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advertise for


Comptroller of the Currency, and also make report to the Comptroller of the Currency of all his acts and proceedings. The Comptroller shall thereupon cause notice to be given, by advertisement in such newspapers as he may direct, for Comptroller to three consecutive months, calling on all persons who may claims have claims against such association to present the same, and to make legal proof thereof. And from time to time the Comptroller, after full provision shall have been first made for refunding to the United States any such deficiency in redeeming the notes of such association as is mentioned in this act, shall make a ratable 24 dividend of the money -and make divi so paid over to him by such receiver on all such claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction; 25 and from time to time, , as the proceeds of the assets of such association shall be paid over to him, he shall make further dividends, as aforesaid, on all claims previously proved or adjudicated; and Balance, if any, the remainder of such proceeds, if any, shall be paid over shareholders. to the shareholders of such association, or their legal representatives, in proportion to the stock by them respectively held.

Provided, however, That if such association against which Banks denying proceedings have been so instituted, on account of any refused to realleged refusal to redeem its circulating notes as aforesaid, deem notes may shall deny having failed to do so, such association may, at appetes, to U.S. any time within ten days after such association shall have been notified of the appointment of an agent, as provided in this act, apply to the nearest circuit, or district, or territorial court of the United States, to enjoin further proceedings in the premises; and such court, after citing the

24. The United States have no right to priority of payment of debts due to the Government as against private creditors of insolvent banks, except to be reimbursed the amount expended in redeeming the circulating notes of such banks, according to the provisions of section 47 of this act. (See page 132.)

The act of March 3, 1797, (sec. 5,) giving the United States priority over general creditors of insolvent debtors, does not apply to national banks. (Official Opinion of Attorney General Akerman, 1870.)

25. The Supreme Court of Iowa held that the receiver is a proper party in proceedings for the adjudication of claims against a national bank. (Turner v. First National Bank of Keokuk, 26 Iowa, 562.)

Comptroller of the Currency to show cause why further proceedings should not be enjoined, and after the decision of the court or finding of a jury that such association has not refused to redeem its circulating notes, when legally presented, in the lawful money of the United States, shall make an order enjoining the Comptroller, and any receiver acting under his direction, from all further proceedings on

account of such alleged refusal. Expense of pro

Sec. 51. And be it further enacted, That all fees for protest, receiver

testing the notes issued by any such banking association ship, &c., how paid.

shall be paid by the person procuring the protest to be made, and such banking association shall be liable therefor; but no part of the bonds pledged by such banking association, as aforesaid, shall be applied to the payment of such fees. And all expenses of any preliminary or other examinations into the condition of any association shall be paid by such association; and all expenses


any receivership shall be paid out of the assets of such association before

distribution of the proceeds thereof. Transfer of prop- Sec. 52. And be it further enacted, That all transfer of erty of insolvent the notes, bonds, bills of exchange, and other evidences of nets giving pref. debt owing to any association, or of deposits to its credit; crence, void.

all assignments of mortgages, sureties on real estate, or of judgments or decrees in its favor; all deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of its assets in the manner prescribed by this act, or with a view to the preference of one creditor to another, except in payment of its circulating notes, shall be utterly null and void.


Violation of law by directors to forfeit rights, lic..

Sec. 53. And be it further enacted, That if the directors of any

association shall knowingly violate, or knowingly of bank, and di- permit any of the officers, agents, or servants of the assorectors liable for ciation to violate, any of the provisions of this act, all the

rights, privileges, and franchises of the association derived


from this act shall be thereby forfeited. Such violation shall, however, be determined and adjudged by a proper circuit, district, or territorial court of the United States, in a suit brought for that purpose by the Comptroller of the Currency, in his own name, before the association shall be declared dissolved. And in cases of such violation, every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person, shall have sustained in consequence of such violation.


pay. .

Sec. 54. And be it further enacted, That the Comptroller Bank examiners, of the Currency, with the approbation of the Secretary of their duty and the Treasury, as often as shall be deemed necessary or proper, shall appoint a suitable person or persons to make an examination of the affairs of every banking association, which person shall not be a director or other officer in any association whose affairs he shall be appointed to examine, and who shall have power to make a thorough examination into all the affairs of the association, and, in doing so, to examine any of the officers and agents thereof on oath ; and shall make a full and detailed report of the condition of the association to the Comptroller. And the association shall not be subject to any other visitorial powers than such as are authorized by this act, except such as are vested in the several courts of law and chancery. And every person appointed to make such examination shall receive for his services at the rate of five dollars for each day by him employed in such examination, and two dollars for every twenty-five miles he shall necessarily travel in the performance of his duty, which shall be paid by the association by him examined.


SEC. 55. And be it further enacted, That every president, Embezzlement, director, cashier, teller, clerk, or agent of any association, 26 willful misap

plication of

funds, and other 26. The act of April 6, 1869, chapter 11, provides for the punishment of misdemeanors, persons aiding or abetting officers or agents in doing any of the acts enumer. how punished.

who shall embezzle, abstract, or willfully misapply any of the moneys, funds, or credits of the association, or shall, without authority from the directors, issue or put in circulation any of the notes of the association, or shall, without such authority, issue or put forth any certificate of deposit, draw any order or bill of exchange, make any acceptance, assign any note, bond, draft, bill of exchange, mortgage, judgment, or decree, or shall make any false entry in any book, report, or statement of the association, with intent, in either case, to injure or defraud the association or any other company, body politic, or corporate, or any individual person, or to deceive any officer of the association, or any agent appointed to examine the affairs of any such association, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by imprisonment not less than five nor more than ten years.


Certain suits to

Sec. 56. And be it further enacted, That all suits and probe conducted by ceedings arising out of the provisions of this act, in which

, .

the United States or its officers or agents shall be parties, shall be conducted by the district attorneys of the several districts, 27 under the direction and supervision of the Solicitor of the Treasury.

Sec. 57. And be it further enacted, That suits, actions, suits against

and proceedings against 28 any association under this act, may be had in any circuit, district, or territorial court of the United States held within the district in which such association may be established, 29 or in any State, county,

Jurisdiction of


ated in this section. And the act of July 8, 1870, chapter 226, declares to what officers and what banks the section and the amendment thereto shall apply.

27. The requirement of this section that all suits, &c., under this act shall be conducted by the district attorneys of the several districts is merely directory, and suits may be conducted by private counsel. (Kennedy v. Gib. son et al., 8 Wallace, 504.)

28. Under this section suits may be brought by as well as against national banks in the courts therein mentioned. The omission of the word "by" is decided to be accidental. (Kennedy v. Gibson et al., 8 Wallace, 506.)

29. The Supreme Judicial Court of Massachusetts has decided that a national bank can be sued in a State court only in the county or city in which it is established. The Supreme Court of New York has decided otherwise, and holds that a national bank may be sued even in a State other than that in which it is located. (Crocker v. Marine National Bank of New York, 101 Mass., 240; Cooke v. State National Bank of Boston, 50 Barbour, 339.)

or municipal court in the county or city in which said association is located, having jurisdiction in similar cases: Provided, however, 30 That all proceedings to enjoin the Comptroller under this act shall be had in a circuit, district, or territorial court of the United States, held in the district in which the association is located.

MUTILATION OF NOTES. Sec. 58. And be it further enacted, That every person who Mutilating notes shall mutilate, cut, deface, disfigure, or perforate with holes, dences of debts, or shall unite or cement together, or do any other thing to punishable. any bank bill, draft, note, or other evidence of debt, issued by any such association, or shall cause or procure the same to be done, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued by said association, shall, upon conviction, forfeit fifty dollars to the association who shall be injured thereby, to be recovered by action in any court having jurisdiction.


FALSE PLATES, AND OTHER OFFENSES. Sec. 59. And be it further enacted, That if any person Forgery, counter shall falsely make, forge, or counterfeit, or cause or procure

feiting notes,

passing forged to be made, forged, or counterfeited, or willingly aid or notes, &c. assist in falsely making, forging, or counterfeiting, any note in imitation of, or purporting to be in imitation of, the circulating notes issued under the provisions of this act, or shall pass, utter, or publish, or attempt to pass, utter, or publish any false, forged, or counterfeited note, purporting to be issued by any association doing a banking business under the provisions of this act, knowing the same to be

30. This proviso does not give to United States circuit courts jurisdiction of a suit in equity to interfere with the United States Treasurer or Comptroller of the Currency in their duties respecting bonds deposited for the security of notes, and those courts have no such jurisdiction. (Van Antwerp v. Hulburd, 7 Blatchford C. C. R., 426; Same, 8 Blatchford C. C. R., 282.)

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