Free banking

Sec. 275. Any person or association of persons, or corporation formed in compliance with the following provisions, may transact the business of banking in this State, and establish of- authorized. fices of discount, deposit and circulation for that purpose, upon the terms and conditions, and subject to all the liabilities and penalties herein described.

C. C. 427 (418). Act 1855, p. 214.

granted.

Sec. 276. Bankers and banking corporations carrying on the business of banking, shall have power to discount bills, notes and other evidences of debt, to receive deposits, to buy and sell Powers gold and silver bullion, foreign coins and bills of exchange, to lend money on real and personal security, and to exercise all incidental powers necessary to carry on the business; but the shall not be aggregate amount of the capital stock of the banker or corpora- $100,000. tion shall not be less than one hundred thousand dollars.

Capital stock

less than

Sec. 277. Any person or persons, more than five, associating Number of themselves for the purpose of banking, may constitute them- persons necesselves a corporation, with power and authority:

sary for bank

ing.

banking cor

First-To have and enjoy succession by a corporate name, to be selected by themselves, for a period that shall be expressed Powers of and limited in the articles of association, not exceeding twenty porations. years, and by that corporate name to sue and be sued, plead and be impleaded, appear, answer and prosecute, in any and all courts of justice and elsewhere.

Second. To hold, receive, purchase and convey, by and under their corporate name, such property, real and personal, as may be indispensable to the objects of the association. The real estate which such corporation may lawfully purchase, hold and convey, shall be:

I. Such as may be necessary for the proper transaction of their business;

II. Such as shall have been mortgaged to them in good faith as security for loans;

III. Such as shall have been conveyed to them in satisfaction of debts previously contracted bona fide in the course of their business; and

IV. Such as they may purchase at sales under judgments of mortgages held by themselves, or in which they may have an interest, by being subrogated to rights, according to article two thousand one hundred and fifty-seven of the Civil Code; but they shall not have power to hold any real estate, acquired in any way, except such as may be required for the transaction of their business, for a longer time than five years.

--

C. C 2161 (2157).

Third. To make and use a corporate seal, to be described in the articles of association.

Fourth. To name and appoint such managers and directors to administer the affairs of the corporation as they may think necessary and proper, the number and style of such directors or managers being described in the articles of association, and to fix the compensation of all persons in their employment. All the managers and directors shall be citizens of the State.

Fifth. To make and ordain such by-laws for the proper management of the affairs of the corporation as may be necessary and proper, and in conformity with the provisions of law, the articles of association and such by-laws, to repeal, alter and amend at pleasure.

C. C. 2161, (2157.)

Sec. 278. They shall be organized by written articles of asWritten arti-sociation, executed by a notarial act, and recorded in the office tion, how exe- of the recorder of mortgages, or other officer exercising the

cles of associa

cuted and published.

Act to be recorded.

functions of recorder of mortgages, at the place named in the act as the place of business or domicile of the corporation; a certified copy of the same shall be deposited in the office of the auditor of public accounts; it shall also be published once a week, for four weeks, in the official journal of the State, and if the official journal of the State should not be a newspaper in Auditor to be the city of New Orleans, the act shall also be published for the same time in at least one daily newspaper of the city of New Orleans, and also in a newspaper at the place named in the act given by pub- as the place of business, if there be one published there. A duly certified copy of the record of such an act may be used as evidence for and against such corporations.

furnished with a copy.

Notice to be

fication.

act of incor

Sec. 279. The act thus recorded and published shall contain and set forth, under the signatures of the subscribers and asso- Contents of ciates, the name assumed to distinguish such banking company, poration. and to be used in its dealings; the place where the banking business of such association is to be carried on, designating the particular parish and city or village in the State; the amount of the capital stock of the banking company, and the number of shares into which the same shall be divided; the names and places of residence of the shareholders, and the number of shares held by each of them respectively, and the time when and the manner in which payments on stock subscribed shall be made; the period at which the association shall commence, and the period of its duration; the number of its directors and managers; the mode of election, and liquidation at the end of the term. The same may also provide for an increase of the capital and of the number of associates, and for any modification, addition or alteration in the articles of association. Every in- Modifications, erease, modification, alteration or addition shall be submitted to a general meeting of the stockholders, held after thirty days' notice, and shall be approved by two-thirds of the amount of the capital stock, and shall be executed, recorded and published, as provided for the original articles.

how made.

Sec. 280. All stock subscribed to any banking company un- Stock subder this act, must be paid up in full in specie within twelve scribed, when months after the company shall commence business.

to be paid.

Sec. 281. No loans of any banking company shall be made to Restriction as any of its stockholders on a pledge of its own stock.

person;

to loans to stockholders.

to be personal property-how

stockholders.

Sec. 282. The shares of the banking companies shall be personal property, and shall be transferable upon the books of the Shares of stock same, in such manner as the by-laws may direct; but no shareholder therein shall be liable for its debts and contracts to a transferable. greater amount than the whole of his shares therein. UnincorIporated bankers shall be liable to the full amount of their obli- Liability of gations and contracts. The liability as stockholders shall apply not only to such persons as appear by the books of the company to be such, but also to every equitable owner of stock, although the same may appear upon the books in the name of another also to every person who shall have advanced the installments or purchase money of any stock in the name of a person under twenty-one years of age, and while such person remains a minor; and also to every guardian who shall voluntarily invest funds in such stock. No trust funds shall be liable for the corporate debts; the guardian or trustees shall be personally liable, until the person beneficially interested becomes competent to control and dispose of the same, and for sixty days thereafter. But when a guardian or trustee holds such stocks under a transfer from a third person in good faith, or by positive directions to make such investment, the person so transferring or giving directions, or his estate, if he be deceased, shall Liability of asbe responsible for the debts and liabilities chargeable on the stock. stock.

signees of

Stockholders

Sec. 283. The stockholders shall be exonerated from any re-how exoner- sponsibility in respect to stock duly transferred on the books of ated from lia- the association in good faith, and without intent to evade such

bility.

Charter-how forfeited.

case of for

feiture.

responsibility, before default has been made by the company in the payment of its debts. The assignee shall succeed to the same responsibilities as though he had been owner of the stock at the time of contracting the debt or liability for which the stockholders are responsible, and the same rule of responsibility shall prevail in regard to all subsequent assignees.

Sec. 284. Every banking company established under this act Proceeding in shall, on proof of any act of insolvency or non-compliance with any of the conditions of this act, forfeits its corporate rights, and it shall be the duty of the district court of the district in which such corporation is situated, at the instance of any credi tor, or of the auditor of public accounts, and on proof of the alleged facts, to decree such forfeiture, and to appoint thereupon commissioners to effect the liquidation of the affairs of the corporation; to convert into cash, as speedily as may be, under the direction of the court, all the assets of the corporation, including the sum that may have remained unpaid by stockholders upon their respective shares of the capital stock, and after providing for any unpaid balance which may be due to the billholders, to distribute the same as now provided by law, in case of insolvencies of individuals.

Duty of audi

circulating

notes.

Auditor to

register all notes.

Sec. 285. The auditor of public accounts is authorized and tor in causing directed to cause to be engraved and printed, in the best mancirculated ner to guard against counterfeiting, such quantity of circulating notes, in blank, of the different denominations, not less than five dollars each, which are authorized to be issued by the incorporated banks of the State, as he may from time to time deem countersign, necessary. The blank circulating notes shall be countersigned by the auditor, and numbered and registered in his office, so that the notes of each denomination of such circulating notes issued to the same banker or banking company shall be uniform. All such circulating notes, of every denomination, shall be stamped upon their face, "Secured by pledge of public stocks." The form and devices of such circulating notes may be selected by the bankers and banking companies who may be entitled to receive them from the auditor; but the device for receiving the form and de- signature of the auditor, and the number herein directed to be put upon such notes by him, shall be uniform.

Notes, their

vice.

Bonds and stocks to be as

auditor by

Sec. 286. Banks and banking companies established under this act, upon legally assigning to, and depositing with the audisigned to the tor, the bonds or evidences of debt of the United States; bonds of this State; bonds of the consolidated debt of the city of New Orleans, authorized and secured by the thirty-seventh section of the act "to consolidate the city of New Orleans, and provide for the government and administration of all its af fairs," approved February the twenty-third, eighteen hundred and fifty-two, and the fifth section of the act approved February

banks, for which they shall receive circulating notes.