On 1 February 2013 the Dutch government nationalised the SNS Reaal bank and expropriated its shareholders and subordinated bondholders. At the same time, most of the company’s top managers resigned, including its CEO and CFO. Finance Minister Jeroen Dijsselbloem initially claimed at a press conference that the managers would not be held legally accountable for their mismanagement. However, a few days later a majority of the Dutch parliament urged him to explore the possibilities for liability anyway.
Who is liable when a banking business goes wrong? This perennial question already troubled the minds of the Romans. Thanks to the many records recovered from archeological sites such as Pompeii (the most famous being the archive of a prominent family of bankers, the Sulpicii) we have a good insight into how the Roman banking system functioned in daily life. A striking feature is the fact that Roman aristocrats did not manage their banks themselves, since professional banking was considered an inferior way of making a living (Cic. De offic. 1,150). They appointed slaves or freedmen in their stead. It should come as no surprise that this system also led to questions of liability, in particular if the business failed and the managing directors were nowhere to be found.
The Roman jurist Julius Paulus reports such a case (D. 14,5,8) in his Decreta, a collection of judgments of the Roman emperor and his consilium as the highest judicial instance in the Empire. A man called Titianus Primus had appointed a slave to lend money at interest and accept pledges as security in return. His slave, being an ambitious sort, expanded the business on his own initiative and without consent of his master. He involved himself in the grain-trading business by renting granaries and guaranteeing the payment of debts owed to grain merchants by purchasers (so-called recepta argentarii). However, when he decided he had made enough of a profit, he skipped town. The grain merchants were left empty-handed and tried to get their money elsewhere: they sued his principal, Titianus Primus.
Under Roman law, it was possible in some cases to hold a master liable for his slave’s conduct by means of an additional action which was modeled after the contractual action of the third party (actio adiecticiae qualitatis). One of these cases was if a slave had conducted a business on behalf of his master (actio institoria). However, this kind of liability was restricted to transactions concluded within the terms of the slave’s appointment (praepositio). Tititianus Primus claimed that the slave’s dealings with the grain merchants fell outside the scope of his appointment and that consequently he could not be held liable.
Paulus tells us that he sided with Tititianus Primus and pleaded with the emperor (probably Septimius Severus) and the consilium that the master should not incur liability in this case. Yet the emperor decided in favor of the grain merchants. He argued that Titianus Primus was to blame for the reliance which the merchants had placed on the runaway slave, since Titianus had given the impression that he had appointed the slave to act on his behalf in all things.
As the case of Titianus Primus shows, the argument that an appointed bank director has acted ultra vires is not a perfect defense against liability. A failure to adequately oversee operations may contribute to liability for appointed personnel (‘holding out’), since the public may reasonably expect bankers (and slaves) to be supervised adequately. This goes for Roman bankers and their clients as much as for their modern counterparts.