142 Mich. 292 | Mich. | 1905
Plaintiff, as assignee of the Gratiot County State Bank, brought this action against the defendant in the circuit court for the county of Clinton to recover damages alleged to have been sustained by his assignor in consequence of certain fraudulent representations of defendant, and a violation of his duty as a director of its predecessor, the First National Bank of St. Louis, Mich. The declaration alleges, in brief, that at the time of presenting certain notes payable to Robert M. Steel for discount and renewal for his benefit the defendant, being a director of the bank, fraudulently represented the notes and the makers and indorsers thereof to be good and collectible, and that, in violation of his duty as a director of the bank, he procured and permitted the bank to extend credit to said Robert M. Steel in excess of the limit fixed by section 5200 of the national banking law [U. S. Rev. Stat.]. The trial court directed a verdict for the defendant'upon the grounds, in brief:
“First. A right of action for damages for a naked fraud is not assignable.
“ Second. The plaintiff can only recover upon such issues as he alleges in his declaration.
“ Third. The defendent, as an officer of a bank, may deal with his bank in the same manner as any other patron, providing he does not in the transaction attempt to represent or act for the bank.
“ Fourth. No person can be held liable for representa*294 tion as to the credit or financial standing of another person, unless such representations are in writing, signed by the persons sought to be charged thereby.”
Plaintiff brings the record to this court for review upon writ of error.
First. We think the court was in error in holding that the cause of action in this case was not assignable. The First National Bank of St. Louis was organized in 1884 and continued its business down to July 6, 1897, when it was succeeded by the Gratiot County State Bank, in accordance with the provisions of section 6106, 2 Comp. Laws. Under such circumstances the State bank was substantially the same corporation as the national bank,, invested with all its property and possessed of all its rights, of action. First Commercial Bank of Pontiac v. Talbert, 103 Mich. 625; City Nat. Bank of Poughkeepsie v. Phelps, 97 N. Y. 44.
Act No. 195 of the Public Acts of 1897 (3 Comp. Laws, §§ 10421, 10422), took effect August 30, 1897, and provides that an action of assumpsit may be brought for injuries produced by fraudulent representations or conduct in place of an action on the case for fraud or deceit, and that a promise shall be implied to pay all such damages as arise from such fraud or deceit. The second section of the act provides that the cause of action shall survive. The act, in terms, provides for cases where “an injury has been,” as well as to cases where an injury “shall be produced,” and, as we have heretofore held, related to causes of action in existence at the time it took effect. First Nat. Bank of Ovid v. Steel, 136 Mich. 588. The State bank had, as successor of the national bank, a right to bring an action for fraud and deceit against defendant at the time the act took effect, and immediately thereafter it had the right, at its option, to bring an action of assumpsit. As the act provided for the survival of the cause of action, it could be assigned.
Second. The trial court construed the declaration as charging that the defendant presented to the national
Third. Testimony was introduced by plaintiff tending to show that defendant made false representations as to the notes to his fellow directors at meetings of the board held on October 23, 1895, and January 17, 1896, when it is claimed that he was acting as &• member of the board.
“ The liability of directors for damages caused by acts expressly prohibited by the company’s charter or act of incorporation is not created by force of the statutory prohibition. The performance of acts which are illegal or prohibited by law may subject the corporation to a forfeiture of its franchises and the directors to criminal liability ; but this would not render them civilly liable for damages. The liability of directors to the corporation for damages caused by unauthorized acts rests upon the common-law rule which renders every agent liable who violates his authority, to the damage of his principal. A statutory prohibition is material under these circumstances merely as indicating an express restriction placed upon the powers delegated to the directors when the corporation was formed.”
The declaration alleging a violation of defendant’s authority as such agent, to the damage of his principal, it was essential to a recovery that he should show such
The judgment is affirmed.