Norwich bulletin., 1918-03-15
LIMIT ON LoANs
TO BANK MEN
Hinman Says Liability of Director ln- eIudea That ef indeFser.

'4e.@S S4fp4A " 01llk Nu1uk4xD6fOucI GA J. Sturges . slegal definition of the meaning of thesNtord "obligated' as it is used in chapter 15s Of the public acts of 1917, referring to the financial relations between the director of a l state bank or trust company and the | concern. The attorney general says that the statute means that the di- | rector's liability includes that of an indorser as well as absolute and dt- rect indebtedness. He disucees the meaning of the word obligated" as 1t IS used in the statute and refers to the history of the word as a legal phrase. The opinion of the attorney general is as .Soilows:
 Section 3411s of the general statutes as amended byEchapter 45S, public acts of 1917. provides as follows:
 No director of | any state sbank or director or trustee of any trust com panE shall be obligated to any such bank or trust company to .an. amount exceeding 5 per -cef1tum sofsits paid in capital surplus and undivided profits combined, provided the foregoing pro- vision shall not apply to deans secared by collateral, so long as the market value of such collateral shah exceed by 20 per centitm the total loans se-
  but in the total loans 10 any director or trustee shall, at no time, exceed 10 per cenfum of hepaid-in capital, sur plus and undivided profits of such bank or trust company. No such bank or trust company shall permit it's di- rectors or trustees to become obligated to it in an amount at any time ex- l ceeding in the aggregate the sum if 30 per centum of it's paid-in capital, surplus and undivided profits com 1 bined''
 You ask my opinion as to the proper construction to be given to the word obligated" as used in the above statute, with reference to the amount of loans properly to be made by a bank or trust company to it's directors
 Merely reading the statute as it now stands, the term obligated" as used therein might well be construed ac- cording to its general and populal meaning, i. e., as indebted through ar absolute and direct contract or equiva. lent obligation. and as not including contingent undertakings as indorser ol the like.
 As Synonymous With Debt.
 Obligation" has been construed a; synonymous with debt, although deb is not synonymous with liability. bu is included in the latter term; 1ia bility" expresses in the broadest ant most comprehensive manner any form of obligation, including those wficl are contingent as well as those whicl are absolute
 Emerson vs. Detroit Steel & Sprini company, 100 Mich, 127; Pittsburgi Melting company vs. Reese, 118 Pa 355; Fidelity 6 Deposit company vs Commonwealth Trust company, 119 N r., Supp. 598-599; McENfresh vs. Kir kendall, 36 Iowa, 224-226.
 The legislative history of the statut, under consideration, however, appear
 to me to preclude the application o such restricted meaning to the tern as used therein. Said section 3411 o the general statutes originated as sec
 tion ? of chapter ', public acts of 1858
 which read as follows:
 :. 'tNo person holding the office 0 bank director in any bank in this stat shall owe or be indebted to any ban
 in which he is such director, either a
 maker, acceptor, drawer or indorsel
 or in any other manner, to an amour
 exceeding per centum of the capita
 of said bank actually paid in; provid
 ed that no bank shall permit its di
 rectors to become indebted to sai , bank, either as maker, accepto
 drawer or indorser, or in any othe . manner, to an amount exceeding i
 the whole the sum of 20 per centuf
 on its capital stock actually paid i ] at any one time"
 I Revision of 1872. , In the revision of 1872, page 2si : this act appears changed, in it's Ian ! guage, to read as follows:
 NO director Of any bank shall | ! obligated to such bank to an amour
 exceeding 5 per centum of it's capitt actually paid in, and no bank sha
 permit it's directors to become obl Il Il gated to it to an amount at any or C time exceeding in the whole the sui
 of 20 per centum on it's capital actl e ally paid in"
 = This section appeared, in the san ' form, as section 177S in the revisic Il of 1888, and the amendments whic
 have subsequently,, from time to tim n been made do not appear to me
 affect the construction of the statu'
 upon the point here in question. e In the revision of 1872, as abo, T indicated, the word obligated" "; ;- substituted for the words "indebt, d either as amaker, accepter, drawer |, indorser, or in any other manner" U Change of PhraseoIosy.
 It is well settled rule that in il
 revision of statutes change phras E ology should not be deemed to wo a change in the law unless there be : |. evident intention on the patr of t
 legislature to effect such change. CoI
 densation is necessary in the work
 compilation and revision, and we n frequently words which do not affe at the sense will be omitted, or the sar = general idea will be expressed u briefer phraseology. No design to g .s s ter the law itself could rightly .1t predicated upon such notifications ,l the language.
 +n Black on Interpretation of Lav Io 594 -595.
 ,4 It is therefore reasonably to ~ concluded that in the revision of IS ,d and the subsequent re-enactmer ,e o thereof the term "obligated'' is us V, in the same sense as, and is to T construed as equivalent to. the woT ,S in the original law for which it " ,t substituted in the revision of IS ,n Hence, in my opinion, the obligatio |. referred to in said statute are to
 construed as including liability to
 bank as indorsera or similar cont
 gent undertaking as well as absolt and direct indebtedness