ARK.] GREEN V. JONES. 423 GREEN V. JONES. Opinion delivered March 30, 1925. 1. BILL AND NOTES—VALIDITY OF NOTE FOR PATENT.—Crawford & Moses' Dig., § 7956, providing that a note given, for the sale of a patented article, which does not show on its face that it was executed in consideration of a patented article, is void, and § 7958, providing that any vendor of any patented thing who shall violate § 7956 "shall, upon conviction, be punished by a fine of not more than three hundred dollars," are penal and criminal statutes, and must be strictly construed. 2. BILLS AND NOTES—LEASE OF PATENTED ARTICLE.—Under Crawford & Moses' Dig., § 7956 requiring a note given for the * sale of a patented article to show on its face that it was executed for a patented article, does not apply to a lease of a patented article. Appeal from Logan Cireruit Court, Southern District; James Cochran, Judge; reversed. Evans & Evans, for appellant. Kineawnon & Kincawnon, and White & White, for appellee. SMITH, J. Appellant, who was the plaintiff below, brought this suit to recover on a promissory note exe-
424 GREEN A). JONES. L168 • cuted by appellees, the defendants below, to the order of the (xmners' Compress Trust Company, of .Milwaukee, Wisconsin, for the sum of $1,200. Plaintiff, testified that he acquired the note as an innocent purchaser for value on the day of its execution. The defense made by the makers of the note was that it was executed in payment of a patented article, a fact not recited in the face of the note, as required by § 7956, C. & M. Digest; and it was also denied that the 'plaintiff was an innocent purchaser thereof. • • • The note in suit constituted the consideration for an agreement of even date with the note, made betWeen the maker and the payee of the note, and which reads as follows: • " This agreement, made and entered into this 17th day of February, 1922, by and between the Ginners' Compress Trust Company, of Milwaukee, Wisconsin, hereinafter called the lessor, and the Magazine Gin Company, Magazine, Arkansas, herein called the lessee, "Witnesseth: Whereas, the lessor has this day agreed to and does hereby lease and deliver, to lessee, and installed ready for operation on or hefore•the l egin-ning of the ginning season of 1922, upon the condition herein set forth, : the following personal property, -to-wit: ."One complete system for baling - cotton * into cylinder bales, as per specifications and drawings shown in pamphlet called 'Prodigy on Baling Cotton.' ' • "The lessee does hereby agree to receive said property and operate same at their gin plant, a public toll gin, baling cotton into cylinder bales at the option of the cotton owner. "Whereas, the lessee, as a guaranty of good faith, does give his promissory note for twelve hundred ($1,200) dollars to lessor. "The lessee agrees to operate this system for a term of not less than three years, and to use their best energy to make it a success, and to accommodate the ginning public. Said lessee further agrees to pay the lessor
ARK..] GREEN V . . JONES.. 425 a .rental of 20 cents per hundred pounds for all cotton baled in said . system,.which the lessee is to charge and, collect as . a toll for compressing the cotton at the gin and deposit the same at the end of each month to the, order, of, the lessor, less the amount hereinafter stipulated. , • "It is further agreed by the lessee that he will keep a correct account of all cotton baled on said system,.giving the number of bales and weight of same. A .settle-. ment of all amounts due under this lease during anY one, year shall be computed on or before the first day of Jan:, uary of each year while this lease is in effect. The lessee to dedUct all the toll's colleeted up to twelve hundred dollars. as the return of his money advanced on installing the system. This . 'amount to be credited on the twelve, hundred dollar nOte until paid. "It is understood ,that the title of the aboVe described property shall remain in the name of the lessor, Who is the owner. "This agreement in no way transfers or incumbers the title other than herein set forth, and the lessor shall have the right to enter the premises of the lessee at any time and take possession and remove, without cost to lessee, said system from his premises, provided if ,any term of this lease is or shall be violated. "The lessee is not to interfere or in any way hinder the rerhoval of the machine, nor is the lessor to be held responsible for any' damage from same. "Further, the lessor reserves the right to remove tile s y stem between ginning seasons provided said system does hot Outturn two thonsand bales under ordinary season conditions, without expense to lessee. The lessee is to do all necessary carpenter work at his own expense. ' ' . "The lessor guarantees the system' .to make a p er-fr="4. yeerchantatile bale of cotton and a continuous o p era-tion. and g marantees to kee p said machine in g ood repair. "The lessor also znarantees a market for the p rod-uct of all cotton outturned, bidding for same in . the
426 GREEN V. JONES. [168 open market at the usual premium of round over square, and will furnish the lessee, or whom he may designate, with a limit each day for the purchase of all cotton out-turned offered for sale. "The lessor reserves the right to furnish an operator at his•own expense, who will operate and care for the plant when so desired. "The lessor guarantees not to install another system where it will directly interfere with the patronage of the lessee system for a period of seven years, provided the lessee meets the demands of the ginning public. "Witness our hands this the 17th day of February, 1922." There was testimony that the cotton press to be installed under the agreement was covered by patents, and, in submitting the case to the jury, the court gave the following instructions : "You will find for the plaintiff, Mr. Green, the full value of this note, unless you find that the note was given for the purchase or lease of a patented machine, instrument or thing. If you find that it was given for a patented machine, instrument or thing, then you will find for the defendants." After reading § 7956, C. & n Digest, the court further instructed the jury as follows : "Therefore, if you find from a preponderance of the testimony that this note was given for the purchase of a patented thing, or a lease for a patented machine, instrument or thing, it is absolutel y void, and your verdict will be for the defendants." The jury found for the defendants under the instructions given, and there was a judgment accordingly. and the plaintiff has appealed. For the reversal of the judgment it is contended by appellant that the agreement set out above contemplated a lease of a patented article, and not a sale thereof, and that the provisions of § 7956, C. & M. Digest, do not apply to leases of patented articles, but only to sales thereof.
ARK.] GREEN V. JONES. 427 The section of the statute mentioned reads as fol. lows : "Section 7956. Any vendor of any patented machine, implement, substance, or instrument of any kind or character whatever, when the said vendor of the same effects the sale of the same to any citizen of this State on a credit, and takes any character of negotiable instrument in payment of the same, the said negotiable instrument shall be executed on a printed form, and show upon its face that it was executed in consideration of a patented machine, implement, substance or instrument, as the case may be, and no person shall be considered an innocent holder of the same, though he may have given value for the same before maturity, and the maker thereof may make defense to the collection of the same in the hands of any holder of said negotiable instrument, and all such notes not showing on their face for what they were given shall be absolutely void." We think counsel for appellant are correct in their contention that the contract set out was a lease and not a sale, and that the statute does not apply to leases of patented articles. The statute is both penal and criminal. For its violation the penalty of the forfeiture of the agreed purchase price of the article sold is imposed, and the not6 or notes executed for the purchase price which do not conform to the requirements of the statute are rendered void in the hands of an innocent purchaser, and, in addi-Lion, a fine of $300 may be imposed for a violation of the statute. As the statute is penal and criminal, it must, for both reasons, be strictly construed. In Black on Interpretation of Laws, § 114, page 286, it is said: "It is a familiar and well-settled rule- that penal statutes are to be construed strictly, and not extended by implications, intendments, analogies, or equitable considerations. Thus, an offense camiot be created or inferred by vague implications. And a court cannot create a penalty by construction, but must avoid it by construction unless it is brought within the letter
428 GREEN V. JONES. [168 and the necessary meaning 'of the act creating it. . And where a statute may be so construed as to give a penalty, and also, and as well, so as to withhold the penalty, it will...be given the latter construction. 'A penal statute l/. will not be .extended by implication or constraction to 1 cases which may be within the mischief • which the stat-) ute. was designated to cure, if they are not at the same \ time within the terms of. the act fairly and reasonably interpreted. Hence an act not expressly prohibited by i such a statute cannot be reached by it merely because.it J, resembles the offenses provided against, or may be equally and in the same way demoralizing or injurious. 'In construing such laws, we should be careful to dis-1 /I tinguish between what may have been desirable. in the enactment in order that it should effectually, accom: plish its purpose, and what has been really prohibited . or commanded by it. .Before conduct hitherto innocent can ibe adjudged to have been criminal, the Legislature must have defined the crime, and ;the act: in, question i must, clearly appear . to, be within the prohibitiOns or t requirements *of the statute, that 'being reasonably , con- / ? strued for the purpose of arriving at the legislative intention aS it has been declared. It is not enough that ilt the case may be within the apparent reason and pOlicy \ of the , 'legislation upon the subject, if the Legislatifte i) has omitted to include it within the terms orits -enact: ment. .What the Legislature has, froth inadvertence:Or otherwise, omitted to include ,Within the express :proVi- ( sib y l's of a penal law, reasonably construed, the courts ) cannot supply.' Further, in its application to . a ''caSe / which clearly comes within its terms, such a law mnSt I be strictly construed." . • i This court has made numerous applications of the ( principles thus announced in the' 'construction of' such / statutes, several of which cases are .aited in the brief of ) counsel for a.ppellant. 5 • * Brooks v. Western . Union Tel. Co., 56 Ark., 224, Simmons V. American Ry. Express Co., 147 Ark., 339, and Gillaon v. State, 47 )/ 'Ark. 555 — are cited in appellant's brief (Reporter).
1 i \ \ ARK..] . GREEN , V. JONES. 429 The subject-matter of the , contract ;between Me i parties and the note sued on was the lease of a patented t., article, and . not a sale thereof; and, as the statute quoted .applies only to sales of patented.articles, the court was in error in instructing the jury that a note given for the 1 lease or the purchase of Such an article Was.y.oid. f .. Appellee- insists. that, in the,interpretation of ,§ 7956, ■ .0. &M. Digest, that section should-be read in.connection with § 7957 and .§ 17958, C. & M. Digest,. and, when so •Tead, the' statute should be interpreteThas including; nOt ( 'only'. the sale of a ' patented article', but the Sale of the .:right to . uS , e a patented artiele. \ The fast nuMbered. sections read as folloWs; , - "Section 7957: The foregoing, section - shall. , also I 'apply to venders of patent right's, and faniily rights to pse any patented thing ot.any character,:whatever. "Section 7958. Any vendor of any patented , thing of ,any character, ,or 'any , vendor otany patent right or family right to use any 'Patented thing Of any character whatsoever, who shall . violate the provisions of §, 7956 shall, upon conviction; be punished by a fine of not more than three hundred dollars."' : ' . . .,. ...We' do not think that the Ginners' Compres's T.rust 1 ' Compank, .the . leSSor in . the agreenient set . out above, i comes Within the Provisions , of § 7957 dr' § 7958, C. & M. DigeSt. The Ginners' . Compress , ' Timst Company . wns not the vendor of any patented thing, 'nor waS it the \ vendor 'of any family right to use any uatented thing.. t ' ', What we have said disposes'of the only question considered hy the cOurt VelOw or submitted to the' jury, fol. • 'and - the ertor in giving the instruction , , , , . set out aboVe, the , jpdgment Of the court, below , will be reversed, and the cause remanded for'.4 neW trial.
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.