Opinion of the Court. laws of the United States, and is engaged in the banking business at Ft. Worth, Tex. "The Bryan County State Bank of Caddo, Okla., is a corporation duly incorporated under the laws of the State of Oklahoma, and was organized on or about the 27th day of January, 1908, with a capital stock of $40,000 fully paid, and began operation, as a bank at Caddo, Okla., on or about the 1st day of February, 1908. "That the Bryan County State Bank has ceased to do a banking business and is now in process of liquidation, and S. W. Maytubby of Caddo, Okla., is the liquidating officer thereof, and that all depositors have been fully paid. That it owes no debts, and its assets belong to the stockholders. "That the Security State Bank of Caddo, Okla., is a corporation incorporated under and by virtue of the laws of the State of Oklahoma, with its office at Caddo, Okla. "That Edw. D. Bennett resides in Caddo, Bryan county, Okla. "It is admitted: That the said Edw. D. Bennett is indebted to the American National Bank in the sum of $1,200, with interest thereon from February 12, 1911, at the rate of 8 per cent. per annum, and $120 as attorney's fee, and that said debt is secured by 15 shares of the capital stock of the Bryan County State Bank, as shown by certificate No. 67, and that said certificate is held by the plaintiff herein. That said debt was first contracted and made on or about February 19, 1910, at which time. said stock was delivered as security, and has ever since been held by plaintiff to secure said debt, which had been renewed from time to time and which debt was due and unpaid at the time of the filing of this suit, and is still due and unpaid. That said note or debt was for money loaned by the plaintiff to the defendant, Edw. D. Bennett. The plaintiff had no actual notice of any claim on the part of others to said stock. That the said Edw. D. Bennett was the principal maker of the note sued on, and that Bryan Co. State Bank et al. v. Amer. Nat. Bank of Ft. Worth. Tex., et al. H. M. Dunlap signed the same as surety. That the said certificate for 15 shares of the capital stock of the Bryan County State Bank of Caddo, Okla., was issued to H. M. Dunlap, on December 31, 1908, having been transferred to him by Julia Hancock, and the same was a part of certificates Nos. 6, 7, and 8, issued by the said Bryan County State Bank to C. A. Hancock on January 29, 1908, and transferred by him to the said Julia Hancock. "This does not preclude either party from adding such other and further evidence as may be material. "E. F. NICHOLDS, "Atty. for Plaintiff. "E. D. BENNETT, "MCPHERREN & COCHRAN, "Attys. for Defendant Bank." The provisions of the banking law of Oklahoma, as in force at the time of the transactions involved in this action, may be found in Rev. Laws 1910, secs. 262, 264, 266, 268, 270, 273, 282, 294, 295, which are as follows: "262. Officers-Election, Duties and Liabilities. The affairs and business of any banking association organized under the laws of this state shall be managed or controlled by a board of directors of not less than three nor more than thirteen in number, who shall be selected from the stockholders, at such time and in such manner as may be provided by the by-laws of the association. No person shall be eligible to serve as director of any bank organized or existing under the laws of this state unless he shall be a bona fide owner of five hundred dollars of the stock of such bank, fully paid and not hypothecated. Any director, officer or other person who shall participate in any violation of the laws of this state, relative to banks and banking, shall be liable for all damages which the said bank, its stockholders, depositors or creditors shall sustain in consequence of such violation. The board shall select from among their number the president and secretary, and Opinion of the Court. shall select from among their stockholders a cashier. Such officers shall hold their offices for a term of one year and until their successors are elected and qualified. The board shall require the cashier and any and all officers having the care of the funds of the bank to give a good and sufficient bond, to be approved by them, and held by the State Banking Board. The board of directors shall hold at least two regular meetings each year, and at such meetings a thorough examination of the books, records, funds and securities held by the bank shall be made and recorded in detail upon its record book, and a certified copy thereof shall be forwarded to the Bank Commissioner and to each stockholder of record within ten days." "264. Charter Forfeited, When. The violation of any of the provisions of this chapter by the officers or directors of any bank organized or existing subject to the laws of this state shall be sufficient cause to subject the said bank to be closed and liquidated by the Bank Commissioner and for the annulment of its charter." "266. Securities and Disposition Thereof. No bank shall employ its moneys, directly or indirectly, in trade or commerce, by buying or selling goods, chattels, wares or merchandise, and shall not invest any of its funds in the stock of any other bank or corporation, nor make any loans or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares, unless such securities or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale, and after the expiration of six months any such stock shall not be considered as part of the assets of any bank: Provided, that it may sell any personal property which may come into its possession as collateral security for any debt or obligation due it, upon posting a notice in five public places in the county wherein the property is to be sold, at least ten days before the time therein specified for such sale, and which Bryan Co. State Bank et al. v. Amer. Nat. Bank of Ft. Worth. Tex., et al. said notice shall contain the name of the bank and the name of the pledgor, the date of the pledge, the nature of the default and the amount claimed to be due thereon at the date of the notice; a description of the pledged property to be sold and the time and place of sale." "268. Liability of One Person Limited. The total liabilities to any bank of any person, corporation or firm, for money borrowed, including in the liabilities of such company or firm the liabilities of the general stockholders, officers or members thereof, shall not at any time exceed twenty per cent. of the capital stock of such bank; but the discount of bills of exchange drawn in good faith against actual existing values, as collateral security and a discount of commercial or business paper, actually owned by the person, shall not be considered as money borrowed." "270. Loans to Officers. It shall be unlawful for any active managing officer of any bank organized or existing under the laws of this state to borrow, directly or indirectly, money from the bank with which he is connected; and the officer making or authorizing a loan to any such person, as well as the person receiving the same, shall be deemed guilty of a larceny of the amount borrowed." "273. Banks to Make Reports. Every bank shall make at least four reports each year, and oftener if called upon by the Bank Commissioner and according to the form which may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, and attested by the signature of at least two of the directors. Each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the association at the close of business on any past day by the Bank Commissioner specified, and shall be transmitted to the Bank Commissioner within ten days after the receipt of a request or requisition therefor by him, and shall be published at the expense of the bank in the same form in which it is made to the Bank Commissioner within ten days after the same is made, Opinion of the Court. by two insertions in a newspaper published in the county in which such bank is established; and such proof of publication shall be furnished within five days after date of last publication, as may be required by the Bank Commissioner. The Bank Commissioner shall also have power to call for special reports from any bank, whenever, in his judgment, the same are necessary, in order to gain a full and complete knowledge of its condition. Provided, that the reports authorized and required by this section to be called for by the Bank Commissioner shall relate to a date prior to the date of such call, to be specified therein." "282. Penalty for Violations. Every banker, officer, employee, director or agent of any bank who shall neglect to perform any duty required by this chapter, or who shall fail to conform to any lawful requirements made by the Bank Commissioner, shall be deemed guilty of a felony, and upon conviction thereof shall be punished by a fine not to exceed one thousand dollars, or by imprisonment in the penitentiary not to exceed five years, or both such fine and imprisonment." "294. Shares. Personal Property Transfer. The shares of stock of an incorporated bank shall be deemed personal property, and shall be transferred on the books of the bank in such manner as the by-laws therefor may direct, but no transfer of stock shall be valid against a bank or any creditor thereof so long as the regular holder thereof shall be liable as a principal debtor, surety or otherwise to the bank for any debt, nor in such cases shall any dividend, interest or profits be paid on such stock so long as such liabilities continue, but all such dividends, interests or profits shall be retained by the bank and applied to the discharge of such liabilities, and no stock shall be transferred on the books of any bank where the registered holder thereof is in debt to the bank for any matured and unpaid obligations. "295. Bank Cannot Loan on its Stock-Loans to Stockholders.. It shall be unlawful for any bank to loan |