Second Department, May, 1908. [Vol. 126. Where in such action it appears that the cashier who converted the bank's securities was its largest stockholder and had administered its affairs for many years, had a good reputation in the community and himself verified the false reports in conjunction with the president, the question as to whether the president was negligent in failing to discover the absence of securities listed in the reports by a personal investigation is one of fact for the jury. GAYNOR, J., dissented, with opinion. APPEAL by the defendant, Annie C. B. Foster, as administratrix, etc., from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Richmond on the 25th day of June, 1907, upon the verdict of a jury, and also from an order entered in said clerk's office on the 25th day of June, 1907, denying the said defendant's motion for a new trial made upon the minutes. John G. Milburn [Walter F. Taylor and Frederick P. Forster with him on the brief], for the appellant. Charles F. Brown [Nathan D. Stern with him on the brief], for the respondent. JENKS, J.: I think that this judgment must be reversed for an error in instructions to the jury. The appeal is by the administratrix c. t. a. of Augustus Prentice from a judgment entered on a verdict at Trial Term against the estate for $183,690. The plaintiff as the receiver of the Bank of Staten Island sues the officers and directors of the bank in a common-law action for negligence, whereby Ahlmann, the cashier and a director, found opportunity for thefts which brought the bank to insolvency and the closing of its doors on December 31, 1903. Ahlmann killed himself on December 30, 1903. Twenty-two thousand five hundred and thirty dollars was recovered from his estate. Augustus Prentice was the president, and he with A. B. Prentice, R. L'H. Finch, Wood and Ahlmann were directors. Finch is dead; Wood was not served, but was called as a witness by the plaintiff; and as to A. B. Prentice, the action was dismissed at trial. The plaintiff read in evidence official reports of the bank to the Superintendent of Banks, of which all save the last were verified by Prentice as president and by Ahlmann as cashier; the last was App. Div.] Second Department, May, 1908. verified by Ahlmann alone, with the statement that Prentice was ill. The examination by the State Bank Examiner showed that the report of December, 1902, was correct and that the assets were intact. There is no doubt, however, that a report was verified by Prentice after securities to a large amount or their proceeds had been made away with by Ahlmann, which report showed that the securities or their equivalent were still assets of the bank, and the contention of the plaintiff is that the fact that Prentice as president verified a report or reports which were false in that respect, was evidence of negligence in his offices of president and of director. There were also other acts of alleged omission proved as to the conduct of the bank by him and his fellow-officers, such as lack of attention, audit or examination, absence both of proper committees of supervision, and of directors' meetings, improper bookkeeping, lax care of securities and divers matters of alleged slipshod management. If at the time of a verification of a particular report which showed the securities or their equivalent on hand, the securities had been stolen, the fact that the verification was made in such ignorance was not the cause of the theft. The cashier did not know but that before the president joined in the verification he might call for a production of the securities; the cashier could only surmise when he abstracted the securities that as to future reports the president might not require the production of the securities, and if the president had not done so in the past he probably would be content not to do so in the future. But much stress was laid upon the verification of these reports upon the proposition that if Prentice had observed due care in qualifying himself to make the oath he would not have been ignorant of the fact that the securities were no longer possessed by the bank. Indeed, the learned court, after instructing the jury that negligence must be proved against Prentice, said that the jury must determine whether reasonable care was exercised to prevent dishonesty and whether the losses were traceable to specific acts of negligence on the part of Prentice, and thereupon called to the attention of the jury that Prentice had signed quarterly reports, that the last of them was signed in August, 1903, that at that time, as it recalled the evidence, the bonds had been extracted and the fraudulent loans of $30,000 had been made. Then the court laid down the law as to the require Second Department, May, 1908. [Vol. 126. ment of the oath by Prentice, in terms which I shall specifically notice further on, and immediately charged the jury: "I also charge you that inasmuch as the said reports contained statements that the bank was the owner of certain investment securities at the time of making such reports, if the jury- you find that the president of the bank made such reports without knowledge that such investments were in the possession of the bank, and relied upon the statement of the cashier, instead of informing himself of the fact, and that as a consequence thereof opportunity was given to the cashier to make away with such securities so as the same were lost to the bank, then you may find a verdict for the plaintiff for such amount as you find was lost as the result of such conduct or negligence on the part of the president of the bank." And the court thereafter further charged: "I charge you further it is the duty of the President of a bank to keep himself informed, sufficiently familiar with the affairs of the bank and the conduct thereof-not alone by the cashier, but the general conduct, and the investment of securities, and the securities on hand, to enable him truthfully and faithfully to comply with the requirements of the statute that he verify on oath the several quarterly reports, as to the details thereof." The stolen securities made up a very great part of the thefts. I now consider the instructions of the court as to the oath annexed to the report, which were as follows: "Now, the banking laws of the State of New York in the year 1900 and subsequent thereto made it the duty of the president of the bank to verify by oath the several quarterly reports to the superintendent of banks which have been put in evidence in this cause, and to verify by his oath as to each of said reports that the same was true and correct in all respects. I charge you, as matter of law, that it was the duty of the president of the bank to have such knowledge of and such acquaintance with the several matters stated in the quarterly reports that he could truthfully make oath that the said reports were true in all respects." The exception taken to this instruction was as follows: "Defendants' counsel excepts to so much of the charge as instructs the jury that it was the duty of the president of the bank to have such knowledge of and such acquaintance with the several matters stated in the quarterly reports, that he could truthfully make oath that the said reports were true in all respects." App. Div.] Second Department, May, 1908. The first question is whether the exception was sufficient. The purpose of such an exception is to call the attention of the court to the instruction given and to the fact that it is objected to, in order that the court may have the opportunity to retract, alter or modify the instruction. Comparing the exception with the instruction, it appears that the exception pointed out the precise language of the instruction objected to. The court could not mistake the subject of the exception. In McGinley v. United States Life Ins. Co. (77 N. Y. 497) the court, per MILLER, J., say: "When it is intended to except to a specific proposition or to particular remarks of a judge in his charge to the jury, the counsel making the exception should put his finger on the proposition clearly and distinctly, beyond any question, and employ language entirely plain, so that there can be no doubt as to the real character of the exception, or as to what was actually intended. This is essential to enable the judge to correct, modify or change the language used, if he deems it proper, and to prevent any misconception or misapprehension as to what portion of the charge the exception was intended to apply. To obtain the advantage of an exception as to language used in the charge it must be presented either in the same or in equivalent words, or so as to embrace the substance of the charge, and not in phraseology which is at least of a doubtful construction." That case is cited and approved in Brozek v. Steinway Railway Company (161 N. Y. 63, 65). In People ex rel. Dailey v. Livingston (79 N. Y. 292) the court say: "The learned counsel for the relator in answer to this point insists, first, that the exception was not sufficiently specific. At the close of the charge several requests to charge were made by the respective parties, and then the case states that the defendant excepted to the closing of the charge in regard to the ballot-boxes. It would have been strictly more accurate to have repeated the language excepted to, but the exception referred to the close of the charge and the subject. There was but a single idea in that part of the charge, and that was expressed in clear and emphatic language. The exception could not have referred to anything else, and it is difficult to see how there could have been any misapprehension as to the application of the exception. We think that the rule requiring specific exceptions was substantially, if not technically complied with." I fail to see how the exception could be more precise and definite. Second Department, May, 1908. [Vol. 126. It is not the rule that the exceptor is bound to state the reason for his challenge to the law of the instruction. In Requa v. v. Holmes (16 N. Y. 202) the court say: "In excepting to a charge, all that is necessary is to specify the legal proposition therein supposed to be objectionable. In this case the whole charge consisted of but a single legal proposition, and a general exception thereto was suffi cient. It was unnecessary to state the reasons why the charge was, or was supposed to be, erroneous." In Goldman v. Abrahams (9 Daly, 223) the court say: "The proposition of the charge, in view of the evidence, was erroneous, and to that erroneous proposition an exception is taken. In an exception to a charge counsel are not bound to state the grounds of their exception. They are simply called upon to except to such propositions as they deem erroneous, and this raises the question of law in a proper form." In Freund v. Paten (10 Abb. N. C. 316) the court say: "The instructions given the jury were plainly not in accord with the legal rule, and more strongly marked by the omission of the term 'reasonable,' in qualification of the word 'doubt.' The plaintiff's counsel, by excepting to the court's charge of legal propositions, did all that was needful to present the question. Under such circumstances counsel are not called upon to suggest amendments or changes to the court; but may rely upon the exception (Goldman v. Abrahams, 10 Weekly Dig. 108;* Allis v. Leonard, 58 N. Y. 291)." (See, too, Brick v. Fowler, 12 Wkly. Dig. 310; Allis v. Leonard, 58 N. Y. 288; Baylies Tr. Pr. [2d ed.] 336; 2 Rumsey Pr. [2d ed.] 368.) As stated in the last authority cited, if the error was merely inadvertent, like the misuse of a word or a slip in phraseology, where it is perfectly clear that the court could not have intended the expression used, courts have been inclined to require that the exception should suggest the correction, e. g., Ellis v. People (21 How. Pr. 356, 360); Simmons v. Ocean Causeway (21 App. Div. 36). But I think that the appellant should not be deprived of the benefit of his exception on the ground that the instruction was an inadvertence. The learned court three times instructed the jury that the law required that the president verify the reports by absolute oath, and never made mention of the fact that the oath as required was but a qualified one. In the dissenting opinion of my brother * Same case reported in 9 Daly, 223 (supra).— [REP. |