Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1898-06-09

III W Hhhipat W.T. HHN
on this ground tho suretiea sought to
part of the directors
Tho opinion of the court is to the
same etfsct as in the Massachusetts
case and is full and emphatic.
In late Federal case, Pbillipa ys. |
Brossard. 30 Fed Rep, 100, Simonton,
j., says "The second offence is. That |
the wilful negligence ana misconduct
OF tho president and board Of directors
permitted tho fraudulent acts OF Bart |
lett ami the HuretieH consequently are
mot liable therefor. Assuming that the
validity of tho bond at its execution is
not disputed, no evidence to this effect
having beBn shown, | churga you that
thiB defence, oven IL it he fully made
out cannot avail the defendant.
"'rhe bond of Bartlett, signsd by the
defendants, was given to the National
Bank of Sumpter, not To tho president
nor 10 tho boHrd OF directors. If he
committed the defalcatlon at frauds
charged, neither he nor his surnties
can be excused because Of any negli-
genGe or omission Of duty on the raft
of the president or board of directors. "
This principle lie emphatically laid
down in tho leading case upon this cub,
iect 10 our own State, Sparks ct al Vs.
Farmers Bank. 3 Del. Chan, page 302
and it would DO superfuous for me to
cite further. Indeed tho learned uoun-
sci does not dispute this principle, ap-
parently. in it's application to subse'
quent frauds, but in his extremely
elaborate and learned argument, rests
the claim OF the complainant to be re-
leased from his ALLEGATION OF suretyship
solely upon the two distinct grounds
which he states 10 the following lan'
guage in mia brief:
First That the bonds Hignod ny
Lieberman arc void as to him because
he became surety theron by the fraudu-
lent representations OF the respOndent.
Second That the right of the First
National Bank to proceed on said bond
ia barred by tho statute OF limitation.
The facts alleged 10y the complainant
in support of the first proposition arc
first, that Mr.. IIiubermnn, the com
plainant, prior to signing each bond
made inquiry of George ID. Armstrong,
Cashier of the bnnk, with regard to
Smiths accounts and character, ami
was each time assured hy Armstrong
that Smiths accounts we're all straight
and that he could 60 on his bond with
safety.
This allegation requires but little
consideration as a ground far relief, IN
asmuch as no statements made by tho
cashier, fellow omploye of Smith,
could in any way affect tho responsible
ity of a surety. The cashier having no
more authority to represent tho corpora
| tion respondent in HuuI a matter than
any clerk or boukkeeper in the employ
of the association.
The second fact alleged inaupport of
the first proposition ia tho one upon
which complainant manifestly relies SO
| far aa his first ground for relief is con-
cerned, and required careful conaidera-
ton.
In order to understand clearly this
point il is necessary to cite section 52ii
of the u. =. Rev issd Statutes, under
the title National Banks, which pro-
videH as follows: EVERY association
shall make to the comptroller Of the
currency not leas than five reports dur
ing each year according 10 the form
which may be prescribed by him, veri-
fed by the oath or affirmation of the
president or cashier of such association
and attestetl. by the signature Of at least
three of the directors. Each such re-.
port should EXHIBIT, in detail, and
under appropriate heads, the resources
and liabilities of the association at the
close OF business on any past day by
him specified; and shall he transmitted
to tho comptroller within five days after
the receipt OF o request or requisition
therefor from him, aud In the same
form, in which it ia made to the
comptroller shall be published in q
newspaper published in the place where
such association is established, or il
there ia no newspaper published in the
place thon in the one published nearest
thereto in the same county, at the ex'
pense of the Rssociation and sucl
proof of publication shall be furnished
as may be required by the comptroller.
"The comptroller shall also have
power to call for special reports froir
auy particular association whenever il
J his judgment the same are necassary,
in order to full and complete knowl
} edge OF its condition.
The reports required by tho statutel
we're regularly made and published IL
the Every Evening newspaper in thu
, city of Wilmington and ii ia in eyi
, dence were always read ny the com
plainant, who waa depositor in thu
the complainant further testities, pag,
90 OF the testimony, in reply TO tn
following question:
, ~ will nsk you, whether 1t was from
these published statements and iron
, what Mr.. Armstrong said to you tina
/ you wers induced to go on the bond il
, l6s5p'' as follows:
at certainly was. III had seen tina
the hanks published account did no
| show it in good standing i certginl
would not have gone on his bond
y second time. /"
, Again On page 81 he answers th
i 6ams question as TO the bond of 1879 il
q the Affirmative; and on page 81 a
, tbs testimony, when asked on cross
. examination what he found out in re
, gard TO the bank from that Htatemen
: he replied; - found that the han
i was in good, healthy condition"
!: This is all the evidence before m
i tending to show in any way that tn
I representations contained in these re
/. ports had any effect iu inducing th
a complainant TO become surety /
Il Smiths hUnd.
/. Those repurts contaiuvd, az We hRy
i seen. statement Of the resources an
a liabilities OF the respondent, as show
! by the hooks of tho bank, and thos
a books being incorrect 10 the extent {
v Smiths Justification of them, the II
' ports therefore stated incorrectly I
\ that extent, the RESOURCES and liabil
a ties of the respondent.
n The complainant tuatifios poaitiyel
10 that he never made any inquiries AZ t
r. tba condition NJ the HANK mr. nj Smith