Court Opinion

ID: 3882009
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:13:11.957933+00
Date Added: 2024-06-11T07:41:57.501076
License: Public Domain

In my opinion the order of his Honor, Judge Dennis, sustaining the demurrer to the complaint, was erroneous and should be reversed. I therefore dissent from the opposite conclusion announced in the opinion of Mr. Justice Stabler, for the reasons which follow.
This is really an action in tort, instituted by the eight plaintiffs, as separate, individual depositors in the Bank of Latta, against the directors of that bank, for damages resulting to them from the loss of their deposits, on account of the insolvency of the bank.
Objections to the complaint upon the ground of misjoinder of actions or that the complaint does not state facts sufficient to constitute a cause of action, as indicated in the case of Fant v. Brissey, 143 S.C. 264, 141 S.E., 450, have not been presented and will not be considered.
The gist of the charge of wrongful conduct on the part of the defendant directors is that, during the period within which the plaintiffs made deposits, the bank was insolvent; that its condition "was well known to the defendants (one of whom, I interpolate, was president of the bank, another was its cashier, and a third was chairman of the finance committee), or by the exercise of such diligence as the law requires and required of them as its directors should have been well known to them"; that notwithstanding such condition, the bank continued to do "business as usual," its open doors an uninterrupted operation inviting deposits; that the plaintiffs were induced by the confidence thus engendered to make their deposits unaware of the condition of the bank; *Page 472 
and that owing to the insolvency of the bank these deposits, with the exception of a 10 per cent. dividend declared, have been wholly lost.
It will be assumed in this discussion that the alternative allegation that the defendants knew or should have known of the condition of the bank, as held in the opinion of Mr. Justice Stabler, amounts simply to a charge of negligence in not ascertaining and reporting the condition, and thus saving the plaintiffs from the losses sustained.
The defendants interposed a demurrer to the complaint upon various grounds. As the order of his Honor, Judge Dennis, sustaining the demurrer is based upon only one ground, and as no motion has been made to sustain the order upon any other, the order only needs to be set forth. It is as follows:
                             "ORDER
"The above matter comes before me on demurrers of the several defendants, challenging the sufficiency of the complaint on the ground that the same does not state facts sufficient to constitute a cause of action. The matter has been fully argued before me by counsel for plaintiffs and defendants. It seems to me to be very clear that the sufficiency of the complaint must be tested by the provisions of Section 3973, of Volume 3, of the Code of 1922 (this provision being also contained in the Penal Code, Volume 2, where it is designated as Section 241). Unless a cause of action is set forth within the terms of that statute, I do not think that the plaintiffs can maintain the present action.
"Viewed in this light, it seems to me that the complaint undertakes to state a cause of action that would render the defendants liable to the plaintiffs on grounds and under conditions other than those set forth in the statute, and for this reason I think that the demurrers should be sustained.
"A further ground of demurrer relied upon by the defendants is that the liability created by the statute referred to is *Page 473 
limited to officers of banks, whereas in the present case the defendants are charged with liability as directors, and it is contended that directors are not officers within the meaning of the statute. I have carefully considered the arguments relating to this ground of demurrer, but do not think that they are sound. My view is that the word `Officer' includes a director. It is, therefore,
"Ordered, Adjudged, and Decreed, That the demurrers to the complaint be, and the same hereby are, sustained with leave to the plaintiffs to serve an amended complaint on the defendants, if they should be so advised within 20 days after the date hereof."
It thus appears that the conclusion of the Circuit Judge was, in effect, that as the complaint did not state facts sufficient to constitute a cause of action, under Section 3973, Vol.3, Code, 1922, against the directors, the demurrer had to be sustained. He made no reference to what the plaintiffs contend, that, regardless of the statute, a depositor who may have been personally wronged by the negligence of the directors has a cause of action for damages resulting from such negligence.
As pointed out by this Court in the case of State v. Lewis,141 S.C. 207, 139 S.E., 386, there is a marked distinction between the essential elements of criminal liability and ofcivil liability under the statute (Section 3973 of Volume 3 of the Code, and Section 241 of the Criminal Code, duplicates).
The criminal liability attaches upon proof that the officerpersonally received deposits after he had become aware that the corporation was insolvent. It was held in that case that a conviction could not be sustained unless the officer actuallyreceived the deposit; that even if he knew of the receipt by another, he could not be convicted.
The civil liability attaches upon proof that the officer either personally received the deposit, or that it was received with his "knowledge or assent." It will be observed that the phrase "after he shall become aware that such corporation *Page 474 
is insolvent," which is specifically made an element ofcriminal liability, does not appear in that portion of the section defining the elements of civil liability; that portion reads:
"* * * And every officer of such failing corporation shall become personally liable to the amount of such deposits or trusts received by him, or with his knowledge or assent,in any such case, to the person thereby damaged. * * *"
It may be contended that the phrase "in any such case" was intended to prescribe the same conditions as were prescribed in the criminal liability portion of the section; that is, the condition that the officer must have been "aware that such corporation is insolvent." It is not at all clear that this view may be sustained; it is very clear that the statute intended to make a difference between the two forms of liability; and as it was so easy to have reproduced the condition in imposing civil liability, its omission may be assumed to have been intentional. It is but natural that the definition of a criminal offense, a felony, would have included elements which were not called for in the definition of a civil liability. "In any such case" apparently covered the elements immediately preceding; the failing corporation, and the receipt of the deposits by the officer or by some other employee with his knowledge or assent.
If this be the proper construction of that portion of the section defining civil liability, then the positive knowledge by the directors of the insolvency of the bank is not a necessary element in civil liability, and the complaint would be sufficient in its charge that the deposits were received either with knowledge of, or assent to, the receipt of deposits when the bank was in failing circumstances; for it is impossible to conceive that they could have been received without the knowledge or assent of at least the president, cashier, or chairman of the finance committee.
But, assume that an element in the officer's civil liability was intended to be "after he shall become aware that such *Page 475 
corporation is insolvent," it does not follow that the statute was intended to wipe out any and all rights and causes of action which the depositor, under other circumstances, may have possessed. The fact that the officer was made liable civilly if he received, or had knowledge of, or assented to, the receipt of a deposit, at a time when he was aware that the bank was insolvent, cannot destroy a remedy which the depositor may have had for damages resulting to him personally, from the negligent conduct of the directors.
As the Court held in Kaminitsky v. R. Co., 25 S.C. 53, referring to the statutory crossing signals:
"They did not take away the common law right of action, by giving in lieu thereof a new cause of action under the statutes. * * *"
Mr. Morse strikingly expresses the idea, "* * * Dextrous and subtle evasions of the language of the statute will not enable the directors to frustrate its intent, or to shun a responsibility which is fastened upon them by extrinsic principles of law wholly outside of the statute or the charter, and quite independently of either," in Morse, Banks (5th Ed.), p. 280.
In the opinion of Mr. Justice Stabler it is stated:
"The present case, however, is not grounded on fraud or deceit, but only on passive negligence; and the question at issue therefore is whether, under the common law, a director who negligently allows a deposit of money in an insolvent bank, after he knows or should have known by the exercise of due care that the bank was insolvent, is liable to the depositor suffering loss on account of the insolvency."
I am not so sure that directors, whose names as men of business ability are gazetted to the world as vigilant and capable of protecting deposits, who are so careless in discharging the duties which they have assumed as not to know the condition of their bank, and allow it to keep its doors open, continue in business, inviting the confidence of depositors, do not evince an element of deceit, and are guilty only *Page 476 
of "passive negligence." It appears to me that the continued exercise of their duties as directors, which must be presumed so long as the bank was open for business, is something more than passive negligence, if they knew or ought to have known that the bank was insolvent. In fact, it appears to be the "conscious failure to observe due care," which is willfulness.
The learned Justice passes from the real question in the case which he states: "Whether under the common law a director who negligence allows a deposit of money in an insolvent bank, after he knows or should have known by the exercise of due care that the bank was insolvent, is liable to a depositor suffering loss on account of the insolvency," and concludes, from an array of authorities which are not questioned, that, because, in the case of a wrong done to thecorporation, there is no such relation of trust between the directors and the depositors as to give the depositors a cause of action against the directors for the indirect loss they may have sustained by reason of the breach of the directors' obligations to the corporation, the depositors have no cause of action against the directors on account of a wrong donedirectly to them.
There is very respectable authority for the proposition that the directors of a bank are trustees, not only for the corporation and its stockholders, but also for its general creditors and depositors, particularly for depositors.
Chancellor Kent has said in 2 Commentaries, 307, note b:
"The received doctrine now is, as shown by the statutes and judicial decisions, that the capital and debts of banking and other moneyed corporations constitute a trust fund and pledge for the payment of its creditors and stockholders; and a Court of Equity will lay hold of the fund and see that it is duly collected and applied."
This doctrine is not limited to the status of the corporation after insolvency, but is applicable to it while a going concern. If a trust fund, there must be trustees; the directors *Page 477 
are the trusted agents of the corporation, and their position must, of necessity, be that of trustees.
In Trustees of Mutual Building Fund  Dollar SavingsBank v. Bosseiux (D.C.), 3 F., 817, the Court said:
"Moreover, all authorities now tend to the conclusion that directors of banks and other moneyed corporations hold the relation to stockholders, depositors, and creditors of trustees to cestui que trust, and as such are personally responsible for frauds and losses resulting from gross negligence and inattention to the duties of their trust."
The observations of the Circuit Court of Appeals in the case of Boyd v. Schneider, 131 F., 223, are interesting:
"The relation of depositors to the bank, and so far as directors stand liable for the doings of the bank, the relation of the depositors to the directors, while that of debtor and creditor, is something more than the mere relation of debtor and creditor. The contract of deposit is a loan; but not a loan pure and simple. On the acceptance of the deposit, a promise is raised that the bank will repay it on demand, or at the time stipulated; and to that extent the transaction is a loan. But when this much is said, the whole contract is not stated. The parties deal with each other on a basis, not merely that of borrower and lender, but on the basis, that the party receiving the money is a bank, organized under the laws of the United States, and subject to the provisions of law, present and future, relating to the custody and disposition of the money deposited; and that the party loaning the money is a depositor, leaving his money with the bank on the faith that such provisions respecting the custody and disposition of the deposit, will be observed. In legal effect, the depositor says, Here is my money; in consideration of its reception, and such interest as you pay, you can have its use; but only on this condition, that the use conform to the safeguards provided by the law. The acceptance of money thus tendered, implies that the bank and its directors, so far as they are responsible for the doings of the bank, agree to *Page 478 
conform to the conditions named. The law governing the custody and disposition of deposits thus enters into and forms a part of, the relation created between the parties, * * * thereby creating direct privity of relation between the directors and the depositors."
The precise point arose in the case of Delano v. Case,121 Ill., 247, 12 N.E., 676, 2 Am. St. Rep., 81, where it was held:
"1. That the directors of a bank are trustees for depositors as well as for stockholders; 2. That they are bound to the observance of ordinary care and diligence, and are hence liable for injuries resulting from their nonobservance; and 3. That the present appellants did not observe that degree of care and diligence, and in consequence thereof appellee sustained the damages for which the judgment was rendered."
In Morse, on Banks, 133, it is said:
"If bank directors do not manage the affairs and business of the bank, according to the directions of the charter, and in good faith, they will be liable to make good all losses which their misconduct may inflict upon either their stockholders or creditors, or both. (Hodges v. New EnglandScrew Co., [R.I., 312, 53 Am. Dec., 624], supra.) They may be held to account to an injured party in a Courtof Chancery (Bank of St. Marys v. St. John, 25 Ala., 566); or they, or any one of their number who shared in the wrong doing, may be sued at law for damages. (Conant v. SenecaCo. Bank, 1 Ohio St., 298.) They are required simply to show a reasonable capacity for the position they accept, to use it in their best discretion and industry, to show the scrupulous bona fides and conscientiousness in every matter, however minute, which is exacted rigorously of all trustees of the property of others, and to obey accurately the requisitions of the charter or of the general law under which they are organized." *Page 479 
In Seale v. Baker, 70 Tex., 283, 7 S.W. 742, 8 Am. St. Rep., 592, the Court said:
"Directors of banking corporations occupy one of the most important and responsible of all business relations to the general public. By accepting the position and holding themselves out to the public as such, they assume that they will supervise and give direction to the affairs of the corporation, and impliedly contract with those who deal with it that its affairs shall be conducted with prudence and good faith. They have important duties to perform toward its creditors, customers, and stockholders, all of whom have the right to expect that these duties will be performed with diligence and fidelity, and that the capital of the corporation will thus be protected against misappropriation and diversion from the legitimate purposes of the corporation. Customers are invited to business relations, and are induced to accept and act upon such invitation by the representations that the institution is solvent and owns a certain amount of capital, and that this capital is under the supervision and control of certain directors. It is the duty of directors to know the condition of the corporation whose affairs they voluntarily assume to control, and they are presumed to know that which it is their duty to know, and which they have the means of knowing."
"It is the duty of officers of a banking institution receiving or assenting to the reception of deposits to know the financial condition of the bank, and the law presumes they do know it." Eads v. Orcutt, 79 Mo. App., 511.
In Ellis v. H.P. Gates Mercantile Co., 103 Miss., 560,60 So., 649, 43 L.R.A. (N.S.), 982, Ann. Cas., 1915-B, 5, the Court said:
"The bill in this case sufficiently charges that the directors failed to use proper care and diligence in the management of the affairs of the bank, and that they neglected to perform the duties imposed upon them by the by-laws; that they ought to have known, and by the use of ordinary *Page 480 
care, such as it was their duty to exercise, should have known, the condition of the bank, the defalcations, and improvident and reckless conduct by the cashier whom they employed, and finally its insolvency; that their neglect to carry out the plain requirements of the by-laws resulted in the failure of the bank, and loss to the depositors and stockholders. The directors were elected by the stockholders and were surely directly responsible to them for the proper management of the bank. The relation of the depositors to the bank, growing out of their placing their money with that institution for safekeeping, and to be at their convenience drawn out for their use, is such that the directors, as the officers charged with the management of the bank, are required to be diligent and careful in conducting the bank's business, and are liable to the depositors for losses sustained by the bank from negligence in performing the duties of their office. It is the duty of a director to know the condition of his bank, and to see that its affairs are honestly and properly managed. He cannot shirk this duty and avoid liability."
In United Society of Shakers v. Underwood, 9 Bush. (Ky.), 609, 15 Am. Rep., 731, it is held that directors of a bank may be liable, upon the ground of negligence or mismanagement, to special depositors whose deposits are lost in consequence of such negligence or mismanagement.
"The directors of a bank are trustees for depositors, and can be held for injuries resulting from gross negligence on their part in allowing the bank to be held out to the public as solvent when it was, in fact, insolvent." 1 Morse, Banks (5th Ed.), page 282, citing Delano v. Case, 121 Ill., 247,12 N.E., 676, 2 Am. St. Rep., 81; Foster v. Bank (C.C.), 88 F., 604; Holmes v. McDonald, 226 Ill., 169, 80 N.C. 714;Lippitt v. Ashley, 89 Conn., 451, 94 A., 995.
In Morse, Banks (5th Ed.), § 130, it is said: "* * * In commercial banks the better opinion is that, though the officers are liable only to the bank for ordinary negligence, *Page 481 
they are liable to third parties for gross neglect," citingUnion Nat. Bank v. Hill, 148 Mo., 380, 49 S.W. 1012, 71 Am. St. Rep., 615 (cited in the opinion of Mr. Justice Stabler); Deaderick v. Bank, 100 Tenn., 457,45 S.W., 786; Elliott v. Bank, 61 W. Va., 641, 57 S.E., 242.
I cannot imagine conduct on the part of directors which could more aptly be described as "gross neglect" than to allow an insolvent bank to invite deposits by the opening of its doors and continuing its banking operations, without ascertaining the condition of the bank. I cannot conceive of a more imperative duty in connection with the trust undertaken by the directors for the corporation, its stockholders, general creditors, and depositors, than to be constantly informed of the bank's condition.
It is more than the directors are entitled to, to limit their liability to gross negligence. If they owe the duty of ordinarycare to the corporation and to its stockholders, as beneficiaries of that obligation, the depositors who are most directly concerned in the discharge of that obligation have an unquestioned right to sue for damages on account of its breach.
This case turns upon the question whether the directors of a bank owe any duty to the depositors who have put their money into the bank upon their faith and confidence in the officers in control of the bank. If they owe no duty to the depositors, and, though their names are advertised as men of ability and integrity and vigilance in the conduct of the affairs of the bank may neglect their official duties and bring disaster upon the depositors, the depositors have no recourse against them.
I do not subscribe to such a proposition, and, in the light of the deplorable consequences which have come upon men and women, upon widows and orphans and trust estates, within the last few years, due to the neglect and mismanagement of officers and directors of banks, it will be many moons before I do. I do not think that now is the *Page 482 
time to slacken the reins upon these officers whose responsibilities are great and which have been voluntarily assumed. It may be a distinct shock to some of them to learn that it is the duty of directors to direct.
Deposits constitute the life blood of a bank. It is upon them that make their profits; without them the bank would close its doors and hand back to its stockholders the amounts subscribed to the capital stock, that it may be privately invested. They are the most important feature of a bank. The reputations and characters of its officers and directors are gazetted to the world for the purpose of inducing deposits — an implied guaranty that the deposits will be in safe hands and returnable upon demand.
While I feel satisfied that the wisdom and justice of the law constitute the directors, with an unquestioned duty to perform for the benefit of the depositors, trustees for them, the question is not to be decided upon the existence or nonexistence of such relation. Every one knows that the relation between a depositor and the bank is that of creditor and debtor; every one knows, too, that the directors are the managing agents of the bank, and, as such, trustees for the corporation and its stockholders; every one knows, too, that the directors owe a contract and legal duty to the corporation to manage its affairs with vigilant care, which necessarily embraces protection to the corporation from its general creditors and depositors; every one knows, too, that the directors owe a duty to the stockholders to so manage the affairs of the bank that there will be no statutory liability upon the stockholders to depositors; every oneshould know that where an obligation is assumed by a person to another, which redounds, even indirectly, to the benefit of a third person, not even a party to the engagement of such person, the third person is entitled to recover for the damage resulting to him from the breach of such engagement. *Page 483 
As is declared in the case of Standard Oil Co. v. PowellPaving  Contracting Co., 139 S.C. 411, 138, S.E., 184:
"It is a settled principle of law that a contract [and I interpolate, an obligation implied by law] between two persons for the benefit of a third, even though he be not named therein, can be enforced by such third party."
To this effect are also the cases: Mack Mfg. Co. v. MassachusettsBonding  Insurance Co., 103 S.C. 55,87 S.E., 439; Duncan v. Moon, Dud., 322; Dehay v. Porcher, 1 Rich. Eq., 266; Brown v. O'Brien, 1 Rich., 268, 44 Am. Dec., 254; Thompson v. Gordon, 3 Strob., 196; Butler v. Tel.Co., 62 S.C. 222, 40 S.E., 162, 89 Am. St. Rep., 893;Ancrum v. Walter Co., 82 S.C. 284, 64 S.E., 151, 21 L.R.A. (N.S.), 1029.
When the directors were elected, assumed the office, undertook to discharge its duties, and published their names to the world as the responsible and vigilant agents of the bank, they impliedly obligated themselves to supervise and manage the business so that the interests of those who were induced by their representations to make deposits should be protected; that the corporation, within whose fold were the interest of the stockholders, should not suffer loss, to the detriment of the stockholders; and that the stockholders would not be called upon to respond to their statutory liability to the depositors in the event of insolvency of the bank.
The depositors therefore, were the beneficiaries of the implied contract and legal obligations of the directors to the corporation, although not immediate parties thereto; they were vitally interested in the fulfillment of the obligations of the directors both to the corporation and to its stockholders. If it should be held that the directors owed no duty to the depositors, and therefore assumed no liability for their acts which caused loss to them, the depositors' only recourse would be against the stockholders upon their statutory *Page 484 
duty, and the obligation of the directors to the stockholders, to protect them against this liability, would be broken.
There can be no controversy as to the proposition that a cause of action against the directors of a bank for lossesto the bank, as a result of the negligent mismanagement of the affairs of the bank by the directors, lies in the corporation, as an asset of the corporation, and that a creditor (general or by deposit) can sue only in the right of the corporation, after having taken the necessary steps to induce action by the officers of the corporation.
That doctrine is clearly announced in the case of Brownev. Hammett, 133 S.C. 446, 131 S.E., 612, with which conclusion the writer certainly is not in a position to complain:
"The right of action against the officers and directors of a corporation for their negligent and wrongful acts causingloss to the corporation, is one which is vested in the corporation, and can only be enforced by the corporation, or in its right, for the benefit, as an asset, of those lawfully entitled to an interest in the assets of the corporation."
The distinction, I respectfully submit, has been lost sight of in the opinion of Mr. Justice Stabler, between a cause of action which is inherently an asset of the corporation and a cause of action which is not but is inherently a personal claim of a depositor on account of a wrong done to him, notto the corporation.
The distinction is clearly developed in the case of Killenv. Barnes, 106 Wis. 546, 82 N.W., 536.
"There are numerous cases where the distinction has not been clearly recognized, if at all, between a wrong to a depositor of a bank committed by its officers, for which they are personally liable directly to such depositor on the ground of deceit, and a wrong by such officers to the corporation for which they are liable to such corporation and through it to the creditors. Leland v. Case [supra], is a good specimen of such cases." *Page 485 
If the directors have so acted as to cause a loss to the corporation, it, of course, has a cause of action against them, as in the negligent mismanagement of the affairs of the bank which has caused a loss to the corporation. But where depositors have been induced to make deposit upon the implied representation of the directors that the bank is solvent — a representation implied by the conduct of the directors in keeping the bank with open doors, inviting deposits — the wrong is not done to the corporation, but to the depositors.
The cause of action alleged in the complaint is not one that adheres to the corporation. It has no right to sue the directors for a return of the money deposited by the plaintiffs; it has already passed that money into its treasury and wasted it; it cannot claim the right to receive it again. No one is entitled to that money except the depositors; the right is one that adheres to them, and to them only. It appears to me illogical in the extreme to turn the depositors out of Court upon the ground that the suit can be brought only in the right of the corporation, when it appears so plainly that the corporation has no right.
When it is considered that the directors were under an obligation to the corporation to so manage its affairs that, upon demand, the corporation should be able to respond to the checks of the depositors, and not be called upon to sacrifice its property in order to do so, I have no doubt but that the corporation could maintain an action against the directors to compel them to restore those deposits for the benefitof the depositors, and indirectly to relieve the corporation from its obligation to them. If so, there can be no necessity for such circumambulation when the present action would accomplish the same purpose; particularly, in view of Section 354 of the Code, which requires that all actions be prosecuted in the name of the real party in interest.
When it is considered, too, that the directors were under an obligation to the stockholders, for whom they were admittedly *Page 486 
trustees (no question as to that), to so manage the affairs of the bank that the statutory liability of the stockholders to the depositors would not be created or increased, I have no doubt but that the stockholders as cestuisque trust, could maintain an action against the directors to compel them to restore these deposits for the benefit ofthe depositors, and indirectly to relieve them from their statutory liability. If so, there can be no necessity for such circumambulation when the present action would accomplish the same purpose; particularly in view of the section of the Code above referred to, as to the real party in interest.
The stockholders would be interested from another angle: The wrong of the directors increased the liabilities of the bank to the extent of the claims of the depositors, and correspondingly decreased the dividends which the stockholders would be entitled to.
The cases cited in the opinion of Mr. Justice Stabler are practically without exception, cases involving causes of action vested in the corporation:
Briggs v. Spalding, 141 U.S. 132, 11 S.Ct., 924,35 L.Ed., 662. Decided upon the finding that the directors had not been guilty of negligence. It, of course, has no application to the case at bar, except as to the inference to be drawn from the fact of the discussion and conclusion of no negligence, that liability would have attached if the conclusion had been otherwise.
Swartley v. Oak Leaf Co., 135 Iowa, 573,113 N.W., 496. This was a case based upon a wrong done to the corporation, and not to the individual depositor.
Hart v. Evanson, 14 N.D., 570, 105 N.W., 942, 3 L.R.A. (N.S.), 438. The decision in this case is based upon what I consider a most fundamental error: That "creditors (which, I interpolate, includes depositors) of the corporation are utter strangers to the obligations of the directors *Page 487 
to the corporation." This cannot be the law for the reasons indicated above.
Union Nat. Bank v. Hill, 148 Mo., 380, 49 S.W. 1012, 71 Am. St. Rep., 615. This was an action by general creditors of a bank against the directors, charging that the mismanagement had caused the insolvency of the bank and consequent loss. The Court naturally held that the alleged cause of action, which was a wrong against the corporation, could not be enforced in the right of general creditors.
Savings Bank v. Caperton, 87 Ky., 306, 8 S.W. 885. This was an action based upon the embezzlement of the cashier, which was clearly a loss to the bank and not a wrong personal to a depositor. It could only be redressed in the right of the corporation.
The other cases cited are of the same character as readily appears from the statements in the opinion: The quotations from textbooks plainly are applicable to cases in which a depositor seeks to enforce for his personal benefit a cause of action which is enforceable only by the corporation.
In Hodges v. New England Screw Co., 1 R.I. 312, 53 Am. Dec., 624., the action was by a stockholder against the directors for loss to the corporation caused by their negligence and fraudulent mismanagement. It was held, of course, that the action could only be maintained in the right of the corporation.
See Bowerman v. Hamner, 250 U.S. 504, 39 S.Ct., 549,63 L.Ed., 1113.
I do not understand that the majority opinion precludes an action by the stockholders, general creditors, or depositors,in the right of the corporation, against the directors for negligent mismanagement of the affairs of the bank, under the case of Browne v. Hammett and others.
I cannot conceive, as suggested in the concurring opinion of Mr. Justice Blease, that a controlling factor in the case *Page 488 
is the supposed common impression among directors that they may not be held liable to an innocent depositor for the consequences of their unquestioned negligence in permitting the insolvent bank, whose condition they should have known, to remain open for the reception of deposits from unsuspecting and misled depositors.