Smith v. Wood

36 S.E. 649, 111 Ga. 221, 1900 Ga. LEXIS 519
CourtSupreme Court of Georgia
DecidedJuly 11, 1900
StatusPublished
Cited by12 cases

This text of 36 S.E. 649 (Smith v. Wood) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Wood, 36 S.E. 649, 111 Ga. 221, 1900 Ga. LEXIS 519 (Ga. 1900).

Opinion

Fish, J.

There was no error in the judgment of the court sustaining the demurrer to so much of the plea as set up that the note sued upon was illegal and void. The note was not void, although it failed to comply with the act approved Dec. 21, 1897. (Acts 1897, p. 81.) A failure to comply with the' requirements of that act, by expressing in the face of a note or contract given for the purchase-price of any patent right, or territory for the sale of such right, the consideration, stating the thing or article for which the same was given, does not render the note or contract void, but makes the seller, who takes such note or contract, guilty of a misdemeanor. Had the purpose of the legislature been to render void every note and contract for the purchase of a patent right, which failed to express upon its face the consideration and the particular thing or article for which it was given, doubtless the act wmuld have declared such notes or contracts to be illegal and void. Instead of doing this, however, the act imposes upon the seller of a patent right, who-takes a note or contract for the purchase-money of the same, the legal duty of expressing in the note or contract the consideration of the same, and makes his failure to do so a misdemeanor; and further provides that when the consideration is expressed in the writing as required by the act, any one who purchases the note or contract shall take it subject, to all the equities existing between the original parties. It is true that the title of the act, after stating the requirements of the act in reference to such notes and contracts, does indicate a purpose to declare void all notes and contracts which fail to comply therewith, but there is nothing in the act itself which declares them to be void, nor is there anything which indicates an intention to render them void. If the meaning of the act itself were doubtful, resort might be had to the title, in order, if possible, to resolve the doubt. But as the provisions of the act are clear and unambiguous, it is neither necessary nor proper to resort to its title in order to ascertain its meaning. Counsel for plaintiff in error contend that the note is void, “because based upon a crime,” and in support of this contention cite Kleckley v. Leyden, 63 Ga. 215, Johnston v. McConnell, [226]*22665 Ga. 129, and Conley v. Sims & Blalock, 71 Ga. 161. It is undoubted^ true, from these decisions, that a note based upon an illegal consideration is void, even in the hands of a bona fide holder thereof. In each of the cases cited the note involved was founded upon an illegal consideration, having been given for the purchase-price of commercial fertilizers which had not been inspected, branded, and tagged as required by law. The law made it a crime to sell such fertilizers. A note given for something the sale of which the law absolutely prohibits and makes penal is based upon an illegal consideration, and is consequently void in the hands of any holder thereof. The thing for which the note is given is outlawed, and the note standing upon such a foundation is outlawed also. There is a wide difference between those cases and the one now under consideration. In the present case the consideration for the note was perfectly legal. It is not illegal to sell a patent right. The crime consists, not in the sale of the patent right, but in the failure of the seller to express in the note the article or thing which forms its consideration. The note in question was not “based upon a crime; ” if it had been, no matter how it might have been written, or with what particularity it described the consideration, it would have been void. The consideration of .a note given for a patent right may be perfectly legal, and the maker of the note may have even received full value .for the note, and jmt the seller of the patent right may have violated the law by not properly expressing in the note the consideration for which it was given. It is one thing to sell an article the sale of which the law prohibits and makes penal; it is quite another thing to sell an article the sale of which is perfectly lawful, and to violate the law by taking a note for the purchase-money which does not properly express the consideration for which the note was given. In the one case the consideration upon which the contract is based is illegal; while in the other the consideration of the contract is perfectly legal.

2. The only other ground to be considered is, whether, as alleged in the motion for a new trial, the judgment was contrary to the evidence. The court tried the case without the intervention of a jury, and rendered judgment in favor of the plaintiff for the full amount of the note. Was this judgment con[227]*227trary to the evidence? The only defense to the merits was the plea of partial failure of consideration. This plea was not stricken, and the question to be considered is, did the defendant, as against the plaintiff, sustain this defense? Failure of 'consideration is no defense against one who purchases a negotiable instrument before its maturity, unless at the time of the purchase he knew, or had reasonable grounds to suspect, that the consideration had failed. The note, while not complying with the statute by stating the particular thing for which if was given, did show that it was given for a patent right. While it is only when the consideration of a note given for the purchase of a patent right “is expressed in the face thereof as is provided in section 1” of the act of 1897, that the note carries upon its face such notice of its consideration as necessarily subjects any one who purchases the note before its maturity to the equities which may exist between the original parties, in view of the policy of the law, as shown by the act of 1897, with reference to notes given for the purchase of patent rights, it maybe that the statement of the consideration in this note was sufficient to put a prospective purchaser upon inquiry as to its consideration and what equities, if any, might exist between the maker and the payee. Granting this to be true, we are of opinion that, under the evidence, the defense of partial failure of consideration was not available as against the plaintiff. It appears from the testimony of the defendant himself that “the consideration for the note sued on was a patent right for a gate, for the counties of Floyd and.Bartow.” On January 18, 1898, he bought the right for Floyd county for $125, for which amount he gave his note. Afterwards he purchased of Gregory the right for Bartow county, for which he was to pay $75. Gregory “said he would destroy the noté and deed that had been executed in January, and give [the defendant] a deed to Bartow and Floyd together.” The note sued on was executed on the 16th of March, 1898, and ithnay be inferred from the defendant’s testimony — he nowhere expressly states it — that its consideration was the right to the patent for both Floyd and Bartow counties. According to the agreement, the note should have been for only $200, instead of $210. The consideration for this note has partially failed, because Gregory failed to convey to the [228]*228defendant the right to Bartow county. On April 7,1898, which was more than three weeks after the note sued on was executed, the defendant gave to Gregory, who then held the note, a certificate stating that he had given the note to Gregory for a patent right, “that he expected to pay it when due, that he had value received therefor, and that he was whiling for Gregory to sell or trade it.” So much appears from the defendant’s own testimony.

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Cite This Page — Counsel Stack

Bluebook (online)
36 S.E. 649, 111 Ga. 221, 1900 Ga. LEXIS 519, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-wood-ga-1900.