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WITTEBS, R·8CGlV€Il,»BlJC.,·fD..»SOWLEB and others. .
_ A (Ctircutt Ooart, D. Verhumt. April 6, 1887.)
1. Nnronsr. ‘BANl{-mLIABILITYAOF OFFICERS—LOANS—DISCOUNTS.
The oilicers of an insolvent national bank cannot be held personally respon-
sible to creditors for losses on loans and discounts made by them in good
faith, and, as they thoughtat the time, for the best interests of the bank,
merely because such loans and discounts appear to have been unwise and
hazardouswhen looked back upon.
2. Sams:. ‘
Under Rev. St. U. S. § 5200, directors of a national bank, who make or assent
to the making of a loan to any one person of a sum exceeding one-tenth of the
capital stock of the bank, become personally and individually liable for all
loss sustained thereby; but wherethe borrower, in such a case, is also one of
‘ the directors, he is not so liable, but simply as a debtor to the bank.
3. SAME—DIVIDENDS—LOBBES.
· Bank directors cannot be held personally liable for money paid out for
dividends “to a greater amount than net profits after deducting losses and bad
debts,·" (Rev. St. U. S. § 5204,) because there were debts bad in fact, but sup-
posed to be good, when the dividends were declared and paid. Bad judgment
on the part of the directors, as to the condition of the assets, without had
~ faith, does not make them individually liable. _
4. SAME—LOAN—KNOWLEDGE. , ·
Directors of a national bank _cannot be held to the common-law liability for
inattention to duty as directors in not preventing a hazardous, impru ent,
~ and disastrous loan, if such loan was made by thou associates, without their ,
knowledge, connivance, or participation.
In Equity. _ I . V
Chester W. Witters, for orator. , _.
Albert P. Gross, for defendant Burton. l
Edward A. Sowles, for himself.
_ WHEELER, J. This bank was organized and continued in existence,
with a capital stock of $100,000, under the laws of the United States re-
lating to national banks. It failed and stopped doing business April 8,
1884, and was soon after placed in the hands of a receiver. The de-
fendants, except Hall, Edward A. Sowles being president, and Albert
Sowles cashier, were directors, with George W. Foster, now deceased,
_ v.311v·.no.1—1 ,