Cassidy v. . Uhlmann

63 N.E. 554, 170 N.Y. 505, 8 Bedell 505, 1902 N.Y. LEXIS 1085

• Court: New York Court of Appeals
• Decided: April 8, 1902
• Status: Published

Opinions

Werner, J.

The plaintiff, as assignee of the claims of several depositors in the Madison Square Bank, brought this action against the president and two directors thereof to recover damages for their alleged fraud and deceit in directing and permitting said bank to remain open for the transaction of its regular business after it had become hopelessly insolvent, and in directing and permitting said bank to receive the deposits made by plaintiff’s assignors while said bank was in said insolvent condition and with full knowledge thereof. The complaint charges, in substance, that the Madison Square Bank was a moneyed corporation organized under the laws of this state, and prior to August, 1893, engaged in the banking business in the city of Rew York; that on the 7th and 8th of August, 1893, the plaintiff’s assignors deposited certain moneys with said bank; that it was then hopelessly insolvent and permanently closed its doors at the end of banking hours on the 8th day of August, 1893 ; that the defendant Blaut as president of said bank, and the defendants McDonald and Uhlmann as directors thereof, constituting a committee having the charge, management,- direction and actual control of said bank and having knowledge of its insolvency, did direct the same to be kept open for the regular transaction of its business for the purpose of inducing depositors to deposit moneys therein, and with that purpose and intention did represent to the depositors - of said bank that it was solvent and could properly and lawfully accept deposits; that said representations were false ; that while said bank was insolvent it received the moneys of the plaintiff’s assignors; that this was done with the consent, direction, procurement and instigation of said defendants who wrongfully concealed from said depositors the actual condition of said bank to their damage to the extent of their said deposits, less the dividends paid to apply thereon by the receiver of said bank. Service of the summons herein was never made upon said Blaut, the president of said bank. McDonald, although served, died before the trial of the action, and it has not been revived as against his personal representatives. The appellant Uhlmann is, therefore, the sole defendant. He presented no evidence.

The evidence given in support of the allegations of the complaint is substantially as follows: At the expiration of banking hours on Tuesday, August 8th, 1893, the Madison Square Bank closed its doors, never to open them again. It was then hopelessly insolvent and had been so during several days prior to the 7th and 8th days of August when the deposits upon which plaintiff’s claim is based were made. On the evening of August 2nd, Blaut, the president of the bank, McDonald and Uhlmann, two of its directors, Thompson, cashier and director, and Morton, its bookkeeper, met in the banking house. Blaut, McDonald and Uhlmann were in the president’s room, or the cashier’s department. At intervals they called in Morton, the bookkeeper, who gave them figures and statements from the books as to the assets and liabilities of the bank. On the evening of Friday, August 4th, the appellant Uhlmann, McDonald, his co-director, Putney, the latter’s lawyer, Thompson, the cashier, and Morton, the bookkeeper, were again in the banking house. Morton ivas at work upon a statement of the bank’s assets and liabilities which was not complete. He showed it to Uhlmann and had some conversation with him about it. On Saturday morning, August 5th, between 9 :30 and 10:00 o’clock, McDonald and Uhlmann were again at the banking house. Morton showed the completed statement of the bank’s assets and liabilities to Uhlmann and had some talk with him about it. After the latter had examined it, he threw his pencil upon the table and exclaimed “the surplus is gone—the capital begins to walk off—■ by gosh, the bank is busted.” Uhlmann was at the banking house again that afternoon. In the evening he was there with McDonald and Thompson. At the latter meeting there was some discussion as to the advisability of receiving deposits on the following Monday. McDonald and Uhlmann both stated that it would not be right to receive deposits in the then condition of the bank. McDonald asked Thompson what could he done about it. Then the former told the "latter to receive deposits on Monday under the following plan, viz.: “If a person owed the bank any money, and the amount that he owed the bank was in excess of his deposit then standing to his credit, the amount should be entered upon his pass book. If it was less, he was to be given a duplicate deposit ticket and his book held. In case the depositor did not owe the bank, a duplicate deposit ticket was to be given him and his book held on any pretext — for balancing or whatever it might be.” This method of receiving deposits was followed on Monday until some time in the afternoon, “ when word was received from down town to put the deposits through.” Until this message was received the deposits taken in were laid aside, but after that all deposits, including those received under said arrangement, were entered upon the books as assets of the hank. On Monday evening, August Uh, there was a meeting at the banking house. There were present Blaut, the president, who had not been there since the preceding Wednesday ; Soulard, McDonald and Uhlmann, directors; Thompson, cashier and director; Mr. Jenner, counsel for Uhlmann; Messrs. Putney and Twombly, counsel for McDonald. On Tuesday, August 8th, the bank was opened at the usual hour and deposits were received in the regular way. This was continued throughout the day. At the close of banking hours the bank shut its doors forever. At six o’clock that evening there was a meeting at the banking house. There were present Blaut, the president; Thompson, cashier and director; Uhlmann, McDonald, Ottenberg, Iialisher and Soulard, directors, and a committee of the clearing house. Later in the evening the state treasurer entered the banking house' and was admitted to the private room where a conference was going on. „ On Wednesday morning, August 9th, it transpired, that after the close of banking hours on the previous day checks had been drawn in favor of said state treasurer for $250,000.00 ; in favor of the East River Bridge Co., of which the defendant was president, for $50,000.00, and in favor of the Glen Ridge Mining and Quarry Co., a corporation of which Simon Ulilmaun, the defendant’s brother, was an officer, for $5,000.00 against the deposits for these amounts, respectively, standing to their credit, and these checks were paid by the St. Nicholas Bank, the clearing house agent of the Madison Square Bank.

There was evidence to the effect that the defendant had not been in the habit of visiting the banking house in the evening at any time prior to August 2d, 1893. There was -no evidence showing that any meeting of the directors of the Madison Square Bank was held or called at any time between the 2d and 9th days of August, 1893; or that any attempt was made to hold or call such meeting. It did not appear who sent word to the bank on Monday “ to put the deposits through.”

Upon this evidence the court submitted to the jury two questions: 1st. Did the defendant know, at the time the deposits in question were taken by the bank, that the bank was insolvent ? 2d. Did the defendant take part in directing the receipt of the deposits by the bank knowing that it was insolvent? Both of these questions were answered in the affirmative, and a general verdict was rendered in favor of the plaintiff for $6,496.86.

As the Appellate Division has affirmed the judgment entered upon this verdict every fact found which has the support of any evidence is conclusive upon this court., (Nat. Bank of Deposit v. Rogers, 166 N. Y. 380; Castleman v. Mayer, 168 N. Y. 354; Townsend v. Bell, 167 N. Y. 462.) The facts thus found are (1) that the deposits, under which the plaintiff claims, were made in the Madison Square Bank on the 7tli and 8th days of August, 1893; (2) that said bank was then insolvent; (3) that the defendant, then a director of said bank, had knowledge' of such insolvency; (4) that the defendant, with knowledge of such insolvency, took part in directing the receipt of deposits by said bank. In" its final analysis, therefore, the case resolves itself into the question whether, upon the facts established, the legal conclusion of defendant’s liability follows.

The theory upon which the action was brought, and upon which the defendant has been held liable in the courts below, is that by taking part in directing the receipt of deposits by said bank, knowing that it was insolvent, the defendant was guilty of a fraud by which the plaintiff’s assignors were damaged and which gave them, or their assignee, a cause of action. This charge of fraud is predicated not alone upon the ordinary duties with which the defendant was charged by virtue of his office as a director of the bank, but upon those duties in connection with others, which he is said to have voluntarily assumed by his course of conduct during the last days of the bank. It is evident that we can arrive at no just conclusion upon the questions involved in the action without an approximately correct understanding of the relations, to each other, of the parties interested in the controversy.

The ordinary relation between a bank and its depositors is that of debtor and creditor. (Cragie v. Hadley, 99 N. Y. 133; Commercial Bank v. Hughes, 17 wend. 94; Met. Nat. Bank v. Loyd, 90 N. Y. 530; Ætna Nat. Bank v. Fourth Nat. Bank, 46 N. Y. 86; Crawford v. West Side Bank, 100 N. Y. 53; Fowler v. Bowery Savings Bank, 113 N. Y. 453.) This is because cash when deposited ceases to be the money of the depositor and becomes the property of the bank. A different rule obtains, however, when by reason of fraud or insolvency, the title to the deposited money does not pass. In such a case the bank becomes a trustee ex maleficio and, of course, the relation of trustee and cestui yue trust is created. (Atkinson v. Rochester Printing Co., 114 N. Y. 168.) So far as creditors are concerned the relation between a bank and its directors is that of principal and agent. (Briggs v. Spaulding, 141 U. S. 132.) There is also a qualified trust relation between the directors of a bank and its stockholders on the one hand, and between such directors and the bank’s creditors on the other. Since the affairs of a bank are necessarily subject to the exclusive control of its directors, the acceptance of the office of director carries with it the implied and inherent obligation to perform the duties thereof in such a way as to promote the best interests of the stockholders. (Dun comb v. N. Y., H. & N. R. R. Co., 84 N. Y. 199; Cumberland Coal and Iron Co. v. Parish, 42 Md. 599.) So long as a bank is solvent and continues its business in the regular and proper way, its directors are neither agents nor trustees of the creditors. But when a bank is insolvent its directors, who contimie to serve as such, become trustees for the creditors, because they are the custodians of the bank’s assets, which constitute a trust fund for the payment of its debts. (Beach v. Miller, 130 Ill. 162; Haywood v. Lincoln Lumber Co., 64 Wis. 639; Richards v. N. H. Ins. Co., 43 N. H. 263.) An incorporated bank must, of course, be conducted through the intervention of duly authorized officers and agents. The board of directors of a bank has the general superintendence and active management of all its concerns, and, for all practical purposes, the board is the corporation. As a general rule a board of directors must act as a board. But, since directors do not exercise a delegated authority in the sense which applies to other officers and agents, it is clear that a board of directors may delegate some of its powers to committees and individuals selected from the board. This is common practice in the management of banks as well as other corporations. Since a board of bank directors is composed of individuals it is manifest that each director sustains a distinct relation, not only to his bank, but to its stockholders and depositors. For obvious reasons the duties which attach to this relation cannot be precisely defined. They cannot be the same under all circumstances ; nor can they be imposed with unvarying exactness upon all directors alike. Again, applying a general rule, bank directors are bound to administer the affairs of a bank according to-the terms of its charter, in good faith and with reasonable care and diligence. (First Nat. Bank v. Ocean Nat. Bank, 60 N. Y. 278.) Those who deal with a bank have the right to expect reasonable diligence and good faith at the hands of its directors. If the latter fail in either, they violate a duty which they owe to both stockholders and depositors. Justice and public policy require that when one voluntarily takes the position of bank director he should exercise at least the same degree of care that men of common prudence exercise in their own affairs. (Hun v. Cary, 82 N. Y. 65.)

In the light of the foregoing general observations let us now look at the situation presented by this record, to ascertain the duties and liabilities, if any, of the defendant towards the plaintiff’s assignors. Of the history of the Madison Square Bank which antedated the second day of August, 1893, we know nothing except that the defendant was a member of its board of directors and that it had not been his custom to visit the bank outside of banking hours. Beginning with the latter date we find him at the banking house on that evening, on Friday evening, August- 4th, on Saturday evening, August 5tli, on Monday evening, August 7th, and on Tuesday evening, August 8th. His conduct, and the unfortunate termination of the bank’s history on the latter date, clearly point to the purpose of these visits. It was undoubtedly to obtain definite proofs of facts relating to the bank’s condition, which must have been brought to his attention in some way and at some time prior to August 2nd, 1893. His worst fears were realized. On August 5th, 1893, he knew beyond perad venture that the bank was insolvent. This was not an accidental discovery of doubtful import, but the accurate result of a careful and systematic investigation. The later judicial determination of this bank’s utter insolvency was but an echo of the defendant’s declaration of August 5th, “ the surplus is gone ■—the capital begins to walk off — the bank is busted.” Who were the defendant’s associates during the week of investigation which preceded this declaration ? McDonald, a co-director, and Thompson, co-director .and cashier. The remainder of the eleven who constituted the board of directors were not present, nor does their presence seem to have been considered indispensable, for the record is silent as to whether any attempts were made to secure any meetings of the board during that week. On Friday evening, August 4t.h, the defendant’s co-director McDonald, was attended by his counsel, while Morton and the defendant were discussing the statement of the bank’s affairs which the former was preparing at the request of the latter. On the next morning, or at any rate during the next day, the completed statement was shown the defendant, and his expression, above quoted, clearly demonstrates how well founded were the fears which led the defendant into the investigation. “ The bank is busted.” Is anything to be done ? To the man of ordinary prudence, actuated by honest motives, such an emergency would suggest that something ought to be done, and that quickly. What more natural than that a meeting of the board of directors should be held, or at least called ? But the record is barren of any suggestion of that kind. On the contrary, the self-constituted triumvirate consisting of the defendant, McDpnald and Thompson, hold another evening meeting. Although we have here a bank governed, as defendant now contends, by a board of eleven directors, these three meet to discuss and decide the question whether the bank shall open for business on Monday morning, whether deposits shall be received and, if so, under what conditions. They finally decide that the bank shall open and that deposits shall be received in the manner above set forth: Was this done because it was impossible to procure a meeting of the board of directors ? We do not know, for the record is silent upon that subject. Was it because there was hope of extricating this bank from its difficulties ? Evidently not, for it is conceded that there was no substantial change in its condition between Saturday night and Tuesday afternoon when it .closed its doors, hopelessly insolvent. A private banker who continues to take deposits under such circum stances is clearly guilty of fraud.. (Anonymous, 67 N. Y. 599.) The same rule applies against a corporate bank. (Cragie v. Hadley, 99 N. Y. 131.) Counsel for the defendant, while conceding the soundness of the rule referred to, contends that it has no application to the case at bar. As the defendant was neither a private banker nor a corporate bank, it must be admitted that it does not apply unless the acts of the defendant supply the analogy to make it applicable. It is urged on defendant’s behalf: 1st. That the affirmation of solvency implied in keeping the bank open for the receipt of deposits was the affirmation of the bank and not of the defendant. 2nd. That since a corporate bank can only act through its board of directors, as a board, the defendant’s acts were without power and that there can be no duty where there is no power. 3rd. That defendant did nothing as a result of which the bank was kept open or. the receipt of deposits was continued. It is true that, primarily, the affirmation of the bank’s solvency implied in keeping it open for the receipt of deposits, was the act of the bank. It is equally true that a corporate bank usually acts through its board of directors. We think it is not true that the fraud in this transaction was the fraud of the bank alórf'eq nor can we admit the soundness of the argument that the defendant had neither power nor duty in the' premises. Fbwer and duty, even- when strictly correlative, are never "exact-and unvarying unless they'arise out of fixed," clearly defined and unchanging- conditions. Such conditions-rarely exist in any phase of-commercial activity. This is piarticularly-true of-banking. The executive officers of 'corporate banks are necessarily vested with large discretionary powers. In delegating some of its powers to others, a;board, of directors does not abdicate its other functions, nor do the individual members of the board become mere automatons, bereft of the power of speech and action, except- when the mechanism of the board is set in motion. There .-are .many emergencies which call for individual action -by directora, although no formal authority has been conferred. If abank director should discover a fire in his banking house he would not wait for a formal meeting of the board of directors to authorize him to make an attempt to extinguish the fire or to call out the fire department. If a theft of the bank’s money should be attempted in the presence of a single director, under such circumstances that his prompt interference would easily prevent its consummation, no one would seriously question that director’s power and duty in the premises, because the charter and by-laws of the bank contained no provision to meet such an emergency. If, in such a case, a director should try to do his obvious duty and fail, he would of course incur no liability. But suppose he should actually participate with a bank officer, of superior or equal grade, in starting the fire or committing the theft, could there be an utter absence of duty and liability, simply because there was an apparent lack of formal power % In the case at bar the defendant felt called' upon to make an investigation of the bank’s condition. We will assume that this may have been done with the best of motives. The investigation was pursued to the point where defendant was confronted with indubitable proofs of the bank's ruin. This was not later than Saturday night and probably was as early as Saturday morning, August 5th. He was then chargeable with knowledge that any attempt of the bank to continue business under such conditions would be a fraud upon those who continued to deal with it in ignorance thereof. His appreciation of this fact is attested by his suggestion that it would not be right to continue taking deposits in view of the condition of the bank. When McDonald suggested that deposits be received in the qualified way above referred to, there was no intimation from the defendant that the absence of a quorum of the board rendered all action impossible. When the direction was given to continue the taking of deposits the defendant gave no sign that he objected to the cashier’s receiving orders from a single director. There was no dissent, no objection, and this, we think, was equivalent to acquiescence. It is to be remembered that the defendant was not a mere director, actually ignorant of the real state of affairs and hastily called into an impromptu conference. For nearly a week lie had been in daily and almost constant intercourse with the men who were present on that Saturday evening. Between them they had pursued such a systematic investigation of the bank’s condition as would ordinarily be undertaken only at the instance of the board of directors. The president of the bank had not been at the banking house since the previous Wednesday. Somebody was managing that bank. Was it the president, or the board of directors, or the cashier in conjunction with his co-directors, the defendant and McDonald ? The events of that week furnish a convincing answer to these inquiries. “ But,” asks the defendant’s counsel, “ what particular thing was the defendant called upon to do ? ” As we have already intimated, the question cannot be answered categorically. At first suggestion it seems so direct and plausible as to raise serious doubts whether there is anything that the defendant could or ought to have done. But upon second thought the true situation presents itself. This is not the case of a passive and ignorant director, confused by a sudden emergency, but rather that of one whose voluntary activity and assumption of power disclosed a condition which forbade the continuance of the corporate business. This disclosure was made on Saturday after several days of investigation, during which the official head of the bank had been conspicuous by his absence. The ruin was complete. Under the circumstances above referred to this was known to the defendant, unless we clothe the office of bank director with a sacred and unique immunity from all intelligence and knowledge. In these conditions there were several things that the defendant could have done. He could have called a meeting of the board of directors. He could have communicated with the superintendent of the banking department between Saturday and Monday. He could have instructed the cashier to discontinue the taking of deposits until some other official action could have been taken. He could quietly have warned individual depositors that no further deposits would be received until further notice. He could have publicly announced that the bank would be closed pending official investigation. These suggestions will, of course, meet with a variety of answers. It is said that we do not know whether the defendant called a meeting of the board of directors- or communicated with the banking department. That is true; but we would know if the defendant had told the court what he knew upon the subject. “ But,” says the defendant, “ this is an action based upon fraud, and as fraud is never presumed it must be proved.” Again we assent, but with this qualification : When a prima facie case of fraud has been made out, the burden of explanation is thrown upon the defendant. Then, again, it is suggested that if the defendant had instructed the cashier to discontinue the receipt of deposits it might have been of no avail, for the cashier was at least the official equal of the defendant and subject to no orders except from the board of directors. It may be true that the cashier was under no obligation to obey an individual director. But he had done so. He had yielded such obedience in coming to the bank in the evenings, in making, or having made, tabulated statements of the bank’s finances, and was about to obey McDonald in continuing the taking of deposits under the arrangement suggested by him. ■ In the light of these facts it is not difficult to understand that the cashier would not have dared to disobey a direction so obviously proper and honest. With reference to the suggestion that the defendant might have warned individual depositors of the bank’s insolvency, or, if all else failed, have announced it publicly, defendant’s counsel argues that no reasonable rule of law places upon a director such a duty and responsibility. To the extent that this observation applies to bank directors generally we concur in it. We cannot admit its application to the case of this defendant. It may be assumed that no man of ordinary intelligence and prudence would resort to such extreme measures until all others had been exhausted and then only in a case of clear and hopeless insolvency. But here it must either be assumed that the defendant avoided the obvious and simple duty of calling a meeting of the board of directors, or chat it was impossible to procure one to be held. If it was impossible, then it must have been evident to the defendant that there was no hope for the resurrection of an insolvent bank whose directors could not be brought together for a meeting. We think that under such conditions it was as clearly the duty of the defendant to warn intending depositors or to make public announcement of the bank’s insolvency as it would have been his duty to avoid these drastic measures in other circumstances. It is urged that the defendant has been punished for his diligence, and that the negligence of his fellow members of the board of directors is their passport to absolute freedom from liability. Like many other suggestions in this case, this has a taking sound, but, in our judgment, it will not stand the test of analysis. We are not now concerned with any alleged negligence of any other director. Nor is the judgment herein the defendant’s penalty for his diligence. Had the knowledge which the defendant gained in making his investigation been properly used instead of being fraudulently concealed, the defendant would have received the commendation of the courts instead of condemnation. We regard this as a case of diligence misapplied and misused; of diligence apparently exerted for personal ends at the expense of official constancy. It is further urged on behalf of the defendant, that even if he may be charged with failure of duty in any of the particulars above indicated, he cannot be held guilty of fraud, because his acquiescence, if any, in the continuance of the busine'ss of the bank was only for a specified purpose under proper restrictions; that he did not agree that deposits should be unqualifiedly received, but only subject to the arrangement proposed by McDonald; that if the cashier, after having partially carried out the arrangement, chose to take orders from somebody else and receive deposits in the usual way, the defendant was powerless to prevent it and should not be held responsible. We cannot admit the soundness of this argument. It is superficially plausible, but it rests upon the false premise that there was no wrong in making some arrangement so long as the parties thereto considered it safe; and that when once made, it could properly be treated as self-executing. So far as the plaintiffs assignors were concerned, the defendant’s wrong began when he acquiesced and took part in the arrangement to receive deposits under any conditions except a full and fair disclosure of the bank’s condition. As we have seen, the mere fact of taking deposits was an assurance to the depositors that the bank was solvent. Had they known it was insolvent they might well have declined to make any further deposits, even though they had been informed of the special arrangement under which .deposits were to be received. But how are the depositors affected by the secret agreement made between the defendant and McDonald ? As to them it was a nullity if they chose .to treat it as such. Let us assume, however, that the agreement was of such a character that, if faithfully observed, it would have exculpated the defendant from the charge of fraud. Did the defendant’s responsibility end with the mere making thereof ? The very theory upon which the agreement is interposed as a shield to the defendant, is based upon the assumption that it was in the interests of honesty and would be faithfully carried out. Let us assume that the measure of defendant’s duty was ordinary care. Did he exercise it ? When the defendant was at the banking house on Monday evening a single question from him to the cashier or bookkeeper would have revealed the fact that the arrangement of Saturday night had been changed and all the deposits of Monday had been thrown into the assets of the bank. ' The record contains no such inquiry, and there was evidence from which the jury were at liberty to find that there was a reason for not making it. The sequel shows that the deposits were used for other purposes. A few favored depositors were taken care of as we shall presently ascertain.

We now turn to another phase of this case which has been previously mentioned but not discussed. That is the question whether the evidence was competent which relates to the checks in favor of the state treasure!', the East River Bridge Company and the Glen Ridge Mining and Quarry Co. In this connection it is to be remembered that there was evidence of close relations between some of the officers of the bank and the state treasurer, and that the latter was present at the meeting held at the bank after it had closed its doors, and at which said checks were drawn. The defendant was president of the East River Bridge Co. and his brother was an officer of the Glen Ridge Mining and Quarry Co. The checks in favor of the state treasurer and said corporations were drawn at a meeting attended by the defendant and McDonald after the bank had closed its doors and suspended payment of its obligations. These checks amounted in the aggregate to $305,000.00. The visible cash assets of the bank on Saturday, August 5th, amounted to about $90,000.00. This was less than one-third of the amount required to pay the favored depositors. The charge against the defendant is fraud. Is there any connection between keeping the bank open during Monday and Tuesday and the payment of these checks? If there is, then the evidence objected to was competent as part of the res gestae. That there is evidence from which the jury had the right to conclude that there is such a connection cannot be seriously doubted. Upon the facts proven it was competent for the jury to find that all the defendant’s acts in connection with this bank, commencing with August 2nd, 1893, and ending with August 8th, 1893, were parts of a single transaction, the ultimate object and purpose of which was to secure these three favored depositors against loss, in the event that investigation should prove the bank to be insolvent. But, even if we indulge in the more agreeable assumption that the defendant inaugurated his investigation of the bank’s affairs in good faith and without ulterior design, the evidence relating to these checks was still competent as bearing upon the motive or intent with which the defendant took part in keeping open the bank on Monday and Tuesday for the receipt of deposits. In this connection we should not forget that rules of evidence, like principles of law, must be applied to multifarious facts and conditions. In the case at bar we are dealing with fiduciary relations. The defendant was the director of an insolvent bank and the plaintiff’s assignors were innocent depositors. The insolvency of the bank made the directors trustees for its creditors. While courts should be careful to establish no rule that will impose upon bank directors harsh and unjust burdens, they should not be over nice in guarding them with the technicalities of evidence when charged with dishonesty or negligence in the performance of their official duties. Courts should remember that when men accept the honors which attach to such offices they also assume some duties to the stockholders and depositors whom they represent. In this age of banks and banking, confidence is the cornerstone of the whole business structure. Once let it be known that a bank director can be made liable for nothing that is not done by an organized board of directors, and confidence in banks will be put to a crucial test, and a dishonest director will never be at a loss for means of escape.

There are no other exceptions which seem to require specific mention or discussion, and we, therefore, conclude that the judgment of the Appellate Division should be affirmed, with costs.