Forbes v. Mohr

Citations

• 69 Kan. 342
• 76 P. 827
• 1904 Kan. LEXIS 254

Syllabus

<p>SYLLABUS BY THE COUKT.</p> <p>1. Banks and Banking—Liability of Directors to Depositors— Not Released by Corrupt Practices of Cashier. A director.of an insolvent bank is not excused from the liability to a depositor 'therein imposed by sections 65 and 66 of the banking law of this state (Laws 1879, ch. 17, §§ 1, 2; Gen. Stat. 1901, §§171, 172), by showing that the insolvent condition of the bank was caused by the false, fraudulent and corrupt practices of the cashier, so adroitly concealed and covered up by him that such condition could not have been discovered by an examination into the bank’s affairs, when such director has wholly failed to make any examination into those affairs.</p> <p>2. -Duties of Directors to Make Frequent and Thorough Examination. It is the duty of directors to examine into the affairs of their banks with reasonable frequency and thoroughness, for the purpose of thereby acquainting themselves with their condition, and, where they fail so to do, they will be held liable to depositors, in case of insolvency, for deposits made with their assent; and this, even though by such examination the directors would not have discovered the insolvent condition of the bank.</p> <p>3. Attobney and Client—Champertous Contract Not a Defense. That an action is being carried on under a champertous- contract between the plaintiff and his attorney cannot be pleaded as a defense.</p>