the terms of § 5211, Rev. Stat., the necessary implication of which is that the statement thus made and attested must be true and that a false report is prohibited. Yates v. Jones Nat. Bank, 206 U. S. 157-177; § 5239 Rev. Stat.

Two results may flow from a violation of its provisions: the franchise of the association may be forfeited-if such a result is sought, or reached, it must be through the medium of the Federal courts; or the directors guilty may be held liable for the damages sustained by any person. Yates v. Jones National Bank, supra.

Even if the recovery is sustained upon a theory different from that upon which it was based by the Special Term, as it is correct it will not be reversed because founded on a wrong reason. Marvin v. Universal, 85 N. Y. 278, 284; Ward v. Hasbrouck, 169 N. Y. 407, 420; Siefke v. Siefke, 6 App. Div. 472, 474; Penny v. Rochester, 7 App. Div. 595, 606; Cullinan v. Furthman, 70 App. Div. 110, 112; Arnot v. Erie, 67 N. Y. 315, 321; McLaughlin v. Fowler, 154 U. S. 663; Lancaster v. Collins, 115 U. S. 222, 227.

A finding that the defendants below knew, or were convinced, is simply stating in two forms that the defendants knew; and a statement recklessly made, without knowledge of its truth, which is, in reality, false, is a false statement knowingly made. Cooper v. Schlesinger, 111 U. S. 148, 155; Moline Plow Co. v. Carson, 72 Fed. Rep. 387, 392; Boddy v. Henry, 113 Iowa, 463, 468; Rothschild v. Mack, 115 N. Y. 1, 7; Hadcock v. Osmer, 153 N. Y. 604, 609.

MR. JUSTICE MCKENNA delivered the opinion of the

court.

Action against plaintiffs in error for attesting as directors a false report, as it is alleged, of the condition of The Citizens' National Bank of Saratoga Springs, New York, whereby the plaintiff in the action (defendant in error)

was deceived and induced to purchase thirty shares of the stock of the bank for the sum of $160 per share, which would have been worth that sum had the report been true, but on account of its being false he was compelled to pay 100 per cent assessment on his shares, which was required to be made by the Comptroller of the Currency. Damages were laid in the sum of $4,800, for which, with interest, judgment was prayed.

The action was framed in deceit under the common law, the trial court stating that "the defendant claims, and the plaintiff concedes, that this is not an action to recover upon any liability stated in the National Banking Act against a director or officer of a national bank." And this was the ground of judgment, the trial court rejecting the contention of defendants (plaintiffs in error) that the only action, if any, available to the plaintiff (defendant in error) was under the National Bank Act. The court said: "But here the liability set forth in the complaint is not created by statute; the action is not a statutory action. It is the common-law action to recover damages in deceit affecting plaintiff only, not the bank or the stockholders generally, and must be considered as such. In the complaint the plaintiff has set forth a cause of action for deceit, and not a cause of action under the statute." The court was also of the view that there was nothing in the statutes of the United States "that destroys the commonlaw action for deceit practiced by the directors of a national bank;" and said, further, that if the plaintiff were attempting to enforce a liability under the statute against the directors of a national bank, there would be a different case. Considering that the evidence established all the elements necessary for the recovery in an action for deceit, the court rendered judgment against defendants (plaintiffs in error) for the sum of $4,800 and interest.

The Appellate Division, where the case was carried by defendants, and also the Court of Appeals, gave a broader

effect to the action, and decided that its requirements under the common law of the State coincided with the requirements of the statutes of the United States, and satisfied the measure of responsibility of those statutes as expressed in Yates v. Jones National Bank, 206 U. S. 158. "The case," the court said, "both as to pleadings and proofs, meets the statutory requirements."

The court, however, decided that by the realization of $97,000 of the assets condemned by the Comptroller, defendant in error's stock was not a total loss, as found by the trial court, but had a value of nearly $2,000, and required him to stipulate to deduct from the judgment the sum of $2,000 and interest, in which case the judgment so reduced was to be affirmed. The stipulation was filed.

The judgment was affirmed by the Court of Appeals, "on opinion of Cochrane, J., in the Appellate Division." We shall refer to the opinion as that of the Appellate Division, although it was adopted by the Court of Appeals.

A consideration of the pleadings need not detain us long. How the action should be denominated or regarded was for the Appellate Division and the Court of Appeals to decide, and those courts, considering the laws of the State, decided that it was the facts pleaded and not the technical designation of the action which constituted grounds of recovery; and we accept their decision. There is nothing in the national banking laws which precludes such view. Those laws are not concerned with the form of pleadings. They only require that the rule of responsibility declared by them shall be satisfied.

The attack made by the plaintiffs in error is as much directed against the evidence as against the ruling of the court, and it is well to consider the facts. They are stated in a general way in the opinion of the Appellate Division as follows (124 App. Div. 53, 54):

"The defendants [plaintiffs in error here] are directors of the Citizens' National Bank organized under the National Bank Law and doing business in the village of Saratoga Springs, N. Y. Prior to March 1, 1904, the Comptroller of the Currency informed the directors of the bank by letter that certain specified assets, amounting to $194,107.02, must be regarded as doubtful, and that immediate steps should be taken for their collection or removal from the bank. Of such letter the defendants had knowledge. On April 8, 1904, pursuant to a call of the Comptroller, a report of the condition of the bank at the close of business on March 28, 1904, made in regular form, verified by the cashier of the bank, and attested to be correct by each of the defendants, was published as required by law. In such report were included as a part of the resources of the bank the doubtful assets to which the attention of the defendants had been called by the Comptroller. The report also stated that the capital stock of the bank was $100,000; that there was a surplus of $50,000 and that there were undivided profits of $13,456.75. This published report was not seen by plaintiff, but its contents were communicated to him, and relying on the same, he purchased in the early part of June, 1904, thirty shares of the stock of said bank for the sum of $4,800. On June 27, 1904, the bank received notice from the Comptroller that its capital had become totally impaired, and that the same must be supplied by assessment upon the stockholders. Immediately thereafter such assessment was ordered, and the plaintiff paid $3,000 on account of the stock he had recently purchased."

All through the argument of plaintiffs in error runs the insistence that the common-law action of deceit does not lie against the directors of a national bank and that the only measure of their responsibility is laid down in the national banking laws. This is admitted. It was conceded by the Appellate Division as having been established

by Yates v. Jones National Bank, 206 U. S. 158, and the question in the case comes to the simple one, whether the Appellate Division rightly decided that the findings in the case at bar satisfied the test of liability declared in the Yates Case.

In that case a broad consideration of the national banking laws was given, and it was deduced from them that the report which § 5211 of the Revised Statutes required must contain a "true"" statement of the condition of the bank and that "the making and publishing of a false report is prohibited." These, however, it was said, were implications but that the liability of the directors was fixed by the express provisions of the laws, and its extent was measured "by the promise not to 'knowingly violate, or willingly permit to be violated, any of the provisions of "" the Title relating to national banks.

This test is the foundation of the action. The complaint charges plaintiffs in error with actual knowledge. The allegation is that when plaintiffs in error attested the report "they knew the same was not correct and was false, and said statement was thus attested by them with the intention of deceiving the public and, among others, the plaintiff" (defendant in error). And the Appellate Division says (p. 56): "That the report was false and known to the defendants to be false they do not deny, nor do they attempt to explain their conduct." This would seem like a finding of fact of knowledge of the falsity of the report on the part of plaintiffs in error. Indeed, in distinguishing the case from the Yates Case the court did so on the ground that in that case "there had been a recovery against directors without proof of scienter, which proof the statute requires," and added: "Such proof has been supplied in the present case."

But, not insisting on this, let us consider the argument of plaintiffs in error. It is that the statement was not voluntary, having been made under the command of the VOL. CCXXIV-6