Court Opinion

ID: 9704077
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:21:08.317095+00
Date Added: 2024-06-11T15:15:17.410825
License: Public Domain

Clinton, J.,
dissenting.
I respectfully dissent. The record I believe discloses that the defendant Colburn, as a director of the bank, exercised not the slightest degree of care to prevent or detect defalcations such as here occurred. The record shows that from the time he first became a director he abdicated completely his responsibilities as such and left the entire, complete, and absolute control of the bank in the hands of the bank manager. He did not in all those years even suggest a director’s audit with independent random verification of accounts and loans. He did not suggest any of the internal controls which might prevent, discourage, or lead to the detection of defalcations. A bank directorship is not an honorary' position. Depositors and stockholders rely upon the directors to fulfill their obligations. Directors who do not wish to exercise their responsibilities should resign if they wish to avoid responsibility for their defaults. Colburn was negligent as a matter of law because he did not exercise even slight care. Gibbons v. Anderson, 80 F. 345; Gamble v. Brown, 29 F. 2d 366, cert. den. 279 U. S. 839, 49 S. Ct. 253, 73 L. Ed. 986; Bank of Commerce v. Goolsby, 129 Ark. 416, 196 S. W. 803; 25 *508A. L. R. 3d, Directors—Liability for Defalcations, § 18, p. 1011; Atherton v. Anderson, 99 F. 2d 883; Anderson v. Bundy, 161 Va. 1, 171 S. E. 501; Lippitt v. Ashley, 89 Conn. 451, 94 A. 995.
I do not suggest of course that one director alone can take appropriate precautions without the joinder of the majority of the directors. Proksch v. Bettendorf, 218 Iowa 1376, 257 N. W. 383. In this case the record shows that all of the directors abdicated their responsibilities. Under these circumstances whether the defendant could have done anything effective to prevent or to earlier detect the defalcations is open to debate. Therefore, whether the defendant’s negligence was the proximate cause of the bank’s losses presented a jury question. The trial court properly set aside the verdict and on retrial only the questions of proximate cause and the amount of damages, if any, would be jury questions.