a misdemeanor, and shall be imprisoned not less than five years nor more than ten."

LIABILITY FOR EMBEZZLEMENT.

Embezzlement is defined as "an unlawful conversion by the officer to his own use of funds intrusted to him, with the intent to injure or defraud the bank." It is used to describe a crime "which a person has an opportunity to commit by reason of some office or employment, and which may include some breach of confidence or trust."

ABSTRACTION OF FUNDS.

While embezzlement consists in the unlawful conversion of funds held in trust, with an intent to "injure or defraud," "abstraction" or "misapplication" consists of the conversion with the same intent, but not particularly of trust funds. "Willful abstraction" under section 5209 means "that the money or the funds of the association must be withdrawn by the officer or by his direction; that such taking or withdrawing should be without the knowledge or consent of the bank, or its Board of Directors; that the money so taken or withdrawn should be converted to the officer's own use or for the benefit and advantage of some person other than the association, and that this should be done with the intent to injure and defraud the association." The meaning

of the word "willful" under this statute implies a knowledge and purpose to do wrong.

WILLFUL MISAPPLICATION OF FUNDS.

To constitute the offense of "willful misapplication" it is necessary that the money or funds of the association be misapplied for the 'use, benefit, or gain of the party charged, or of some company or person other than the association."

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FALSE ENTRIES.

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False entries within the meaning of section 5209 has been defined as follows: Any entry on the books of the bank which is intentionally made to represent what is not true or what does not exist, with intent either to deceive its officers or defraud the association, is a 'false entry' within the meaning of the statute."

When false entries are made in the books of a national bank, and it is proven that they were known to be false by the officers making them, the presumption is raised that they were made for the purpose of deceiving, although such presumption is not conclusive.

When a clerk or any other employe of a bank makes false entries in any books or statements of the bank under the direction of any officer or director, such officer or director would be chargeable with the offense the same as if he had made them personally.

When the original figures or entries in the books of a national bank are erased and other figures which would falsify the account are substituted therefor, the act would constitute a "false entry.' Where in the ordinary course of business an overdraft is allowed, and such overdraft is correctly recorded in the books just as it occurred, it is not a false entry, although the overdraft was made under such circumstances as to constitute a fraud upon the bank.

A bank officer or director who verifies a report, which he believes to be true, cannot be held criminally liable, although the report is in fact false, "since that makes the intent to defraud a material element of the offense." A "false entry" in a report by a national bank officer or director to the Comptroller of the Currency within the meaning of section 5209, is not merely an incorrect entry made through inadvertent negligence or mistake, but is an entry known to the maker to be untrue and incorrect and by him intentionally entered while so knowing its false and untrue character.

To constitute a false entry within the meaning of the statute in a report of the condition of a national bank, it is not necessary that the report be made by an officer of the bank in response to a call by the Comptroller of the Currency. But "a report of the condition of a national bank, whether called for by the

Comptroller or not, which is a report in the usual form made by an officer of the bank in his official capacity, if it contains a false entry made with intent to deceive, is within the Revised Statutes, section 5209, which declares such false entries to be a misdemeanor." Neither must the report be one of those mentioned in the statutes, or one which the bank is bound by law to make. It is sufficient that the report be made in due course of business.

ACTIONS AGAINST DIRECTORS.

Let us now consider who are entitled to a right of action against directors for losses suffered through their wrong-doing and mismanagement, and in what manner proceedings should be brought.

Although the several stockholders, depositors, and creditors of a bank may have been damnified by the wrongful acts of the directors, they cannot bring suit to recover their individual losses. Such a right would give some priority over others, and the directors would become party defendants to multitudinous law-suits and endless litigation.

The directors are not agents, bailees, or trustees of the individual stockholders or depositors, and therefore not answerable to them severally for losses caused by their mismanagement.

In law the corporation is as a distinct person, and it is to it that its officers and agents are accountable for all torts and injuries diminishing or destroying the value of its property. Such losses as are recovered from the directors must be treated as an asset of the