The opinion
Gaynor, J. (dissenting):
The law in respect of the duty of bank directors to their bank is settled in this State; They are trustees of the bank, and are “ bound *465 to exercise care and prudence in the execution of their trust, in the same degree that men of common, prudence ordinarily exercise in their own affairs ” ; and for failure in this they are liable in damages to the bank (Hun v. Cary, 82 N. Y. 65 ). The measure of the care and supervision required of a director who is also president of the bank (as was the case here) is this and something more, according to his extra duties of care and supervision as president required generally by law, or put upon him by the power and duties entrusted to his position by his directors, by the by-laws, or by the custom or course of business in his bank. The learned trial Judge charged the jury that the duty of the deceased president, for whose negligence this action is brought by the receiver of the bank against his administrator, was to exercise the same care in respect of the execution of the functions of his office, both as director and as president, as a man of ordinary business capacity and prudence would exercise in the conduct of his own interests ”. This was so fully explained and reiterated that the jury must have fully understood it, and the charge of the learned trial Judge may not be understood as departing from that to some other rule, unless it does so expressly or by necessary implication.
The cashier of the bank stole securities of the bank, and the question was whether the negligence of the president, measured by the requirement of his duty of care and supervision, as laid down by the learned trial judge as stated above, enabled or encouraged him to steal them. The evidence showed not only general inattention by the president to the bank’s business during several years before the theft, but also that he had during the same time signed and sworn to the quarterly reports to the state banking department, giving, as the law requires, a particular statement of the items of assets of the bank, without ever looking to see whether the securities so reported were among the bank’s assets. There was also evidence by the state superintendent of banks - that after an examination of the affairs of the bank in 1890 (two to three years before the theft) he and the examiner who had made the examination went to the president and informed him that they had found a deficiency of $5,810 in the bills discounted compared with the amount shown by the ledger as the total amount of such discounts, and that after the *466 discovery, and while the examination was in progress, two notes amounting to such deficiency, and purporting to be made one by “ H. Kirchner ” and the other by “ Chas. Beinert ”, which they exhibited to the president, ivere put among the bills and found there by them before their examination was completed, and that the cashier when spoken to by them about such notes, and shown them, admitted that he had made them. The witness kept them and produced them on the trial. It is minimizingly said that although this information was communicated to the president, there was really no evidence that the notes were forgeries within the requirements for a conviction under the Penal Code. This technicality is entirely aside from the point, and does not diminish the force of the evidence. The president was informed of the deficiency, and that the cashier had privily slipped in two notes to make it up, and when confronted by the bank superintendent with them acknowledged that he had made them, i. e., that they were fictitious or forged by him. Having such information of the cashier his duty of care and supervision over the affairs and assets of the bank was certainly increased if he was to permit the cashier to retain his position under him, or remain president over such a cashier, which he did.
This being the state of the case, it was claimed on the trial that the neglect of the president to examine the securities, and his continually making the quarterly reports to the banking department of their possession by the bank without looking to see if that was true, encouraged the cashier to believe, and taught him, that he could take them without danger of such a derelict president making discovery of his theft, and that in that way the neglect of the president led to such theft. This naturally led the learned trial Judge to charge on that head, and no exception was taken to his entertaining that view of the case. The exception principally relied on is to his charge that it was the president’s duty “ to have such knowledge of and such acquaintance with the several matters stated in the quarterly reports that he could truthfully make oath that the said reports were true in all respects ” ; and later on that it was his duty “ to keep himself informed, sufficiently familiar with the affairs of the bank and the conduct thereof — not alone by the cashier, but the general conduct, and the investment of securities, and the securities on hand, to enable him truthfully and faithfully to comply with *467 the requirements of the statute that he verify on oath the several quarterly reports, as to the details thereof.”
The criticism of this is that it says tliatthepresident had to make a positive oath to the quarterly reports that they were “ true in all respects”, whereas the oath required of the president by statute was that they were “ true and correct in all respects, to the lest of his knowledge and lelief>'>; and that it therefore sets up a standard of care higher than that which the learned trial Judge had already so carefully charged the jury was the standard, viz., that the care and oversight had to be such as to enable the president to make a positive oath, i. e., of his own personal knowledge, that the securities were in the bank’s possession. But it is not justly nor honestly open to such a criticism. The learned trial Judge correctly said that the president had to make oath to the report that it was “ true in all respects ”, That is what the statute requires. lie was not speaking of the form or quality of the oath ; he did not say that the oath had to be positive, or of the affiant’s own knowledge. He simply said that an oath had to be taken that it was true, and this was strictly true. The form and quality of the oath was another matter. Ho one understood him as saying that the oath had to be a positive one. The express words of the statute left no room for discussion as to the form of oath it prescribed. If the learned trial Judge had made an inadvertent error in respect of it, from lack of memory or otherwise, it was the duty of counsel for the defendant to call his attention to such error, or slip, if they deemed it detrimen tal to the defendant. If they had so understood him as charging in respect of the form of the oath, and that it had to be positive, it would have been their duty to point out such error, and have it corrected. Hot having done so they may not claim such error now. It is an old rule that having remained silent when they should have spoken they will not be heard now (Kramer v. Brooklyn Heights R. R. Co., 190 N. Y. 310 ). But no one understood the'trial Judge in the way now claimed. The quarterly reports had been received in evidence, and read to the jury, and every one knew the form of the oath to them, and there was no question about its correctness, or that a more stringent oath was required. Ho one understood the trial Judge as charging that the form of the oath was wrong — that it should have been in positive words. Really, the understanding *468 of jurors is not so thick or feeble as we are now asked to believe by the contention that they understood that they were instructed that the oath had to be positive.
But even if the learned trial Judge had charged the jury that it was the duty of the president to take the trouble to look at the securities before making the report, instead of taking the bare word of his cashier, would we say it was error ? — especially as he was credibly informed that his cashier had already embezzled the money of the bank and tried to conceal it by fabricating two fictitious notes. Can ■ the law permit the suggestion that a prudent man would, dealing with Ms own affairs, take the word of such a man in such a matter ? If not, the question is not one of fact but of law. That his oath might be to the best of his knowledge and belief did not permit him to go without knowledge which was at hand and accessible.
There are other exceptions to the charge on the ground that the learned trial judge charged negligence as matter of law on certain facts enumerated by him, but on referring to the text it is found that the charge was that the jury “may” or “might” find negligence therefrom, the question being thus left to the jury as one of fact.
If there be any error presented, it is not of sufficient gravity to justify the reversal of a wholesome and just judgment. Persons 'who accept trusts must be made to understand that they enter into solemn obligations and corresponding liabilities thereby. The swindled depositors of this bank are entitled to have this case judged in a broad and wholesome spirit of accountability of bank directors and officers. Much has been made of the fact that the cashier received a large salary and the president a small one, and that the latter was aged and somewhat infirm; but such considerations have to be inexorably suppressed.
The judgment should be affirmed.
Judgment and order reversed and new trial granted, costs to abide the event.