Opinion
June Term, 1836.
No warranty is implied in the sale of a patent right, and therefore the purchaser of such a right cannot, in the absence of fraud, and without an express promise, recover of his vendor the price paid for it, upon its turning out to be invalid.
THE BILL charged that the President of the United States, on 18 January, 1826, issued letters patent to one Thomas Key upon the allegation that he was the inventor of a new and useful improvement in the mode of letting water on water-wheels. In the schedule or specification annexed to the letters patent, and forming a part thereof, and which was set out in the bill, a description and drawing of the said improvement was given. The bill also charged that Key conveyed his right in the letters patent for the State of North Carolina to Hiram H. Tusk, who assigned it to the defendants, and that on 2 December, 1826, the plaintiffs purchased, and the defendants conveyed to them, the exclusive right of constructing, using and vending, forever, the (316) said improvements, in the counties of Stokes and Orange, at and for the price of $200. The plaintiffs then stated that, since the purchase, they had discovered that Key was not the inventor of the said improvement; that the pretended improvement was a plan which had been discovered by one Jones, and had been in use twenty years ago, at divers sawmills in this State; that they were ignorant of this when they made the purchase, and charged, first, fraud on the part of the defendants; secondly, a mistake as to a fact upon which the validity of the patent rested. They insisted that the contract had not been, nor could it be, of any value to them, and prayed to have it rescinded and to be repaid their purchase money.
No counsel for plaintiff.
Nash for defendants.
The bill was taken pro confesso against the defendant Montgomery, as to whom publication had been made, he being an inhabitant of another State. The defendant Twomey answered and admitted that he and Montgomery contracted with the plaintiffs as mentioned in the bill, and for the price there stated; but he insisted that they had no notice that the invention was in use anywhere before Key discovered the improvement and obtained his patent; that the improvements mentioned in the bill to have been so long in use in this State were different from the specification annexed to the patent; that Key assigned the patent right for North Carolina to Tusk, and that the defendants were his agents, and that they conveyed to the plaintiffs in that character, and that the contract and sale on their part was bona fide and not fraudulent. The plaintiffs replied to the answer, and proofs were taken, the general result of which will be found in the opinion of the Court.
The Constitution of the United States gives to Congress the power to pass laws securing to inventors the exclusive right to their respective (317) discoveries, for a limited time. Const. U.S., Act 1, sec. 8, clause 8. Under this authority Congress has passed laws upon this subject. Under the sixth section of the Patent Law (Act 1793, ch. 55), it is enacted that, if the thing secured by patent had been in use, or had been described in a public work, anterior to the supposed discovery, the patent is void, whether the patentee had or had not a knowledge of this previous use or description. Evans v. Eaton, 3 Wheat., 454; 1 Mason, 302. The same is the rule in England, under the statute of 21 of James I, ch. 3. 5 Bac. Abr. Wilson's edition, Prerogative, pp. 591, 592, 593. The evidence in this case satisfies the Court that there was no fraud committed by the defendants, and that the contract was made by them in good faith. But the proofs established that the improvements described in the specification annexed to Key's patent were known and used in this State before the date of the patent, though there is no evidence that the defendants had notice of that fact. According to the above authorities, the patent is void, and the defendants had no title, in law or equity, to convey. If a sale be made of a chattel, there is an implied warranty that the vendor in possession has title; and if the vendee be evicted by a better title, he can at law maintain an action of assumpsit on the implied warranty. 1 Chit. Plead, 92, 93. In the sale of lands the rule is different. The possession of lands is no criterion of title, and no person in his senses would take an offer for a purchase from one merely because he stood upon the ground. The purchaser must look to his title, and if he does not, it is crassa negligentia. If there be no fraud, and no covenants taken to secure the title, the purchaser has no remedy for his money on a failure of title. This is a settled rule of law. Frost v. Raymond, 2 Cain's Rep., 188. And the same rule prevails in equity. Abbott v. Allen, 2 Johns. Ch. Rep., 523. The vendor, selling in good faith, is not responsible for the goodness of his title beyond the extent of his covenants. Bree v. Holbeck, Doug. Rep., 654; Johnston v. Johnston, 3 Bos. Pul. Rep., 162; Governeur v. Elmendorf, 5 Johns. Ch. Rep., 84. The plaintiffs do not exhibit their conveyance, nor have they alleged that it contains any (318) express stipulations for the validity of the patent, nor anything from which a stipulation to that effect can be inferred. But they claim simply the restoration of their money because their patent turns out to be invalid. The subject-matter is not relative to any corporeal thing, either real or personal, but to something intangible and incorporeal, resting wholly in grant. In contracts for the assignment of such interests, if there be no fraud, the purchaser must depend, in case they prove of no value, wholly upon his covenants. Both parties are equally innocent, there is no necessary warranty of title, and the loss must fall wherever the bargain leaves it. Taylor v. Hare, 4 Bos. Pul. Rep., 260.
The bill must be dismissed, but, as the proofs are very satisfactory that the defendants were not merely the agents of Tusk, but had purchased from him the interest in the patent for this State, and sold it in their own right to the plaintiffs, we think, from the unfairness of the answer, that they are not entitled to costs.
PER CURIAM. Bill dismissed.
Cited: Cansler v. Eaton, 55 N.C. 501.