be a defense against a suit by the creditors, because they can attain no higher rights than the bank has.15 87. National banks. In the case of national bank directors it is necessary to keep in mind that there are liabilities created by statute and liabilities that exist independently of any statute. Thus national bank directors are liable, just as any other bank officer or private person, for fraudulent representations by words or by conduct. The bank or its receiver may sue the directors for mismanagement and misapplication of the funds of the bank. The stockholders in a national bank may sue where the receiver or the corporation will not. The creditors may have the remedies that exist for the creditors of any other bank. But where the redress sought is for a violation of the national banking law, a court of appeal has erroneously held that the remedy given to the comptroller is exclusive, and can only be enforced by the receiver of the comptroller. But that receiver may bring the suit without an order from the comptroller." It is held further that where a remedy is sought in order to charge directors with a violation of the national banking act, under section 5239 of the Revised Statutes of the United 15 Cooper v. Hill, 94 Fed. R. 582. But the laches will not begin until the directors surrender control. National Bank v. Wade, 84 Fed. R. 10. 1 Prescott v. Haughey, 65 Fed. R. 353; Merchants' Nat. Bank v. Thoms, 28 Wkly. Law Bul. 164. Withdrawal of a large deposit by a director is said to be by a remarkable effort of the judicial intellect cognizable at law, but not in equity. Robinson v. Hall, 59 Fed. R. 648. That is not true. It is an illegal preference which the receiver of the bank may recover. See § 327, post. 2 Robinson v. Hall, 63 Fed. R. 222, 25 U. S. App. 48; Warner v. Pennoyer, 91 Fed. R. 987. See § 81, supra. Hayden v. Thompson, 71 Fed. R. 60, puts the suit on the ground of breach of trust. This is true where the corporation or its receiver sues. When the creditor sues, the right to recover, on whatever ground it is put, is not for a breach of trust toward the creditor, but a breach of trust toward the bank. 3 Ex parte Chetwood, 165 U. S. 443. See § 80, supra, and cases cited in note 3 to that section. 4 See § 86, supra. 5 Hayden v. Thompson, 71 Fed. R. 60. But this case must be considered as overruled by Ex parte Chetwood, 165 U. S. 443. See § 334, post. 6 Hayden v. Thompson, supra States, no suit lies until forfeiture of the charter is made as provided in that act. This erroneous ruling in effect denies such remedies to either stockholders or creditors until a forfeiture has taken place, when, a receiver being already in possession, the suit would be useless. The rules of joinder of causes of action have been noticed in the preceding section. The directors cannot discharge their liability for any part of an illegal loan by showing that part of the loan was paid in illegal dividends. The statute of limitations or the defense of laches will not run in favor of the officers while they control the bank.9 § 88. Release to directors.-The rule of law is, except where modified by statute, that the release of one joint tortfeasor releases all. A release to one director jointly liable would be a defense to the action. Since the right to call its officers to account belongs to the corporation, except where the statute confers the right on some other party, the corporation can release its directors from liability to it, if the act be otherwise lawful. But such a transaction would be narrowly scanned by a court for evidences of fraud. If fraudulent it would be held for naught.2 Compromises of the liability are not usually permitted.3 § 89. Criminal liability of bank officers.- Certain acts in banking officers are offenses at common law, others are 7 Wells v. Graves, 41 Fed. R. 459; Gerner v. Thompson, 74 Fed. R. 125. These cases are no longer authority. Their absurdity is sufficiently apparent. Cockrill v. Cooper, 86 Fed. R. 7 (C. C. A.); National Bank v. Wade, 84 Fed. R. 10. And a fictitious increase of capital stock on a fictitious valuation of assets renders the directors liable. Cockrill v. Abeles, 86 Fed. R. 505. 8 Witters v. Sowles, 43 Fed. R. 771. 9 National Bank v. Wade, 84 Fed. R. 10. 1 Cocke v. Jennor, Hob. 66, pl. 69. See also, where a release is given to one with a reservation as to others, Solly v. Forbes, 2 Brod. & Bing. 38; Ruble v. Turner, 2 Hen. & Munf. 38; Matthews v. Manufacturing Co., 3 Robt. 711. 2 A release after insolvency or suit brought would probably never be permitted to stand. The release by the directors to one of their own number or to an officer would be a fraud in itself. 3 Williams v. Halliard, 14 Atl. R. 880. offenses under statutes. Where no common-law offenses exist, as under the United States law and under the criminal and penal codes of many states, the statute is the sole definition of the crime. But in states which recognize commonlaw offenses, that system must be looked to as well as the statutes in order to ascertain what acts are criminal. § 90. Receipt of deposits in insolvent bank.— Where a bank officer fraudulently represents his bank to be solvent and obtains a deposit, his offense has been defined to be the obtaining of money by false pretenses. Insolvency under such statutes means that condition where the bank is unable to meet its liabilities as they become due in the ordinary course of business. An exception is made in some statutes as to the receipt of a deposit where the depositor is indebted to the bank, but it must be such a deposit as the bank would have the right to appropriate to its claim. Such statutes have been held not to apply to private bankers. Making such an act a criminal offense in a private banker does not cause imprisonment for debt, nor does it deny to the banker the equal protection of the laws. The reasons why insolvency exists and the agency of the defendant in producing the condition is immaterial. The deposit need not be received in the banking rooms, nor by the defendant himself." The offense is committed by keeping the bank open and permitting the reception of deposits, knowing it to be insolv 1 Commonwealth v. Schwartz, 18 S. W. R. 359, 19 S. W. R. 189. Exhibiting false books. People v. Helmer, 43 N. Y. Supp. 642. The rule applies to certificates of deposit. State v. Shore, 70 N. W. R. 312. 2 State v. Caldwell, 79 Iowa, 432. Capital stock and surplus are considered resources. State v. Myers, 54 Kan. 206. See also Meadowcroft v. People, 163 Ill, 56. 3 State v. Beach, 43 N. E. R. 949; Nichols v. State, 46 Neb. 715. Com pare Commonwealth v. Scholl, 12 Pa. Co. Ct. R. 209. But it is no defense that the depositor can follow the deposit as a trust fund. State v. Eifert, 71 N. W. R. 248. 4 State v. Kelsey, 89 Mo. 623. Compare State v. Smith, 62 Minn. 540, and next case. Commonwealth v. Sponsler, 16 7 State v. Yetzer, 97 Iowa, 423. 12 ent; but even the element of knowledge is dispensed with by some statutes.10 But if the officer forbids the reception of the deposit, he is not guilty," unless he afterwards received it. There is no necessity to allege in the indictment that any one was injured, but the fact of insolvency should be alleged as a fact and not inferentially." This offense is sometimes defined as the creating of indebtedness of the bank by receiving deposits while the bank was insolvent.15 A similar offense of fraud is perpetrated by selling a draft, knowing the drawer bank to be insolvent, and that before the draft can be cashed the fund against which it is drawn will be exhausted.16 In states requiring a popular vote to ratify a banking law, a statute defining a criminal offense as to banking does not need to be ratified by popular vote." Other matters of evidence are ruled upon in cases in the note.18 § 91. Other offenses.- Statutes exist requiring returns to be made by bank officers, and a false return is defined to be perjury. The same offense is a false réturn in the case of national banks. The return is for the purpose of showing the condition of the bank. Even if it does not agree with the books, but is a fair showing of the condition of the bank, the officer is not guilty of perjury by verifying it.' It seems 9 Carr v. State, 104 Ala. 4; State v. Yetzer, 97 Iowa, 423. Compare State v. Eifert, 65 N. W. R. 309; Commonwealth v. Scholl, 12 Pa. Co. Ct. R. 209. 10 Murphy v. People, 19 Bradw. 125. 11 Commonwealth v. Jenkins, 170 Pa. 194, reversing Comm. v. Sponsler, 16 Pa. Co. Ct. R. 116. 12 State v. Eifert, 65 N. W. R. 309. 13 State v. Myers, 54 Kan. 206. An intention to return the deposit is no defense. Comm. v. Sponsler, 16 Pa. Co. Ct. R. 116. But if the identical thing deposited was returned and never mixed with the bank's funds, no offense was committed. Comm. v. Jenkins, 170 Pa. 194. 14 State v. Bardwell, 72 Miss. 535. The word "unsafe" in a statute means insolvent as applied to banks. In re Koetting, 90 Wis. 166. 15 State v. Sattley. 131 Mo. 464. 16 Anonymous Case, 67 N. Y. 598. 17 In re Koetting, 90 Wis. 166. 18 State v. Beach, 43 N. E. R. 949; State v. Caldwell, 79 Iowa, 432; State v. Yetzer, 97 Iowa, 423; State v. Sattley, 131 Mo. 464; Nichols v. State, 46 Neb. 715. 1 Comm. v. Dunham, Thacher Cr. Cas. 519. Compare United States v. Allen, 47 Fed. R. 696. a fair proposition that the indictment should allege a false return was made wilfully, because the law does not punish mere mistake or ignorance. If the return was made by the officer believing it to be true, but when it was in fact false, he would not be guilty. Such is the law of perjury. There are offenses connected with banks, such as converting money or bank bills or notes of the bank, and overdrawing an account by an officer. The offense of conversion of bank bills or notes in a statute has been held not to be committed by appropriating promissory notes or commercial paper of the bank. For the offense of overdrawing an account by an officer and wrongfully obtaining the money of the bank, it is necessary to show something more than a mere overdraft," although it is not necessary to allege an intent to defraud. § 92. National bank returns.-The national banking law requires a return verified by the president or cashier of a national bank and attested by three directors to be made five times a year, and special reports at such other times as the comptroller of the currency may designate. The form is designed by the comptroller, and the date of the call is never known until the call is made. Thus two kinds of reports are provided for, both upon call. Another section of the statute makes it an offense wilfully to make a false entry in such a The entries are criminal when made with an intent return. 2 Comm. v. Dunham, supra. Compare Graves v. United States, 165 U.S. 323. ciple the two kinds of reports ought to be discriminated. If the indictment was based upon an allegation 3 See cases of false return in the of a report made to the comptroller, next section. 4 State v. Stimson, 24 N. J. Law, 9. The phrase was “money, bank bill or note." The word "note," on the principle of noscitur a sociis, was construed bank note. 5 People v. Clements, 42 Hun, 286. 6 State v. Stimson, 24 N. J. Law, 478. 1 Sec. 5211, R. S. U. S. proof of either one of the regular five reports, or of a report on special call, would answer. But if the indictment alleged one of the five reports, proof of a report upon special call would be a variance. Because needless particularity of averment in an indictment where matter of description must be proven as alleged. This very point was made 2 Sec. 5209, R. S. U. S. On prin- in Bacon v. United States, 97 Fed. R. |