On Entry of Order.

The contention that this action, transferred to this court, must now proceed in equity, and that equity rule 26 applies, is unsubstantial, since I think, as heretofore stated, that plaintiffs, under the bank statute, have a complete remedy at law. See, also, Chesbrough v. Woodworth (C. C. A.) 195 F. 875; and Jones Nat. Bank v. Yates, 240 U. S. 541, 36 S. Ct. 429, 60 L. Ed. 788. Of course, to avoid any confusion as to the probability of plaintiffs relying on different reports filed by the bank with the Comptroller of the Currency, or on different statements or reports, and when, how, and by whom made, a bill of particulars would be serviceable and an aid to the court or auditor.

The purpose of the Civil Practice Act, § 211, in my opinion, was intended to enable plaintiffs, who have any right to relief against a number of defendants, to proceed against them in a single action when the right arises out of the same transaction and to lessen expense and a multiplicity of actions, and this right obtains, regardless of whether the liability is joint or several or alternative.

It is not necessary that the complaint should be amended, especially as a bill of particulars would serve the purpose to acquaint the defendants with the specific grounds against them.

[5,6] The defendants, in my opinion, were properly joined in this action, and the complaint is not open to the objection of multifariousness.

2. Abatement and revival 55(3)-Right of action against bank director for false reports of resources survives against defendant's personal representatives (National Banking Act [12 USCA §§ 93, 161]; Decedent Estate Law N. Y. § 120).

Right of action against bank directors for violating National Banking Act (Rev. St. §§ 5211, 5239 [12 USCA §§ 93, 161]), by making false reports as to bank's resources, does not against his personal representatives under Deabate on death of defendant, but survives cedent Estate Law N. Y. (Consol. Laws, c. 13) § 120, since substance of action is remedial rather than penal.

3. Courts

343-In determining whether right of action against bank director for making false reports survives against deceased defendant's representatives, law of state must guide federal court (National Banking Act [12 USCA §§ 93, 161]).

In determining whether right of action against bank director for violating National Banking Act (Rev. St. §§ 5211, 5239 [12 USCA 88 93, 161]), by making false reports as to bank's resources, survives against deceased defendant's personal representatives, law of state where action is originally brought must guide federal court, since cause of action is to recover under remedial statute.

Action by Isaac S. Benton and others against William Deininger and others. On motion to revive action against Julia Breed

French, personal representative of deceased defendant, George J. French. Order of re

vival entered.

See, also, 21 F. (2d) 657.

Barber B. Conable, of Warsaw, N. Y., and Louis L. Thrasher, of Jamestown, N. Y., for plaintiffs.

Hubbell, Taylor, Goodwin & Moser, of Rochester, N. Y., for Julia Breed French.

HAZEL, District Judge. The question submitted is whether a particular cause of action alleged in the complaint survives, and, if it does, concededly it may be continued against the personal representative of the deceased in question. Rev. St. § 914 (28 USCA § 724 [Comp. St. § 1537]); Gerling v. Baltimore & Ohio R. Co., 151 U. S. 673, 14 S. Ct. 533, 38 L. Ed. 311.

In the instant case, the death of George J. French occurred after this action was brought and process served upon him. Its basis is to recover damages for violation of the National Banking Act (Rev. St. §§ 5211, 5239 [12 USCA §§ 93, 161]), the deceased person having been a director of the National Bank of Commerce of Rochester. The

complaint alleges that the deceased and other directors made false reports as to the condition of the bank upon which plaintiffs relied in their purchase of bank stock, and suffered pecuniary loss.

[1] The various authorities cited in the briefs have been considered, but I incline to the view that the cause of action has not abated, but survives against the personal representatives of the deceased. The statute, authorizing the action, is remedial, and its intendment was that directors should become personally liable for damages which its shareholders or other persons sustained in consequence of failure to comply with their statutory duties. Although in a sense the statute is penal, it was nevertheless intended to afford a civil remedy for a wrongful act, without involving a direct issue of tort. There is no fixed penalty, and the recovery depends wholly upon the extent of damages proven. Stephens v. Overstolz (C. C.) 43 F. 46.

In Boyd v. Schneider, 131 F. 223, the Circuit Court of Appeals for the Seventh Circuit regarded an action brought against directors of an insolvent national bank for failure to properly apply its assets, as in the nature of an implied contract, which survived against the personal representatives of a deceased director.

In Yates v. Jones National Bank, 206 U. S. 158, 27 S. Ct. 638, 51 L. Ed. 1002, the suit was against directors of a national bank for mismanagement and waste of assets and general neglect of duty, resulting in plaintiff's damage. It was continued against an administrator of a deceased director.

In Allen v. Luke (C. C.) 141 F. 694, a receiver of a national bank brought action for misconduct or negligence of the directors on behalf of creditors and stockholders and the cause of action was also held to survive against the executor of a director.

This action was removed to this court from the state Supreme Court, and, under the Decedent Estate Law (Consol. Laws N. Y. c. 13) § 120, survived against the representatives of the deceased director.

Counsel for the executrix, appearing specially, relies upon actions for penalties and forfeitures under the copyright laws, which, however, specifically declare the amount of the penalty that may be recovered, qui tam actions for penalties, and, in some instances, for negligence wherein personal injuries were sustained, and generally actions arising ex delicto, which I conceive are not strictly apposite. Nor does Chesbrough v. Woodworth (C. C. A.) 195

F. 875, modify the decisions above cited. Indeed, in that case the learned court declared that making a false report, under the statute here considered, did not constitute an underlying wrong, since it was "the medium of necessary causal relation between wrong and damage," without involving a direct issue of negligence. It must therefore be ruled herein that the cause of action alleged in the complaint did not abate on the death of the defendant French, even though it is not claimed that the estate benefited by his failure to comply with the statute.

The motion is granted. A supplementary summons and complaint may be served upon the survivor's representative. So ordered.

On Entry of Order.

[2, 3] Consideration has again been given to the arguments of counsel for defendants, and the various authorities cited by him, but I think now, as I did when the original opinion was filed, that the right of action has not abated. It is true that actions for a common-law tort abate, even though they are in their nature statutory, unless there a survival provision, but I still think that the substance of the action with which we are here concerned is remedial, as distinguished from those that are purely penal. Concededly actions brought by a receiver of a national bank against its officers or directors for misappropriation or misapplication of its fund, or actions brought against the directors by the bank, under section 5239, Rev. St., the National Banking Act, to recover loss due to making false reports, do not abate as against the personal representatives of a director. This rule of decision is not limited to losses sustained by the bank or its depositors, since, under the statute, a director is liable, in terms, for damages sustained by the bank, its stockholders, or any other The cases of Stephens v. Overstolz (C. C.) 43 F. 465, and Boyd v. Schneider (C. C. A.) 131 F. 223, are perhaps, as contended, actions brought by depositors for violation of the bank's implied contract, still, as stated in my original opinion, the remedy here invoked does not involve a direct issue of common-law tort. To falsify the report and mislead purchasers of stock was, of course, a wrongful thing to do, and the extent of the liability, not unlike what was said in Stephens v. Overstolz, supra, is the damage imposed on others. Moreover, as the cause of action is to recover under a remedial statute, I think that the law of this state, where the action was originally brought, must guide me in the

person.

The answer sets up, by way of set-off, an indebtedness of Varney, the payee, to defendant, in the sum of $5,000, owing to it at the time the certificate became due. The sufficiency of this defense depends on whether this certificate of deposit was negotiable and whether the plaintiff is a holder in due course. By section 3720b1, Kentucky Statutes, in order to the negotiability of an instrument, it is essential amongst other things that it "be payable to the order of a specified person or to bearer." By section 372068 it is provided that an instrument is "payable to order where it is drawn payable to the order of a specified person or to him or his order."

The certificate here is not payable to the order of Varney. The question is whether it is payable to him or to his order. Defend ant contends that it is not, and that it is payable only to Varney himself. Had the wording been "payable to himself or order," instead of "payable to himself order," the requirement of the statute would have been met. By section 3720b10 it is provided that the instrument "need not follow the language of this act, but any terms are sufficient which clearly indicate an intention to conform to the requirements thereof." If, instead of inserting the word "or" between the words "himself" and "order," the words "or to his" had been inserted, the instrument would have followed the exact language of the statute. The word "order" is not the only indication which the instrument contains that it was intended that it should be negotiable. A further indication is to be found in the words, "on the return of this certificate properly indorsed." These words

174 F. 345, the following instrument was involved.

"No. 1853. Philadelphia, January 2d, 1909 $3,000.00

"Peter F. Fallon has deposited in the Safety Banking & Trust Company three thousand dollars to the credit of himself, payable in current funds on return of this certificate properly indorsed on July 1, 1909. Interest 32 per cent. per annum.

"H. J. Colver, Cashier. "H. L. Rock, Secretary. "This certificate of deposit is not subject to check and is only payable at maturity."

It was held: "The present certificate is in effect payable to Fallon or his order, for this is necessarily implied by the phrase 'properly indorsed.'"

Had the certificate here not contained the word "order," it would still be a question whether, in view of this clause, it should not be construed to be payable to Varney or his order. The defendant has treated the certificate as if it did not contain this clause, "on the return of this certificate properly indorsed." The word "order," as well as this clause, is in print, whereas the word "himself" is in typewriting. Defendant contends that this circumstance calls for the application of subdivision (4) of section 3720b17, which is in these words:

"Where there is conflict between the written and printed provisions of the instrument, the written provisions prevail." [1-3] The conflict had in view here is one that exists after the instrument has been properly construed. Before, therefore, the question as to whether there is any such con