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tion.

and continue a corporation for

CORPORATE EXISTENCE, POWERS, &C. SEC. 8. And be it further enacted, That every association when a corporaformed pursuant to the provisions of this act shall, from the date of the execution of its organization certificate, be a body corporate, but shall transact no business except such as may be incidental to its organization and necessarily preliminary, until authorized by the Comptroller of the Currency to commence the business of banking.

Such association shall have power to adopt a corporate May adopt a seal seal, and shall have succession by the name designated in its organization certificate, for the period of twenty years twenty years. from its organization, unless sooner dissolved according to the provisions of its articles of association, or by the act of its shareholders owning two-thirds of its stock, or unless the franchise shall be forfeited by a violation of this act; by such name it may make contracts, sue and be sued, 3 complain and May sue and be defend, in any court of law and equity, as fully as natural persons;

It may elect or appoint directors, and by its board of directors appoint a president, vice president, cashier, 4 and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss said officers, or any of them, at pleasure, and appoint others to fill their places;

And exercise under this act all such incidental powers as What basiness shall be necessary to carry on the business of banking by may be transactdiscounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; by obtaining, issu

sued.

3. See section 50, and notes thereon.

4. The cashier is the financial officer, or the executive officer, through whom the whole financial operations of the bank are conducted. The directors may limit his authority as they deem proper, but this would not affect those to whom the limitations were unknown. His authority to do particular acts may be inferred from evidence as to the powers exercised by him, with the knowledge and acquiescence of the directors and the usage of other banks in the same city. (MerchantsBank v. State National Bank, 10 Wallace, 604; The Wakefield Bank v. Truesdall, 55 Barbour, 602.)

5. The directors may remove the president even before any by-laws are adopted. (Taylor v. IIutton, 43 Barbour, 195.)

Transfer of stock.

ing, and circulating notes according to the provisions of this act;

And its board of directors shall also have power to define and regulate by by-laws, not inconsistent with the provisions of this act, the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and all the privileges granted by this act to associations organized under it shall be exercised and enjoyed;

And its usual business shall be transacted at an office or banking-house located in the place specified in its organization certificate.

Where to transact business.

DIRECTORS AND PRESIDENT.

Directors and president:

Sec. 9. And be it further enacted, That the affairs of every association shall be managed by not less than five directors, one of whom shall be the president. Every director shall, during his whole term of service, be a citizen of the United States; and at least three-fourths of the directors shall have resided in the State, Territory, or district in which such association is located one year next preceding their election as directors, and be residents of the same during their continuance in office.

Each director shall own, in his own right, at least ten shares of the capital stock of the association of which he is a director. Each director, when appointed or elected, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such association, and will not knowingly violate, or willingly permit

--must each own ten shares and lake official oath.

6. A bank whose certificates of stock declare the stockholders entitled to a certain number of shares, transferable in person or by attorney on the books of the bank, and upon a surrender of the certificates, but not otherwise, and which permits a stockholder to transfer his shares without a surrender of his certificates, is liable for value of the same stock to a bona fide transferee, who produces the certificates with a properly executed power of attorney to transfer. (Bank v. Lanier, 11 Wallace, 369.)

Banks have no valid liens on the shares of stockholders for debts due from them to the bank, even although the by-laws and the certificates of stock set forth such lien, unless the bank is authorized to make such a provision by the articles of association. (Rosenback v. Salt Springs National Bank, 35 Barbour, 495; Bank v. Lanier, 11 Wallace, 369.)

elections.

to be violated, any of the provisions of this act, and that he is the bona fide owner, in his own right, of the number of shares of stock required by this act, subscribed by him, or standing in his name on the books of the association, and that the same is not hypothecated, or in any way pledged, as security for any loan or debt; which oath, subscribed by himself, and certified by the officer before whom it is taken, shall be immediately transmitted to the Comptroller of the Currency, and by him filed and preserved in his office.

SEC. 10. And be it further enacted, That the directors of Term of officeany association first elected or appointed shall hold their places until their successors shall be elected and qualified. All subsequent elections shall be held annually on such day in the month of January as may be specified in the articles of association, and the directors so elected shall hold their places for one year, and until their successors are elected and qualified.

But any director ceasing to be the owner of the requisite amount of stock, or having in any other manner become disqualified, shall thereby vacate his place. Any vacancy in the board shall be filled by appointment by the remaining directors, and any director so appointed shall hold his place until the next election.

If from any cause an election of directors shall not be made Election, when at the time appointed, the association shall not for that cause omitted at the ar

pointed time. be dissolved, but an election may be held on any subsequent day, thirty days' notice thereof in all cases having been given in a newspaper published in the city, town, or county in which the association is located; and if no newspaper is published in such city, town, or county, such notice shall be published in a newspaper published nearest thereto. If the articles of association do not fix the day on which the election shall be held, or if the election should not be held on the day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise: Provided, That if the directors fail to fix the day, as aforesaid, shareholders representing two-thirds of the shares may.

Sec. 11. And be it further enacted, That in all elections of stockholders' directors, and in deciding all questions at meetings of share- votes : proxies.

act as proxy

No officer,&c., to holders, each shareholder shall be entitled to one vote on

each share of stock held by him. Shareholders may vote by proxies duly authorized in writing; but no officer, clerk, teller, or bookkeeper of such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote.

CAPITAL STOCK AND STOCKHOLDERS.

Shares personal property; transserable.

Sec. 12. And be it further enacted, That the capital stock of any association formed under this act shall be divided into shares of one hundred dollars each, and be deemed personal property and transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association; and every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior holder of such shares, and no change shall be made in the articles of association by which the rights, remedies, or security of the existing creditors of the association shall be impaired.

The shareholders of each association formed under the provisions of this act, and of each existing bank or banking association that may accept the provisions of this act, shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association to the extent of the amount of their stock therein at the par value thereof, in addition to that amount invested in such shares;' except the shareholders of any banking association now existing under State laws, having not less than five millions of dollars of capital actually paid in, and a surplus of twenty per centum on hand, both to be determined by the Comptroller of the Currency, shall be liable only to the amount invested in their shares;

Rights and liabilities of shareholders.

7. The liability of stockholders is several, not joint. The limit of their liability is the par of the stock held by each one. Where the whole amount is sought to be recovered the proceeding must be at law. Where less is required the proceeding may be in equity for contribution, and all stockholders who can be reached by the process of the court may be joined in the suit; but it is no objection that there are others beyond the jurisdiction of the court, who cannot for that reason be made co-defendants. (Kennedy v. Gibson et al., 8 Wallace, 498.)

withhold certifi. cate in certain cases.

tal.

and such surplus of twenty per centum shall be kept undiminished, and be in addition to the surplus provided for in this act; and if at any time there shall be a deficiency in said surplus of twenty per centum, the said banking association shall not pay any dividends to its shareholders until such deficiency shall be made good; and in case of such deficiency, the Comptroller of the Currency may compel said banking association to close its business and wind up its affairs under the provisions of this act.

And the Comptroller shall have authority to withhold Comptroller may from an association his certificate authorizing the commencement of business, whenever he shall have reason to suppose that the shareholders thereof have formed the same for any other than the legitimate objects contemplated by this act.

Sec. 13. And be it further enacted, That it shall be lawful Increase of capifor any association formed under this act, by its articles of association, to provide for an increase of its capital from time to time as may be deemed expedient, subject to the limitations of this act: Provided, That the maximum of such increase in the articles of association shall be determined by the Comptroller of the Currency; and no increase of capital shall be valid until the whole amount of such increase shall be paid in, and notice thereof shall have been transmitted to the Comptroller of the Currency, and his certificate obtained specifying the amount of such increase of capital stock, with his approval thereof, and that it has been duly paid in as part of the capital of such association.

And every association shall have power, by the vote of Reduction of shareholders owning two-thirds of its capital stock, to re- capital. duce the capital of such association to any sum not below the amount required by this act, in the formation of associations: Provided, That by no such reduction shall its capital Proviso. be brought below the amount required by this act for its outstanding circulation, nor shall any such reduction be made until the amount of the proposed reduction has been reported to the Comptroller of the Currency and his approval thereof obtained.

Sec. 14. And be it further enacted, That at least fifty per Fifty per cent. of centum of the capital stock of every association shall be paid in

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