wrrrnas v. sownns. 3
capital stock are prohibited.? Noneof thedirectors who are living, and A
are defendants, is shown to;have knowingly participated in or assented
to any of the loans or discounts constituting the debts against him, or
those for which he is liable as surety or indorser. The liability of
Edward A. Sowles originated in .a direct loan to him soon after February
11, 1880, of $36,000. This- loan was in excess of one-tenth of the cap-
ital stock, and in direct violation of the provisions of section 5200. All
those who were then directors, which includes all the defendants except
Hall, knew of and assentedto this loan. This is not disputed. Section
5239 provides that if the directors of any national bank shall knowingly
violate, or permit any oihcer, agent, or servant, to violate, any of the
provisions of that title, which includes section 5200, the rights, privi-
leges, and franchises of the·.·bank shall be forfeited; and that in cases of
such violation every director, who participated in or assented to the
same, shall be held liable in his personal and individual capacity for all
damages sustained in consequence of such violation. By force of these
provisions, the defendants Albert Sowles and Burton, by their participa
tion in and assent to this loan, became liable to the bank, as now rep
resented by the orator, for all damages in consequence of it. 'l`he loan
was made to Edward A. Sowles. He procured it in his own behalf, and _
became liable as debtor for it. He would not appear to be liable as par-
ticipating in or assenting to it on behalf of the bank. U. S. v. Britton, »
108 U. S. 193, 2 Sup. Ct. Rep. 526.
This bill is not brought to charge the defendants for money received
by them as stockholdersfrom dividends, but for losses to the bank itself
. for unlawfully or wrongfully declaring dividends. By section 5204, div-
idends to a greater amount than net profits, after deducting losses and
bad debts. are prohibited; and debts on which interest is past due and
unpaid for six months, unless well secured and in process of collection,
are defined to be bad debts. The assets of this bank did not so consist
of bad debts, within this definition, at the time when they were made,
as to make the dividends improper. There were debts which were in .
fact bad in the result to an extent so great as to wipe out the pronts from
which dividends could be made when the later ones were declared. The
defendant Burton is not shown to have participated in making the divi-
dends. Those who did misjudged as to the value of the assets. The
evidence does not warrant the conclusion that they took this method of
dividing the assets of the bank among themselves when they knew that .
dividends could not properly be made. It is not considered, therefore,
that the defendants are liable for the amount of the dividends because
they were unlawfully or wrongfully declared. Whether those who re-
ceived the dividends are chargeable for the amount received, on the ·
ground that the money from which they were paid was needed to pay
the liabilities of the bank, is a question not presented in this case. Sper-
dngts Appeal, before cited; Thomp. Liab. OH`. 351; U. S. v. Bmtton, 108
U. S. 199, 2 Sup. Ct. Rep. 531.
It is strongly urged that the defendants are liable at common law for
A inattention to duty as directors, although not liable under the express