Upton, Assignee, v. Tribilcock.

will or will not permit to be done, is one on which the party to whom it is made has no right to rely, and if he does so it is his folly, and he cannot ask the law to relieve him from the consequences. The truth or falsehood of such a representation can be tested by ordinary vigilance and attention. It is an opinion in regard to the law, and is always understood as such." (See Star v. Bennett, 5 Hill, 303; Lewis v. Jones, 4 B. & C., 506; Rashdall v. Ford, L. R., 2 Eq., 750.)

The law is presumed to be equally within the knowledge of all parties.

That a stockholder may relieve himself from his liability by proof that he was misinformed as to the effect of his contract when he made it, would be a disastrous doctrine.

That a defendant who could not by contract lawfully relieve himself from liability as a stockholder, can accomplish that result by proof that it was fraudulently represented to him that he could so relieve himself, would be strange indeed. (Ogilvie v. Knox Ins. Co., 22 How., 380.)

The rule that a mistake of law does not avail, prevails in equity as well as at common law. (Bank of U. S. v. Daniel, 12 Pet., 32; Hunt v. Rousmaniere, 1 Pet., 1; 8 Wheat., 174; Mellish v. Robertson, 25 Vt., 603; Leavitt v. Palmer, 3 N. Y., 19.)

"If ignorance of law was admitted as a ground of exemption, the court would be involved in questions which it were scarcely possible to solve, and which would render the administration of justice next to impossible, for in almost every case ignorance of law would be alleged, and the court would, for the purpose of determining this point, be often compelled to enter upon questions of fact insoluble and interminable." (Austin's Jour., Vol. II., 172; Kerr,

397.)

A statement that the insurance company had consulted with good lawyers, and that their opinion was as stated, should have been clear proof to the defendant that a representation of the law was a matter of opinion only.

Upton, Assignee, v. Tribilcock.

We think the judge erred in not charging as was requested.

The facts upon which the second point arises are these: Assuming that fraudulent representations had been made to the defendant respecting his non-liability for the eighty per cent., and that they were of a character that might relieve him from his contract, it was objected that he had not used proper diligence in discovering the fraud, and in repudiating his contract. The transaction took place in August, 1870, and the defendant himself gave evidence "that he never suspected any liability as to said eighty per cent., or that the said representation as to the laws of Illinois were false, until the agent of the assignee made a demand upon him for the eighty per cent. in the year 1873, and that as no claim had been made upon him, he never made any investigation as to the truth of such representations until after said demand in 1873." In February, 1871, the defendant did ask for a rescission of his contract on the untenable ground that it had been fraudulently represented to him that his note should be retained and held in Bloomfield, Iowa, which representation had been violated by a sale of the same and a removal thereof to the city of Chicago. The defendant is explicit and emphatic in his evidence that this attempted repudiation" was based wholly on what was represented" as to the intended disposition of the notes and mortgage.

The plaintiff thereupon requested the court to charge the jury as follows:

Seventh. That if he, defendant, offered to surrender his stock to the officers of the company, but not upon the ground that he had been induced to subscribe for the stock upon a fraudulent representation as to his liability for the eighty per cent., but upon another ground, to wit: that the company had sold and assigned his note and mortgage, then the evidence of such offer is immaterial, and the evidence of fraud as to such misrepresentations as to his liability for the eighty per cent. cannot be made available in this suit, and constitute no defense in this action."

Upton, Assignee, v. Tribilcock.

Twelve. "That if defendant was induced in August, 1870, to become a stockholder of the Great Western Insurance Company, by a representation of the agent of the company that eighty per cent of the stock was non-assessable, and that the laws of the State of Illinois allowed the company to make such contract with those who took stock, then it was the duty of the defendant to use reasonable diligence. to ascertain the truth of such representations, and to ascertain what the law of Illinois was on that subject; that if he did not do so within a reasonable time, and did not ascertain the truth of said matter until after the insolvency of the company in 1873, then he cannot, as to the creditors of the company, maintain any defense by means of such representations. The court instructs you, as matter of law, that the defendant could have ascertained the truth of such representations within a few months from the time they were made, and that not doing so is negligence on the part of the defendant that bars such defense as to the assignee."

The defense arising from the alleged promissory representations that the note and mortgage of the defendant should not be removed from Bloomfield, but should be retained in charge of the branch of the company at that place, was frivolous, and was practically abandoned on the trial. The case was submitted to the jury solely on the question arising upon the representations of the non-assessability of the eighty per cent. The attempted rescission on account of the representation as to non-removal and its violation was, however, unfortunately introduced into the charge in a manner that prejudiced the right of the plaintiff.

The requests, as above stated, were declined, but the judge charged the jury as follows: That "as respects creditors, the law requires of one who has been drawn by fraud. into the purchase of stock, that he shall be guilty of no negligence or want of reasonable care in discovering the fraud, and on discovering it promptly repudiating the purchase. If you find from the evidence that within a few months after receiving the stock certificate the defendant, discovering that

Upton, Assignee, v. Tribilcock.

he had been deceived in some respects, procured the agent who had obtained his certificate to go to Chicago, delivering to such agent his stock certificate, and instructed the agent to surrender up the stock and demand back the note for twenty per cent. ; and if the agent accordingly went to Chicago and offered to the company to surrender the stock and rescind the contract, which the company refused; and if you find that the defendant never afterwards acquiesced in being a member of the company; that in September, 1871, he brought an action of replevin for the note, based on the ground of fraud; and if afterwards he refused to receive any dividend; and if all this took place before bankruptcy or insolvency of the company, I instruct that in point of law this is a sufficient repudiation of the contract to become a stockholder to enable defendant, living in another State, to resist an action for the payment of the eighty per cent., provided you find that defendant was induced to become a stockholder by fraud, as before explained; and also further find, in view of all the circumstances, that defendant was not unreasonably negligent in discovering the fraud, and was guilty of no want of reasonable diligence in taking steps to repudiate the transaction."

To this charge the plaintiff excepted.

The general principles set forth in this charge are no doubt sound. If the alleged promissory representation as to the non-removal of the note had been available, and had been the question submitted to the jury, the charge would have been well enough. But that question was not before them. The questions submitted to them related exclusively to the representation that the eighty per cent. should not be required to be paid. That was the fraud before the jury, and the question involved in the seventh and twelfth requests was this: Assuming that representation to be a fraud which would avoid the contract, had the defendant discharged his duty in discovering that fraud and repudiating the contract on account of that fraud, and not on account of another fraud not now in question. We think the defendant was en

Upton, Assignee, v. Tribilcock.

titled to the opinion of the jury on that precise question. The charge refused him this right. The jury were charged that if within a few months after receiving the certificate, the defendant, discovering that he had been deceived in some respects, sent an agent to Chicago to surrender his certificate and demand his note, if he never afterwards acquiesced in being a member of the company, if he brought an action of replevin for the note, and if he refused to receive a dividend, this was sufficient evidence of repudiation. This was well enough as to the abandoned fraud which was not before the jury, but was entirely inapplicable to the fraud that was before them. As to that fraud, the defendant testified that he had no knowledge or suspicion of its existence until after the demand made upon him in 1873, by the assignee, and that he never made any investigation as to the truth of the representation as to the eighty per cent. liability until after said demand, in 1873. On this point there was no contradictory evidence. It should have been ruled as a question of law. (Pettibone v. Stevens, 15 Conn., 19; Beers v. Bottsford, 13 lb., 146.) The submission should have been made, if not ruled as a question of law, on these facts only, as requested; and the failure to do so, and the introduction of the facts tending to show a repudiation on the ground of another fraud, could not fail to confuse the jury, and was error on the part of the judge.

Wright's case (L. R., 12 Eq., 331-351) is an authority on this point. It was there held, 1st, that under the English act, a surrender and cancellation of shares did not relieve the holder from his liability to creditors of the bank; and 2d, that a surrender by Wright of his shares in November, on the ground of an apprehended difficulty in the affairs of the bank, did not enable him to claim a rescission of his subscription on account of a fraudulent representation in the prospectus of the company, which fraud was then unknown to him. (Henderson v. Royal British Bank, 7 El. & Bl., 356; Powis v. Harding, 1 C. B., N. S., 533; Oakes v. Turquand, L. R., 2 E. & I., Ap. Cas., 325.)