§ 168. Reducing capital of State banks. The capital stock of a State banking corporation can only be reduced by complying with the law as enacted in each State. The statute providing the steps to be taken and the proceedings to be had must be strictly complied with. In no instance can the capital stock be reduced to an amount less than the indebtedness of the corporation. In the State of California the statute reads that "no corporation shall diminish its capital stock to an amount less than the indebtedness of the incorporation." After an authorized reduction of the capital stock of a duly incorporated company it is held, that the "amount of corporate assets over and above the amount of the capital stock is reduced, and the debt is equivalent to surplus profits, and may be treated as such by the corporation. It may be set aside as surplus, or it may be divided among the stockholders proportionately, inasmuch as the rights of previous corporate creditors are not injured." 10 And the same authority holds that "under certain circumstances the surplus may be used to buy outstanding shares of stock." In Strong v. Brooklyn Cross Town R. R., 93 N. Y. 426, held: “* * * where upon the reduction of the capital stock of a bank, certificates of deposit are issued to the stockholders. to the amount of the reduction of the capital stock, such certificates of deposit can be enforced only to the extent that the actual assets of the bank exceeded its liabilities and reduced capital stock." A distribution is only lawful when, upon investigation, it is found that the capital stock was unimpaired at the time of the decrease. The reduction of the capital stock of the corporation does not take place, and is not final in the State of California until the filing of the proper certificate in the office of the Secretary of State. When the statute of a State makes a certificate conclusive proving that the capital stock has been reduced, the same cannot be questioned in a collateral proceeding, though the reduction was not made in accordance with the statute.11 10 Cook on Corporations. § 289. 300 (1899), aff'd (1900), 2 Q. B. 11 Ladies, etc., Association. Lim- 376. ited, v. Pulbrook, 81 L. T. Rep. CHAPTER XVIII. CHANGING NAME OF BANK. § 169. Adopting new name. The name of the corporation is an essential part of the instrument or articles of incorporation. It cannot exist or do business without a name. The law authorizing a bank to amend its articles of incorporation does not apply where the object is to change the name of the corporation. The name of a corporation may, or may not, designate its purpose. Where a new name is to be entirely adopted, this can be done only by complying with the special provisions of the statutes prescribing the mode of procedure. When the name of a corporation is to be abandoned and an entirely new and different name to be substituted, it can hardly be an amendment, or classed as an amendment to the articles of incorporation. The articles of incorporation usually may be amended without application to a court of record, while in some of the States an application for change of name must be made to the court, and where a statute prescribes a mode of procedure it is mandatory and must be followed. The National Banking Act provides by the act of May 1, 1886, section 2, that the name of a national bank may be changed; said section reads: name * * * "That any national banking association may change its with the approval of the Comptroller of the Currency by the vote of shareholders holding two-thirds of the stock of such association. Duly authenticated notice of the vote and of the new name * * shall be sent to the office of the Comptroller of the Currency, but no change of * shall be valid until the Comptroller shall have issued his certificate of approval of the same." name * * * The name of a national bank cannot be changed unless by consent of the Comptroller of the Currency. Section 3 of the act approved May 1, 1886, provides that: "All debts, liabilities, rights, provisions and powers of the association under its old name shall devolve upon and inure. to the association under its new name." Section 4 of said act provides: * * that nothing in this act contained shall be construed as in any manner to release any national banking association under its old name * from any liability, or effect any action or proceeding in law in which said association may be, or become, a party interested. "A national bank desiring to change its name may call a meeting of the shareholders for that purpose, and by their directions direct that the president or cashier of the association submit the resolutions adopted by the shareholders to the Comptroller of the Currency, and if approved by him he will issued a certificate to the effect that the change has been approved by him." When a State bank desires to change its name, after the preliminary steps have been taken by the shareholders of the corporation, and where a procedure is to be had in a court of record, an application may be made to said court, by petition or bill, setting out the necessary facts, and upon hearing, no objector intervening, the court may order a change of name; but where sufficient objections have been alleged by parties who would be directly injured, and a serious wrong be perpetrated upon some other friendly corporation having a similar name, the court would probably refuse the application. The statute of the State wherein the bank is located would govern the procedure, rights, and power of the corporation to change its name. The statute authorizing a corporation to select its name will protect it in retaining the same, and the courts are inclined to protect the name of a corporation independently of any statute. In Holmes v. Holmes, etc., Co., 37 Conn. 278, the court, in discussing this question, holds that "a corporate name, legally acquired, should be protected upon the same pricipal and to the same extent that individuals are protected in the use of trade-marks." "The case of an encroachment is analogous to, if not stronger than that of a piracy upon an established trademark." 1 "In Massachusetts, by statute, a foreign corporation doing 1 Newby. v. Oregon Central Ry., 18 Fed. Cases, 38; Goodyears' India Rubber Co. v. Goodyear Rubber Co., 128 U. S. 598. a banking, loan, trust, or investment business in the State cannot use the same name as, or a similar name to, a domestic corporation." 2 In Higgins Co. v. Higgins Soap Co., 144 N. Y. 462, New York Court of Appeals states the law as follows: "In respect to corporate names the same rule applies as to the names of firms or individuals, and an injunction lies to restrain the simulation and use by one corporation of the name of a prior corporation which tends to create confusion, and to enable the latter corporation to obtain by reason of the similarity of names the business of the prior one. The courts interfere in these cases, not on the ground that the State may advise such corporate names as it may elect to the entities it creates, but to prevent fraud, actual or constructive. For the purpose of suits it is held that the original name remains unchanged." 3 The changing of a name of a corporation cannot affect its real estate contracts.* As to the right of a corporation to maintain an action on the contract or note executed, to-wit: In the old name." It has been held that where a corporation selects a name similar to one already in existence without the knowledge of such facts and without intention of deceit, the court may, in the exercise of its discretion refuse an injunction. е In the absence of statutory provisions providing that a corporation may change its name, it has no power to do so. 2 Cook on Corporations, Vol. 1, (5th ed.), § 15; International T. Co. v. International Loan & Trust Co.. 153 Mass. 271; The Illinois Watch Case Co. r. Piearson, 140 Ill. 423. 3 Morris v. St. Paul, etc., Ry. Co., 19 Minn. 459. 4 Wellfley v. Co., 83 Va. 768. Shenandoah, etc., 5 Northwestern College r. Schwagler, 37 Ia. 577. 6 Hygeia, etc., Co. v. New York, etc., Co., 140 N. Y. 94. 7 Bellows . Hallawell, etc., Bank, 2 Mason, 31; Sykes r. People, 132 Ill. 32. A deposit made by a dealer with the bank (unless declared special), and placed to his credit as such, makes it a general deposit. There being no terms or agreement expressed or fixed between the bank and the depositor, that it is to be held by the bank as distinct from other deposits which are general, it therefore becomes what is termed a general deposit. The depositor in making a deposit in a commercial bank, does so with the implied promise that (unless some special agreement is entered into) it will repay the same upon demand. The money therefore becomes the property of the bank, and the bank has a right to the use of the same, but must repay it upon demand without grace. A general deposit is therefore one which deprives the depositor of the title to the funds until a demand is made for repayment; and it is at once owned by the bank, and ownership authorizes the bank to use the same until called for by the depositor. During such ownership the bank may loan the money and make profit therefrom. The position between the bank and the depositor in a commercial bank of a general deposit is always one of debtor and creditor, and the bank is bound by law to pay upon demand. A depositor in such a case is not required to give notice of a particular time when he will demand payment, but may present his check drawn upon the bank and against his account, without previous notice, and the amount withdrawn discharges the debt of the bank to the extent of the sum named in the check. When the position between the depositor and the banker is one purely of debtor and creditor, the bank cannot be held to the position of a trustee, but may loan such funds for the profit of the bank. Special deposits are the placing of specific kinds of property, or money, in the possession of the bank, to be held by it in kind and returned to the bailor. The bank, in such a case, in |