Court Opinion

ID: 7981899
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:08:06.934724+00
Date Added: 2024-06-11T16:35:03.978815
License: Public Domain

Stone, J.
(dissenting).
The alleged misrepresentation ivas as to the status under the law of a corporation and its stock. That status depended not so much on law as on the fact of compliance or noncompliance with it. The law was law, but compliance or noncompliance was fact. Therefore the statement of the result on status, if made, was of fact rather than law.
The law of our constitution (making shareholders in Minnesota corporations not organized exclusively for manufacturing or mechanical purposes liable to creditors of the corporation) was not at all the subject of the misrepresentation charged. The latter implies two conclusions, both of fact. One is that the stock was fully paid for and so not subject to assessment for unpaid subscriptions. The other is that the company was organized exclusively for manufacturing or mechanical purposes and so its stock not assessable to pay creditors. Those conclusions are not as to the law but solely as to facts of action under the law.
In any event, a misrepresentation involving matter of law is “actionable if it amounts to an implied assertion that facts exist that justify the conclusion of law which is expressed.” So a false statement that an insurance company was authorized to do business in Minnesota was held actionable in Miller v. Osterlund, 154 Minn. 495, 191 N. W. 919. The representation was no more of law and was just as much as to the fact of corporate status as the one now under consideration. The same thought, that a misrepresentation of status (of land) under applicable law is one of fact and actionable, is the gist of the decision in Pieh v. Flitton, 170 Minn. 29, 211 N. W. 964. Upon similar grounds, the conclusion that representa*451tions that corporate stock is nonassessable are of fact rather than law and so actionable was reached in Browne v. San Gabriel R. R. Co. 22 Cal. App. 682, 136 P. 542; Merchants R. & I. Co. v. Kelso, 46 Cal. App. 218, 189 P. 116; Van Slochem v. Villard, 207 N. Y. 587, 101 N. E. 467; Windram v. French, 151 Mass. 547, 24 N. E. 914, 8 L. R. A. 750; and Coolidge v. Rhodes, 199 Ill. 24, 64 N. E. 1074. In Guaranty Mtg. Co. v. Ellison, 66 Utah, 1, 239 P. 29, it was held that the representation that a corporation was organized under the banking laws of the state was one of fact. So in Maine v. Midland Inv. Co. 132 Iowa, 272, 278, 109 N. W. 801, a representation that “the corporation was fully and legally organized” was considered one of fact. In both cases the misrepresentation was as to status under applicable law. Such status is matter of fact although the law is involved secondarily. In these cases “the facts were unknown, and a statement of the conclusion imported a statement that facts existed which justified it, just as when a man states that he owns a thing, or that two persons are husband and wife, or that goods are attached, or that a pauper has a settlement in a certain place.” Windram v. French, 151 Mass. 547, 551, 24 N. E. 914, 8 L. R. A. 750.
One is not shielded by reason of his ignorance of law from the consequences of his own illegal action. But the maxim that ignorance of the law excuses no one was not intended, and ought not to be used, to enable a wilful wrongdoer to protect himself from the consequences of his act because of his victim’s ignorance of law. To use the maxim to that end is a perversion of it. It is for such reasons that I am unable to agree with the majority view.