facts). The validity of § 7956 of Crawford & Moses' Digest is the only question raised on appeal. It is conceded that - the constitutionality of the act has been sustained in the following . .cases decided by the Supreme Court of this State and of the United States : Tilson v. Gatlimg, 60 Ark. 114, 29 S. W. 35; Wyatt v. Wal-lace, 67 Ark. 576, 55 S. W. 1105; Wood v. Carl, 75 Ark. 328, 87 S. AAT . 621, and 203 U. S. 358; Ozan Lumber Co. v. Uwion County National Bank, 207 U. S. 251; Columbia County Bank v. Emerson, 86 Ark. 155, 110 S. W. 214 ; Ensign v. Coffelt, 102 Ark. 568, 145 S. W. 231 ; Jonesboro. Trust Co. v. Nutt, 118 Ark. 368, 176 S. W. 322; and Alley v. Riley, 203 U. S. 347. • It is also conceded that, in .the case last cited and in Patterson v. Kentucky, 97 U. S. 501, it waS expressly decided that art. 1, § 8, of the Constitution of the United States, giving to Congress the power to promote • the progress of science and useful arts, does not deprive •the States of the right, under their police power, to regulate the form -and prescribe the effect of negotiable instruments given for patented : articles. The decision -in the case of Woods v. Carl, 203 U. S. 358, was also baseci upon the same construction of this provision of our Constitution by the Supreme Court of the United States. Columbia County Bank v. Emerson, 86 'Ark. 155, 110 S. W. 214, it was held that the exception'contained in the act, applicable to merchants and de*rs who sell patented things in the usual course of business', contained in § 7959, does not render the act invalid as being an unlawful discrimination ; and the case of Ozan Lumber Co. v. 'Union
J. B. COLT COMPANY V. MITCHAM. 1172 County National Bank, 207 U. S. 251, was cited in support of the decision. Counsel for the plaintiff, however, rely for reversal of the judgment upon art. 1, § 8, of the Constitution of the United- States, which provides that Congress shall have power to regulate commerce among :the several States, and' they contend that this court and the Supreme Court of the United States have left open this question because it was unnecessary to a decision of the contentions made in any of the eases heretofore deeided. We do not agree -with counsel in this contention. In the case of Tilson v. Gaffing, 60 Ark. 114, 29 S. W. 35, the courtused this language : "That such an act does not violate § 8, art. 1, of the Constitution of the United States, giving to Congress the . power ' to, regulate commerce with foreign nations, and among the several . States,' etc., and to. 'promote the progress of science and . useful arts, by ssecuring. for, limited times, , to authors and inventors, the .eNclusive , ..right to their respective writings and discoveries,! we think is settled by the better reason, and the ,weight of authority." In Wyatt v. Wallace, 67 Ark. 575, 55 .S. W. 1105, the-court. had .under consideration the aet in question, and expressly held that a note given by a citizen of this State ;for an interest in a patent right, which does . not show •• upon its face that it was given therefor, is void. It is true that the ; ease contains no discussion of whether tbe act in question is in contravention of the interstate commerce clause of the United States Constitution just referred . to, but it is of some importance that the same judge wrote the decision in this case as delivered the -opinion in Tilson v. Gaffing, .supra. Again, in the case of Woods v. Carl, 75 Ark. 328, 87 S. W. 621, the court had the statute in question under consideration, and referred to the case of Tilson V. Gat-1ing,.60 Ark. 114, 29 S. • W. 35, as holding . that the statute did not invade the pOwer of Congress to promote the progress , of science and useful arts by securing to inventors the exclusive right to their discoveries. •
ARK.] J. B. COLT COMPANY V. MITCHAM. 59 Continuing, the court said : "It is difficult tO perceiVe any distinction between the validity of the twn Oat-ntés in that regard ; for, if the Legislature had • the 'rightful power to pass one of the statutes, it had ' also :the power to Pass the other. If the jurisdiction of 'CongreSS over the subject of patents and patent rights iS So: extensive as to exclude the power of a State to declare yoid, unless made in certain form, written obligations giiien in consideration Of sales of patent rights, or patented articles, then it also follows that the State is poweileSs to alter the established rules of the law merchant so as to permit defenses, not applicable to other negotiable paper, to a b e made to such paper given in consideration of sales patent rights : or patented artieles.," Following this discussion, the court said: "In Wyatt v. Wallace, 67 Ark. 575, the precise question' was 'presented there as presented bere, and the court held that there could be no recovery upon the note sued bn." This court is committed to the doctrine that thetmain purpose of the act was to enable the maker of a negotiahle instrument, given for patent rights or patented articieS. to make the same defense thereto against . any holder thereof that Could be made against . the original Solder or party to whom it was given. Roth v: Merchants' & Planters' Bank, 70 Ark. 200,66 S. W. 918; Warmaa Askew, 97 Ark. 19, 132 S. W. 1013 ; . and Brenard 31f4..co. v. McRee's Model Pharmacy, 287 S. W. 187. Hence it is held in these cases that the failure to cOmply . mith the statnte does not affect the validity of tbe sale, but renders only the note absolutely void. It has been held further that, though the note may be void, the vendor may recover .Whatever may be , dne him on the contract of sale from the . Vendee'. -In the case of Roth v. Merchants' & Planters' Bitiik, 70 Ark. 200, 66 S. W. 918, to supPOrt the Principle of law contra. ling the decision, the case of Iron Mountain &.Ilel'eU4 Railroad y. Stansell, 43 Ark. 275, and other case's of like character, are cited. In the Stansell case it was held that, in an action for money due on a contract, Change tickets
60. J . B. COLT COMPANY V. MITCHAM. [172 issued by the defendant in violation of the statute and delivered in payment of the debt, though, illegal, may be used as evidence of the amount due on the contract. The court said that they were a written confession that the maker had received the value expressed in them. • In Todd v. Wick Brothers & Co., 36 Ohio St. 370, one of the cases cited with approval in Woods v. Carl, 75 Ark. 320, 875 S. W. 621, it is said: "The right to regulate the form and . prescribe the effect of paper taken in commercial transactions has always been regarded as belonging * to the State, and such right has been exercised in this State during the whole period of its existence." Hence it was held that the act under consideration in that case was not . in conflict with § 8 of the first article of the Constitution of the United States nor with the act of Congress enacted in pursuance thereof,. relating to the granting of letters patents • It is well settled by the decisions cited above and numerous other cases of like character that a state of law which discriminates against goods outside • the State, either in respect to the commerce clause or the patent clause contained in § 8,. art. 1, of the Constitution of the United States, is unconstitutional. We do not understand, however; that the Supreme Court of the United States has gone to the extent claimed by counsel for plaintiff, or has denied the power of the State- to prescribe a• form, for notes given for patent rights or patented articles where such act does not directly affect interstate commerce. As we have already seen, the effect of - our former decisions is to hold that the State, by the passage of the act under consideratiOn in the case at bar, has gone no further than to prescribe the form of notes given for patent rights and patented articles. • The act is general in its . application, and has not in any wise attempted to discriminate against goods manufactured and sold by owners residing in other States to persons in this State. 'The validity of contracts of sales of such goods has been
expressly upheld by this court in sustaining the constitu-0 tionality of the statute. Under our decisions, while no recovery can be had upon the note unless it is in the - prescribed forms, still the note is capable of being used in evidence in arriving at the terms of the contract. After all, the practical effect of our former decisions in construing the statute is to limit the right of recovery to the terms of the contract, and to give the purchaser of the patent right or patent article the right to avail himself of any defense he may have to the action. In the absence of such a statute, the purchaser would have that right against tbe owner of such goods, whether sold to him from within or without the State. So, too, in the absence of such a statute, only an innocent purchaser for value of tbe note before maturity would be afforded any protection against fraud in the procurement of the note or other infirmities attached to it, such as that the patent was void as not being novel and useful. In short, an innocent purchaser for value of the note will stand in the shoes of his vendor. The result Of our vieWs in that we adhere to our former . decisions in the interpretation of the statute, and hold that its enactment was a valid exercise of the police power, and that interstate commerce is only incidentally and remotely affected by it. It 'follow . s that the judgment will be affirmed._
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.