Houston v. . Thornton

Citations

• 29 S.E. 827
• 122 N.C. 365
• 1898 N.C. LEXIS 264

Syllabus

<p>Action Against Bank Directors — Issues—Bank Directors — Negligence—Liability of Bank Directors for False Statements of Bank's Condition — Purchasers of Stock — Summons—Statute of Limitations.</p> <p>1. In the trial of an action against the directors of a Bank for loss suffered by the plaintiff through the negligence of the defendants in permitting false statements of the Bank’s condition to be published by which the plaintiff was deluded as to the value of the stock and misled into purchasing it, it was proper to submit issues as to the negligence and wrongful acts of the defendants instead of issues as to whether there had been fraud and misrepresentations on the part of the defendants.</p> <p>2. The negligence of the directors of a national bank in permitting to be published false and fraudulent statements of the condition of the bank, whereby a person is misled into buying stock in the bank, is a wrong done to such purchaser for which the directors are liable directly to such purchaser and is a eausC of action which does not pass to the Receiver of the bank upon its insolvency.</p> <p>3. Directors of a national bank who, by their negligence, permit false and fraudulent statements of the bank’s condition to be published and . wrongful dividends to be declared, are liable to a person injured thereby whether or not they directly participated in the fraud by signing the statements or otherwise.</p> <p>4. In the trial of an action against the directors of a bank based upon their negligence in permitting false and fraudulent statements of the bank’s condition to be published and dividends to be declared, when the earnings did not justify them, the plaintiff’s right to recover should not be restricted to one instance of negligence when there are many others in evidence.</p> <p>5. The fact that bank directors, who left the management of the'bank to dishonest and careless officers by whom the bank was wrecked, resided away from the town where the bank was located and b