in payment of the debt, but rather as collateral security is without consideration and unenforceable. Same-collateral for existing debt. 2. A note given by a woman as security for an existing debt of her husband is not founded on a valuable consideration. (January 3, 1906.) they could not be enforced at law, was a sufficient consideration for the new note. Whitney v. Clary, 145 Mass. 156, 13 N. E. 393; Wilton v. Eaton, 127 Mass. 174; Prout v. Fire District, 154 Mass. 450, 28 N. E. 679; Easton v. Easton, 112 Mass. 438; Nye v. Chace, 139 Mass. 379, 31 N. E. 736; Wheeler v. Slocumb, 16 Pick. 52; Boyd v. Freize, 5 Gray, 553; Robinson v. Gould, 11 Cush. 55; Jennison v. Stafford, 1 Cush. 168, EXCEPTIONS by plaintiff to rulings of 48 Am. Dec. 594; Wooley v. Cobb, 165 Mass. the Court for Suffolk County made during the trial of an action brought to enforce a promissory note, which resulted in a verdict in defendants' favor. Overruled. 503, 43 N. E. 497. Messrs. Stephen H. Tyng and Joseph G. Holt, for defendants: A discharged debt of a bankrupt or insolvent is a barren ideality which is converted, by a new promise of the debtor to The facts are stated in the opinion. Messrs. J. E. Hannigan and Wallace Wil- pay it, into a potential reality. But the son, for plaintiff : A wife's note in payment, or as security, for her husband's debt, is given for a valid consideration. promise of a third person, whether a wife or a stranger, can have no such effect. Marston v. Bigelow, 150 Mass. 45, 5 L. R. A. 43, 22 N. E. 71; Saunders v. Saun Webster v. Le Compte, 74 Md. 250, 22 ders, 154 Mass. 337, 28 N. E. 270; 9 Cyc. Atl. 232. Law & Proc. p. 311. The discharge in bankruptcy did not extinguish the debt or demand. Champion v. Buckingham, 165 Mass. 76, 42 N. E. 498; Maxim v. Moore, 8 Mass. 127. There is a moral obligation founded upon an antecedent valuable consideration. Mills v. Wyman, 3 Pick. 207; Parish v. Stone, 14 Pick. 202, 25 Am. Dec. 378; Church of United Soc. v. Winkley, 7 Gray, 460; Williams v. Bugbee, 6 Cush. 418; Lerow v. Wilmarth, 7 Allen, 463, 83 Am. Dec. 701. Knowlton, Ch. J., delivered the opinion of the court: This is an action upon a promissory note, signed by the defendants, Alice A. Baxter and Isaac E. Baxter, who are husband and wife. The chief justice of the superior court, before whom the case was tried without a jury, found that the note was given in renewal of eight notes, seven of which were for $200 each and one for some additional amount, made by the defendant Alice A wife's note, payable to her husband's in 1893. He found that these notes were creditor, is good against her. Bell v. McDowell, 158 Mass. 79, 32 N. E. 1035; Carpenter v. Page, 144 Mass. 315, 10 N. E. 853; Hunt v. Adams, 5 Mass. 358, 4 Am. Dec. 68; Post v. First Nat. Bank, 38 Ill. App. 259. The surrender of the old notes, even if 208, which resembles the one at bar in that the original debt had been discharged by the bankruptcy of the debtor, who had since died, it was held that such circumstances did not impose such a strong moral obligation on the debtor's sons to pay the debt as would support a note given by them therefor, under a provision of the Georgia Code, declaring a good consideration to be such as is founded on natural duty and affection, or on a strong moral obligation. A promise by sons to pay a note of their deceased father is nudum pactum, and unenforceable where the deceased left no estate out of which the note could be paid. Schroeder v. Fink, 60 Md. 436; Parker v. Carter, 4 Munf. 273, 6 Am. Dec. 513. It has also been held that a father cannot be held liable on his promise to pay the expenses previously incurred by a stranger in caring for a sick son, who was of full age and had ceased to be a member of his without consideration, and that the note in suit was therefore without consideration. See Holden v. Cosgrove, 12 Gray, 216. The case is before us on the plaintiff's exceptions, after a finding for the defendants. The circumstances under which the eight notes were given were as follows: The father's family,-Mills v. Wyman, 3 Pick. 207; to pay for supplies previously furnished to a son,-Loomis v. Newhall, 15 Pick. 159; to pay for past board furnished children, for which the father was not legally liable,-Dodge v. Adams, 19 Pick. 429; to pay for goods purchased on his credit by a minor child, for which the father is not legally liable, Freeman v. Robinson, 38 N. J. L. 383, 20 Am. Rep. 399; Mortimore v. Wright, 6 Mees. & W. 482; to pay for the past support of a bastard child,-Wiggins v. Keizer, 6 Ind. 252; Chilcott v. Trimble, 13 Barb. 502. Nor can a son be held liable on his promise to pay for necessaries previously furnished an indigent father by a third person. Cook v. Bradley, 7 Conn. 57, 18 Am. Dec. 79; Dawson v. Dawson, 12 Iowa, 512. For an exhaustive note upon the subject of moral obligation as a consideration for a promise, see 53 L. R. A. 353. husband, Isaac E. Baxter, went into notes, so that it could not afterwards be insolvency in 1890 and John W. McMahon, made a foundation for a valid new promise to whom the notes were afterwards given, by the insolvent, if he chose to make one. proved a claim of more than $2,000 against The first request for instructions was rightthe estate. In 1891, with the assent of Mc-ly refused. Mahon, a discharge in insolvency was granted to Baxter: Afterwards Baxter made some voluntary payments on this indebted ness proved by McMahon. In 1893 Alice, his wife, signed these eight notes, which McMahon had requested Baxter to get from her. The amount of them was what all parties thought was the moral indebtedness of Baxter to McMahon at that time. Afterwards, from time to time, until December 4, 1899, Baxter made various payments to McMahon, so that there remained unpaid at this date $1,420, including interest. At McMahon's request, the note in suit and another note of $500 were given to take up the six notes then outstanding of the original eight, and these notes were received by Baxter and his wife in exchange for the two then executed. The judge refused to rule, as requested by the plaintiff, that there was a consideration for the eight notes signed by the defendant Alice. The second request was that a wife's note, given in payment or as security for her husband's debt, is on valid consideration. This was too broad. A wife's note, given to a third person in payment of her husband's debt, is for a valuable consideration; but a note given as security for such a debt, previously existing, is not. To make a note of the latter kind valid, there must be a new consideration. In the case supposed, the wife obtains nothing, and the husband's creditor gives up nothing, and there is no consideration moving from either party to the other. Green v. Shepherd, 5 Allen, 589; Courtney v. Doyle, 10 Allen, 122; Mecorney v. Stanley, 8 Cush. 85; Ellis v. Clark, 110 Mass. 389, 14 Am. Rep. 609. The finding of the judge that there was no consideration for the original eight notes, and that the note in suit was given in renewal of them, makes it unnecessary to consider other exceptions taken by the plaintiff. Exceptions overruled. NORTH DAKOTA SUPREME V. COURT. P. S. EVANSON, Impleaded, etc., Appt. 1. A director of a banking corporation owes no duty in a legal sense, by reason of his office, to the creditors of the bank or to the public. Same-liability. 2. The directors of a bank are liable only to the corporation whose agents or trustees they are, for violation or neglect of their official duty. There is no indication that there was anything of benefit to her in the transaction, nor does it appear that McMahon gave up anything of value as a consideration for the notes. He had at the time an unsecured, unenforceable debt, against her husband, which had been discharged in insolvency, and was worthless except as it might furnish a consideration for a promise that would bind the husband if he should choose to waive the benefit of his discharge, and Bank-director-duty. make an unequivocal new promise to pay the debt. Champion v. Buckingham, 165 Mass. 76, 42 N. E. 498, and cases cited. Way v. Sperry, 6 Cush. 238, 52 Am. Dec. 779; Bigelow v. Norris, 139 Mass. 12, 29 N. E. 61. It does not appear that the parties treated it as anything more than a mere moral obligation of Baxter. It is plain that such an obligation is not a sufficient consideration to support a promise of a third person to discharge it. Mills v. Wyman, 3 Pick. 207; Valentine v. Foster, 1 Met. Case Note. The scope and limits of the 520, 35 Am. Dec. 377. If it was treated as doctrine applied in the foregoing case are a debt, the evidence does not show that the well stated in the following extract from notes were received in payment of it. The the opinion of Fusz v. Spaunhorst, 67 Mo. conduct of the parties is quite as consistent "Aside from statutory provisions, with a finding that the notes were received law, the directors or officers of an incorpoor one of similar nature in the organic as a kind of security to strengthen the pur-rated bank would not be individually repose of the husband to meet his moral obligation. He had previously made payments which he was under no legal obligation to make, and for nearly six years afterwards he continued to pay, as if the matter were his and not his wife's, while she paid nothing. We must assume that the judge did not find that the debt was paid by the Headnotes by ENGERUD, J. 256: sponsible, in an action at law, for injury resulting to a creditor or depositor, unless the injury were occasioned by the malicious or fraudulent act of the party complained of. Mere nonfeasance will not answer; positively wrongful act intendedly and dinothing short of active participancy in a rectly operating injuriously to the prejudice of the party complaining will give or Same-loss by creditor. 3. In the absence of actionable deceit, directors are not directly liable in damages to a creditor of the corporation for loss suffered by the creditor through the insolvency of the corporation caused by the directors' neglect of their official duties. Same-insolvency-failure to close. 4. The mere fact that a director, who knows that the bank is insolvent, takes no action to close the bank, or announce its insolvency, does not make him liable for deceit to persons who extended credit after the bank became insolvent on the assump tion that it was solvent. Appeal-dismissal of action. 5. Where the complaint does not state a cause of action, and the evidence affirmatively shows that no cause of action exists, igin to individual liability as above indicated." The doctrine in substantially this form is supported by the following cases, in addition to those cited in the opinion in HART V. EVANSON: Chester v. Halliard, 36 N. J. Eq. 313; Fischer v. Tamm, 13 Mo. App. 108; Minton v. Stahlman, 96 Tenn. 98, 34 S. W. 222; Deaderick v. Bank of Commerce, 100 Tenn. 457, 45 S. W. 786. The general doctrine is also sustained by many cases involving the liability of directors of corporations other than banks, including the case of Landis v. Sea Isle City Hotel Co. (N. J. Eq.) 31 Atl. 755, where there is a thorough discussion of the subject. The case of Deaderick v. Bank of Commerce, supra, practically limits the doctrine to mismanagement of the corporation in the sense of nonfeasance as contradistinguished from malfeasance. As shown in the opinion in HART V. EVANSON, however, there are a number of cases holding bank directors directly liable to depositors and other creditors for mismanagement of the bank's affairs, and some of them at least extend the liability to cases of nonfeasance as well as misfeasance. Thus, the circuit court of appeals of the 7th circuit, in Boyd v. Schneider, 65 C. C. A. 209, 131 Fed. 223, Reversing 124 Fed. 239, takes the view that the duty of the directors of a bank to see that the conditions of the banking law are complied with runs directly to the depositors, and that the latter may, in the absence of a statute to the contrary, maintain an action in their own right to recover losses resulting from the breach of such duty, followed by the insolvency of the bank; and further holds that there is nothing in the national banking act providing for the administration of the affairs of an insolvent national bank by a receiver, that deprives depositors of such right of action. The court here had especial reference to breach of duty on the part of the directors in allowing violations of the banking law, of some of which they were aware, and of others of which they would have been advised if they had exercised reasonable diligence. The court, however, substantially adopts the trust doc The facts are stated in the opinion. Mr. Tracy R. Bangs, for appellant: The keeping of the bank open for busitrine with respect to the relations between the depositors and directors, and the principle applied would seem to be equally ap plicable to any breach of duty, whether misfeasance or nonfeasance, on the part of the directors resulting in the loss to depositors. Tate v. Bates, 118 N. C. 287, 54 Am. St. Rep. 719, 24 S. E. 482, adopts the view that directors of a bank are trustees for the creditors as well as for the corporation and stockholders, and that any creditor who has been misled to his hurt by their fraud and deceit, or injured by their misconduct and gross neglect in discharge of the trust, may maintain an action for such injury against them personally in his own behalf. Solomon V. Bates, 118 N. C. 311, 54 Am. St. Rep. 725, 24 S. E. 478, is to the same effect. It is clear from the opinions in the last two cases that the decision in favor of the depositor's right of action covers not only cases of misfeasance, but also of nonfeasance; and it is also clear that they do not belong to the class of cases referred to in Killen v. Barnes, 106 Wis. 546, 82 N. W. 536, where the action is upheld as one to enforce a liability in the right of the corporation. The case of United Society of Shakers v. Underwood, 9 Bush, 609, 15 Am. Rep. 731, holds that directors of a bank may be liable, upon the ground of negligence or mismanagement, to special depositors whose deposits are lost in consequence of such negligence or mismanagement. It is also impliedly held in Wolfe v. Simmons, 75 Miss. 539, 23 So. 586, that directors are directly responsible to a customer of a bank for fraud or negligence in the management of its affairs. As already shown, the courts in Tennessee distinguish between misfeasance and nonfeasance; and Miller v. Howard, 95 Tenn. 407, 32 S. W. 305, applying that distinction, held that directors of a bank were personally liable for deposits made during the suspension of payment, upon faith of a circular issued by them that such deposits would be kept subject to the depositor's order in the vaults of the bank, where they allowed a receiver of the bank, subsequently appointed, to take possession of them. ness did not constitute a representation of Penoyer, 44 L. R. A. 761, 33 C. C. A. 222, its solvency. 61 U. S. App. 372, 91 Fed. 587. 14 Am. & Eng. Enc. Law. p. 80; Cochrane v. Halsey, 25 Minn. 52; Bell v. Ellis, 33 Cal. 620; Hotchkin v. Third Nat. Bank, 127 N. Y. 329, 27 N. E. 1050. The element of intent is one of the essential facts constituting fraud, which must exist to entitle one to recover damages for deceit. As soon as a bank is insolvent it is its duty, not only to decline to receive deposits, but also to close its doors. 3 Am. & Eng. Enc. Law, 2d ed. p. 847; Higgins v. Hayden, 53 Neb. 61, 73 N. W. 280; Cragie.v. Hadley, 99 N. Y. 131, 52 Am. Rep. 9, 1 N. E. 537; American Trust & Sav. Bank v. Gueder & P. Mfg. Co. 150 Ill. 336, 37 N. E. 227; Peck v. First Nat. Bank, 43 Fed. 357; Wasson v. Hawkins, 59 Fed. 233. The facts make out a case of constructive fraud. 14 Am. & Eng. Enc. Law, 2d ed. p. 21; Feeney v. Howard, 79 Cal. 525, 4 L. R. A. 826, 12 Am. St. Rep. 162, 21 Pac. 984; Haven v. Neal, 43 Minn. 315, 45 N. W. 612. Messrs. Frank B. Feetham and B. G. Gibson v. Love, 4 Fla. 217. Skulason, for respondent: Where one voluntarily takes the position of a director or trustee of a corporation, good faith, exact justice, and public policy unite in requiring of him the degree of care and prudence that men prompted by self-interest generally exercise in their affairs; and it is a gross breach of duty not to bestow them. Hun v. Cary, 82 N. Y. 65, 37 Am. Rep. 546; Ackerman v. Halsey, 37 N. J. Eq. 356, 38 N. J. Eq. 501; United Society v. Underwood, 9 Bush, 609, 15 Am. Rep. 735; Horn Silver Min. Co. v. Ryan, 42 Minn. 196, 44 N. W. 56; United States v. Means, 42 Fed. 599; Warren v. Robison, 19 Utah, 289, 75 Am. St. Rep. 734, 57 Pac. 287; Warren v. And so, Chester v. Halliard, supra, while denying the liability of directors to depositors on account of negligence or nonfeasance, intimates that each depositor may have an individual action against the directors if induced to make his deposit by reason of false representations as to the solvency of the bank. The decision in Townsend v. Williams, 117 N. C. 330, 23 S. E. 461, holding a director liable to a depositor whom he induced not to withdraw his deposit by assurances of the entire solvency of the bank, might, upon the facts, have been referred to the same distinction without trenching upon the general doctrine that denies the liability of directors to depositors on account of negligence or nonfeasance. As above shown, however, the entire doctrine is repudiated in North Carolina. It would seem that the decisions in Delano v. Case. 121 Ill. 247, 2 Am. St. Rep. 81, 12 N. E. 676, and Seale v. Baker, 70 Tex. 283. 8 Am. St. Rep. 592, 7 S. W. 742, holding directors liable to depositors for permitting misrepresentations as to the solvency of the bank, which, by the exercise of ordinary diligence, they would have known were false, might have been put upon the ground that the directors were liable by reason of deceit; but, as a matter of fact, the decisions are referred to the trust theory of the relations between directors and depositors, and are, therefore, M'Bronn v. Rives, 1 Stew. (Ala.) 72; One who damages another while in the commission of an act which is declared unlawful is responsible to the person damaged for the full amount of his injury. Baxter v. Coughlin, 70 Minn. 1, 72 N. W. 797; United Society v. Underwood, supra. Defendants are liable for negligence. Gibbons v. Anderson, 80 Fed. 345; Hun v. Cary, supra; Solomon v. Bates, 118 N. C. 311, 54 Am. St. Rep. 725, 24 S. E. 478; Cassidy v. Uhlmann, 170 N. Y. 505, 63 N. E. 554; Carr v. State, 104 Ala. 4, 16 So. 150; San Pedro Lumber Co. v. Reynolds, 121 Cal. 74, 53 Pac. 410; Marshall v. Farmers' & M. Sav. Bank, 85 Va. 676, 2 L. R. A. 534, 17 Am. St. Rep. 84, 8 S. E. 586; Cragie v. Hadley, supra; Cummings v. Winn, 89 Mo. 51, 14 S. W. 512. doubtless to be regarded as authority for the general doctrine that directors of a bank are liable directly to depositors for mismanagement of its affairs whether such mismanagement consists of misfeasance or nonfeasance. own In Foster v. Bank of Abingdon, 88 Fed. 604, and Marshall v. Farmers' & M. Sav. Bank, 85 Va. 676, 2 L. R. A. 534, 17 Am. St. Rep. 84, 8 S. E. 586, which, impliedly at least, hold that creditors may maintain an action against directors for misfeasance and negligence in the management of the affairs of the bank, the suit was by depositors for themselves and others who should elect to come in. If it were not for the language in the opinions indicating that the court assumed that the depositors could maintain an action in their right, these cases might, perhaps, be regarded as belonging to the class referred to in Killen v. Barnes, supra, in which the action is brought in the right of the corporation (see opinion in HART V. EVANSON). It was said in Penn Bank v. Hopkins, 111 Pa. 328, 56 Am. Rep. 266, 2 Atl. 83, that a creditor's bill may be maintained against directors of an insolvent corporation for mismanagement of its affairs; but it is not clear whether the court meant that such a bill might be maintained by the creditors in their own right, or in the right of the corporation. On petition for rehearing. Every person who suffers detriment from the unlawful act or omission of another may recover from the person in fault a compensation therefor in money, which is called damages. Rev. Code, § 4971; Hyland v. Roe, 111 Wis. 361, 87 Am. St. Rep. 873, 87 N. W. 252; Parker v. Barnard, 135 Mass. 116, 46 Am. Rep. 450; Tvedt v. Wheeler, 70 Minn. 161, 72 N. W. 1062; American Trust & Sav. Bank v. Gueder & P. Mfg. Co. 150 Ill. 336, 37 N. E. 227. The keeping of an insolvent bank open is certainly an unlawful act or omission. It is a misrepresentation and a deception. Hyland v. Roe, supra; St. Louis & S. F. R. Co. v. Johnston, 133 U. S. 566, 33 L. ed. 683, 10 Sup. Ct. Rep. 390; Higgins v. Hayden, 53 Neb. 61, 73 N. W. 280; Richardson v. New Orleans Coffee Co. 43 C. C. A. 583, 102 Fed. 785; Dreyer v. Pease, 88 Fed. 978; Grant v. Walsh, 145 N. Y. 502, 45 Am. St. Rep. 626, 40 N. E. 209. The doctrine of Briggs v. Spaulding, 141 U. S. 132, 35 L. ed. 662, 11 Sup. Ct. Rep. 924, has no application to a case like the one at bar. Gerner v. Mosher, 58 Neb. 135, 46 L. R. A. 244, 78 N. W. 384; Killen v. Barnes, 106 Wis. 546, 82 N. W. 536. liable for the injury caused by that act or omission. Killen v. Barnes, supra; Blackman v. Simpson, 120 Mich. 377, 58 L. R. A. 410, 79 N. W. 573; Corey v. Havener, 182 Mass. 250, 65 N. E. 69. Engerud, J., delivered the opinion of the court: Defendant P. S. Evanson appeals from a judgment for plaintiff, and from an order denying a motion for a new trial. The complaint states, in substance, the following facts: The defendants were directors of the State Bank of Northwood. On or about February 20, 1901, the bank's application to the county commissioners of Grand Forks county to be designated a depositary of the funds of that county under article 8, chap. 26, Pol. Code, had been accepted, and the directors authorized Mr. Lough, the president of the bank, to cause to be executed and delivered to the county, in behalf of the bank, a bond, with sureties, as required by the county depositary law, to indemnify the county against loss of the funds received by the depositary. At the solicitation of Mr. Lough, this plaintiff and his assignors became sureties on such depositary bond, and the same was delivered to and accepted by the county. County funds were thereupon deposited in the bank, and on July 23, 1901, the bank was closed by the state authorities by reason of its Conceding that the act of keeping open the insolvent bank was the joint wrong of all the directors, each director would be There is an obvious distinction between | for positive acts of fraud or misrepresentadiscount banks and savings banks as regards the relations which the directors or trustees bear to depositors. Thus, Williams v. McKay, 40 N. J. Eq. 190, 53 Am. Rep. 775, while repudiating the trust theory with respect to the relation between depositors and directors of discount banks, concedes that that is the true relation between depositors and trustees of savings banks, and impliedly admits that the depositors in a savings bank may maintain an action in their own right against the trustees to recover for losses due to neglect or mismanagement by the latter. The question discussed in this note cannot, of course, arise when a right of action is expressly given by statute to depositors or other creditors against the directors. And the personal liability of directors who, in violation of a penal statute, permit deposits to be made after they know or ought affirmed in Baxter v. Coughlin, 70 Minn. 1, 72 N. W. 797; Cummings v. Winn, 89 Mo. 51, 14 S. W. 512; Cassidy v. Uhlmann, 54 App. Div. 205, 66 N. Y. Supp. 670, Affirmed in 170 N. Y. 505, 63 N. E. 554. It is apparent from what has been said that the doctrine adopted in HART V. EVANSON does not necessarily preclude an action by depositors or other creditors of the insolvent bank, in their own right, to recover to know that the bank is insolvent, is tion by the directors, nor actions by the depositors or other creditors, in the right of the corporation, to enforce the liability of directors on account of their mismanagement of the affairs of the bank, whether such mismanagement consists of misfeasance or nonfeasance. The distinction between these two classes of actions, both of which are exceptions to the general doctrine, is brought out in the opinion in Gores v. Field, 109 Wis. 408, 84 N. W. 867, 85 N. W. 411, where the court said, in effect, that such causes of action cannot be joined, since one is an action in equity and the other an action at law, and one is brought to enforce a right of action accruing to the bank, in which the recovery, if any, must go to the assignee for distribution, and the other is brought to enforce a liability for damages to the individual creditor caused by the deceit. If, however, the right of depositors in their own name to hoid account of negligence or nonfeasance is admitted in a particular jurisdiction, the objections above stated, to the joinder of such cause of action with a cause of action against the directors for deceit, do not apply. Thus, it was held in Solomon v. Bates, supra, that such causes of action might be joined. directors liable on |