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premium may be charged and received in addition thereto. And no such corporation shall advertise by newspaper or letter-head or in any other way a larger capital stock than has been actually paid in. 89 0. L. 366.

In transactions with incorporated banking association by innocent party, neither the abuse nor disregard of his authority by its managing officer or agent, or his fraud or bad faith, will be a defense to such incorporation. Citizens' Sav'gs Bank v. Blakesley, 42 Ohio St. 645.

Such association cannot enforce contract for interest which is usurious here, though contract is made in a state where the rate stipulated is authorized; but the contract will not be invalid in toto for want of power to make it. Ewing v. Toledo S. B. & Trust Co., 43 Ohio St. 31.

$ 3806a. Loans by savings banks in counties containing a

city of the second grade, first class; how

madeProvided, that any savings bank in a county containing a city of the second grade of the first class, having in its articles of incorporation expressed the purpose to loan money upon pledges of personal property, it shall, as to all such loans, be subject to all laws and ordinances governing pawn-brokers; and such corporation having in its articles of incorporation such purpose so expressed, may invest its funds in loans upon personal property left with such corporation in pledge, not exceeding fifty per cent of the cash value of such pledge, and upon such loans such corporation may charge and collect a rate of interest not exceeding one per cent a month, and in addition to the cost of rent, insurance and storage, not exceeding one-half of one per cent a month. In all cases where such corporation does a general pawn-broking business, the articles received in pledge shall be kept for ninety (90) days after the loan becomes due, when, if not redeemed, they shall be sold; and the proceeds of such sale after payment of interest, costs of loan, storage, as hereinbefore provided, and the reasonable expenses of sale, shall be credited to the party [to whom] the loan was made and paid upon demand, together with any interest which may accrue thereon under the rules of such corporation governing deposits; provided, that any such corporation having expressed in its charter “to loan money upon pledges of personal property,” shall have the same condition printed in all pass or deposit books and a notice conspicuously displayed in said bank stating that loans are so made by such corporation. And no corporation shall advertise by newspaper or letter-head, or in any other way, a larger capital stock than has actually been paid in. 86 0. L. 369.

The lien upon pledges of personal property is not lost although the pledgee has not complied with the law concerning pawnbrokers. Griffith v. Goldsall, 42 B. 264 (Sup. Ct.).

$3806b. Powers of associations loaning money on chattel

mortgage in certain cities-Capital such asso.

ciations must haveIn cities of the first and third grades of the first class and the first and second grades of the second class, a company organized under the general incorporation laws of the state for the purposes and in accordance with the provisions of this chapter, and which also states in its articles of incorporation that it is organized for the purpose of making loaus secured by mortgage of personal property, and which shall display in its place of business, a notice that it loans money upon chattel mortgage, shall have power to invest its funds in loans not greater than one thousand dollars each, upon mortgage of personal property not exceeding fifty per cent of the value thereof. And


such loans such company may charge and collect a rate of interest not exceeding one and one-half per cent per month, and shall charge no commission, and not more than seventy-five cents for preparing a mortgage or contract, and the actual legal expenses of filing or recording the same, and such charge as may be agreed upon in written contract between the parties for inspection of property mortgaged, and indemnity against loss by fire when insurance is not made by mortgagor. And if any greater charge is made than is herein authorized such company shall forfeit the whole amount of interest. Such company shall have power to borrow money upon its certificates of indebtedness, but not exceeding the amount of its paid capital, and at interest not exceeding legal rates. The capital stock shall not be less than fifty thousand dollars, provided, that a company organized in pursuance hereof may commence business when fifteen thousand dollars of capital are actually paid in. 91 0. L. 308.

$ 3807. Limit of loans to one person

The total liabilities of any person, company, corporation, or firm, to any such association, either as principal debtor, or as security or indorser for others, for money borrowed, including in


the liabilities of a company or firm the liabilities of the several members thereof, shall at time exceed one-fifth

part of the capital stock of such association actually paid in; but the discount of bills of exchange drawn against actually existing values, and the discount of commercial or business paper actually owned by the person, company, corporation or firm negotiating the same, shall not be considered as money borrowed. 70 v. 40, S 17

$ 3808. Dividends

The directors may, as often as they deem proper, make and declare dividends of the profits of the corporation, after paying its expenses, and reserving and setting aside from the net profits of the institution not less than one-tenth part thereof, to be held and invested as a surplus fund to meet any contingency in its business, which reservation shall continue until such surplus is equal to at least twenty per cent of the amount of the full capital stock; and such dividends shall be payable to the shareholders within ten days from the time the same are so declared. 70 v. 40, S 18.

Such association has power to create a lien upon its stock to secure a loan; a by-law may be created by custom and acquiescence; if notice of such lien is printed on the face of stock certificates, purchasers have notice, and are bound by a loan made after the sale by the association and without notice of the sale. Stafford v. Produce Ex. Banking Co., 42 B. 342, affirming 16 C. C. 50. See, also, note to 3797.

Such association may enact a by-law providing that dividends may be withheld to apply on any indebtedness of the stockholder, and that no assignment of dividends can be made while such liability exists, except by consent of the board of directors. Bellevue Bank v. Higbee, 4 C. C. 222, affirmed, 28 B. 336.

$ 3809. Distribution when association ceases to do busi


When any association ceases to do business, or the directors thereof determine to close up its affairs, the assets of the association shall be distributed and disbursed by the directors, or other designated persons, as follows:

ist. In payment of depositors.
2d. In payment of the debts of the corporation.

3. The remainder shall be distributed proportionately among the shareholders. 70 v. 40, $ 20.

$ 3810. Notices and reports to auditor of state

The directors of every such association shall, within six months from and after its incorporation, notify the auditor of state of the date of its organization, and shall, each year, within ten days after its annual meeting, make, under oath, a complete statement of its condition, showing the amount of deposits and capital stock, the amount of the investments, and specifying the character of the same, which statement shall be filed with the auditor of state, and published in his annual report; and they shall also cause such statement to be published in at least one newspaper of general circulation in the county where the corporation is located 70 v. 40, $ 21.

§ 3811. Certain corporations not affected

Associations incorporated under the act entitled “an act to incorporate savings societies,” passed April 16, 1867, and the act passed March 19, 1868, entitled “an act to amend an act entitled 'an act to incorporate savings societies,' passed April 16, 1867,'' may continue their business under said acts, and without any prejudice to any rights acquired; such institutions, and other savings and loan institutions organized under the laws of this state, may, if they so elect, continue their business under this chapter, by signifying such election, under their seal, to the secretary of state, and conforming their action thereto; and the secretary shall record the same, and his certificate be evidence thereof. 70 v. 40, § 23.

Trustees doing business not anthorized, though in the name of the corporation, are individually liable upon contracts entered into; in this case a deposit of money. Ridenour v. Mayo, 40 Ohio St. 9. See, also. Medill v. Collier, 16 Ohio St. 599.

Such societies are not required to pay taxes upon deposits, which are the property of the depositors, who are required to return and pay taxes upon the value of their interests in the society. Collett v. Springfield Savings Society, 13 C. C. 131, affirmed in 37 B. 332, 334.

$ 3812. Their powers increased

Savings societies organized and doing business under the acts named in the preceding section may, in addition to the investments authorized in said acts, invest their funds in the bonds of any county or municipal corporation issued in pursuance of any law of this state, and may charge interest on loans at a rate not to exceed eight per centum, payable semi-annually. 72 v. 150, SS 1, 2.

$ 3813. Further increase of their powers

Societies for savings, duly incorporated by the general assembly of this state, and doing business under their respective acts of incorporation, may invest in land, and in the erection of buildings thereon, for the purpose of their own business, such sum as the trustees thereof deem necessary, not to exceed five per cent of the amount of the deposits held by them, and they may rent any part of such buildings not needed for their own use. 63 v. 62, $ 1; S. & S. 187.

$ 3814. Certain charters extended

All “societies for savings," and "savings societies," now doing business, whose charters are subject to alteration or repeal, may continue their business under their respective charters, after the expiration thereof, subject, however, to the repeal of any such charter, and to such amendments, alterations, rules and regulations as may be prescribed, from time to time, by any law of the state. 74 v. 26, § 1.

$ 3815. Must create a surplus fund

Before any dividend, or interest on deposits, shall be paid by such societies, they must have a surplus fund equal to not less than five per centum of the whole amount of deposits, and they must gradually increase such surplus fund to an amount equal to ten per centum of the amount of deposits. 74 v. 26, $ 2.

§ 3816. Annual reports to the auditor of state

The president and treasurer of every such society shall make to the auditor of state, annually, in writing, during the month of June, an accurate statement of the financial affairs of the society, and the auditor of state shall cause the same to be investigated and examined by two suitable persons, appointed by him, who shall, within a reasonable time, report to him the result of the investigation and examination, with such suggestions as to them seem right and proper; the report of the president and treasurer, with the report of the examiners, or such portion thereof as the auditor of state deems advisable, shall be published in some newspaper printed and having general circulation within

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