Cornell University Law Library 1 The Moak Collection PURCHASED FOR The School of Law of Cornell University | And Presented February 14, •8p3 IN nenoRY of 1 JUDGE DOUGLASS BOARDMAN FIRST DEAN OF THE aCKOOL By his Wife and Daughter A. M. BOARDMAN and ELLEN D. WILLIAMS Cornell University Library KF 999.B18 The law of national bankscontaining t^^ 3 1924 018 877 591 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018877591 THE LAW OF NATIONAL BANKS CONTAINING THH NATIONAL BANK ACT, AS AMENDED, WITH FORMS OF PROCEDURE ASD NOTES EEFERRING TO ALL DECISIONS BBPORTBD TO NOVEMBER 1, 1880. By FARLIN Q. JJ^LL, ^ OF THE CHICAGO BAB. ' ■ i' CHICAGO; CALLAGHAN AND COMPANY. 1881. Entered, according to tHe Act of Congress in the year 1880, by FARLIN Q. BALL, In the office of the Librarian of Congress, at Washington. PREFACE. This work was not " made." It has grown up in five years active practice for Receivers of ifational Banks, There being no treatise upon the subject the author kept memoranda of the cases he had occasion to examijie. To the end that the form should be the most convenient-' fijr his own use, he placed under each section of the National pank Act the authorities relating thereto. In this way all that the courts have said upon each topic is seen at a glance. Where the authorities conflict, no effort has been made to reconcile them. Care has been taken, however, to state accurately the pith of each case. These memoranda are submitted to the public with the hope that thereby the labors of his professional brethren may be somewhat lightened, and the officers of National Banks be aided in the solution of some of the many difficult questions which daily arise in their business. The author is grateful to the Honorable John Jay Knox, Comptroller of the Currency, for his kindness in furnishing much valuable information. FAELm Q. BALL. CmcAao, Illinois, November, 1880. CONTENTS. THE REFERENCES ABE TO PAGES. CHAPTER I. History of Paper Money 1-4 CHAPTER IL Facts concerning National Banks 6-7 ' CHAPTER III. Organization and Powers of National Banks 8-12 CHAPTER IV. Obtaining and Issuing Circulating Notes 13-16 CHAPTER Y. Regulation of the Banking Business 17-21 CHAPTER YL Dissolution and Receivership 22-26 CHAPTER YII. I. Yacancies in Subordinate Offices , . . 27 II. The Comptroller of the Currency 27-36 1. Bureau of Comptroller of the Currency established ', 27 (V) VI CONTENTS. 2. Comptroller, how appointed, etc 28 3. Bond and oath of office of Comptroller . . 28 4. Deputy Comptroller of the Currency. . 28 6. Clerks for Comptroller 29 6. Interest in National Banks, Comptrol- ler cannot have 29 7. Seal of Comptroller of Currency 29 8. Booms, vaults, furniture, etc., for Cur- rency Bureau ". 30 9. Banks in District of Columbia 30 10. Report of Comptroller 81 III. Powers and Duties of the Comptroller .... 32-36 lY. Conduct of suits involving National Banks 37 V. United States Courts, jurisdiction 37-4:0 1. District Courts. 37 2. Circuit Courts 38 3. Bemoval of suits to United States C'rts 39 • 4. Proceedings to enjoin Comptroller.... 40 YI. Instruments and papers of Comptroller shall be evidence .- 40 YII. Officers may enter premises where taxable articles are kept 41 VIII. Definition of the words " bank," "banker " 42 IX. Capital of banks expired or converted into National Banks 42 X. Tax on notes of persons or State banks used as circulation, etc 43 XI. Tax on notes of town, city or municipal corporations, paid out by banks, etc ... . 44 XII. State Banks converted into National Banks ; returns, how made 44 XIII. Provisions for bank tax, and returns not to apply to National Banks 45 XIY. Keport on National Banks 45 XY. Formationof National Banking Associat'ns 45-47 XYI. Requisites of organization certificate 47-48 XYII. How certificate shall be acknowledged and filed 48-49 CONTENTS. Vll XVIII. Corporate powers of Associations 49-146 1. Powers of bank 49- 55 2. Directors 65-58 3. President 58-60 4. Cashiei- 60-66 5. Cliecks 66-78 6. Drafts 78-83 7. Deposits 83-87 8. Certificates of deposit 87-88 9. Collections 88-90 10. Bill of lading 90-91 11. Promissory notes 91-100 12. Accommodation paper 100-102 13. Surety and indorser 102-108 14. Lien 108-110 15. Cliattel mortgages 110-111 16. Special deposits • 111-114 17. Guaranty 114^115 18. Estoppel 115-119 19. Agent and agency 120-122 20. Attorney 1-22-123 21. Bankruptcy and insolvency 123-126 22. Set off 126-127 23. Pleading and evidence 127-135 24. Suits 135-140 25. Ultra Yires.... 140-141 26. By-laws 141 27. Miscellaneous 141-146 XIX. Power to hold real property 146-150 XX. Requisite amount of capital 150 XXI. Shares of stock and transfers 150-157 XXII. How payment of the capital stock must be made and proved 157 XXIII. Proceedings if shareholder fails to pay in- stallments , . 157 XXIY. Increase of capital stock 158 XXY. Eeduction of capital stock 159 XXVI. Right of shareholders to vote 159 Till CONTENTS, XXVII. Election of directors 1S9 XXVIII. Eeqiiisite qualiiications of directors 160 XXIX. Oath required from directors 160 XXX. Filling vacancies 161 XXXI. Proceedings where no election is held on the proper day 161 XXXII. Election of President of the Board 161 XXXIII. Individual liability of shareholders 162-163 XXXIV. Executors, trustees, etc., not personally liable 163-164 XXXV. Duties and liabilities when designated as depositories of public moneys 164r-167 XXXVI. Organization of State Banks as National Banking Associations. 167—169 XXXVII. State banks having branches 169 XXXVIII. Reservation of rights of associations or- ganized under Act of 1863 170 CHAPTEE VIII. I, What associations are governed by chapters 2, 3 and 4 of the Act 171 II. Registered bonds are intended by the term "United States bonds " 171 III. Deposit of bonds required before issue of cir- culating notes 171-172 IV. Increase or reduction of deposit to correspond with capital 172 V. Exchange of coupon for registered bonds 172 VI. Manner of making transfers of bonds 173 VII. Registry of transfers 173 VIII. Notice of transfer to be given to association interested 174 IX. Examination of registry and bonds 174 . X. Annual examination of bonds by associations . 174-175 XI. Custody of bonds, collection of interest, etc. . . 175-176 XII. Comptroller to determine if association can commence business 176-177 CONTENTS. IX XIII. Certificate of authority to commence bank- ing to be isBued 177-178 XIV. Publication of certificate 178 XY. Delivery of circulating notes 178-179 XVI. Printing, denominations and form of the circulating notes 179-180 XVII. Plates and dies to be under the control of Comptroller 180 XVIII. Annual examination of plates, dies, etc.. . . 180 XIX. Limit to issue of notes under five dollars. . 181 XX. Limit to amount of circulation of certain banks 181 XXI. Limit to aggregate amount of circulating notes 181 XXII. Apportionment of aggregate amount of cir- culating notes 181-182 XXIII. Equalizing the apportionment of circulating notes 182 XXIV. How the necessary amount of notes shall be withdrawn 183 XXV. Eemoval of association to another State . . . 184 XXVI. For what demands National bank notes may be received 184 XXVII. Issue of other notes prohibited 184-185 XXVIII. Destroying and replacing worn out and mutilated notes 185 XXIX. Organization of associations to issue gold notes authorized 185-186 XXX. Limit to circulation of gold banks removed 186 XXXI. Their lawful money reserve, and duty of receiving notes of other associations. . . .186-187 XXXII. Penalty of issuing circulating notes to un- authorized associations 187 XXXIII. Penalty for imitating National bank notes, etc 187 XXXIV. Penalty for defacing, etc., National bank notes 188 CONTENTS. CHAPTER IX. I. Place of business of banking associations . . 189 II. " Lawful money reserve " prescribed 189-190 III. What may be counted toward the "lawful money reserve " 190—191 IV. Certain certificates of deposit may be counted 191 Y. Limitation on the power to issue such cer- tificates 191-192 TI. Place for redemption of circulating notes to be designated 192 YII. National batiks to receive notes of other banks 193 VIII. Limitation upon rate of interest which may be taken 193 IX. Consequences of taking usurious interest. . . 194-200 X. Dividends 200 XI. Limit to liabilities which may be incurred by any one person 201-^02 XII. Associations not to loan or purchase their own stock 202-204 XIII. Limit upon indebtedness to be incurred .... 204 XIV. Restriction upon use of circulating notes. . .204-205 XV. Prohibition upon withdrawal of capital. . . . 205 XVI. Enforcing payment of deficiency in capital stock 205-206 XVII. Restriction upon use of notes of other banks.206-207 XVIII. United States notes not to be held as colla- teral, etc., penalty • 207 XIX. Penalty for falsely certifying checks 207-208 XX. Embezzlement; penalty 208-210 XXI. List of shareholders, etc., to be kept 210-211 XXII. Reports to Comptroller of the Currency . . . ; 211 XXIII. Report as to dividends 212 XXIV. Penalty for failure to make reports 212-213 XXV. Duties payable to the United States 213 XXVI. Half-yearly return of circulation, deposits and capital stock 213-214 CONTENTS. XI XXVII. Penalty for failure to make return 214 XXVIII.- Penalty for failure to pay duties 214 XXIX. Refunding excessive duties 215 XXX. State taxation 215-224 CHAPTER X. I. Voluntary dissolution of associations 225 II. Kotice of intent to dissolve 225-226 III. Deposit of lawful money to redeem outstand- ing circulation 226 IV. Exemption as to an association consolidating with another 226 V. Reassignment of bonds; redemption of notes, etc 227 VI. Destruction of redeemed notes 227 VII. Mode of protesting notes 228 VIII. Examination of special agent 228-229 IX. Continuing business after default 229 X. Notice to holders; redemption at treasury; cancellation of bonds 229-230 XI. Sale of bonds at auction 230 XII. Sale of bonds at private sale 230-231 XIII. Disposal of protested notes 231 XIV. Cancellation of National bank notes 231 XV. Appointment of receivers 231-234 XVI. Notice to present claims 235 XVII. Dividends 235-236 XVIII. Injunction upon receiver 236-237 XIX. Fees and expenses 237 XX. Penalty for violation of the National bank act 238 XXI. Appointment of occasional examiners 238-240 XXII. Limit of visitorial powers 240 XXIII. Transfers, when void 240-243 XXIV. Use of the title " National " 243 Xll CONTENTS. CHAPTER XI. I. An act authorizing the appointment of receiv- ers of National banks, etc 244-24:8 1. When receiver to be appointed 244 2. Individual liability of shareholders, how to be enforced 244-245 3. Meeting of shareholders after payment of debts, and expenses of receivership, etc.245-246 4. Sale of stock of shareholder refusing to pay assessment 246-247 5. Fraudulent notes to be stamped, etc 247 6. Eeports to Comptroller by savings banks.247-248 II. An act authorizing the conversion of National gold banks 248 CHAPTER XII. FOEMS. 1. Commission of receiver 249 2. Petition to compromise a doubtful claim 250 3. Affidavit to petition 251 4. Order of court on same 251 6. Petition to compromise a doubtful claim when collaterals are involved , 251 6. Order of court on same 252-253 7. Petition to partition real estate 253 8. Order of court on same 254 9. Petition for confirmation of sale of real estate. .254-255 10. Order of court on same 255 11. Petition to compromise stock liability 255-256 12. Order of court on same 256 13. Form of allegation when petition is filed by sub- sequent receiver 257 14. Declaration on promissory note 257-258 15. Assessment upon shareholders by the Comptroller of the Currency 258-259 CONTENTS. xm 16. Notice to shareholders by the receiver 259 17. Declaration in debt on stock liability 259-261 18. Bill in equity to enforce stock liability 262-264 OHAPTEK XIII. Addenda of latest cases 265-277 TABLE OF CASES. A. Abbott ». Mayor of Bangor, 54 Me. 540...-. 220 Abbott ». Inhabitants of Bangor, 56 Me. 310-.., 220 Abner, First National Bank, «. 1 McAi'thur, 590 125 Abrahams, Dorsey ». Reporter, 53 :. 55, 62 Abrams «. Union National Bank, 31 La. Ann. 61 .' 74 Adams, Brown b. 5 Biss. 181 65, 188,151 Adams, Casey o. 21 Alb. L. J. 376 (U. S. C. 0.) 276 Adams, Central National Bank v. 11 S. C. 453 104 Adams ■!). Cook County National Bank — Mss. {Blodgctt, J.) 46,54 Adams «. Daunis, 29 La. Ann. 315 137 Adams v. Mayor, 16 Alb. L. J. 416 218 Adams ». Mayor, 95 U. S. 1-9 218 Adams v. Mayor, 10 Leg. Ns. 98 218 Adams s. Merchants National Bank, 2 Fed. Rep. 174 273 Adams Ex. Co., Bank of Kentucky d. 93 U. S. 174 146 Adderly ». Storm, 6 Hill, 634 153 Adkins, Bralim u. 77 111.263 83 -lEtna National Bank v. Fourth National Bank, 46 N. Y. 82 67, 139 ^tna National Bank v. Winchester, 3 L. & E. Rep. 597 106 Agawam National Bank «. Inhabitants of So. Hadley, 1 Am. L. Rev. N. S. 535 - 368 Albiger, First National Bank v. 71 N. T. 606 101 Aldermen, Austin v. 14 Allen, 359 ..221 Aldermen, Austin, v. 7 Wall. 694 331 Aldermen, Citizens National Banks. 28 Minn. 280 222 Aldermen, Flint «. 99 Mass. 141 316 Aldermen, Hubbard v. 23 Iowa, 130 318 Aldrich, Simmons e. 41 Wis. 341 334 Allen «. First National Bank, 33 Ohio St. 97 147, 169, 201 Aliens. Fourth National Bank, 59 N. Y. 12 ' 88 Allen V. Freedmans 8. & T. Co., 14 Ha. 418 79, 116, 203 Aliens. Georgia National Bank, 60 Ga. 347.. 104 Allen, Third National Bank ». 59 Mo. 310.. 97 Alley, Irving National Banks. 9 N. Y. Week Dig. 493 98 Als, Parkersburg National Bank s.7 W.Va. 50 88 American Exchange National Bank, Gaston v. 39 N. J. Eq. 98 65 XVI TABLE OF OASES. American National Bank ®. Lockwood, 9 R. I. 308 55 American National Bank, Van Allen ®. 52 N.Y.I 133 Ames ■!). York National Bank, 103 Mass. 326 --- 26 Andresaena. First National Bank, 2 Fed. Rep. 122 266 Andrews e. German National Bank, 9 Heisk. 211 75 Arkansas, Currant. 15 How. 304 163 Armat, "Wroten's Assg. «. 31 &ratt. 328 275 Assessors, Van Allen ». 3 Wall. 573 217 Athol National Bank v. Hingham Manf. Co., 131 Mass. 399 -.135 Atlantic National Bank v. Franklin, 55 N. Y. 235 •. 99 Atlantic National Bank, Hand «. 55 How. P. R. 231 129,134 Atlantic National Bank, Harris v. 118 Mass. 147 - 59, 138, 169 Atlantic National Bank v. Savery, 18 Hun, 36 54, 55 Atlantic, etc., R. R. Co. »'. Carolina National Bank, 19 ■Wall.548..181, 198 Atlas National Bank v. Brownell, 9 R. I. 168.. 103 Atlas National Bank®. Savery, 11 Leg. Ns. 382. 52 Atlas National Bank b. Savery, 127 Mass 75 52 Attleborough National Bank?). Rogers, 125 Mass. 339 117 Auburn City National Bank v. Hunsicker, 72 N. Y. 252.. 93 Auditor, etc.. National Bank v. (U. S. C. 0. N. D. Ohio) "Week Cinn. L. B. July 26, 1880 276 Austin V. Board of Aldermen, 14 Allen, 359 231 Austin «. Board of Aldermen, 7 Wall. 694. 221 Ayer, Smiths. lOlTJ. S 320 374 Ayrault v. Pacific Bank, 47 N. Y. 570 89 B. Baaok, Manufacturers' National Bank v. 8 Blatchf. 137 38, 129, 153 Bache, First National Bank v. 71 Pa. St. 313 131 Bagley, Ticonic National Bank v. 68 Me. 249 99 Bailey, Chemical National Bank v. 12 Blatchf. 480 138, 300, 236 Bailey B. Clark, 7 Leg. Ns. 339 ...43,150 Bailey «. First National Bank, 11 Bank. Mag. 793 138 Bailey*. Sawyer, 9 Leg. Ns. 191 36, 153, 163,232 Bain b. Brown, 56 N. Y. 285 58 Baird «. Bank of Washington, 11 8.&R. 411 148 Baker, Cadle «. 20 Wall. 650 36, 232, 337 Baldwin, Farmers'* M.Bank v.23 Minn. 198 ....134 . Bangor, Abbott v. 54 Me. 540 ; 220 Bangor, Abbott j). 56 Me. 310 130 Bangor, City of. Weld ®. 56 Me. 274 120 Bangor, City of. Weld v. 59 Me. 416. 320 Bangs, National Bank of North Americas), 106 Mass. 441 70 Bank 11. Adams Ex. Co., 93 U. S. 174 1.'['l46 Bank, Baird «. 11 S & R. 411 !!"!!l48 Bank, Bast®. 101 U. S. 93 !!!!^274 TABLE OF OASES. XVll Bank, Bullard a. 18 Wall. 589 50, 108, 141, 304 Bank, Bushnell b. 10 Hun, 378 141 Bank, Buahnell ». 74 N. Y. 290 141 Bank, Case ®. 100 U. S. 446 66,234 Bank v. Case, 99 U. S. 628 ...54, 153 Bank, Casey o. 96 U.S. 493 36, 109 Bank, Clewes ». 9 N. T. Week. Dig. 143 76 Bank, Crocker v. 3 Am. L. T. (N. S.) 350 ...197 Bank, Davis «. 6 Cent. L. J. 106 196 Bank, Duncan ®. 11 Bank. Mag. 787 196, 199 Bank B. Dunn, 6 Peters, 51 103 Bank ». Elmore, 9 Rep. 110 (Iowa) Ill, 140 Bank, Espy «. 18 Wall. 604 ....66,78 Bank, Essex Co. National Bank ®. 7 Biss. 193 67, 90 Bank, Essex Co. National Bank ®. 11 Bank. Mag. 143 67, 90 Bank D. Farnesworth, 18 111.568 1... 87 Bank, First National Bank b. 7 W. Va. 544 78 Bank, Highley B. 26 Ohio St. 7S 199 Bank, Hintermister ». 64 N. T. 212 ■. 197 Bank, Hobbs b. 9 Rep. 467. 151, 157 Bank «. Hooh, 9 Rep 153 (Pa.) 60,141 Bank, Huflfaker B. 13 Bush. 644.. ..93,166 Bank b. Hunt, 11 Wall. 391. _..lll Bank «. Jones, 8 Peters, 13 103 Bank ». Kenan, 76 N. C. 340 90 Bank B. Kennedy, 17 Wall. 23 333 Bank b. Lanier, 11 Wall. 369 ". 108, 118, 301, 303 Bank, Lemoine b. 3 Dill. 44 ..101 Bank, Levy b. 1 Blnn. 37 81 Bank of Madison, inre, 5 Biss. 515 83, 140, 336 Bank; Main B. 6 Biss. 26 48 Bank v. Mathews, 98 U. S. 621 140 Bank ». Mathews, 7 Rep. 257 155 Bank, Maynard b. 7 Philad. 6 155, 168 Bank, McDonough b 34 Tex. 309 58 Bank B. Merrill, 2 Hill, 395 87 Bank B.Millard, 10 Wall. 153 67,133 Bank b. Millard, 11 Brews. 483. 67 Bank,Newell b. 13 Bush. 57 137, 196 Bank B. New York City, 2 Black, 620 76 Bank, Overholt b. 83 Pa. St. 490 196 Bank ®. Pahquioque Bank, 14 Wall. 883 58, 186, 188, 333, 338 Banks. Parmelee, 16 Alb. L. J. 478 54, 64, 100 BankB. Patchin Bank, 13 N. Y. 809 81, 101 Bank b. Patchin Bank, 19 N. Y. 313 101 BaukB. Planters Bank, 9 Wheat. 904 371 Bank, Ray B. 10 Bush. 844 ..112 XVni TABLE OF OASES. Bank, Schmidt ®. 22 La. Ann. 314 - 109,336 Bank, Scofleld ■». 3 N. W. Rep. N. 8. 888 ^^^ Bank, Security «. 2 Hun, 278 -137, 137, 138, 334 Bank, Shunk v. 22 Ohio St. 508 - 196 Bank e. Slemmons. 84 Ohio St. 142 57, 118 Bank, SouthwickD. 7Hun, 96.- 341 Bank, Tappanu. 19 Wall. 490 151, 317, 219 Bank, Turner «. 4 Abb. Ct. of App. 434.. - 267 Barnes, Manufacturers' National Bank®. 65 111. 69 133 Barnet B. National Bank, 98 U. S. 555 - 197 BarnetB. Muncie National Bank, 11 Leg. Ns. 239 197 Bari-y, Commonwealth v. 116Mass. 1 - 309 Barry, National Mahaiwe Bank v. 125 Mass. 20 i 144 Bast D. Bank,. 101 U. S. 93 374 Batchelor ». Planters' National Bank, 10 Rep. 16 62 Bates, First National Bank v. Fed. Rep. 702 272 Bates, First National Bank v. 9 Am. L. Reg. 566 (U. S. 0. C. S. D. Ohio).273 Bayard,City of Evansville 11.39 Ind. 459-.'. --203 Beach, Piatt, Recr. ■». 3 Ben. 303 233 Beauregard v. Case, 91 U. S. 134. 109, 127 Beauregard, Cases. 99 U. S. 119- 36 Beauregard, Case b. 101 U. S. 688 - ...271 Beebe, Piatt v. 57 N. Y. 339.. 30, 40, 131, 232 Belfast National Bank ». Harri man, 68 Me. 523 93 Belknap v. National Bank of N. Am., 100 Mass. 376.. 71 Bennett, First National Banks. 33 Mich. 520 114 Bensley, First National Bank of Lacon ». 10 Rep. 66 83 Bentley, First National Bank «. 6 N. W. Rep. 432 199 BestD. Nokomis National Bank, 76 111. 608.. 93 Bethel Bank ». Pahquioque Bank, 36 Conn. 335. 54, 64, 138, 333 Bethel Bank, Pahquioque Bank ». 14 "Wall. 383 58, 136, 138, 233, 283 Bevard, Schoharie Co. National Bank «. 51 Iowa, 357 97 Bigle ®, First National Bauk, 18 Hun, 400 102 Bickford d. First National Bank, 43111. 388 74 Bigelow, inre, 1 Bey. Reg. 667 203 Bigler, National Newberg Bank ». 18 Hun, 400. 102 Bingham, Lamoille Co. National Bank o. 50 Vt. 105 106, 199 Bird's Ex'rs. ■». Cockrem, 3 Woods, 32 39, 139 Bisling V. Third National Bank, 10 Rep. 410 273 Bissell ®. First National Bank, 69 Pa. St. 415 47, 66 Black River F. L Co., Kohler «. 2 Black. 731 58 Blair v. First National Bank, 10 Leg. Ns. g4 58, 64, 100, 304 Blake s. National Bank, 23 Wall. 307 •. 224 Blake, Third National Bank «. 73 N. T. 260 138 Bletz V. Columbia National Bank, 87 Pa. St. 87 198 Bletz V. Columbia National Bank, 11 Leg. Ns. 45 198 Board, etc., Austin v. 14 Allen, 359 221 TABLE OF OASES. XIX Board, etc., Austin D. 7 Wall. 694 321 Board, etc., Citizens' National Banks. 23 Mian. 280 322 Board, etc., Flint, ■». 99 Mass. 141 316 Board, etc., Hubbard v. 23 Iowa, 130 218 Boston, City of, Jewell ®. 101 Mass.- 575... 219 Boston, City of, Revere ». 5 Rep. 46.../. 321 Boston, City of, Providence v. 101 Mass. 575 219 Bowdens. Farmers' Bank, 1 Hughes, 307 •. 152 Bowden «. Morris,! Huglies, 378 130 Bowden v. Santos, 1 Huglies, 158... 153, 163 Bowden, Wilson «. 113 Mass. 433 65 Bowen, Bnrley ». Mss. Biss ^-.54, 100 Bowen, First National Bank of Medina d. 35 How. P. R. 408 48, 341 Bowen, Fridley o. 87 111.151 - 51,147 Bowery National Bank, Hagan B. 64 Barb. 197 74 Bowery National Bank, Shipley «. 59 N. Y. 485 - 71 Bowery National Bank, Shipley ». 36 N. Y. Sup. Ct. 503 71 Boyd, Third National Bank «. 16 Law Reg. 371 53, 112 Boyd, Third National Bank ». 44 Md. 47 53,112 Boylestou National Banks. Richardson, 101 Mass. 287. 70 Bradford, Gallatin «.l Bibb, (Ky.) 209 86 Bradley, People ». 39 111. 130 222 Bradley ». People, 4 Wall. 459 •. 217 Brahm «. Adkins, 77 111. 263 - 83 Branch s. United States, 13 Bank. Mag. 61... 167 Branch®. United States, 13 Court of Claims, 381 167 Breed v. First National Bank of Central City, 4 Colo. 483 120 Breese, First National Bank «. 39 Iowa, 640.... 105 Bright, First National Bank i). 136 Mass. 535 243 BristolKnife Co. s. First National Bank, 41 Conn. 421 70 Bromley s. Commercial National Bank, 9 Philad. 533 67 Brooks, Burton v. 35 Ark. 215 145- Brooklyn City, etc. ». National Bank, etc., 7 Week.Jur. 379.. .113, 116, 136 Brown v. Adams, 5 Biss. 181 65,138,151 Brown, Bains. 56 N.Y. 285.. 58 Brown, Davis s. 94 U. S.423 ..- .108, Brown v. First National 3ank, 34 How. P. R. 408 233 Browns. McElroy, 52 Ind. 404 87, 132 Brown s. Second National Bank, 73 Pa. St. ^09 J 102, 196 Brownell, Atlas National Bank s. 9 R. I. 168 102 Bruce ®. Fulton National Bank (N. Y. Ct. of App.) 1 Am. L. Rev. N. S. 331 - 271 Bryce, First National Bank s. (Ky.) 19 Am. L. Reg, 503.. .273 Buckley s. Second National Bank, 6 Vroom, 400 ' 75 Bullard s. Bank, 18 Wall. 589 50, 108, 141,204 Bullock, Massachusetts National Bank s. 130 Mass. 88 242 Burkhalter s. Second National Bank of Erie, 40 How. P. R. 334 71, 80 XX TABLE OF CASES. Burkhalter v. Second National Bank of Erie, 42 N. T. 538 affd. 71, 367 Burkam, First National Bank of Peoria v. L. & E. Rep. 37 83 Burkliardt, National Bank «. 100 U. S. 686- ^^^ Burley •». Bowen, Mss. (Biss) S^> ^^^ Burley, Burton «. 9 Bep. 301 ^^ Burley, Burton®. 13 Leg. Ns. 178 48. 118, 189 Burlington, Clapp «. 42 Vt, 579 10' Burrows «. Smitli, 10 N. Y. 5.50 48 Burtnett ». First National Bank, 38 Mich. 630 122 Burton®. Brooks, 25 Ark. 315.. 145 Burton ®. Burley, 9 Rep. 301 48 Barton B. Burley, 12 Leg. Ns. 178.... 48, 118,189 Bushnell v. Chautauqiie Co. N. Bank, 10 Hun, 378 52, 118, 141 Bushnell «. Chautauqua Co. N. Bank, 74 N. Y. 290 53 Byersa First National Bank, 85 111.423. 135 Byrne v. Hibernian National Bank, 31 La. Ann. 81 119 Byrne, Osborne v. 43 Conn. 155 126 0. Cadle 1). Baker, 30 Wall. 650. 36,333,337 Cadle D. Tracy, 11 Blatchf. 101 37, 136 Cakea. First National Bank, 86 Pa. St. 303 196, 197 Caldwell «. National Mohawk Valley Bank, 64 Barb. 333 61 Calef, Hawthorne v. 3 Wall. 10 163 Campbell, Traders' Bank ». 14 Wall. 87 -.134 Canfield ®. State National Bank, 1 N. W.Rep. 173 53 Capitol Bank, Pope v. 20 Kas. 440 53 Cardozo, Merchants' National Bank e. 8 Jones & S. 163 40, 131, 333 Carll, Ocean National Bank v. 7 Hun, 237 140, 155, 233 Carolina National Bank, Atlantic, etc., R. R. Co. v. 19 Wall. 548.. .131, 198 Carpenter, First National Bank v. 41 Iowa, 518 114 Carpenter, National Bank v. 101 TJ. S. 567 36, 54, 152 Carpenter®. Northborough National Bank, 123 Mass. 66. 96 Carr «. National Security Bank, 107 Mass. 45 139 Can-. Union National Bank ®. 49 Iowa, 359 131 Carthage v. First National Bank, 10 Rep. 469 (Mo.) 376 Case V. Bank, 100 U. S. 446 66,234 Case, Beauregard v. 91 U. S. 334.... 109, 137 Case®. Beauregard, 99 U. S. 119 36 Case®. Beauregard, 101 U. S. 688 271 Case ®. Citizens' National Bank, 3 Woods, 23 124 240 Case, Germania National Bank v. 8 Rep. 449 153 Case ®. Hawkins, 53 Miss. 703 60 gg Case ®. Marchant, 11 Leg. Ns. 287 36, 54, 152 Case, National Bank®. 99 U. S. 638 .'...'. 35 Case ®. Terrell, 11 Wall. 199 86," 333 TABLE OF OASES. XXI Casey ». Adams, 31 Alb. L. J. 376 (U. S. C. C.) 276 Casoy«- Bank, 96 U. S. 492 109 Caseys. Cavaroc, 96U S. 467 109 Casey «. Gall i, 94 U. S. 673.36, 116, 130, 131, 133, 155, 163, 168, 177, 178, 233, 287 Casey J). La Societe, 3 Wood, 77 109,117,234,241 Casey B. La Societe, 7 Leg. Ns. 313 109 Casey J). National Bank, 96 U. 8.492 109 Casey ». Schneider, 96 U. S. 496 - 109 Casey «. Schugardt, 96 U. S. 494 -. 146 Cass, Citizens' National Bank?;. 6 Rep. 579 - 126 Cavaroc, Casey «. 96 U. S. 467 109 Cayuga Co. National Bank «. Daniels, 47 N. T. 631 79 Cayuga Co. National Bank, Gould v. 7 Week. Jur. 315 146 Central National Bank ». Adams, 11 S. C, 453 -.104 Central National Bank, Dougherty Bros. i). 13 Leg. Ns. 3 110 Central National Bank, Lacey v. 4 Neb. 179 96 Central National Bank, Ordway v. 8 Leg. Ns. 291 198, 225 Central National Bank,>Ordway o. 47 Md. 317 137, 198, 235 Central National Bankjj. Pratt, 115 Mass. 539. - 195 Central National Bank o. Richland National Bank, 53 How. 136.-241, 242 Central National Bank «. Valentine, 18 Hun, 417 97 Central Trust Co. v. First National Bank, 13 Leg. Ns. 232. 115 Central Trust Co. v. First National Bank, 101 U. S. 68 115 Chadsey, Olney v. 7 R. L 334.... _.54, 59, 140 Chadwell, McLaughlins. 7 Heisk, 389 Ill Chambers «. Union National Bank, 78 Pa. St. 205 81 Chancellor, Second National Bank ii. 9 W. Va. 69 104 Charleston v. Peoples' National Bank, 5 8. C. 303 36, 158, 824 Charlotteville National Bank, Johnson v. 3 Hughes, 657... 54, 102 Chatham National Bank v. Merchants' National Bank, 4 Thomp. & C. 196 - 48,139,189 Chattahoochee National Bank v. Schley, 58 Ga. 369 55, 63, 114 Chattahoochee National Bank «. Schley, 4 L. & E. Rep. 475 55,63 Chatauqua Co. National Bank, Bushnell v. 10 Hun, 378 53, 118, 141 Chatauque Co. National Bank, Bushnell v. 74 N. Y. 390 52 Cheek®. Merchants' National Bank, 10 Heisk. 618 106 Cheeney, Worchester National Bank v. 87 111. 603 147 Cheeseman, Mann ». Bank. Mag. 1875 153 Chemical National Bank v. Bailey, 13 Blatchf. 480 128, 200, 236 Chemical National Bank, Frank c. 37 N. T. Sup. Ct. 26 86 Chemical National Bank v. Kohner, 58 How. P. Rep. 267 63 Chemical National Bank m re, 9 N. Y. Week. Dig. 181 125 Chesepeake v. First National Bank, 40 Md. 369 46, 51, 137, 143 Cheshire National Bank v. Jewett, 119 Mass. 241. 243 Chicago, City of, Collins «. 4 Biss. 472 233 Chicago, City of, McVpifrh ii. 49 111.318 ...233,133 Cbicopee Bank v. Philadelphia Bank, 8 Wall. 641 80, 82 XXll TABLE OF CASES. Christopher, First National Bank v. 40 N. J. 435 (11 Vroom) 55, 94 Churchill, City of Utica ». 33 N. Y. 161 -331 Citizens' National Bank, Board of Commissioners®. 33 Minn. 280 322 Citizens' National Bank, Cases. 2 Wocds, 23 124, 240 Citizens' National Bank v. Cass, 6 Rep. 579 136 Citizens' National Bank, Lee v. 3 Cin. (O.) 398 136, 154 Citizens National Bank v. Leming, 8 Inter. Rev. Rec. 183.103, 137, 149, 196 Citizens' National Bank, Louisiana National Bank «. 28 La. Ann. 189. 74 Citizens' National Bank, Maitland b. 40 Md. 540 269 Citizens' National Bank v. Richmond, 121 Mass. 110 107 Citizens' National Bank ®. Smith, 3 Am. L. T. 348 93 City of, etc. a. Bayard, 39 Ind. 450 203 City of, etc. ■». Churchill, 38 N. Y. 161 321 City of, etc., Collins «. 4 Biss. 472 323 City of, etc., Jewell «. 101 Mass. 575 219 City of, etc., McVeigh v. 49 111. 318 333, 253 City of, etc., Packard B. 55 Me. 4^6 220 City of, etc., Revere s. 5 Rep. 46 331 City of, etc.. Weld ®. 56 Me. 374 220 City of, etc., "Weld ®. 59 Me. 416 230 City National Bank, Coulston b. 4 L. & B. Rep. 503. ..171 City National Bank v. First National Bank, 45 Tex. 203. 72 City National Bank, Fourth National Bank v. 68 111. 398 66, 83, 84, 108 City National Bank, Marine National Banks. 59 N. Y. 67... 75 City National Bink, Marine National Bank v. 36 N. Y. Supr. Ct. 470.. 75 City Bank, United States v. 31 How. 356. ...61, 63 Claflin B. Farmers' & Citizens' Bank, 25 N. Y. 293 54, 59, 101 Claflin V. Houseman, 93 U. S. 130 186 Clapp «. Burlington, 43 Vt.579 107 Clardy B. National Bank, 100 U. S. 704 82 Clark, Bailey B. 7 Leg. Ns.839 43,150 Clark, First National Bank v 5 L. & E. Rep. (1878.) ..145 Clark, Grocers' National Bank v. 48 Barb. 26 124 Clark, Grocers' National Bank* 43 How. Pa. R. 160 124 Clark, Knoxville National Bank «. 51 Iowa, 264 94 Clark, Marcy B. 17 Mass. 329 153 Clark B. National Metropolitan Bank, 2 Mc Arthur. 249 75 Cleveland National Bank, IlambrightB. 66 Tenn. 40 198 Clewes B. Bank of New York, etc., 9 N. Y. Week. Dig. 143 76 Clinton National Bank b. Graves, 48 Iowa, 328 .133 Clinton National Bank b. Manwarring, 39 Iowa, 281 149 Cocheco National Bank B. Haskell, 51 N. H. 116 64 Cockrem, Bird's Ex'rs. b. 3 Wood 33 39 i;.j9 CoflFey b. National Bank, 40 Mo. 140 133_ 168 Colby, First National Bank v. 7 Leg. Ns. 397 238 Colby, National Bank v. 21 Wall. 609 36, 109, 137, 333, 336, 337, 241 Collins «. City of Chicago, 4 Biss. 473 223 TABLE OF OASES. XXUl Colston, Magruder «. 44 Md. 349 153 Columbia National Eank, Bletz v. 87 Pa. St 87 198 Columbia National Bank, Bletz t>. 11 Leg. Ns. 45. 198 Commercial Banks. Cunningham, 34 Pick. 270 .- - 55 Commercial Ex. National Bank v. National Bank, 9 Phila. 133 71 Commercial National Bank, Bromley «. 9 Phila. 523 67 Commercial National Bank, Gardner ®. 95 111. 298 273 Commercial National Bank, Pelton «. 101 U. S. 143 277 Commercial National Bank o. Simmons, 8 Leg. Ns. 164 38, 186 Commercial National Bank v. Simmons, 10 A.lb. L. J. 155 186 Commercial National Bank, Wayne v. 52 Pa. St. 343.. 103, 118 Commercial National Bank, White v. 4 Brews. (Ba.) 234 118, 133, 137 Commercial Press v. Crescent Bank, 26 La. Ann. 744 107 Commissioners v. Elston, 83 Ind. 27.. 317 Commissioners v. Farmers' & M. National Bank, 48 Md. 117 317 Commissioners, People o. 4 L. & E. Rep. 213 .217 ' Commissioners, People a. 69 N. Y. 91 223 Commissioners, People v. 4 Wall. 244 217 Commissioners, People, v. 8 Hun, 586 .220, 238 Commissioners, People v. 9 Hun, 650 333 Commissioners, People v. 94 U. S. 415 219 Commissioners, People v. 3 Black, 630 217 Commissioners, Euffin v. 69 N. C. 498 ." 223 Commonwealth v. Barry, 116 Mass. 1 209 Commonwealth J). Felton, 101 Mass. 204 ...209 Commonwealth v. Eetner, 12 Leg. Ns. 432 210 Commonwealth, Luberg «. 37 Leg. Intel. 839 ...276 Commonwealth, Luberg v. 7 Week. Jur. 458 276 Commonwealths M. & M. Bank, 73 Pa. 70.. 221 Commonwealth t>. M. & M. Bank, 2 Pearsons, 886 321 Commonwealth, National Bank v. 9 Wall. 353 ,. .318 Commonwealth v. Tenny, 97 Mass. 50 209 Comstock, Merchants v. 55 N. Y. 24 103 107 Conklin i). Second National Bank, 45 N. Y. 655 109, 303 Continental National Bank v. National Bank of Commonwealth, 50 N. Y.575 75,118 Continental National Bank, Wright b. 1 L. & E. Rep. 543 118 Cook, Davis v. 9 Nevada, 134 48, 135 Cook, Merchants' «. 95 tr. S.343.. ".'...'.124 Cook, Merchants' «. 10 Leg. Ns. 83 124 Cook, Seventh National Bank e. 73 Pa. St. 483 67, 139 Cook County National Bank, Adams v. Mss. (Blodgett, J.).. 46, 54 Cook County National Bank, United States ». 11 Leg. Ns. 344.. 109 Cook County National Bank, United States v. 8 Rep. 198 109 Cooke ». State National Bank, 52 N. Y. 96... 48, 73, 137, 189, 208 CordellD. First National Bank, 64 Mo. 600 88 Corn Exchange National Bank v. National Bank, 9 Phila. 133 77 XXIV TABLE OF OASES. Corn Exchange National Bank v. National Bank, 78 Pa. St. 233 -- 77 Oom Exchange National Bank d. Philadelphia Trust Co., 9 Leg. Ns. 65.142 Couch •!). First National Bank, 64 Ind. 93 - 134 Coulston V. City National Bank, 4 L. & E. Rep, 503 131 County V. Bank, 23 Minn. 280 - 322 Cox V. National Bank, 100 U. S. 704 - -- 83 Cravens ». Gillilan, 68 Mo. 28 - 95. 133 Crawford, First National Bank b. 2 Cin. 125 78 Crawford, Piatt c. 8 Abb. 297. 139 Crescent Bank, Commercial Press v. 29 La Ann. 744 107 Crocker v. Bank, 3 Am. L. T. (N. S.) 350 —197 Crocker ». First National Bank, 3 Cent. L.J. 537 124, 199 Crocker «. First National Bank, 11 Am. Law Reg. 169 ..197 Crocker B. Marine National Bank, 101 Mass. 240 137 Crocker c. Whitney, 71 N. T. 161 92,147 Crow, Mechanics' & Traders' Bank®. 60 N. T. 85 93, 133 Cumming, Merchants' National Bank ■». 5 Rep. 680 218 CummingsD. National Bank, 101 U. S. 153... 277 Cunningham, Commercial National Banks. 24 Pick 270 55 Curran v. State of Arkansas, 15 How. 304 ..163 Curtis, States. 35 Conn. 374 58,139 Cushman, National Security Bank d. 121 Maas. 490 54, 55 D. Dana s. Third National Bank, 13 Allen, 445 67 Daniels, Cayuga Co. National Bank, v. 47 N. T. 631 79 Daunis, Adams v. 39 La. Ann. 315 137 Davis V. Bank, 6 Cent.L, J. 106 196 Davis V. Brown, 94 U. S. 423 108 Davis V. Cook, 9 Nevada, 134 48, 135 Davis «. Essex, B. S. 44 Conn. 533 104. Davis B. First National Bank of Cheyenne, 5 Neb. 243 143 Davis, National Bank v. 6 Cent. L. S. 106 196 Davis, National Bank v. 10 Leg. Ns. 156. 196 Davis, Receiver v. Randall, 115 Mass. 547 54, 59, 102, 194 Davis, State «. 50 How. 447- 54,64 Davis, Receiver v. Stevens, (U. S. C. C, S. D. N. T.) Leg. Int. Nov. 28, 1879 275 Davis «. Weed, 44 Conn. 569 ..164 Dawson Bank, Kent ». 13 Blatchf. 237 80 Dearborn B. Union, 58 Me. 273-. 113 Dearborn o. Union, 61 Me. 369 112 Dearing, Farmers' & M. Bank, 91 U. S. 39 .47, 51, 197 De Haven o. Kensington Natipnal Bank, 81 Pa St. 95 113 De Mayer «. State National Bank, 8 Neb. 104 105 Dix,Shoe. 50 Iowa, 557 139 First National Bank, McDonougli ». 34 Tex., 309 58 First Nalional Bank ». McKinney, 67 Me. 273 92 First National Bank ii. McManigle, 69 Pa. St. 156 108 First National Bank v. National Ex. Bank, 51 How. Pa. R. 330 53 First National Bank J). National Ex, Bank. 2 Otto. 122 53 First National Bank, Nelsons. 48 111. 36 84 First National Bank, New York Iron M. v. 39 Mich. 644 101, 123 First National Bank v. Northern R. R. Co., 7 Rep. 566 _ 91 First National Bank v. Northern R. R. Co., 58 N. H. 91 First National Bank v. Ocean Nat. Bank, 60 N. Y. 378.. 51, 54, 63, 112, 132 First National Bank v. Ocean Nat. Bank, 48 How. Pa. R. 148 113 First National Bank, Palmers. 14 Hun, 126.. 241 First Nalional Bank, Pate ». 63 Ind. 354 95 First National Bank v. Peterborough, 56 N. H. 38 223 First National Banka. Pettit, 41 111. 493 84 First National Bank®. Pierson, 16 Alb. L.J. 319 52 First National Banks. Pierson, 34 Minn. 140 53, 134 First National Bank v. Portland, etc., 3 Fed. Rep. 831 269 First National Bank®. Priest, 50 111. 321 140 First National Bank®, lieed, 36 Mich. 263 56 First National Bank v. Reno Co. Bank, Fed. Rep. Aug. 11, 1880 267 First Nitional Bank, Resh ». 10 Rep. 411 (Pa.) _..371 First National Bank «. Rex, 87 Pa. St. 308 Ill, 132 First National Bank, Rhoner ®. 14 Hun, 126 341 First National Bank®. Ricker, 71 111.439 68 Tirst National Bank ®. Rush School District, 3 L. & E. Rep. 148 97 First National Bank®. Schlichting, 40 Iowa, 51 99 P'irst National Bank, School District ®. 103 Mass. 174 132 First National Bank ®. Schuyler, 39 N. Y. Sup. Ct. 440 101 Firsi National Bank, Shinkle ®. 23 Ohio, 516.- 50, 147, 197 First National Bank Shnnk «. 22 Ohio, 508 196 First National Bank, Simonson ®. 24 Minn. 316 120 First National Bank, Smith v. 99 Mass. 605 57, 113 First National Bank, Smith s. 17 Mich. 479 151, 223 First National Bank®. Smith, 65 111. 44 151, 223 First National Bank, South wick ®. 30 Hun, 349 83 First National Bank, Spafford ®. 37 Iowa, 181 110 First Nalional Bank ®. Stauffer, 6 Week Jur. 793 ^ 195 First National Bank ®. Stauffer, 1 Fed. Rep. 187 I95 First National Bank ®. Stauffer, 10 Rep. 70 .» 195 First National Bank, Steckel ®. (Pa.) Week. Notes of Gas. (Sept. 2) 17. .267 First National Bank, Stewart®. 40 Mich. 348 , 106 First National Bank ®. Tappan, 6 Kas. 456 81 XXX TABLE OF OASES. First National Bank «. Tisdale, 18 Hun, 151 103 First National Bank, Tracy v. 37 N. T. 533 233 First Nation al Bank, Turner «i. 26 Iowa, 563 128, 234, 335 First National Bank, Union National Bank v. 90 111. 56 127 First National Bank, Van Allen v. 54 N. T. 671. 1 53, 54, 59 First National Bank, Van Leuven b. 54 N. Y. 671 53, 54, 59 First National Bank, Watriss -o. 6 Rep. 308, 124 Mass. 571 142, 169 First National Bank, Weckler «. 43 Md. 581-- 53, 54, 64, 141 First National Bank, West ®. 30 Hun, 408 88 First National Bank v. W. U. Teleg. Co., 5 Rep. 660 - 145 First National Bank d. Whitman, 94 U. 8.343 68 First National Bank, Whitney o. 50 Vt. 388 112 First National Bank, Wiley v. 47 Vt.546... 51, 55, 63, 111 First National Bank b. Wood, 71 N. T.405 101 First National Bank ». Wood, 51 Vt. 471... 103 First National Bank, Wrights. 18 Alb. L. J. 115 124, 199 First National Bank, Wrights. 6 Rep. 239. 124, 199 First National Bank, Zieglerc.lO Rep. 411 (Pa.) 356 First Ward National Bank v. Thomas, 125 Mass. 373 144 Flints, Board of Aldermen, 99 Mass. 141 316 Foil's Appeal, 7 Week. Jur. 102 51,155 Forbes v. Omaha National Bank, 6. N. W. Rep. 393 (Neb.) 104 Forbes e. Omaha National Bank, 7 Week. Jur. 392... 104 Foss «. First National Bank, Fed. Rep. Aug. 17, 1880 270 Foss V. First National Bank, 1 Am. L. Rev. 741 (Colo.) 370 Fourth National Bank, .(Etna National Bank b. 46 N. T. 83 67, 139 Fourth National Bank, Aliens. 59 N. Y. 12 88 Fourth National Bank, Allen v. 37 N. Y. Sup. Ct. 137 88 Fourth National Bank v. City National Bank, 68 111. 398 66, 83, 84, 108 Fourth National Bank, Dod s. 57 Barb. 365 80 Fourth National Bank, First National Bank v. 16 Hun, 333 89 Fourth National Bank, First National Bank v. 1 Am. L Rev. (N. S.) 91.267 Fourth National Bank, Lindauers. 55 Barb. 17 80 Fourth National Bank, Sturges v. 75 111. 595 81, 132 Fowler, First National Bank v. (Ohio) 1 Am. L. Rev. 92 (N. 8 ) 368 Fowlers. Scully, 72 Pa. St. 456 50, 108, 140,147 Franks. Chemical National Bank, 37 N. Y. Sup. Ct. 36 86 Frankenberger s. First National Bank, 33 Mich. 46 78 Franklin, Atlantic National Bank s. 55 N. Y.235 99 Freedman's 8. & T. Co., Allen s. 14 Fla. 418 79 ng^ 202 Freedman's 8. & T. Co., State National Bank v. 3 Dill. 11 88 Freund s. Imp. & T. Bank, 76 N. Y. 352 "!!!!^!!!] 76 Fridley s. Bowen, 87 111. 151 5I 147 Fulton Bank, Marine Banks. 2 Wall. 256 83 93 Fulton National Bank, Bruce s. N. Y. Ct. of Apps. 1 Am. L Rev (n' S0331 '___i2n Fulton National Bank, Edgerton s. 43 How. Pa. R. 316 92 Fusz s. Spannhorst, 67 Mo. 256 __ gg TABLE OF OASES. XXXI G. Gage, First National Banli v. 93 111. 172 370 Gallatin u. Bradford, 1 Bibb, (Ky.) 209 86 Galli, Casey B. 94 U. S. 673_36, 116, 130, 131, 133, 155, 163, 168, 177, 178, 332, 237 Gallery B. Kational Exchange Bank, 41 Micli. 169 57 Gardner ». Commercial National Bank, 95 111. 398 372 Garlinghouse, First National Banks. 33 Ohio, 492 103, 143, 197 Garrison ». Howe, 17 N. T. 458 126 Gartier, New Amsterdam v. 54 How. 385 126 Gasting, State «, 33 La. Ann. 1609 310 Gaston ». American Ex. Bank, 29 N.J. Eq. 98 65 Gay, First National Banks. 63 Mo. 33 - 95 Georgia National Bank, Allen «. 60 Ga. 347 104 German Am. Banks. National Bank, 11 Leg. Ns.. 7 90,284 German Am. Banks. National Bank, 6 Rep, 484 90, 234 German Am. Bank, Welch s. 73 N. Y. 434 69. German Am. Bank, Welch s. 43 N. Y. Sup. Ct. 462 69 German Bank, International Banks. 3 Mo. App. 0. 363 88 German National Bank, Andrews s. 9 Heisk. 311 75 German National Bank s. Engelns Com., 14 Bush, 708 143 German National Bank s. Meadowcroft, 1 N. W. Rep. 759 141 German National Bank s. Meadowcroft, 95 111. 134 141 German National Bank s. Studley, 1 Mo. App. C. 260 120 Germania National Bank s. Case, 8 Rep. 449 153 Gettysburg National Bank s. Kuhns, 62 Pa. St. 88 71 Gibson, Kennedy s. 8 Wail. 498... 35, 36, 37, 38, 123, 127, 128, 130, 135, 163, 232, 233, 236, 287 Gillilan, Cravens s. 63 Mo. 28 : 95,188 Gish's Assg., First National Bank s. 72 Pa. St. 13_ 67, 134 Givenss. Merchants' National Bank, 85 111. 443 104 GlendonCo., Merchants s. 120 Mass. 97 129 Globe National Banks. Ingalls, 136 Mass. 309 133 Gold Mining Co. o. National Bank, 96 U. S. 640 301, 303 Goldsbury s. Inhabitants, 113 Mass. 884 330 Gore, East R. National Bank s. 57 N. Y. 597 65 Gould s. Cayuga Co. National Bank, 7 Week. Jur. 315 146 Gove, East R. Nat. Banks. 57 N. Y. 597 65 Gov't National Bank, Lucas s. 78 Pa. 338 197 Graham s. First National Bank, 20 Hun, 336 143 Graham, First National Bank s. 79 Pa. St. 106 55, 63, 111 Graliam, First National Bank s. 85 Pa. St. 91 ...113 Graham, National Bank s. 100 U. S. 699 114, 140, 339 Grants. Monmouth National Bank, 97 U. S. 80 134 Graves, Clinton National Bank s. 48 Iowa, 338 133 Graves s. Lebanon National B:mk, 10 Bush, 33 55, 102, 103 Green, First National Bank s. 43 N. Y. 398 133 XXxii TABLE OF CASES. Green, Home b. 53 Miss. 453.. - -- - ^17 Green d. Walkill National Bank, 7 Hun, 63 - 138, 333, 334 Gregg, First iNTatioQal Banks. 79 Pa. St. 384 89 Giidley, Peoples' Bank «. 1 Mo. Ju. 589 154 Gridley, Peoples' Bank v. 91 111. 457.-- - 15* Grocers' National Banks. Clark, 33 How. Pa. R. 160 134 Grocers' National Bank, National Bank of Oormw. ■». 35 How. Pa. R. 413- 69 Gruber, First Natioaal Bank v. 87 Pa. St. 468 - 44 Grulier ». First National Bank, 19 Alb. L. J. 137 44, 139 Gunkle's Appeal, 48 Pa. St. 13 56 Gunst, National Park v. 4 Abb. N. 0. 393 48 Gunton, Zantzingers v. 19 Wall. 33 148, 234 H. ^ackettstown National Bank v. Rea, 64 Barb. 175 199 Hade v. McVay, 31 Ohio St. 331 - - -136 Hade, United States v. 10 Leg. Ns. 33 309 Hagan v. Bowery National Bank, 64 Barb. 197 - -- 74 Hagar v. National Union Bank, 63 Me. 509 - 108, 300, 342 Haight, First National Bank ». 55 111. 191 86 Hair, First National Banks. 36 Iowa, 443 -.149 Hale, Leach ». 31 Iowa, 69 133 Hale s. Walker, 31 Iowa. 344 131,152,311 Hall, First National Bank v. 101 U. S. 43 79 Hall, First National Bank v. 19 Am. L. Reg. (N. 8.) 389 79 Hall, First National Bank B. 44 N. Y. 395 64 Hall, First National Banks. 46 N.Y. 83. 97 Hall, Merchants ®. 18 Hun, 176 - 145 Hambright s. Cleveland National Bank, 66 Tenn. 40 198 Hamlin, North National Bank s. 135 Mass. 506 86 Hammond, First National Banks. 51 Vt. 303 119 Hand s. Atlantic National Bank, 55 How. Pa. R. 231 139, 134 Harding, Platte "Valley Bank v. 1 Neb. 461 - 116 Harriman, Belfast Nat. Banks. 68 Me. 533 93 Harrington s. First Nat. Bank, 1 Thomp. & C. 361 58, 65 Harris, Atlantic Nat. Banks. 118 Mass. 147 59, 138, 169 Harris, First Nat. Banks. 108 Mass. 514 ..53, 70 Hartford, First Nat. Bank s. 45 Conn. 33 156 Hartford & N. T. T. Co., First Nat. Bank v. 46 Conn. 569 110 Harvey, Schroeder s. 75 111.638 69 Haskell, Cocheco Nat. Bank s. 51 N. H. 116 64 Havens «. Nat. City Bank, 4 Hun, 131 123 Havens v. Nat. City Bank, 6 Thomp. & 0. 346 133 Hawkins, Cases. 53 Miss. 703 60,82 Hawthorne s. Calef, 2 Wall. 10 163 TABLE OF OASES. XXXlll Hayzlett, First Nat. Bank «. 40 Iowa, 659 243 Helwege 0. Hibernian Nat. Bank, 28 La. Ann, 520 71 Helphenstine v. Vincennes Nat. Bank, 6 Kep. 169 135 Hemingray, Second Nat. Bank o. 5 Rep. 404 - 131 Hendrickson, City Nat. Bank®. 6 Rep. 213 151 Hendrickson, Salt Lake City Nat. Bank ». 6 Rep. 213 151 Hendrie, First Nat. Bank B. 49 Iowa, 402 94 Hepburn®. School Directors, 23 Wall. 480 220 Hershire, First Nat. Bank®. 31 Iowa, 18 221 Hershire ». First Nat. .Bank, 35 Iowa, 373 134,331 Hibernian Nat. Bank, Byrne®. 31 La. Ann. 81 - 119 Hibernian Nat. Bank, Helwege v. 28 La. Ann. 520 71 Highley ®. Bank, 26 Ohio St. 75 199 Highley, First Nat. Bank®. 36 Ohio St. 75 199 Higham Mfg. Co., Athol Nat. Bank®, 131 Mass. 399 -125 Hintermister 0. Bank, 64 N. Y. 213 -197 Hoag, Sawyer ®. 17 Wall. 610 136, 154 Hobbs V. Bank, 9 Rep. 467 151, 157 Hoch, Bank®. 9 Rep. (Pa.) 153 - 60, 141 Hoch, First Nat. Bank®. 7 Weekly Notes, 298 53 Hoch, First Nat. Bank ®. 20 Alb. L. J. 215 -. 52 Hodges ®. First Nat, Bank, 22 Gratt. 51 54,57,60 Holmes ®. First Nat. Bank. 126 Mass. 853 124 Holtsinger ®. Nat. Corn Ex., 37 How. Pa. R. 203 -.120 Holtsinger®. Nat. Corn Ex., 1 Sweeny, 64 120 Home Sgs. Bank, First Nat. Baak v. 7 Leg. Ns. 174 146 Hoover Assg. ®. Wise, 1 Otto. 308 89 Hopper®. Moore, 43 Iowa, 563 . 55 Home®, trreen, 52 Miss. 452 - 217 Horrigan®. First Nat, Bank, 10 Leg. Ns 113 54, 63 Hotchkiss ®. Nat. Bank, 21 Wall. 354 100 Houghton «. First Nat. Bank, 36 Wis. 663 47, 54, 63, 100, 189 Housatonic Bank ®. Martin, 1 Mete. 294 54,55 Houseman, Claflin ®. 93 U. S. 130 136 How, First Nat. Bank ®. 1 Mont. 604 93 Howard v. Miss. Valley Bank. 38 La. Ann. 737 81 Howe, Garrison ®. 17 N. Y. 458 136 Howell®. "Village of Cassopolis. 35 Mich. 471 231 Hubbard ®. Board, 33 Iowa, 130 218 Hubbard, First Nat. Bank ®. 49 Vt. 1 136 Huffaker ®. Bank, 13 Bush. 644 92, 116 Hungerford ®. Van Nostrand, 106 Mass. 559 116 Hunsicker, Auburn City Nat. Bank ®. 73 N. Y 252 93 Hunt, Bank ®. U Wall. 391 lU HUrlburd, Van Antwerp 0. 7 Blatch. 436 172 Hurlbard, Van Antwerp®. 8 Blatoh. 283 136, 173, 233, 234 Hutton, Taylor ®. 43 Barb. 195 58 3 XXXI V TABLE OF OASES. Hydes. First Nat. Bank, 11 Bank. Mag. 140 89 Hyde ®. First Nat. Bank, 7 Biss. 156 90 I. Importers' & T. Bank, Dutcher d. 59 N. T. 5- - 133 Importers' & T. Bank, Freund v. 76 N. Y. 352 -.. 76 Indiana Nat. Bank «. Weckerly, 67 Ind. 345 93 Indig D.Nat. City Bank, 16 Hun, 200 89 Ingals, Globe Nat. Banks. 126 Mass. 309 ■. 138 Inhabitants, etc., Abbott b. 56 Me. 310 1^ 230 Inhabitants, etc., Agawam Nat. Bank v. 1 Am. L. Rev. (N. S.) 535 26S Inhabitants, etc., Goldsbury «. 113 Mass. 384 230 Inman, Lowry ». 46 N. Y. 119 163 Inre Bank of Madison, 5 Biss. 515 88, 140, 286 /re r« Bigelow, 1 Nat. Bey. Reg. 667 ,...203 Z?u-« Chemical Nat. Bank, 9 N. Y. Week. Dig. 131 135 /?i re Dunkerson, 4 Biss. 237 370 Tnre Duryea, 17 Nat. Bey. Reg. 495. 273 /re r« Empire City Bank, 18 N. Y. 199 136 Tn re Manufacturers' Nat. Bank, 5 Biss. 499 128, 335 Inre Piatt, 1 Ben. 534 , 37, 136,333 /» r« Van Campen, 3 Ben. 419 173,209 /TireWild, llBlatchf 343.. j .194 Insurance & L. Bdg. Co. s. Nat. Bank of Mo., 5 Mo. A. C. 333 ..143 International Bank v. German Bank, 8 Mo. A. C. 363 88 Irasburgh Nat. Bank, Dow B. 50 Vt. 112 187 Ireland ®. Kip, 10 John. 489 104 Ireland B. Kip, llJohn. 281 104 Irons 0. Mfgrs. Nat. Bank, 6 Biss. 301 ..133,341 Irving Nat. Bank «. Alley, 9 N. Y. Week. Dig. 493 : 98 Jacob ®. First Nat. Bank, 10 Leg. Ns. 303, 318. 78 Jenkins ». Nat. Village Bank, 58 Me. 275 112 JennessB. First Nat. Bank, 40 Mich. 347 95 Jewell V. City of Boston, 101 Mass. 575.. ..219 Jewett, Cheshire Nat. Bank®. 119 Mass. 241 ...243 Johnson «. Charlotteville Nat. Bank, 3 Hughes, 657 54, 103 Johnson t>. First Nat. Bank, 13 N. Y. Sup. Ct. 121 69 Johnson v. Laflin, 17 Alb. L. J. 146 58, 151, 157 Johnson v. Nat. Bank, 74 N. Y. 339 195 Jones, Bank «. 8 Peters, 12 102 Jones, New York Nat. Ex Bank «. 9 Rep. (N. Y. Com. P.) 538 139 Jordan ». Nat. Shoe & Leather Bank, 74 N. Y. 467'. 108 Justh D. Nat Bank of Comw., 36 N. Y. Sup. Ct. 373 58, 86 TABLE OF OASES. XXXV K. Kansas Valley Nat. Bank «. Rowell, 2 Dill. 371 ... , 147 Keelkamp ». Meyer, 5 Mo. App. C. 444 76 Kelly.FirstNat. Bank®. 57,K. Y. 34 91 Kelsey v. Nat. Bank, 69 Pa. St. 486 117, 168 Kemble, Nat. Park Bank v. 8 Rep. 8 145 Kenan, Bank v. 76 N. O.'340 90 Kennedy, Bank v. 17 Wall. 33 ....238 Kennedy ». Gibson, 8 Wall. 498... 35, 36, 37, 38, 13:3, 127, 138, 130, 135, 163, / 233, 333, 236, 237 Kennedys. Otoe Co. Nat. Bank, 7 Neb. 59 47, 04, 00, 63 Kensington, De Haven «. 81 Pa. St. 95... 113 Kent ». Dawson Bank, 13 Blatchf. 337 80 Ketner, Commonwealth v. 13 Leg. Ns. 432.. 210 Keystone Nat. Bank, Royer v. 83 Pa. St. 348. 97 Kidd, First Nat. Bank®. 30 Minn. 284 ..40, 130 Kimball, Scammon o. 2 Otto 362 83, 126 Kimbro D. First Nat. Bank, 1 McA. 61 143 King, Farmers' & M. Nat. Bank v. 57 Pa. St. 202 88, 121, 242 Kinner, First Nat. Bank «. 1 Utah, 100 115 Kip, Ireland «. 10 John. 489 104 Kip, Ireland «. 11 John. 331 104 Kirby, Nat. Bank of N. A. v. 108 Mass. 497... 99 Knights. Old Nat. Bank, 4 Am. Law Times, 840 156 Knoxville Nat. Bank B. Clark, 51 Iowa, 864 94 Kohler v. Black River P. I. Co., 8 Black, 731 58 Kohner, Chemical Nat. Bank b. 58 How. Pa. R. 267 63 Kost, Wheelock ®. 77 111.896.. 116,133, 153,841 Kountze, Richards ». 4 Neb. 300 148 Kuhns, Gettysburg Nat. Bank v. 63 Pa. St. 88 71 Kyle «. Mayor, 75 N. 0. 445 331 L. Laceys. Central Nat. Bank, 4 Neb. 179 96 Laflin, Johnson v. 17 Alb. L. J. 146. 58, 151, 157 Lamb, First Nat. Bank e. 50 N. T. 95 300 Lamb, First Nat. Bank®. 57 Barb. 439. 200 Lamberton v. Merchants' Nat. Bank, 24 Minn. 281 342 Lamoille Co. Nat. Bank ®. Bingham, 50 Vt. 105 106, 199 Lancaster Co. Nat. Bank v. Moore, 78 Pa. St. 407 143 Lancaster Co. Nat Bank b. Smith, 62 Pa. St. 47 112 Lange, Third Nat. Bank*. 18 Am. L. R. 383 i 97, 107 Lahier, Bank v. 11 Wall. 369 108, 118, 201. 303 La Societe, Casey o. 3 Woods, 77 109, 117, 234, 341 ^^XVl TABLE OF OASES. LaSociete, Casey o. 7 Leg. Ns. 313 109 Law, Nat. Banku. 1 Am. L. Rev. (N. S.) 168 (Mass.) 374 Lazear«. Nat. Union Bank, 13 Leg. Ns. 64 53 Leach v. Hale, 31 Iowa, 69 133 Leavitt, First Nat. Bank®. 65 Mo. 563 105 Leavitt®. Palmer, 8 N. Y. (Comst.) 19 -— 87 Lebanon, Graves o. 10 Bush. 33 55, 103,103 Lee®. Citizens' Nat. Bank, 3 Oin. (O.) 398 136, 154 Lee, Washington Co. Nat. Bank «. 113 Mass. 521 , 40, 130, 131 Lemoine®. Bank of N. A., 3 Dill. 44 101 Leming, Citizens' Nat. Bank v. 8 Intel. R. R. 133 103, 137, 149, 196 Levy®. Bank, 1 Binn. 37 81 Lewis, Nat. Auburn ». 57 N. T. 516 195 Lewis, Washington Bank ®. 33 Pick. 34 55 Lewiston, City of, Packard ®. 55 Me 456 330 Lindauer®. Fourth Nat. Bank, 55 Barb. 75 80 Lionberger v. Rouse, 9 Wall, 468 319 Little Rock®. Nat. Bank, 98 U. S. 808.- 116 Locke®. Merchants' Nat. Bank, 66 Ind. 353 139, 133, 135 Lockwood, American Nat. Bank v. 9R. I. 308 55 Lotton, First Nat. Bank®. 67 Ind. 356 93, 107 Loud, Manufacturers' Ins. Co. «. 99 Mass, 146 376 Louisiana Nat. Bank v. Citizens' Nat. Bank, 38 La. Ann. 189 74 Louisiana State Bank, McLemore ®. 91 U. S. 37 144 Louisville City Nat. Bank, Ferguson ®. 7 Rep. 561 143 Louisville City Nat. Bank, Ferguson ®. 14 Bush.. 143 Lowry v. Inman, 46 N. T. 119 163 Luberg®. Commonwealth, 37 Leg. Intel. 339 376 Luberg®. Commonwealth, 7 Week. Jur. 458. 376 Lucas ®. Gov't Nat. Bank, 78 Pa. St. 338 197 M. Machinista' Nat. Bank®. Field, 136 Mass. 345 156 Mackintosh ®._ Eliot Nat. Bank, 138 Mass. 393 69 Magruder v. Cplston, 44 Md. 349 _ 153 Main v. Bank, 6 Biss. 36 48 Maitland ®. Citizens' National Bank, 40 Md. 540 369 Manufacturers' & Traders' Bank, Nash v. 5 Hun, 568 131, 198 Manhattan ®. Farmers' Bank, 10 Blatchf. 344 59 Mann ®. Cheeseman, B'krs Mag. Jany 1875 153 Mann, United States ®. 95 U. S. 580. 41 Manufacturers' Nat. Bank, in re, 5 Biss. 499 123_ 335 Manufacturers' Nat. Bank v. Baack, 8 Blatchf. 187 38 139 135 Manufacturers' Nat. Bank®. Barnes, 65 111.69 I33 Manufacturers' Nat, Bank, Irons 0. 6 Biss. 301 I33 341 TABLE OF OASES. XXXVll Manufacturers' Nat. Bank, Mays v. 64 Pa. St. 74 125 Manufacturers' Ins. Co. -u. Loud, 99 Mass. 146... 276 Manwarring, Clinton Nat. Bank ». 39 Iowa, 281 149 MapesD. Scott, 88 111. 353.- _._ ...149 Mapes «. Second Nat. Bank, 80 Pa. St. 163 J 66, 106 Marchant, Case ®. 11 Leg. Ns. 287 ...36,54, 152 Marcy 0. Clark, 17 Mass, 339... 153 Marine Bank v. Pulton Bank, 2 Wall. 253 83, 93 Marine Nat. Bank, Crockery. 101 Mass. 340 ..137 Marine Nat. Bank «. Nat. City Bank, 59 N. Y. 67 75 Marine Nat. Bank v. Nat. City Bank, 36 N. Y. Sup. Ct. 470 75 Markoe ®. Hartranf, 6 Am. L. Reg. (N. S.) 487 317 Marsh, Dorsey D. 6 Fislier, 387 27 Martin, Housatonic Banks. 1 Mete. 394 54, 55 Martin,, Tapleyu. 116 Mass. 275 ....40, 103, 130 Mason, First Nat. Bank «. (Pa.) 13 Leg. Ns. 36 268 Mason, Williamson v. 12 Hun, 97 63 Mass. L. & T. Co., First Nat. Bank v. 133 Mass. 330.. 144 Mass. Nat. Banks. Bullock, 120 Mass. 86 242 Mass. Nat. Bank, Mathews v. 1 Holmes, 396 62, 118, 155 Mass. Nat. Bank, Morse e. 1 Holmes, 309.. - 73 Mastin v. First Nat. Bank, 65 Mo. 16 243 Mathews, Bank v. 98 U. S. 631 140 Mathews, Bank 1). 7 Rep. 357 140 Mathews «. Mass. Nat. Bank, 1 Holmes, 396 63, 118, 155 Mathews s. Skinner, 63 Mo. 329 50, 140, 147 Mathews, Union Nat. Banks. 98 U. S. 631 140 Mathews, Union Nat. Banks. 7 Rep. 257 140 Maynard s. Bank, 7 Phila. 6 155, 168 Maynard®. Bank, 1 Brews. 488 155, 168 Mays s. M'fgrs Nat. Bank, 64 Pa. St. 74 125 Mayor, Abbott »■. 54 Me. 540 220 Mayor, Adams s. 16 Alb. L. J. 416 218 Mayor, Adams s. 95 U. S. 19 318 Mayor, Adams s, 10 Leg. Ns; 98 218 Mayor, Bank s. 7 Wall. 16 218 Mayors. First Nat. Bank of Macon, 59 Ga. 648. 231 Mayor, Kyle s. 75 N. C. 445 331 Mayor, Nat. Bank s. 8 Heisk. 814 233 Mayor 0. Thomas, 5 Coldw. 600 320 McCall, People s. 43 111. 286 344 McCoy s. First Nat. Bank, 50 Iowa, 577 139 McDonald, Nat. Gold Bank s. 51 Cal. 64 73 McDonough s. First Nat. Bank, 34 Tex. 309 58 McElroy, Brown s. 53 Ind. 404 87, 132 McGuire, Second Nat. Bank s. 33 Ohio St. 295 105 Mclver s. Robinson, 53 Ala. 456 231 XXXVlll TABLE OF OASES. McKinney, First Kat. Bank v. 67 Me. 373 93 McLaughlin, Mercliants «. 9 Bep. 773 Ill McLemore v. Louisiana St. Bank, 91 U. S. 37 144 McManigle, First Nat. Bank v. 69 Pa. St. 156 108 McVay, Hade v. 31 Oliio St. 231 136 McVeigliD. City of Cliicago, 49 111. 318 333,333 Meadowcroft, German Nat. Bank «. 1 N. W. Rep. 759 141 Meadowcroft, German Nat. Bank «. 95 111. 134 -.141 Mears, Merchants ». 10 Chi. Leg. Ns. 180.. - 148 Mechanics' Nat. Bank ». Nat. Bank, 9 Leg. Ns. 369 300. 236 Mechanics' Nat. Bank». Nat. Bank, 94 U. S; 437 200, 336 Mechanics' & Traders' v. Crow, 60 N. T. 85 93, 133 Mercantile Bank, Fabens v. 33 Pick. 33Q 90 Merchants' & Mechanics' Bank, Commonwealth v. 73 Pa. 70 331 Merchants' & Mechanics' Bank, Commonwealth v. 3 Pearsons, 386 331 Merchants' & Mechanics' Bank, People v. 9 N. T. Week. Dig. 131 135 Merchants' Exchange Nat. Bank ». New Brunswick S. I., 4 Vroom, 170. 78 Merchants' Nat. Bank, Adams v. 3 Fed. Eep. 174 ...373 Merchants' Nat. Bank ». Cardozo, 3 Jones & S. 162... 40, 131, 333 Merchants' Nat. Bank, Chatham Nat. Bank ». 4 Thomp. & C. 196.48, 139, 189 Merchants' Nat. Bank, Cheeks. 10 Heisk. 618 196 Merchants' Nat. Bank v. Comstock, 55 N. T. 34 103, 107 Merchants' Nat. Bank «. Cook, 10 Leg. Ns. 82 - 124 Merchants' Nat. Banks. Cook, 95 U. S. 342.. ..134 Merchants' Nat. Bank v. Gumming, 5 Rep. 680 218 Merchants' Nat. Bank v. First Nat. Bank, (U. 8. C. 0.) Fed. Rep. Aug. 3, 1880 , 366 Merchants' Nat. Bank, Givens ». 85 111. 443 104 Merchants' Nat. Bank v. Glendon Co., 130 Mass. 97 139 Merchants' Nat. Bank o. Hall, 18 Hun, 176 145 Merchants' Nat. Bank Lamberton «. 34 Minn. 281 242 Merchants' Nat. Bank, Locke ii. 66 Ind. 353 129, 132, 135 Merchants' Nat. Bank «. McLsiughlin, 9 Rep. 773. 111 Merchaijts' Nat. Bank«. Mears, 10 Chi. Leg. Ns. 180 148 Merchants' Nat. Bank «. Meyers, 74 N.C. 514... 155, 304 Merchants' Nat. Bank, Nat. Bank ®. 1 Otto, 93 ..78, 91 Merchants' Nat. Bank v. Nat. Eagle Bank, 101 Mass. 381... 76 Merchants' Nat. Banks. New Brunswick, 4 Vroom, 170 78 Merchants' Nat. Bank, Pickett s. 83 Ark. 346.-., 195 Merchants' Nat. Bank ». Proctor, 1 Cin. 1 77 Merchants' Nat. Bank v. Pulaski Co. (U. S. C. C, E. D. Ark.) Fed. Rep. June 15, 1880... 374 Merchants' Nat. Bank v. Randall, 1 "Wilson, (Ind.) 166 99 Merchants' Nat. Bank, Randolph v. 63 Tenn.458 79 Merchants' Nat. Bank, Sandy River Bank v. 1 Biss. 146 63 Merchants' Nat. Bank v. Sells, 3 Mo. ,App. Cas. 85 147 Merchants' Nat. Bank, Shaws. 10 Rep. 139... 91, 368 TABLE OF CASES. XXXIX Merchants' Nat. Bank v. State Bank, 10 Wall. 604. .48, 61, 73, 110, 134, 185, 189, 208 Merchants' Nat. Bank v. TJnited States, 96U. S. 36 144 Merchants' Nat. Bank, Wright s. 3 Cent. L. J. 351 138 Merchants' Nat. Bank, Wright ». 3 L. & E. Rep. 638 138 Merchants' & P. Nat. Bank v. Trustees, 20 Alb. L. J. 337 138 Merrill, Hank b. 3 Hill, 395 87 Metropolitan Nat. Bank, Evansville v. 3 Biss. 537 203 Metropolitan Nat. Bank, Moore d. 55 N. T. 41 117 Meyer, Keelkamp v. 5 Mo. App. C. 444 76 Meyers, Merchants «. 74 N. C. 514 155, 204 Meyers v. Valley Nat. Bank, 18 N. Boy. Reg. 34. 155, 204 Meyers «. Valley Nat. Bank, 18 Alb. L. J. 57 155, 204 Millard. Bank «. 11 Brews. 483 67 Millard, Bank «. 10 Wall. 153 67,133 Miller, Second Nat. Bank v. 63 N. T. 639 97 Miller, Smith o. 43 N. Y. 171 89 Miller, Smith s. 52 N. Y. 545 89 Miss. R. T. Co. V. First Nat. Bank, 74 111. 217 198 Mias. R. T. Co.«. First Nat. Bank, 7 Leg. Ns. 158 198 Miss. Valley Bank, Howard ». 38 La. Ann. 737 81 Mitchell ®. Walker, 19 Alb. L.J. 183, 38,135 Mix ». Nat. Bank of Bloomington, 91 111. 20... 40, 131 MixD. Nat. Bank of Bloomington, 5 Mo. Jur. 650 40 Mo. R. Tel. Co. ». First Nat. Bank, 74 111. 217 137 Monmouth Nat. Bank, Grant v. 97 IT. S. 80 ..124 Monongahela Nat. Bank, Stephens v. 88 Pa. St. 157. 128, 303 Monongahela Nat. Bank, Stephens v. 19 Alb. L. J. 383 ....303 Moore, Hopper v. 43 Iowa, 563 55 Moore, Lancaster Co. Nat. Banks. 78 Pa. St. 407. 143 Moore ». Metropolitan Nat. Bank, 55 N. Y 41 117 Moore, Nat. Ex. Bank «. 3 Bond, 170 ..196 Morris, Bowden «. 1 Hughes, 378 130 Morris, First Nat. Bank «. 4 Thomp. & C. 182. _. 199 Morris v. First Nat. Bank, 68 N. Y. 363 125 Morses. Mass. Nat. Bank, 1 Holmes, 209... 72 Morsell, First Nat. Banks. 1 McArthur, 155 150 Morseman ». Youkin, 37 Iowa, 350 319 Muncie Nat. Bank, Barnet v. 11 Leg. Ns. 339 197 Muskegon Nat. Bank, Sibley s. 41 Mich. 196 96 Mutual Nat. Bank s. Rotge 38 La. Ann. 933 .^ 75 Myers, First Nat. Bank v. 83 111. 507 87, 133 TABLE OF OASES. N. Nash «. Manufacturers' & Traders'' Bank, 5 Hun, 568 131, 198 National Banks v. Auditor, etc., (U. S. C. C, W. D. Ohio) Week. Cinn. L.B. July 36, 1880 , 376 National Bank v. Bangs, 106 Mass. 441 70 National Bank, Barnett ®. 98 TJ. S. 555 197 National Bank, Belknap «. 100 Mass. 376 71 National Bank «. Bigler, 18 Hun, 400 103 National Bank, Blake ». 23 Wall. 307 234 National Bank, Brooklyn City, etc. v. 7 Week. Jur. 379 113, 116, 136 National Bank o.Burkhardt, 100 U. S. 686 115 National Banks. Carpenter, 101 U. 8. 567 271 National Banks. Case, 99 XJ. S. 628 36, 54, 152 National Bank, Casey®. 96 U. S. 492 109 National Bank, Clardy v. 100 U. S. 704 ". 83 National Bank, Coffey B. 40 Mo. 140 132, 168 National Bank v. Colby, 31 Wall. 609 36, 109, 137, 333, 336, 337, 341 National Bank, Commercial Ex. Nat. Banks. 9 Phila. 133 71 National Banks. Commonwealth, 9 Wall. 353 218 National Bank, Continental Nat. Bank s. 50 N. T. 575 75, 118 National Bank, Corn Ex Nat. Bank s. 78 Pa. St. 233. 77 National Bank, Corn Ex. Nat. Banks. 9 Phlla. 133 77 National Bank, Cox s. 100 U. S. 446 82 National Bank, Cummings s. 101 U. S. 153 277 National Banks. Davis. 6 Cent. L.J. 106 196 National Banks. Davis, 10 Leg. Ns. 156 .196 National Banks. Elmira, 53 N. T. 49 319 National Bank s. Eyre, 9 Rep. 83 (la.) 375 National Bank, German Am. Bank s. 11 Leg, Ns 90, 234 National Bank, German Am. Bank s. 6 Rep. 484 90, 234 National Bank, Gold Mining Co. s. 96 U. S. 640 801, 302 National Banks. Graham, 100 TJ. S. 699 114, 140,329 National Bank, v. Grocers' Nat. Bank, 85 How. Pa. R. 413 69 National Bank, Hotchkiss v. 31 Wall. 354 100 National Bank, Insurance & L. Bdg. Co. s. 5 Mo. A. C. 333 143 National Bank, Johnson s. 74 N. Y. 329 ,. 195 National Bank, Justh s. 36 N.T. Supr. Ct. 373 58, 86 National Bank, Kelseys.69 Pa. St. 436 117, 168 National Banks. Kirby, 103 Mass. 497. 99 National Bank v. Law, 1 Am L. Rev. (N. S.) 168 (Mass.) 274 National Bank, Little Rocks. 98U. S. 308 116 National Bank v. Lewis, 75 N.T. 516 195 National Bank s. Lewis, 10 Hun, 468 195 National Bank s. Mayor, 8 Heisk. 814 333 National Bank v. Mechanics' Nat. Bank, 94 U. S. 437 200, 336 National Bank s. Mechanics' Nat. Bank, 9 Leg. Ns. 369 300, 236 TABLE Oir OA8B8. xli National Bank v. Merchants' Nat. Bank, 1 Otto. 92... 1 78, 91 National Bank D. Millard, 10 "Wall. 152 67 National Bank, Mix«. 91 111. 20 40 National Bank v. Nat. Bank, 7 W. Va. 544 73, 208 National Bank v. Nat. Mechanics' B'kg A., 46 How. 376 74 National Bank v. Nat. Mechanics' B'kg A., aflf'd 55 N. Y. 311 74 National Bank, Gates s. lOOU. S. 239 94, 140, 197 National Bank D. Orcutt, 48 Barb. 256 131 National Bank, Ornn «. 16 Kas. 341 149 National Bank. Overholt®. 83 Pa. 400 196 National Bank, Peoples' Bank v. 101 TJ. S. 181 ..369 National Bank v. Phoenix, etc., 6 Hun, 71 85, 40, 48, 115, 140, 177, 189 National Bank «. Pierce, 18 Alb. L.J. 16 48 National Bank D. Ringel,51 Ind. 393 87 National Bank, Robinson «. 19 Hun, 477 241 National Bank, Eobinson v. 58 How. Pa. E. 306 241 National Bank, Robinson «. 32 Alb. L. J. 115 (N. T. S. C.) 277 National Bank, Scott ». 72 Pa. 471 .55, 112 National Bank ». Second Nat. Bank, 10 Rep. 264 266 National Bank, Second Nat. Bank v. 10 Bush. 367 266 National Bank v. Second Nat. Bank, 7 Week. Jur. 820 68 National Bank, Security Bank «. 67 N. T. 458 74, 308 National Bank, Seligman v. 6 Week. Jur. 587 ]14 National Bank, Seligman e. 9 Rep. 73 114 National Bank, Seligman v. 3 Hughes, 647 114 National Banku. Smith, 5 Hun, 183 84 National Bank v. Smith, 43 Conn. 337 143 National Bank, Smiths. 101 U.S. 330 274 National Banks. Smith, 66 N. Y. 371..: 93 National Bank B. Speight, 47 N. Y. 668 86 National Bank, State «. 33 Md. 75 319 National Bank, Talbot «. (Mass.) 10 Rep. 336 269 National Bank «. Texas, 30 Wall. 73 95 National 3ank, Tiffany «. 18 Wall. 409 ...44, 124, 194, 199 National Bank, Tintsman v. 100 U. S. 6 I44 National Bank B. Trust Co., 101 U.S. 68 269 National Bank v. Trustees Masonic Hall, 20 Alb. L. J. 337 138 National Banks. United States, 101 U. S. 1 44, 365 National Bank, Upton v. 130 Mass. 153 I49 National Bank «. Ward, 13 Leg. Ns. 175 122 National Bank s. Washington Co. Nat, Bank, 5 Hun, 605 87, 133 National Bank, Watriss s. 124 Mass. 571. 142, 169 National Bank s. Wells, 15 Hun, 51 gg National Bank, Wheeler s. 10 Leg. Ns. 381 I95, 198 National Bank, Wheeler ». 96 U.S. 368 195,' 193 National Bank, Whitney s. 45 N. Y. 303.. 96 National Bank, Wilson v. 13 Leg. Ns. 401 127 xlii TABLE OF CASKS. National Bank, Wilson n. 1 Am. L. Rev. (N. S.) 801 276 National Bank, Terkes ®. 4 L. & E. Rep. 198- 53, 55, 63, 113 National City Bank, Havens «. 4 Hun, 131 123 National City Bank, Havens v. 6 Thomp. & 0.846 123 National City Bank, Indig ®. 16. Hun, 300 89 National City Bank, Marine Nat. Bank «. 59 N. T. 67 75 National City Bank, Oddie «. 45 N. Y. 735 67 National Corn Ex., Holtsinger o. 37 How. Pa. R. 203 120 National Corn Ex., Holtsinger v. 1 Sweeney, 64 : 120 National Eagle Bank, Merchants' Nat. Bank v. 101 Mass. 281-.. 76 National Ex. Bank, Dodges. 80 Ohio St. 1. 68 National Ex. Bank, Dows ». 15 Am. L. R. 681 90 National Ex. Bank, First Nat. Bank ». 51 How. Pr. R. 330 53 National Ex. Bank, First Nat. Bank v. 2 Otto. 123 52 National Ex. Bank, Gallery?;. 41 Mich. 169 57 National Ex. Bank, v. Moore 3 Bond, 170 196 National Freedman's, Allen v. 14 Fla. 418 79, 116, 302 National Gold Bank B. McDonald, 51 Cal.64 72 National Mahaiwe Bank b. Barry, 135 Mass. 30 144 National Mahaiwe Bank v. Peck, 6 Week. Jur. 533 ..83, 84 National Mahaiwe Bank v. Peck, 137 Mass. 398 83, 84 National Mechanics' B'kg A., National Bank v. 46 How. 874 74 National Mechamcs' B'kg A., National Bank v. afif 'd 55 N. T. 311 74 National Mechanics' B'kg A., Strong ». 45 N.T. 718 85 National Metropolitan Bank, Clark v. 3 McArthur, 249... 75 National Mohawk Bank, Caldwell «. 64 Barb. 333 61 National Monticello Bank v. Bryant, 5 L. & E. Rep. 110 134 National Newberg Bank v. Bigler, 18 Hun, 400 103 National New England ». Smith, 43 Conn. 327 .143 National Pahquioque Bank ». Bethel Bank, 36 Conn. 325... 54, 64, 188, 333 National Park Bank «. Gunst, 1 Abb. N. 0.293 48 National Park Bank v. Kemble, 8 Rep. 8 145 National Pemberton Bank v. Porter, 7 Cent. L. J. 824... .93, 134 National Pemberton Bank . Toung, 35 Iowa, 311 233 National Union Bank, Hagar v. 63 Me. 509 108, 300, 243 National Union Bank, Lazearti. 13 Leg. Ns. 64 53 National Union Bank, Stewart «. 2 Abb. U. S. 424 106 TABLE OF 0A8BS. xliii National Village Bank, Jenkins*. 58 Me. 275 ..112 Nelson fl. First Nat. Bank, 48 111.36 84 Nelson, Rook Island Nat. Bank ». 41 Iowa, 563 95, 133 New Amsterdam ■». Gartter, 54 How. 385 126 Newark, State b. 10 Vroom, 380 216 Newark, State ». 11 Vroom, 558 216 New Brunswick, Merchants' Exchange Nat. Bank, v. 4 Vroom, 170 78 Newell s. Bank, 12 Bush. 57 137,196 New Orleans v. Raymond, 29 La. Ann. 355 148 New Orleans National Bank v. Wells, 28 La. Ann. 736 57 Newport v. Tweed, 4 Houston (Del.) 97, 225 54, 59, 195 New York City, Bank B. 2 Black, 620 76^ New York & E. Bank, Woolen v. 12 Blatchf. 359 78, 91 New York Ex., Seeleyi). Nat. Bank Cas. 804 159 New York Ex., Seeley b. 4 Abb. N. C. 61...-.- 155, 159 New York Iron M. «. First Nat. Bank, 39 Mich. 644 101, 122 New York National B'kg Ass'n, Nolan v. 67 Barb. 24. 74 -New York National Ex. Bank v. Jones, 9 Rep. 628 (N. Y. Com. P.).... 129 Noble, Petillon ®. 9 Leg. Ns. 314 ..39,139 Nokomis National Bank, Best c. 76 111.608 93 Nolan ». New York Nat. B'kg Ass'n, 67 Barb. 24 74 North National Bank v. Hamlin, 125 Mass. 506 86 North Pemberton v. Porter, 7 Cent. L. J. 324 92, 134 Northborough National Bank, Carpenter v. 123 Mass. 66 96 Northern R. R. Co., First Nat. Bank «. 7 Rep. 566 91 Northern R. R. Co., First Nat. Bank v. 58 N. H— -.. 91 Northup B. Shook, 10 Blatchf. 243 ...243 O. Oates D. National Bank, 100 U. S. 239 94,140, 197 Ocean National Bank v. Carll, 7 Hun, 237 140, 155, 233 Ocean National Bank j). Fant, 50 N. Y. 474 103 Ocean National Bank, First Nat. Bank i>. 60 N. Y. 278. .51, 54, 63, 112, 132 Ocean National Bank, First Nat. Bank v. 48 How.Pa. R. 148 .113 Ocean National Bank, v. Williams, 102 Mass. 141 82 Oceana Co. Bank, Union Nat. Bank e. 80 111. 212 66, 132 OdJie ». Nat. City Bank, 45 N. Y. 785 67 O'Hare B. Second Nat. Bank, 77 Pa. 96 202 Old National Bank, Knight b. 4 Am. L. T.240 156 Olney ®. Chadsey, 7 R. L 224 ....54,59,140 Omaha National Bank, Forbes v. 7 Week. Jur. 392 104 Omaha National Bank, Forbes v. 6 N. W. Rep. 363 (Neb.) 104 Opinion of Justices, 53 Me. 594 220 Orcutt, National Bank o. 48 Barb. 256 _,131 Ordway v. Central Nat. Bank, 8 Leg. Ns. 291 198, 225 Ordway v. Central Nat. Bank, 47 Md. 217 187, 198, 225 xliv TABLE OF OASES. Ornn B. National Bank, 16 Kas. 341.. 149 Osborn v. Byrne, 43 Conn. 155 126 Otoe Co. National Bank, Kennedy?). 7 Neb. 59 ..47, 54, 60, 62 Overholt «. National Bank of Mount Pleasant, 83 Pa. 400 196 P. Pacific Bank, Ayrault ». 47 N. Y. 570 89 Packard v. City of Lewiston, 55 Me. 456 220 Pahquioque Bank, Bank v. 14 Wall. 383 58, 136, 138, 332, 23S Pahquioque Bank ». Bethel Bank, 36 Conn. 325 54, 64, 138, 233 Palmer «. First National Bank, 14 Hun, 126 .' 241 Palmer, Leavitt ®. 3 N. T. 19 87 Pape «. Capitol Bank, 20 Kas. 440 52 Papin, St. Louis «. 8 Cent. L. J. 669 222 Papin, St. Louis, v. 4 Dill. 29 222 Park, Stevens B. 73 111.387 85 Parkersburg National Bank v. Als, 5 W. Va. 50 83 Parmelee, Bank B. 16 Alb. L. J. 473 54,64,100 Patchin Bank, Bank of Genesee «. 13 N. Y. 309 81, 101 Patchin Bank, Bank of Genesee b. 19 N. Y. 312 ....81, 101 Pate B. First National Bank, 63 Ind. 354 95 Pattison v. Syracuse Nat. Bank, 17 Hun, 419 113 Paysou, Turnbull v. 10 Leg. Ns.89 132, 153, 163 Peck, Mahaiwe Banks. 6 Week. Jur. 533 83,84 Peck, Mahaiwe Bank B. 127 Mass. 298 83, 84 Pelton V. Commercial Nat. Bank. 101 TJ. S. 143 ...277 People, Bradley v. 4 Wall. 459 217 People B. Bradley, 39 111. 180 } 222 People B. Commissioners, 4 L. & B. Rep. 313 317 Peoples. Commissioners, 69 N. Y. 91 233 Peoples. Commissioners, 4 Wall. 244 317 Peoples. Commissioners, 8 Hun, 536 220, 223 People s. Commissioners, 9 Hun, 650 233 People B. Commissioners, 94 U. S. 415 219 People s. Commissioners, 3 Black, 630 317 Peoples. Dolan, 36 N. Y. 59 224 Peoples. McCall, 43 111. 286 ."J.""""344 People B. Merchants' & M. Bank, 9 N. Y. Week. Dig. 131 125 People s. Tappan, 11 Bank. Mag. 480 320, 233 Peoples' Bank b. Gridley, 1 Mo. Jr. 589 154 Peoples' Bank s. Gridley, 91 111.457 ][l54 Peoples' Bank s. National Bank, 101 U. S. 181 269 Peoples' National Bank, Charleston s. 5 S. C. 103 36, 158, 334 Peoples' National Bank, Woods s. 9 Leg. Ns. 135 103, 140, 148 Peoples' National Bank, Woods 0. 83 Pa. St. 57 103, 140, 148 Peterborough, First National Bank s. 56 N. H. 38 .333 TABLE OF OASES. xlv Peterson v. Union National Bank, 54 Pa. St. 306 --68 Petillon V. Noble, 9 Leg. Ns. 314 39, 139 Pettit, First National Bank ». 41 111. 493 84 Philadelphia Bank, Chicopee Bank v. 8 Wall. 641 80, 83 Philadelphia Trust Co., Com. Exchange Bank v. 9 Leg. Ns. 65 143 Phoenix, etc.. National Bank v. 6 Hun, 71 35, 40, 48, 115, 140, 177, 189 Pickett «. Merchants' Nat. Bank, 33 Ark. 346 195 Pierce, National Bank®. 18 Alb. L.J. 16 48 Pierson, First National Bank v. 16 Alb. L. J. 319 53 Pierson, First National Bank v. 34 Minn. 140 53, 131 Pittsburgh, etc., Fifth National Bank v. 13 Leg. Ns. 51 370 Pittsburgh, etc.. Fifth National Bank v. 1 Rep. 190 377 Pittsburgh, etc. «. State National Bank, 8 Leg. Ns. 41 110 Pittsburgh, etc. v. State National Bank, 3 Cent. L. J. 693 110 Planters' Bank, Bank of United States v. 9 Wheat. 904 271 Planters' Bank, Union Bank v. i Gill. & J. 439 119 Planters' National Bank, Batchelor v. 10 Rep. 16 -- 62 Piatt B. Beach, 3 Ben. 303 333 . Piatt B.Beebe, 57 N.Y. 339— 36,40,131,133 Piatt B. Bentley, 11 Am, L. Reg. 171 136 Piatt®. Crawford, 8 Abb. Pa. Rep. 297 - 139 Piatt m re, 1 Ben. 534 37,186,233 Platte Valley Bank ®. Harding, 1 Neb. 461 116 Pope®. Capitol Bank, 30 Kas. 440 -- 53 Porter, National Pemberton Bank v. 135 Mass. 383 93, 184 Porter, North Pemberton Bank ®. 7 Cent. L. J. 324 93, 134 Portland, etc.. First Nat. Bank v. 3 Fed. Rep. 831 369 Poucher, Second Nat. Bank v. 56 N. Y. 348 98, 108 Pratt, Central Nat. Bank ®. 115 Mass. 539 195 Pratt®. Machinists' Nat. Bank, 133 Mass. 110 156 Price, Rec'r ®. Tates, 19 Alb. L.J. 295 188, 140, 234 Priest, First Nat. Bank, «. 50 111.831 140 Proctor, Merchants' Nat, Bank ®. 1 Cin. 1 77 Providence ». Boston, 101 Mass. 575 219 Pulaski Co., Merchants' Nat. Bank v. Fed. Rep. June 15, 1880 374 Pullman v. Upton, 96 U. S. 338 152 R Rahter®. First Nat. Bank, 9 Rep. 589 (Pa.) 94 Randall, Davis, Rec'r®. 115 Mass. 547 54, 59, 102, 194 Randall, Merchants' Nat. Bank ®. 1 Wilson, (Ind.) 166 99 Rand®. State Nat. Bank, 77 N. C. 153 138 Randolph ®. Merchants' Nat. Bank, 63 Tenn. 458 79 Rasmussen, Farmers' Nat. Bank, ®. 1 Dak. 60 95 Rathburn, Smith ®. 66 Barb. 403 137 Ray®. Bank of Kentucky, 10 Bush, 344 113 xlvi TABLE OF CASES. Kaymond, New Orleans v. 39 La. Ann. 355 ._. 148 Rea v. Hackettstown Nat Bank, 64 Barb. 175 199 Reed«. First Kat. Bank, 36 Mich. 268 56 Reed v. Union Bank of Winchester, 6 Rep. 660 (Va.) 144 Reno County Bank, First Nat. Bank v. Fed. Rep. Aug. 11, 1880 367 Resh«. First Nat. Bank, 10 Rep. 411 (Pa.) 371 Revere «. City of Boston, 5 Rep. 46 (Mass.) •. 331 Rex, First Nat. Bank, v. 89 Pa. St. 308 111, 133 Rhawn, United Stalest. 8 Leg. Ns. 873 41 Rhodes «. Webb, 24 Minn. 393 57 Rhoneru. First National Bank, 134 Hun, 16. 241 Rice County «. Citizens' Nat. Bank, 33 Minn. 380 333 Rice, Exchange Banko. 107 Mass. 37 139 Rich V. State National Bank, 7 Neb. 201 57, 117 Richards®. Kountze, 4 Neb. 200 , 1.148 Richardson, Boyleslon Nat. Bank v. 101 Mass. 287 70 Richland National Bank, Central Nat. Bank, ■». 53 How. 186 341, 343 Richmond, Citizens' Nat. Bank,®. 131 Mass. 110 107 Ricker, First National Banks. 71 III. 439.. 68 Ringel, National Bank ®. 51 Ind. 398.. 87 Rocky M. National Bank, Union G. M. Co. v.l Colo. 581 .36, 301, 338 Robinson, Mclvor v. 53 Ala. 456 331 Robinson v. National Bank of Newbcrne, 19 Hun, 477 241 Robinson v. National Bank of Newberne, 58 How. Pa. R. 306 241 Robinson v. National Bank of Newberne, 33 Alb. L. J. 115 .377 Rock Island National Bank v. Nelson, 41 Iowa, 563 95, 133 Rocky, Union e. 3 Colo. 348 64 Rogers, Attleborough Nat. Bank, v. 135 Mass. 839 117 Rogers, Waco Nat. Bank v. 51 Tex. 606 : 221 Rogers, Wilson «. 1 Wyoming, 51 __66, 121 Rosenback «. Salt Springs Nat. Bank, 58 Barb. 495..- .109, 156, 203 Rotge, Mutual Nat. Bank®. 28 La. Ann. 933 75 Rounds V. Smith, 43 111. 345 74 Rouse, Liouberger v. 9 Wall. 468 319 Rowell, Kansas Valley Nat. Bank ®. 3 Dillon, 371 .147 Royer ®. Keystone Nat. Bank, 83 Pa. St. 348 97 Ruffin V. Commissioners, 69 N. C. 498.. 233 Rush School Dist., First Nat. Bank d. 3 L. & E. Rep. 148 97 Ryan, Fai-mers' & M. Nat. Bank v. 64 Pa. St. 336 83, 131, 242 S. Salt Lake City National Bank v. Hendrickson, 6 Rep. 213.. ...151 Salt Springs National Bank «. Burton, 58 N. T. 430 107 Salt Springs National Bank, Rosenback v. 53 Barb. 495 109, 156, 303 Bandy River Bank v. Merchants' Nat. Bank, 1 Biss. 146 63 Santos, Bowden 0. 1 Hughes, 158 153 163 TABLE OF OASES. xlvii Savery, Atlantic Nat. Bank v. 18 Hun, 36 54, 55 Savery, Atlas Bank v. 11 Leg. Ns. 382 -'-■ 53 Savery, Atlas Bank «. 127 Mass. 75. 52 Sawyer, Bailey ». 9 Leg. Ns. 191 36, 152, 163, 232 Sawyer «. Hoag, 17 Wall. 610 120,154 Scammon«. Kimball, 2 Otto. 362 SB, 126 Schley, Chattahoochee- Nat. Baak b. 58 Ga. 369 55, 63, 114 Schley, Chattahoochee Nat. Bank «. 4 L. & E. Rep. 475 ...55, 63 Schlichting, First Nat. Bank J). 40 Iowa, 51 99 Schneider, Casey «. 96 U.S. 496_ ..109 Schoharie C. Nat. Banks. Bevard, 51 Iowa, 257.. 97 School Directors, Hepburn ®. 23 "Wall. 480 320 School District «. First Nat. Bank, 103 Mass. 174 122 Schmidt !). Bank, 23 La. Ann. ZU 109, 236 SchroederB. Harvey, 75 111. 638 69 Schugardt, Casey B. 96 U. S. 494 146 Schuyler, First Nat. Bank v. 39 N. T. Sup. Ct. 440 101 Scofleld ». Bank, 2 N. "W. Rep. (N. S.) 888 150 Scofield V. State Nat. Bank, 4 N. "W. Rep. (N. S.) 71 150 Scott, Mapes «. 88 111.352 149 Scott D. National Bank, 73 Pa. St. 471 -... 55, 113 Scudder »: Union Nat. Bank, 91 U. S. 406. 81 Scully, Fowler M. 73 Pa. St. 456 50,103, 140, 147 Second National Bank, Bly v. 79 Pa. St. 459 ;..-202 Second National Bank, Brown v. 72 Pa. St. 209. 103, 196 Second National Bank, Buckley v. 6 Vroom, 400 73 Second Nations,! Bank, Burkhalter «. 40 How. Pa. R. 324 71, 80 Second National Bank, Burkhalter v. {aff'd) 43 N. Y. 538 ...71, 267 Second National Bank v. Chancellor, 9 W. Va. 69 104 Second National Bank, Conklin v. 45 N Y. 655 109, 203 Second National Bank ®. Hemingray, 5 Rep. 404 _..131 Second National Bank, Mapes ®. 80 Pa. St. 163 66, 106 Second National Bank v. McGuire, 33 Ohio St. 295 105 Second National Bank ». Miller, 63 N. Y. 639 97 Second National Bank ». National Bank, 10 Bush. 367 266 Second National Bank v. National Bank of Rockville, 10 Rep. 264 266 Second National Bank v. National Bank of Rockville, 7 "Week. Jur. 320. 68 Second National Bank v. National State Bank, 7 Leg. Ns. 70.. ....109, 203 Second National Bank, O'Hare «. 77 Pa. St. 96 202 Second National Bank v. Poucher, 56 N. Y. 348 98, 108 Second National Bank v. Smoot, 3 McArthur, 371 ...198 Second National Bank ®. "Walbridge, 19 Ohio St. 419 ^ 142 Second National Bank «. "Wells, 53 How. Pa. Rep. 343 139 , Second National Bank, "Weyero. 57 Ind. 198 164 Security Bank, Bank of Com., 2 Hun, 387 127, 137, 138, 234 Security Bank «. National Bank, 67 N. Y. 458 ...74, 308 Seeley B. New York Exchange, 1 Nat. Bank. Cas. 804 159 Xlviii TABLE OF OASES. Seeley v. New York Exchange, 4 Abb. N. C. 61 153, 159 Selden «. Equitable Trust Co., 94 TJ. S. 419 -- 43 Seligmans). National Bank, 6 Week. Jur. 587 114 Seligman v. National Bank, 9 Rep. 73 114 Seligman «. National Bank, 3 Hughes, 647 - 114 Sells, Merchants' National Bank v. 3 Mo. App. Cas. 85 -.147 Sevenlh National Bank b. Cook, 73 Pa. St. 483 67, 139 Shaw «. Merchants' National Bank, 10 Rep. 129. 91, 268 Shaw «. National State Bank, 49 Iowa, 179 128 Shawnee Co. Bank, West St. Louis Bank v. 3 Dill. 403 54, 59, 64 Shawnee Co. Bank, West St. Louis Bank v. 95 U. S. 557 62 Shelburne Palls Nat. Bank «. Townsley, 102 Mass. 177 104 Sheldon, Ex'r ®. Benham, 4 Hill, 139 104 Shinkle v. First Nat. Bank, 33 Ohio, 516 50, 147, 197 Shipsey «. Bowery Nat. Bank, 59 N.T. 485 71 Shipsey ». Bowery Nat Bank, 36 N. T. Sup. Ct. 503 71 Shoe & Leather Nat. Banks. Dix, 133 Mass. 148 96 Shoemaker «. Nat. Mech. Bank, 2 Abb. TJ. S. 416.36, 38, 50, 110, 135, 201, 238 Shook, Northup B. 10 Blatchf.343 243 Shunk V. First Nat. Bank of Gallon, 33 Ohio St. 508 196 Sibley «. Muskegon Nat. Bank, 41 Mich. 196 96 Simmons v. Aldrich, 41 Wis. 341 324 Simmons, Commercial Nat. Bank v, 8 Leg. Ns. 164 38, 136 Simmons, Commercial Nat. Banks. 10 Alb. L. J. 155 38, 136 Simonsons. First Nat. Bank, 24 Minn. 216 130 Sixth National Bank, Union Nat. Bank a. 43 N. T. 452 96 Skinner, Mathews o. 62 Mo. 329 50, 140, 147 Slemmons, Bank of Cadiz v. 34 Ohio St. 142 57, us Smith B. Ayer, 101 TJ. S. 330 274 Smith, Burrows B. 10 N. Y. 550 48 Smith, Citizens' Nat. Bank, b. 3 Am. L.T. 248 93 Smith B. Exchange Bank of Pittsburgh, 23 Ohio St, 141 52, 198 Smith, First National Banks. 65 111. 44 151, 833 Smith B. First National Bank, 99 Mass. 605 57, 112 Smith B. First National Bank, 17 Mich. 479 151, 233 Smith, Lancaster Co. Nat. Banks. 63 Pa. St. 47 113 Smith B. Miller, 43 N. Y. 171 '.".'...". 89 Smith B. Miller, 52 N. Y. 545 "'"_ §9 Smith, National Bank s. 5 Hun, 183 84 Smiths. National Bank, 101 U. S. 330 274 Smith B. National Bank, 66 N. Y. 371 '."JJ'.". 93 Smith, National New England Banks. 43 Conn. 327 143 Smith®. Rathburne, 66 Barb. 402 127 Smith, Rounds s. 43 111.345 74 Smoot, Second National Bank, 2 McArthur, 371 198 Southwick s. Bank, 7 Hun, 96 . . 341 Southwick s. First Nat. Bank, 20 Hun, 349 83 TABLE OF OASES. zlix Southworth, Strong v. 8 Ben. 831 128. Spafford «. First Nat. Bank, 37 Iowa, 181 110 Spaunhorst, Furz D. 67 Mo. 256 66 Speight, National Banlc v. 47 N. Y. 668 86 Starbuck, Wiley v. U Ind. 398 .' 103, 300 State, Curran v. 15 How. 304 --. 163 States. Curtis, 85 Conn. 374 58,139 States. Davis, 60 How. 447-- 54,64 State D. Gasting, 23 La. Ann. 609- 310 States. National Bank, 33 Md.75 319 State 0. Newark, 10 Vroom, 380- 316 State r. Newark, 11 Vroom, 558 316 States. TuUer, 34 Conn. 280 309,310 State Bank, Mercliants' Nat. Bank, v. 10 Wall. 604 48, 61, 78, 110, 184, 185, 189, 208 State National Bank, Canfleld v. 1 N. W. Rep. 173 53 State National Bank, Cooke v. 52 N. T. 96.- 48, 73, 137, 189, 208 State National Bank, De Nayers. 8 Neb. 104 105 State National Bank v. Freedman's, 2 Dill. 11 88 Staite National Bank, Pittsburgh, etc. s. 8 Leg. Ns. 41 , .'..110 Stale National Bank, Pittsburgh, etc. v. 3 Cent. L. J. 602 110 State National Bank, Rand v. 77 N. C. 153 128 State National Bank, Rich ». 7 Neb. 301- 51, 117 State National Bank «. Scofield, 7 N. W. Rep. (N. S.) 71... 150 State National Bank, United States ». 96 U. S. 36 144 Stauflfer, First National Bank o. 6 Week. Jur. 193 195 Stauflfer, First National Bank v. 1 Fed. Rep. 187 195 Staufl'er, First National Bank v. 10 Rep. 70 ■....195 . St. Nicholas National Bank v. Falklands, Adm'x, 10 Rep. 341 367, 270 St. Louis «. Papin, 3 Cent. L.J. 669 332 St. Louis o. Papin, 4 Dill 39 333 St. Louis National Banks. Brinkman, 1 Fed. Rep. 45 370 Steckel o. First National Bank, Week. N. C. Sept. 3, 1878 367 Stephens v. Monongahela National Bank, 88 Pa. St. 157 128, 202 Stephens v. Monongahela National Bank, 19 Alb. L. J. 382 203 Stevens, Davis, Rec'r v. Leg. Intel. Nov. 28, 1879 275 Stevens v. Park, 73 111. 387 85 Stewarts). First National Bank, 40 Mich, 848 106 Stewart v. National Union Bank, 2 Abb. (U. S.) 434 301 Stiltz B. Tutewiler, 1 Wilson, (Ind.) 507 ^ 318 Stiltz, Wright ®, 27 Ind. 338 318 Storm, Adderly «. 6 Hill, 624 152 Strong V. National Mechanics' B. A., 45 N. T. 718 _ 85 Strongs. Southworth, 8 Ben. 831 128 Studley, German National Bank s. 1 Mo. App. Cas. 260 -120 SturgesB. Fourth National Bank, 75 111. 695 81, 132 Swift «. Tyson, 16 Peters, 1 136 Syracuse National Bank, Pattison v. 17 Hun, 419 118 i TABLE OF OASBS. T. Taintor, TJnited States v. 11 Blatchf, 374 309 Talbot «. National Bank of (!omw., 10 Rep. 336 269 Tapley e. Martin, 116 Mass. 375 40, 102, 130 Tappan B. Bank, 19 Wall. 490 ..151,317, 219 Tappan, First National Bank ». 6 Kas. 456 81 Tappan, Peoples. 11 Bank. Mag. 480 320,283 Taylor «. Hutton, 43 Barb. 195 58 Taylor, Venango National Bank v. 56 Pa. St. 14 136, 138, 241 Tenny, Commonwealth «. 97 Mass. 50 209 Terrell, Case o. 11 Wall. 199 36, 233 Texas, National Bank v. 30 Wall. 73... 95 Thatcher, West River Nat. Bank, v. 19 Mich. 196.35, 40, 49, 103, 131, 177, 178 Third National Bank ». Allen, 59 Mo. 310.. 97 Third National Bank v. Blake, 73 N. Y. 260 148 Third National Bank, Bisling«. 10 Rep. 410 373 Third National Bank «. Boyd, 44 Md. 47 53, 112 Third National Bank v. Boyd, 16 Am. L. Reg. 371 53, 113 Third National Bank, Dana b. 13 Allen, 445 67 Third National Bank ». Lange, 18 Am. L. R. 383 (Mo.) 97, 107 Third National Bank, Tradesman's Bank v. 66 Pa. St. 435 81 Thomas «. Farmers' Nat. Bank, 46 Md. 43 51, 169 Thomas, First Ward Nat. Bank v. 125 Mass. 378 144 Thomas, Mayor «. 5 Coldw. 600 ...: 220 Ticonic National Bank®. Bagley, 68 Me. 249 99 Tiffany, s. National Bank, 18 Wall. 409 44, 124, 194, 199 Tintsman v. National Bank, 100 U. S. 6... 144 Tisdale, First National Bank®. 18 Hnn, 151 103 Townsley, Shelburne Falls National Bank, v. 103 Mass. 177.. 104 Tracy, Cadle «. 11 Blatchf. 101 37. 136, 138 Tracy v. First Nationa,l Bank, 37 N. Y. 523 233 Traders' Bank®. Campbell, 14 Wall. 87_- 124 Tradesman's Bank ». Third National Bank, 66 Pa. St. 435 81 Troy City Bank, Farmers' & M. Bank®. 1 Doug. (Mich.) 457 65, 80, 101 Trust Company B. National Bank, 101 TJ. S. 68 269 Trustees, Merchants' & Planters' Nat. Bank v. 30 Alb. L. J. 337 138 Toiler, State «. 34 Conn. 380 209,210 Turnbull«. Payson, 95 U. S. 418 132, 153, 163 TurnbuU*. Payson, lOLeg. Ns. 89 153 Turner v. First National Bank, 26 Iowa, 562 138, 234, 235 Turner ». Bank of Fox Lake, 4 Abb. Ct. of App. 434 367 Tutewiler, Stiltz o. 1 Wilson, (Ind.) 507... 318 Tweed, Newport ». 4 Houston, (Del.) 97 54, 59, 195 Tyson, Swift ». 16 Peters,! 136 TABLE OF OASES. 11 U. Underwood, United Society «. 9 Bush. 609 56 Union, Bearborn ®. 58 Me. 273 112 Union, Dearborn «. 61 Me. 369 112 Union «. Eocky, etc., 2 Colo. 248 64 Union Bank «. Oarr, 49 Iowa, 359 131 Union Bank v. Planters' Bank, 4 Gill. & J. 439 119 Union Bank, Reed v. 6 Bep. 606 (Va.) 144 Union Bank, Stewart ®. 2 Abb. U. S. 424 201 Union Bank, Wilder o. 13 Leg. Ns. 75., - .....39, 139 Union Bank, Wilder v. 9 N. Y. Week. Dig. 220 39, 139 Union Gold M. Co. ». R. M. Nat. Bank, 1 Colo. 531. 36, 201, 238 Union National Bank, Abrams «. 31 La. Ann. 61. 74 Union National Bank, Carr v. 49 Iowa, 359 131 Union National Bank, Chambers «. 78 Pa. St. 205 81 Union National BankB. First National Bank, 90 111. 56 127 Union National Bank ®. Mathews, 98 U. S. 631 ...147, 150 Union National Bank v. Mathews, 7 Rep. 257 150 Union National Bank v. Oceana Co. Bank, 80 111. 313 66, 132 Union National Bank. Peterson v. 54 Pa. St. 206 68 Union National Bank, Scudder v. 91 U. S. 406 j 81 Union National Bank v. Sixth National Bank, 43 N. Y. 452 96 Union National Bank, Wheeler e. 96 U. S. 368 195, 198 United Society «. Underwood, 9 Bush. (Ky.) 609 56 United States, Branch «. 12 Bank. Mag. 61 167 United States, Branch «. 12 Court of Claims, 381 167 United States B. City Bank, 21 How. 356 61, 63 United States v. Cook Co. National Bank, 11 Leg. Ns. 844 109 United States v. Cook Co. National Bank, a Rep. 198 .109 United States «. Hade, 10 Leg. Ns. 23 209 United States «. Mann, 17 Alb. L.J. 85 41 United States «. Mann, 95 U. S. 580 41 United States, Merchants' National Bank v. 96 U. S. 36... 144 United States v. National Banks, 101 U. S. 1 44, 265 United States b. Rhawn, 8 Leg. Ns. 372 „.. 41 United States v. State National Bank, 96 U. S. 30 ,...144 United States ®. Taintor, 11 Blatchf. 374 „..209 Upton®. National Bank, 120 Mass. 153 149 Upton V. Pullman, 96 U. S 338 152 Utica, City of v. Churchill, 33 N. Y. 161 331 V. Valentine, Central National Bank v. 18 Hun, 417 97 Valley National Bank, Meyers v. 18 Nat. Bey. Reg. 34 155, 304 Valley National Bank, Meyers «. 18 Alb. L. J. 57 155, 204 Van Alen B. Am. Nat. Bank, 53 N.Y. 1 '. 133 Van Allen B. Assessors, 3 Wall. 573 ..217, 219,233 lii TABLE OF OASES. Van Allen v. First National Bank, 54 N. T. 671 53, 64, 59 Van Antwerp?). Hurlburd, 7 Blatchf. 436 ..172 Van Antwerp «. Hurlburd, 8 Blatchf. 282 136, 172, 233, 234 Van Campen m r«, 2 Ben. 419 173, 209 Van Leuven v. First National Bank, 54 N. T. 671 ..53, 54, 59 VanNostrand, Hungerford ». 106 Mass. 559 : 116 Veazie Bank v. Fenno, 8 Wall. 533 3, 5, 44, 46, 207, 316, 256 Venango National Bank v. Taylor, 56 Pa. St. 14 126, 138, 241 Village, Howell 1). 35 Mich. 471. 221 Vincennes National Bank, Helphenstine v. 6 Rep. 169 135 Vough. Younge s. 23 N. J. E. 335 103, 115, 141, 157 ' W. "Waco National Bank «. Rogers, 51 Tex. 606 221 Waite 1). Dowley, 94 U. 8.527 220 Walbridge, Second National Bank o. 19 Ohio St. 419 143 "Walker, Hale 9. 31 Iowa, 844 131,152,211 "Walker, Mitchell ®. 19 Alb. L.J. 182 88, 135 "Walkill National Bank, Green a. 14 Hun, 68 138,283, 334 "Ward, Curtis B. 58 Mo. 395 133 "Ward, National Bank «. 13 Leg. Ns. 175 123 "Washington, National Bank ». 5 Hun, 605 87, 132 Washington Banke. Lewis, 33 Pick. 34 55 Washington Co. Nat. Bank v. Lee, 113 Mass. 531 40, 130. 131 Watriss v. National Bank, 134 Mass. 571, S. C. 6 Rep. 303 142, 169 Wayne «. Com'l National Bank. 52 Pa. St. 343 ....103, 118 Weaver, Williams «. 75 N. Y. 30 218 Webb, Rhodes «. 34 Minn. 292 57 Weckerly, Indiana Nat. Bank». 67 Ind. 348 93 Weckler v. First National Bank, 42 Md. 581 53, 54, 64, 141 Weed, Davis v. 44 Conn. 569 164 Welch •!). German Am. Bank, 73 N. Y. 424 69 Welch «. German Am. Bank, 43 N. Y. Sup. Ct. 463 69 Weld V. City of Bangor, 56 Me. 274. 220 Weldu. City of Bangor, 59 Me. 416 220 Wells, National Bank v. 15 Hun, 51 98 Wells, New Orleans National Bank v. 28 La. Ann. 736. 57 Wells, Second National Bank «. 53 How. Pa. R. 243 139 West». First National Bank, 30 Hun, 408 88 West River National Bank, Thatcher v. 19 Mich. 196... 85, 40, 49, 103, 131 177, 178 West St. Louis Bank v. Shai^nee Co. Bank, 8 Dill. 403 54, 59, 64 West St. Louis Bank v. Shawnee Co. Bank, 95 U. S. 557 63 Western U. Teleg. Co., First Nat. Bank «. 6 Rep. 660 145 Weyers. Second National Bank, 57 Ind. 198 164 "Wheeler v. National Bank, 96 U. S. 268 195, 193 Wheelers. National Bank, 10 Leg. Ns. 381 19j, 198 TABLS OF OASES. Hi! ■Wheelock e. Kost, 77 111. 296 116, 133, 153, 241 White V. Com. National Bank, 4Brews. (Pa.) 234 113, 133, 187 Whitman, First National Bank, 94 U. S. 343 68 Whitney, Crocker ». 71 N. T. 161. 93,147 Whitney v. First National Bank, 50 Vt. 388 113 Whitney D. National Bank, 45 N. Y. 303 96 Wild in,re,n Blatch. 343 194 Wilder «. Union National Bank,"l3 Leg. Ns 75 39, 139 Wilder v. Union National Bank, 9 N. Y. Week. Dig. 320 39, 139 Wiley ». First National Bank of Brattleboro, 47 Vt. 546 51, 55, 63, 111 Wiley «. Starbuok, 44,Ind. 298 102,200 Williams, Ocean National Bank v. 102 Mass. 141... 83 Williams B. Weaver, 75 N. Y. 30.\ 218 Williamson®. Mason, 13 Hun, 97 63 Wilson B. Bowden, 113 Mass. 422 65 Wilson V. National Bank, 12 Leg. Ns. 401 137 Wilson 0. National Bank, 1 Am. L. Rev. 801 376 Wilson V. Rogers, 1 Wyoming, 51 66, 131 Winchester, .^Etna National Bank s. 3 L. & E. Kep. 597 106 Wise, Hoover, Assg. v. 1 Otto. 308 89 Wood, First National Bank v. 51 Vt. 471 103 Wood, First National Bank v. 71 N. Y. 405 101 Woods «. Peoples' National Bank, 9 Leg. Ns. 135 103, 140, 148 Woods V. Peoples' National Bank, 83 Pa. St. 67 103, 140, 148 Woods V. Peoples' National Bank, 11 Bank. Mag. 657 148 Woolens. N. Y. & B. Bank, 12 Blatchf.359 78, 91 Worchester National Bank v. Cheeney, 87 111. 602 147 Worchester National Bank v. Cheeney, 11 Leg. Ns. 31 147 Wright V. Continental National Bank, 1 L. & E. Rep. 643 73 Wright B. First National Bank, 18 Alb. L. J. 115 .134, 199 Wrights. First National Bank, 6 Rep. 329 ..124, 199 Wright 0. Merchants' National Bank, 3 Cent. L. J. 351 138 Wright V. Merchants' National Bank, 3 L. & B. Rep. 638 138 Wrights. Stiltz, 37 Ind. 338 218 Wroten's Assg. v. Armat, 31 Gratt. 228 275 T. Yates, Price, Rec'r e. 19 Alb. L. J. 295 138, 140, 234 Yerkess. National Bank of Port Jervis, 4 L. & E. Rep. 198..52, 55, 62, 113 York National Bank, Ames s. 103 Mass. 326 26 Youkin, Morsemans. 37 Iowa, 350 219 Young, National State Bank v. 25 Iowa, 311 333 Young V. Vough. 33 N. J. Eq. 835 103, 115, 141, 157 Z. Zantzingers «. Uunton, 19 Wall. 33 148, 234 Zeigler v. First National Bank of Allentown, 10 Rep. 411 (Pa.) 255 LAW OF NATIONAL BANKS. A TREATISE UPON NATIONAL BANKS. CHAPTER I. HISTOET OF PAPEE MONET. The first issue of paper money under the authority of Con- gress was during the Revolutionary war, when " Continental money " aided the people in their long struggle for independ- ence. Treasury notes were first issued June 20, 1812. From that time to February 24, 1815, sixty million and five hundred thousand dollars were put into circulation. They bore interest at the rate of five and two-fifths per centum per annum, and were a legal tender for all dues to the government including taxes and payment for the public lands. By an act passed on the last mentioned date an additional issue of twenty-five millions was authorized, of which those of a denomination of $100 and upward bore interest at two and two-fifths per centum and were transferable by endorse- ment, while those of a less face value bore no interest, and were payable to bearer. The discussion of the principle which underlies our present system of National banks, namely, that the public funds should serve as the basis and support and limit of a paper currency, began in 1815. It was claimed that this use would enhance the value of the funds and would result in a uniform currency. In 1831, Albert Gallatin, citing the fact that the Bank of England kept a permanent loan to the government of a sum 1 (1) 2 NATIONAL BANKS. exceeding its capital, declared this to be " the best security to the holders of its notes and to depositors." The only obstacle he urged to the adoption of this system in the United States was the fact of the then smallness of the National debt as com- pared to our needed bank capital. The exigencies of the late war compelled the administrative and legislative departments of our government to introduce important changes in the currency system then in force. Prior thereto the only banks of issue were those created under iState laws, while the National government recognized coin alone as money. In December, 1861, there had been issued fifty million dol- . lars in demand notes payable in coin.i The Secretary oS the Treasury in his report of that date advocated the issue of National bank notes, secured by a pledge of United States bonds, to take the place of State currency. He argued that this would create a currency of uniform value, diminish exchange, distribute the money so as to avoid a monopoly therein and place the bonds in every part of the common country, thus making it for the interest of all to protect and foster the general government. During the same month (December 31, 1861,) the State banks suspended specie payment. Such suspension and the financial condition of the country necessitated a new policy upon the part of the government. At the request of the Secretary of the Treasury, Mr. Spauld- ing, of New York, presented a National bank bill in Congress; but the opposition was so great that it never left the hands of the committee to which it was referred. In 1862 the needs of the government became so pressing that an issue of three hundred millions of treasury notes was authorized. These were made legal tender upon all contracts and debts, other than government duties. In his annual report for 1862 the Secretary of the Treasury again called attention to the dangers which arise from the issue of United States notes, and the advantages following the use of National bank paper, claiming among other things that ' 12 IT. S. Stats, at Large, 359.' HISTOET OF PAPEE MONET. 6 it woiild " reconcile as far as practicable the interests of exist- ing institutions with those of the whole people." Congress becoming interested in the problem, took np the Spanlding bill, and after some unimportant amendments, passed it. The President gave his approval on the 25th day of February, 1863.1 While the bill was advocated by all as a war measure, the statesmen in Congress foresaw that it would become "a permanent system of National currency and bank- ing for the whole country," This act was repealed by the act of June 3, 1864, the latter being a substituted act creating National banks. * March 3, 1863, an additional issue of one hundred and fifty millions of treasury notes was authorized. By the act of June 30, 1864, it was provided that the total of legal tenders should not exceed four hundred million dollars, and such additional sum not exceeding fifty million dollars as might be lawfully required for the redemption of temporary loans. Marph 12, 1866, an act was passed to fund the legal tender notes, under which more than seventy-two million dollars were retired. In January, 1868, any furtlier reduction was prohibited, thus leaving the volume of legal tender outstanding at $356,000,- 000; and by the act of March 18, 1869, the maximum amount of treasury notes was fixed at $382,000,000, which sum was again declared to be the limit of outstanding United States notes by Ch. 343 of the 43d Congress. January 14, 1875, Congress enacted in substance that the circulation of National bank notes should be no longer limited, and that whenever and so often as circulating notes should be issued to banking associations it should be the duty of the Secretary of the Treasury to redeem legal tender notes to the amount of eighty per cent, of the National bank notes so issued, and to continue such redemption until there should be out- standing the sum of $300,000,000 of such legal tender notes and no more; and that on and after January 3 , 1879, he should redeem in coin the United States legal tender notes then out- standing upon their presentation for redemption at the office ' 13 U. S, Slats, at Large, 670. « Veazie Bk. v. Fenno, 8 Wall. 533. 4 NATIONAL BANKS. of the Treasurer of the United States, in the city of New York, in sums of not less than iifty dollars. ^ The successful return to specie payment and its beneficial efiect upon the general business of the country is now a matter of history. ' Report of John Jay Knox, Comptr. of the Currency, Nov. 29, 1875. SYNOPSIS or THE NATIONAL BANK ACT. CHAPTEK II. FACTS OONCEENING NATIONAL BANKS. It cannot be doubted that, under the Constitution, the power to provide a circulation of coin is given to Congress, and it is settled by the uniform practice of the Government and by repeated decisions that Congress may constitutionally authorize the eriiission of bills of credit. There can be no question of the power of the Government to emit them; to make them receivable in payment of debts to itself; to fit them for use by those who see fit to use them in all the transactions of com- merce; to provide for their redemption; to make them a cur- rency uniform in value and description, and convenient and useful for circulation. These powers until recently were only partially and occasionally exercised. Lately, however, they have been called into full activity, and Congress has undertaken to supply a currency for the entire country. i A careful examination of the provisions of the Banking Act and the amendments thereto will show that it was the inten- tion of Congress to confine the banking associations created thereunder strictly to a legitimate banking business; to make them institutions, safe as places for Government deposits — safe as far as the general public was concerned, and safe for those who became interested therein as stockholders. "The total number of National Banks organized from the establishment of the National bank system, February 25, 1863, to November 1, 1879, is 2,438. Of these, 307 have gone into voluntary liquidation by the vote of the shareholders owning two-thirds of their respective capitals, and 81 have been placed in the hands of receivers for the purpose of closing up their affairs, leaving 2,050 in operation at the date last named."* The aggregate capital of these 81 banks was $17,452,600; the ' Veazie Bank u Fenno, 8 Wall. 54S. ' Eeport of Hon. John Jay Knox, Compt. of Cy., November, 1879. b NATIONAL, BANKS. amount of claims proved was $24,859,472, and that of divi- dends paid was $15,975,223, and estimated dividends yet to be paid is $2,644,060, thus making a total loss to the creditors of these banks of $6,240,189. There has been no loss whatever to the holders of the circu- lating notes. The average annual loss siistained by creditors during the past sixteen years by the insolvency of national banks through- out the United States has been $390,012; and that occasioned by the failure of banks, other than National, for the last three years (ending November 1, 1879), has been not less than $10,865,552.1 National gold banks were authorized to be organized by the act of July 12, 1870. Ten banks were created under this act, all located in the State of California. Of these, seven were still in operation November 1, 1879, with an aggregate capital of $4,000,000, and a total circulation of $1,534,000. These banks redeem their circulating notes in gold coin in the city of San Francisco, and at their own counters.^ They are subject to the same restrictions as are other National banking associations. The amount of circulating notes issued to them upon bonds deposited with the Treasurer is 80 per cent, of such bonds, and, they are required to keep on hand 25 per cent, of their circulation in gold and silver coin. The execution of all laws passed by Congress relating to the issue and regulation of a National currency secured by United States bonds is vested in the Comptroller of the Currency, who performs his duties under the direction of the Secretary of the Treasury. ^ The United States District* and Circuit Courts ^ are vested with jurisdiction of all suits by or against any banking asso- ciation established under the title, " The National Banks." ' Report of Hon, John Jay Knox, Compt. of Cy., November, 1879. ' Ibid. « R. S. V. S. 1874, Sec. 324, et seq. « lb. Sec. 563. " lb. Sec, 639. SYNOPSIS OF THE NATIONAL BANK ACT. i The original papers in the office of the Comptroller, and all properly authenticated copies of such papers, shall be received in evidence in all places and courts. * ' R. 8. U. S. 1874, Sec. 884. NATIONAL BANKS. CHAPTER III. ORGANIZATION AND FOWEBS. The act creating and governing National banks is known as « The National Eank Act.»i Any number of persons, not less than five, may organize a National Bank. They must sign and forward to the Comp- troller of the Currency articles of association which shall specify the object in view, and may contain any other pro- visions not inconsistent with law.* They must also execute an organization certificate, stating therein the name of the proposed bank, the location of its office, the amount of its capital stock and the number of shares into which such stock is divided, the names and residence of its shareholders and the number of shares held by each, and the fact that they desire to form a National Bank.* This cer- tificate must be acknowledged before an officer having a seal^ and then forwarded to the Comptroller,* who decides, upon examination, whether the bank is lawfully entitled to com- mence the business of banking. He may for good reason refuse to issue a certificate, but if he finds the bank ready to proceed, he certifies that fact. This certificate the bank must publish for sixty days in a newspaper printed at the place where the bank is located, or if no newspaper is there pub- lished, then in the nearest one. ^ Upon the approval of the Comptroller the association shall become from the date of the execution of the organization certificate, a corporation with power to adopt and use a cor- porate seal; to exist for twenty years unless sooner dissolved; ' Ch. 343 of 43d Congress and R S. U. S. 1874, Title 62. " Sec. 5133. » Sec. 5134. ■• Sec, 5135 ; Ch. 343 of 43d Congress. ' Sees. 5168, 5169, 5170. OEGANIZATIOlir AND FOWEES. 9 to make contracts; to sue and be sued; to choose directors, who shall have power to appoint and remove the bank officers, define their duties, and to make such by-laws as they see fit not inconsistent with law; and through its officers or agents, to exercise all such incidental powers as shall be necessary to carrj' on the business of banking, by discounting and negotiat- ing promissory notes, drafts, bills of exchange and other evi- dences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; and by obtaining and circulating notes according to the provisions of the act. i The bank can deal in real estate for the following purposes only: (a) such as it needs for its own use; {i) such as shall be mortgaged to it in good faith for debts previously contracted, (c) or conveyed to it in satisfaction of such debts, (d) or pur- chased by it at sales under judgments, decrees or mortgages held by it, or purchased to secure debts due to it. But it shall not retain the title of real estate obtained by mortgage or by purchase to secure a debt for a period longer than five years.* The minimum of capital for a National Bank is $50,000, and this is allowable only when the bank is located in a town hav- ing not to exceed 6,000 inhabitants; if in a city of a population of less than 50,000 and more than 6,000 inhabitants, the least capital is $200,000; in all other cities it mus't not be less than one million.^ The stock of a National Bank is personal property. The shares are fi?ed at one hxmdred dollars par value. They are transferable on the books of the bank in such manner as is provided in the by-laws. The transferee succeeds to all the rights and liabilities of the prior holder.* The bank cannot by a change in its articles of association impair the rights, remedies or securities of existing creditors.* Fifty per cent, of the capital stock must be paid in before the bank commences business, and the balance in monthly installments of at least ten -per cent. each. These payments as ■ Sec. 5136. ' Sec. 5138. ' Sec. 5137. « Sec. 5139. 10 NATIONAL BANKS. made are certified to the Comproller under the oath of the president or cashier, i Should the shareholder fail to pay any installment due upon his stock, the directors may sell the same at public auction after three weeks' notice in a local newspaper, the price to be not less than the amount due with costs. Should the stock bring more than the amount due, the excess belongs to the stockholder. If no one purchases at the sale, the stock must be forfeited to the bank, and the directors maiy sell it within six months from that time. If not so sold it should be can- celled and the amount deducted from the capital stock. Should the capital stock fall below the minimum by reason of such cancellation and' reduction, it must be made good .within thirty days, or the Comptroller will have the right to put the bank into the hands of a receiver. ^ In the articles of association the bank may provide for an increase of its capital, the maximum of which shall be deter- mined by the Comptroller; but no such increase shall be valid until the whole amount of the increase is paid in, notice thereof eent to the Comptroller and his approval obtained.* The shareholders owning two-thirds of the stock may reduce the capital stock of the bank to any amount not less than the minimum, or below the sum required for its outstanding circulation, upon the approval of the Comptroller.* Each share of stock entitles the holder to a vote, which may be cast either by the owner or by any one not an officer or an employee of the bank holding the written proxy of the owner. But shareholders in default shall not be entitled. to vote." The directors are elected by the shareholders. They must be five in number at least, and their term of oflice shall be for one year and until their successors are elected -and qualified.' Every director must be a citizen of the United States; three- fourths of their number must have been residents of the State in which the bank is located for at least one year prior to their election, and must so reside during their term of office. Each ' Sec. 5140. 4 Sec. 5143. " Sec. 5141 s Sec, 5144. » Sec. 5142. » Sec. 5145. OKGANIZATION AND P0WEE8. 11 must be the owner of at least ten shares of stock. Any dis- qualification vacates the right of the director to act in his office. '^ Every director must upon his oath state that he is the owner of at least ten shares of the stock of the bank free from all liens; that he will diligently and honestly administer the affairs of the bank, and will not violate nor willingly permit to be violated any of the provisions of the act; which affidavit shall be sent to the Comptroller.* The directors may fill any vacancy in the board by appoint- ment until the next ensuing election. ^ Should no election be had upon the proper day, it may be held at any subsequent time upon thirty days' notice in a local newspaper. If the articles of association do not fix the day of election, or if no election be held upon the day designated, the directors may call a meeting of the shareholders for that purpose; and should they fail so to do, the shareholders repi'esenting two-thirds of the stock may call an election.* The president is selected by the board of directors from their number. ^ The shareholders are individually responsible, equally and ratably, and not one for another, in addition to the amount invested in such shares, for all contracts, debts and engage- ments of the bank to the extent of the amount of their stock at its par value; except that the shareholders of any bank existing at the date of the passage of the act under State laws, having not less than five million dollars paid in, and a surplus of twenty per centum on hand, shall be liable only to the amount invested in the stock. This surplus is in addition to that provided for in the act and must be kept good; if dimin- ished, no dividends can be paid until the loss is repaired; and in ease of such a deficiency the Comptroller may compel the bank to wind up its affairs.* Executoi's, administrators, guardians and trustees shall not ' Sec. 5146. * Sec. 5149. » Sec. 5147. 5 Sec. 5150. •See. 5148. 6 Sec. 5151. 12 NATIONAL BANKS. be personally liable as stockholders, but the assets in their hands shall be so liable. ^ The Secretary of the Treasury may designate any liTational Bank as and for a depositary of the public money, except receipts for customs. The bank may be chosen as the finan- cial agent of the government. In these capacities it shall per- form such reasonable duties as may be required of it. The bank must give bond for the safe keeping and prompt pay- ment of the public money, and for the faithful performance of its duties as such financial agent. It must take all the National currency bills which have been paid to the Govern- ment for internal revenue, or for loans or stocks.* A State Bank may organize as a National Bank. The organ- ization certificate may be executed by a majority of the direc- tors of the State Bank, upon the request of tvro-thirds of the stock of the State Bank to make the change; and a majority ol the directors may do all other acts necessary to perfect the organization as a National Bank. The shares of the new bank may continue to be for the same amount as they were before the change, and the directors shall hold over until their suc- cesssors are appointed. If the bank be a stockholder in any other bank, it may continue to hold its stock therein. Upon the receipt of the certificate of the Comptroller, the State Bank in every respect becomes a National Bank. The capital of such changed bank shall not be less than if it had been originally organized as a National Bank.* A State Bank having branches may re-organize as a National Bank and still retain its branch organizations.'* The revision of 1874 does not affect the rights or privileges granted by the act of 1864 to banks organized thereunder; but they are subject to all the duties and liabilities of such revision. 5 ' Sec. 5153. 4 Sec. 5155. » Sec. 5153. 6 Sec. 5156. « Sec. 5154. OBTAIMINO AND ISSUING CIBOUIiATING NOTES. 13 CHAPTEE IT. OBTAINING AND ISSUING OIECULATING NOTES. The act of 1874 applies to all associations organized to carry on the business of banking under any act of Congress. ^ The term " United States bonds " used in Chapter 2 of that revision means registered bonds of the United States.^ Upon the organization of the bank, and before it commences business, it must deliver to the Treasurer of the United States, United States interest bearing bonds to an amount not less than $30,000, and not less than one-third of the capital stock paid in.* Such deposit shall be increased from time to time as its capital stock is paid up or increased. Upon the reduc- tion of its capital stock, or a winding up of its .business, the Comptroller will retain such bonds after .the circulating notes of the bank are retired; or if no circulating notes have been delivered to it, he will return the excess of such bonds beyond the one-third of its capital stock.* The Treasurer may take from the bank any United States coupon bonds and issue in lieu thereof registered bonds of like amount, interest and time. ^ All transfers of bonds by a bank under the act shall be made to the Treasurer of the United States in trust, with a memo- randum on each, signed by some officer of the bank; for which a receipt is given by the Comptroller, stating that the bond is held in trust for the bank and as security for the redemption and payment of any circulating notes. No assignment or transfer of any such bonds by the Treasurer shall be deemed valid unless countersigned^ by the Comptroller,* who shall keep a register of every such transfer or assignment, stating ' Sec. 5157. * Sec. 5160. ' Sec. 5158. ' Sec. 5159. ' Sec. 5161. • Sec. 5163. 14 NATIONAL BANKS. the name of tfie bank from whose accounts the transfer is made, the name of the party by whom made, and the par value of the bonds transferred.^ The Comptroller shall give notice of the transfer to the bank interested, ^ and he is by law given access to the books of the Treasurer for information concerning the registry of 'bonds.* Once in each year the bank shall send' to the Treasurer a certificate setting forth the different kinds and amounts of the bonds deposited by it with him. Any duly authorized agent of the bank may make this paper. A duplicate thereof should be retained by the bank.* The bonds thus deposited shall be held solely for the security of the circulating notes of the bank until they are redeemed. The interest accruing on the bonds belongs to and may be received by the bank unless it fails to redeem its notes. If the bonds depreciate in value below the amount of its circulation, the bank must make the deficiency good. 8 The Comptroller, with the consent of the Secretary of the Treasury, may change one set of bonds for another ; he may return the bonds in sums of not less than $1,000, upon the cancellation of a proportionate amount of the circulating notes, provided that the remaining bonds equal in value the balance of the circulation, and the bank has not violated the provisions of the act; and provided that the amount of the bonds is not diminished below that which is required to be kept by the bank.' The bank is entitled to ninety per cent, of the market value of the bonds so deposited with the Treasurer in circulating notes when its capital is less than $500,000; if more tlian the latter sum and less than $1,000,000, eighty per cent.; from $1,000,000 to $3,000,000, seventy-five per cent.; and above the last sum, sixty per cent, only.'' The form, denomination and printing of the circnlating ' Sec. 5163. 6 Sec. 5167. , « Sec. 5164. ' e Sec. 5167. ' Sec. 5165. ' Sec. 5171. * Sec. 5166. OBTAINING AND ISSUING CIKOULATINQ NOTES. 15 notes shall be under the direction of the Comptroller, ^ and lie shall have charge of the plates and dies from which they are made.® He shall make yearly examination of snch material, and destroy such as belong to banks that have ceased to do business. 8 Not more than one-sixth of the notes furnished to the bank shall be of a le'ss denomination than $5.00, and after specie payment is resumed, none of a less denomination than $5.00 shall be issued.* Banks organized after July 1, 1870, are not entitled to a circulation exceeding $500,000.^ A bank located in any State, having more than its propor- tion of circulation, may be removed to one having less, under such restrictions as the Comptroller and Secretary of the Treasury shall prescribe.® The bank, after its circulating notes are signed by the presi- dent or vice-president and cashier, so as to make them obliga- tory promissory notes payable on demand at its place of business, may issue the same as money. Such notes shall be received at par in all parts of the United States in payment of taxes, all dues to the United States except duties on imports, and for all salaries and debts owing by the United States, except interest on the public debt and in redemption of National currency.' No bank shall issue post notes or other notes to circulate a8 money than such as are authorized by the act.^ The Comptroller may replace such circulating notes as are worn out or destroyed.^ Banks may be organized for the purpose of issuing notes payable in gold. The deposit of bonds must be of those bear- ing interest payable in gold. Thereupon, the Comptroller issues gold notes not exceeding 80 per cent, of the bonds so deposited. Such bank shall keep on hand at least 25 per cent, ' Sec. 5173. ' Sec. 5181. ' Sec. 5173. ' Sec. 5183. « Sec. 5174. « Sec. 5183. *Sec. 5175. ' Sec. 5184. » Sec. 5176. 16 NATIONAL BANKS. of its circulation in gold or silver coin of the United States, and shall receive at par in the payment of debts the gold notes of every other such bank. ' The issuing of circulating notes to unauthorized associations,* or in any way imitating or coun- terfeiting them,* or defacing them,* is forbidden. ' Sec. 5186. Sec. 5188. » Sec. 5187. * See. 5189, BEGULATION OF THE BANKING BrSINESS. 17 CHAPTEE V. BEGULATION OF THE BANKING BUSINESS. The usual business of the bank shall be transacted at an oflSce located in the place specified in its organization certifi- cate. * Each of the banks situated in Albany, Baltimore, Boston, Cincinnati, Chicago, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh, St. Louis, San Francisco and Washington, shall keep on hand, in lawful/ money, at least 25 per cent, of its deposits; and all other banks not less than 15 per cent, of the same. If this reserve fall below the minimum, the bank shall make no new loans or discounts other than those at sight, or make any dividend until the proportion is restored. If the bank fail .for 30 days after being ordered so to do by the Comptroller to make such reserve good, a receiver may be appointed to close up its affairs.^ Three-fifths of this reserve may consist of balances due from approved National banks doing business in said six- teen cities ; and clearing house certificates may also be counted as money. 3 If the bank has deposited money with the Secretary of the Treasury, his certificate therefor may be counted as part of this reserve;* but the power to issue such certificates shall not be exercised so as to create any expansion or contraction of the currency.^ Each bank shall keep 5 per cent, of its circulation on deposit in the treasury to redeem such circulation; which sum may be counted as part of the reserve. All National Bank notes presented to the Treasurer shall be redeemed by him in United States notes. Such redeemed notes shall be charged to the bank, and monthly notices of such redemption sent to the bank.* ' Sec. 5190. < Sec. 5193. ' Sec. 5191. 5 Sec. 5194. » Sec. 5193. » Ch. 343 of 43d Congress. 2 18 BATIONAL BAJfKS. Each bank located in any of said cities shall name a bank in the City of New York at which it will redeem its circulating notes; and it may keep one-half of its reserve in IN^ew York. This does not apply to the gold banks in San Francisco. Banks located elsewhere may choose a bank in any one of these cities as its place of redemption. Should the bank fail to make this selection, a receiver may be appointed ; but, notwith- standing, it must pay its notes at its own counter. ^ Any bank may withdraw its notes, in whole or in part, by depositing with the Treasurer lawful money in sums of not less than $9,000, to take up its bonds ; but bonds to the amount of at least $50,000 must remain with the Treasurer to secure the balance of such circulation. ^ The bills of one bank shall be taken by all others, excepting the National gold banks.* The bank may take such rate of interest as is allowed by the law of its locality, unless a different rate is limited to the State banks of issue; in which case the rate of the two shall correspond. When no rate is fixed by law the bank may take 7 per cent, according to the custom of banks. The purchase, sale or discount of bona fide paper, payable at another place at the current rate of exchange for sight drafts added to the interest, shall not be considered usurious.* If the bank take usury knowingly, it shall forfeit the entire interest, and the person by whom it has been paid, or his legal representative, may recover twice the amount of the interest, providing that the action be brought within two years from the payment of the same. ^ The directors may declare semi-annual dividends of the net profits less one-tenth thereof, which shall go to its surplus fund, until the same amounts to 20 per cent, of its capital.' The total liabilities to the bank of any person or company for money borrowed, shall not exceed one- tenth of its capital stock actually paid in; but honafide discounts shall not be con- sidered as money borrowed.' » Sec. 5195. ' Sec. 5198. » Ch. 343 of 43d Congress. » Sec. 5199. » Sec. 5196. ' Sec. 5200. * Sec. 5197. EKGTJLATION OP THE BANKING BUSINESS. 19 The bank can neither loan upon the security of its stock nor purchase the same, unless to prevent loss upon a debt pre- viously contracted in good faith. Stock so acquired shall be sold within six months after its purchase. If the bank violate this rule a receiver may be appointed. ^ No bank shall become indebted to an amount exceeding its capital stock, except for notes of circulation, deposits with or money collected by the bank, bills drawn against money deposited to the credit of the bank or due thereto, or liabili- ties to the stockholders for dividends and reserve profits.^ The bank cannot in any way use its circulating notes so as to create or increase its capital stock. * While the bank continues to do business, no portion of its capital can be withdrawn. Dividends cannot be declared unless net profits have been earned; and, in determining whether net profits exist, all losses and bad debts must be deducted. The dividend should not exceed the net profits thus ascertained. Any debt on which interest is past due and unpaid for six months, not well secured or in process of col- lection, should be considered bad.* If the capital stock of the bank be not paid according to law, or such capital shall become impaired by losses, the Comp- troller may notify the bank of the fact, and if not made up by an assessment'upon its stockholders, the Treasurer shall with- hold all interest upon the bonds deposited with him, and a receiver may be appointed.^ A National Bank shall not pay out the notes of any other association which is not redeeming its notes in lawful money, or whose notes are not received by the paying bank at par.* If any National Bank shall take Treasury notes or National Bank notes as collateral security for a loan, it may be fined one thousand dollars, and a further sum equal to one-third of the money so loaned, and the oflScers making such loan shall be liable to pay a sum equal to one-fourth of the money ' Sec. 5201. * Sec. 5204. ' Sec. 5203. » Sec. 5205. s Sec. 5203. • Sec. 5206. 20 NATIONAL BANKS. loaned ; whicli fines shall be recoverable for the benefit of the party bringing suit.i- 'No oflicer or agent of the bank shall certify any cheek unless the drawer thereof has funds to his credit to an amount equal tct. the check. Such check shall be good as to the bank, but for such act the bank may be wound up.^ If any oflicer or agent of a ^National Bank willfully misap- plies the assets of the bank, or without the authority of the directors puts in circulation any of its notes, puts forth any certificate of deposit, draws any order, makes any acceptance, assigns any note, draft, mortgage, judgment or decree, or makes any false entry in any book or statement of the bank, with intent to defraud the bank, or any one else, or to deceive any examiner; and any person aiding and abetting any such officer, shall be imprisoned not less than five nor more than ten years.* The president or cashier shall keep a list of the shareholders, which shall, during business hours, be subject to the examina- tion of the stockholders and creditors of the bank, and State tax officers; and on the first Monday of July of each year a a copy of such list, certified by one of such officers, shall be sent to the ComptrciUer.* Every bank shall report to the Comptroller five times per year the resources and liabilities of the bank at the close of any business day. Such report shall be in detail, verified by the oath of the president or cashier^ and attested by the signa- ture of at least three of the directors. It must be sent within five days after it is requested, and be published in a newspaper of the locality, proof of -which is forwarded to the Comp- troller. The latter officer may at any time call for a special report of the condition of the bank.^ Each dividend shall be reported to the Comptroller within ten days after it is declared, giving the amount of the same and the net earnings in excess thereof ; which report shall be verified by the oath of the president or cashier.' ' Sec. 5207. < Sec. 5310. ' Sec. 5208. s Sec. 5311. » Sec. 5309. « Sec. 5213. KEGULATION OF THE BANKING BUSINESS. 21 The penalty for failing to make either of these reports is $100 per day; and should the bank refuse to pay such penalty the Secretary of the Treasury may take the same out of the interest due on the bonds deposited with him.i Every bank shall, in the months of January and July, pay to the Treasurer of the United States a duty of one-half of one per cent, upon its circulation, and a duty of one-quarter of one per cent, upon the average amount of its deposits, and an equal tax upon the average amount of its capital stock over the amount deposited in United States bonds.* In order to enable the Treasurer to make this assessment, the bank shall, ten days prior to the time set for the assess- ment, forward the facts to the treasurer. The penalty for neglecting to make this report is $200, which may be taken out of the interest due on its bonds, or recovered as a penalty;* and the Treasurer shall make an assessment based upon the amount of notes issued to the bank, and upon the highest amount of its deposits and capital stock, to be ascertained as he may deem best.* If the bank fail to pay the taxes thus imposed, the Treasurer of the United States may collect it in the manner provided for the collection of United States taxes from other corporations, or may reserve it from the interest due the bank on its bonds deposited with him.^ Should an excessive tax be levied, on a statement to that effect being made and found to be correct, the excess will be refunded to the bank.^ The State in which the bank is located may include in the valuation of the personal property of the holder or owner of its shares, the value of the shares held by him. The mode of such taxation is left to the State, with the proviso that the rate of taxation shall not be greater than that imposed upon other moneyed capital of the State, and that the shares owned by non-residents shall be taxed where the bank is located and not elsewhere. The real property of the bank shall be subject to taxation as other real property is taxed.'' " Sec. 5313. ' Sec. 5317. » Sec. 5314. » Sec. 5318. 8 Sec. 5315. ■" Sec. 5319. * Sec. 5316. NATIOKAL BAJS£S. CHAPTEE YI. DISSOLUTION AND EEOEIVEBSHIP. At any time the shareholders, owning two-thirds of the Btock, may put the bank into liquidation. * The directors shall cause such fact to be certified to the Comptroller, under the seal of the bank and by the signature of the president or cashier, and shall publish notice thereof for two months in a newspaper in New Tork city, and in the place where the bank is located, stating that the bank is closing up its affairs, and notifying the holders of its notes and other creditors to present such notes and other claims for payment within six months from the date of the vote.^ The bank shall deposit with the Treasurer sufficient lawful money to redeem its outstanding circulation ;3 unless the bank be winding up its business for the purpose of consolidating with another bank, when such deposit is unnecessary;* in which case its assets and liabilities shall be reported by the bank with which it is to be consolidated. Upon the making of such deposit, its bonds shall be re-assigned and delivered to it, and thereafter the bank and its shareholders shall be dis- charged from all liability upon account of its circulating notes, which shall be redeemed at the Treasury of the United States. ^ All notes of a retiring bank, which may be redeemed by the Treasurer, shall be destroyed.' When a bank fails to redeem any of its circulating notes upon demand, duly made during the usual hours of business, at its office or designated place of redemption, the holder may cause the same to be protested, unless the officer to whom they are presented waives protest, and signs and delivers to • Sec. 5320. * Sec. 5333. ' Sec. 5331. 6 Sec. 5234. « Sec. 5333. « Sec. 5335. DISSOLUTION AND EECEIVEESHIP. 23 the said party an admission of such facts. Such protest or waiver shall be forwarded to the Comptroller, the notary retaining a copy of the same. If it be shown that payment is restrained by the order of a court of competent jurisdiction, he shall refuse to protest such notes. ^ Upon receiving such notice the Comptroller, with the con- currence of the Secretary, appoints a special agent, who ascertains what the facts are and makes a report thereof to the Comptroller. If, from such protest and report, the Comptroller is satisfied that the bank has refused to redeem its circulating notes and is in default, he shall, within thirty days, declare the bonds deposited by such bank forfeited to the United States. ^ ^ After the default has been ascertained and notice of the for- feiture of the bonds given by the Comptroller to the bank, it can do no other business than to receive and safely keep money belonging to it, and to deliver special deposits.* It is then the duty of the Comptroller to notify the holders of its circulating notes to present them for payment at the Treasury. He may cancel an amount of the bonds equal to the par value of the notes paid;* or, he may cause such bonds to be sold at public auction in New York city, upon thirty days' notice to the bank. Should there be any deficiency in the proceeds of such sale in the payment of its circulating notes, the United States shall have a first lien upon all the assets of the bank to make such deficiency good, after payment of the costs and expenses of administration, s At his discretion the Comptroller may make private sale of such bonds, but not for less than their market value or par. In order to complete the sale of the bonds, the formalities prescribed by Sees. 5162-3-4 must be complied with." The Secretary may dispose of the circulating notes after presentation for payment as may seem to him proper.' All National Bank notes paid at the Treasury shall be cancelled.* ' Sec. 5226. s Sec. 5230. ' Sec. 5227. « Sec. 5231. ' Sec. 5328 ' Sec. 5332 ♦ Sec. 5339. » Sec. 5233. 24 NATIONAL BANKS. Becoming satisfied that the bank has refused to pay its cir- culating notes, and is in default, the Comptroller may appoint a receiver, requiring from him such bond as he shall deem, proper. Such receiver, under the direction of the Comptroller, sliall take possession of the books, records and assets of every description of the bank, collect all debts, dues and claims belonging to it, and upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and sell all the real and personal property of the bank, on such terms as the court shall direct, and may, if necessary to pay its debts, enforce the individual liability of the stockholders. He shall pay ^11 moneys over to the Treasurer, and report all his acts and proceedings to the Comptroller. 1 The Comptroller shall, upon appointing a receiver, cause notice to be given for thirty days in such newspapers as he shall direct, calling on all persons who have claims against the bank to present the same and make legal proof thereof.* After paying to the United States any deficiency in redeem- ing the circulating notes of the bank, the Comptroller shall mate a ratable dividend of the money in his hands on all such claims as may have been proved to his satisfaction, or adjudi- cated in a court of competent jurisdiction ; and so continue as the assets are paid over to him. The remainder of the proceeds, if any, shall be paid to the shareholders in propor- tion to the stock held by them.^ If the bank denies that it has failed to redeem its circula- ting notes, it may at any time within ten days after being notified of the appointment of a special agent to examine into its afi'airs, apply to the nearest Circuit or District Court of the United States to enjoin further proceedings in the premises. Thereupon the Court shall cite the Comptroller to show cause why he should not be enjoined ; and after a decision that the bank ,has not refused to redeem its circulating notes when legally presented, the Court shall make an order enjoining the ' Sec. 5334. s gee. 5236. ' Sec. 5335. DISSOLUTION AND EEOEIVBESHIP. 26 Comptroller and any receiver acting under his direction from all further proceedings in the premises. ' All fees and expenses of this contest shall be paid from the assets of the bank.^ If the directors of any bank shall knowingly violate or per- mit any of its officers or servants to violate any of the provis- ions of the act, the bank shall forfeit all its rights, privileges and franchises. Before the bank is dissolved such violation shall be determined by a court of the United States, in a suit brought by the Comptroller in his own name. Every director who participates in, or assents to such violation, shall be person- ally liable for all damages which the bank, its shareholders or any other person may sustain in consequence of such violation.* The Comptroller may appoint a person to examine the affairs of the bank at any time. Such appointee shall make a thorough examination, and report the same to the Comp- troller; but no officer or director shall be appointed to examine his own bank. The fees and expenses of such examination shall be paid by the bank.* National Banks shall be subject to no other visitorial powers than those named in the act.' All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to any National Bank, or of deposits to its credit; all assignments of mortgages, or of judgments, or decrees in its favor ; all deposits of money, bullion or other val- uable 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, made with a view to prevent the application of its assets in the manner prescribed by law, or with a view to the preference of one creditor over another, except in the payment of its circulating notes, shall be utterly null and void; and no attachment, injunction or execution shall be issued against such association or its property before final judgment, in any suit in any State court,* ' Sec. 5337. * Sec. 5240. « Sec. 5238. » Sec. 5241. » Sec. 5289. « Sec. 5242. 26 .. NATIONAL BANKS. Any corpoi'ation or person, except Savings Banks authorized by Congress, using the word " National " as a part of its or their business or corporate name, shall be liable to a penalty of $50 per day.i ' Sec. 5243. THE COMPTBOLLEB Oi' THE CUBBENOT. 27 CHAPTER VII. SECTION 178. VAOAUOIES IN SUBOEDINATE OTTIOES. In case of the death, resignation, absence, or sickness of the chief of any Bureau, or of any officer thereof, whose appoint- ment is not vested in the head of the Department, the assistant or deputy of such chief or of such officer, or if there be none, then the chief clerk of such Bureau, shall, unless otherwise directed by the President, as provided by section one hundred and seventy-nine, perform the duties of such chief or of such officer, until a successor is appointed, or such absence or sick- ness shall cease". 23d July, 1868, c. 237, § 3, v. 15, p. 168 A provisional or acting officer, who is invested by law with the functions of his superior, in the absence of such superior, is properly described by the title of such superior, so far as the efficacy of his official acts is concerned. The actual incumbent of a public office is presumed to be in the lawful possession of it, and no affirmative proof of his title is required to support his official acts. The contingency upon which the subordinate is authorized to assume the duties of his superior is primarily to be taken to exist from the actual discharge of these duties. The burden of showing the non-existence of the prescribed contingency is upon the party who denies the validity of the ostensible officer's acts. Dorsey ». Marsh, 6 Fisher, 387 j 8. c, 9 Phila. 895; B. c, 4 West. L. J. 49. THE COMPTEOLLER OF THE CURRENCY. SECTION 334. BtTEEATT OF THE COMPTEOLLER OF THE CUEKENOY. There shall be in the Department of the Treasury a Bureau charged with the execution of all laws passed by Congress 28 NATIONAL BANKS. relating to the issue and regulation of a National currency secured by United States bonds; the chief officer of which Bureau shall be called the Comptroller of the Currency, and shall perform his duties under the general direction of the Secretary of the Treasury. 3d June, 1864, c. 106, § 1, v. 13, p. 99. SECTION 325. COMFFEOLLEE OF THE CUREENOT. The Comptroller of the Currency shall be appointed by the President, on the recommendation of the Secretary of the Treasury, by and with the advice and consent of the Senate, and shall hold his office for the term of five years unless sooner removed by the President, upon reasons to be communicated by him to the Senate ; and he shall be entitled to a salary of five thousand dollars a year. Sd June, 1864, c. 106, § 1, v. 13, p. 99; 3d March, 1875, o. 130, § 3, v. 18, p. 398. SECTION 336. BOND AND OATH OF OFFICE OF OOMFTEOLLEE OF THE CUEEENOT. The Comptroller of the Currency shall, within fifteen days from the time of notice of his appointment, take and subscribe the oath of office; and he shall give to the United States a bond in the penalty of one hundred thousand dollars, with not less than two responsible sureties, to be approved by the Sec- retary of the Treasury, conditioned for the faithful discharge of the duties of his office. 3d June, 1864, c. 106, § 1, v. 13, p. 99. SECTION 337. DEPUTY OOMFTEOLLEE OF THE CUEEENOT. I There shall be in the Bureau of the Comptroller of the Currency a Deputy Comptroller of the Currency, to be SEAL OF OOMFIEOLLEE OF THE OQEEEMOY. 29 appointed by the Secretary, who shall be entitled to a salary x>{ two thousand &re hundred dollars a year, and who shall possess the power and perform the duties attached by law to the office of Comptroller during a vacancy in the office, or during the absence or inability of the Comptroller. The Dep- uty Comptroller shall also take the oath of office prescribed by the Constitution and laws of the United States, and shall give a like bond in the penalty of fifty thousand dollars. 3d June, 1864, c. 106, § 1, t. 13, p. 99. SECTION 328. CLEEKS. The Comptroller of the Currency shall employ, from time to time, the necessary clerks, to be appointed and classified-by the Secretary of the Treasury, to discharge such duties as the Comptroller shall direct. (See § 169.) 3d June, 1864, c. 106, § 1, v. 13, p. 100. SECTION 339. INTEEEST IN NATIONAL BANKS. It shall not be lawful for the Comptroller or the Deputy Comptroller of the Currency, either directly or indirectly, to be interested in any association issuing National currency under the laws of the United States. 3d June, 1864, c. 106, § 1, v. 13, p. 99, SECTION 330. SEAL OF COMPTEOLLEE OF THE C0EEENCY. The seal devised by the Comptroller of the Currency for his office, and approved by the Secretary of the Treasury, shall continue to be the seal of office of the Comptroller, and may be renewed when necessary. [A description of the seal, with an impression thereof, and a certificate of approval by the Sec- 30 NATIOHAL BANKS. retary of the Treasury, shall be filed in the office of the Secre- tary of State.] Sd June, 1864, c. 106, § 3, v. 13, p. 100; 18th February, 1875. c. 80, v. 18, p. 817. SECTION 831. EOOMS, VAULTS, FUENITUEE, ETC., FOE CTJEEBNCY BTJEEAU. There shall be assigned, from time to time, to the Comp- troller of the Currency, by the Secretary of the Treasury, suitable rooms in the Treasury building for conducting the business of the Currency Bureau, containing safe and secure fire-proof vaults, in which the Comptroller shall deposit and safely keep all the plates not necessarily in the possession of engravers or printers, and other valuable things belonging to his Department; and the Comptroller shall from time to time, furnish the necessary furniture, stationery, fuel, lights, and other proper conveniences for the transaction of the business of his office. 3d June, 1864, o. 106, § 3, v. 18, p. 100. SECTION 333. BANES IN DISTEICT OF COLUMBIA. The Comptroller of the Currency, in addition to the powers conferred upon him by law for the examination of National Banks, is further authorized, whenever he may deem it useful, to cause examination to be made into the condition of a,iiy- bank in the District of Columbia organized under act of Congress. The Comptroller, at his discretion, may report to Congress the results of such examination. The expense neces- sarily incurred in any such examination shall be paid out of any appropriation made by Congress for special bank exam- inations. 20th January, 1873, c. 43, v. 17, p. 413. KEFOET OF OOMFIEOLLHB. 31 SECTION 333. EEPOET or COMPTEOLLEE. The Comptroller of the Currency shall make an annual report to Congress, [at the commencement of its session,] exhibiting— (See §§ 195, 196.) First. A summary of the state and condition of every association from which reports have been received the pre- ceding year, at the several dates to which such reports refer, with an abstract of the whole amount of banking capital returned by them, of the whole amount of their debts and liabilities, the amount of circulating notes outstanding, and the total amount of means and resources, specifying the amount of lawful money held by them at the times of their several returns, and such other information in relation to such associations as, in his judgment, may be useful. Second. A statement of the associations whose business has been closed during the year, with the amount of their cir- culation redeemed and the amount outstanding. Third. Any amendment to the laws relative to banking by which the system may be improved, and the security of the holders of its notes and other creditors may be increased. Fourth. A statement exhibiting under appropriate heads the resources and liabilities and condition of the banks, bank- ing companies, and savings banks organized under the laws of the several States and Territories; such information to be obtained by the Comptroller from the reports made by such banks, banking companies, and savings banks to the legislatures or officers of the diiFerent States and Territories, and, where such reports cannot be obtained, the deficiency to be supplied from such other authentic sources as may be available. Fifth. The names and compensation of the clerks employed by him, and the whole amount of the expenses of the banking department during the year. 3d June, 1864, o. 106, § 61, v. 3, p. 117; 19 Feb., 1873. c. 166, § 1, v. 17, p. 466; 18 Feb., 1875, o. 80, v. 18, p. 317. 32 NATIONAL BANKS. The Comptroller of the Currency. There is, in the Department of the Treasury, a bureau charged with the execution of all laws passed by Congress relating to National Banks, the chief officer of which is the Comptroller of the Currency. He performs his duties under the general direction of the Secretary of the Treasury; is appointed by the President, on the recommendation of such Secretary, by and with the advice and consent of the Senate; and holds his office for the term of five years unless sooner removed. He has under him a Deputy Comptroller and necessary clerks. He cannot be interested, directly or indirectly, in any National Banking association. He is charged with the con- trol of the National Banks in the District of Columbia. It is his duty to make an annual report to Congress, embracing, 1st. The state and condition of every National Bank; amount of banking capital returned by them ; their debts and liabilities; amount of circulating notes outstanding; and their total amount of means and resources. 2nd. A statement of the banks whose business has been closed during the year, with the amount of their circulation redeemed and outstanding. 3rd. Any amend- ment to the banking law which he may deem advisable. 4th. A statement of the resources, liabilities and conditions of the State Banks. 5th. The expenses of his department.^ All instruments and papers executed by the Comptroller in pursuance of law, and sealed with his seal of office, shall be received in evidence in all places and courts; and copies shall have equal weight as evidence with the originals.* A copy of the articles of association of a National Bank must be sent to the Comptroller. ^ The title assumed by the bank is subject to his approval.* The organization certificate when completed must be sent to him for his examination and approval.^ The bank cannot begin the business of banking until authorized by him so to do.« All payments of install- ' E. 8. 1874, Sec. 324, et seq. * Sec. 5134. » Sec. 884. e Sec. 5185. ' Sec. 5133. 8 Sec. 5136. THE COMPTEOLLKK OF THE OUEEBNCY. 33 ments on stock are to be certified to by him;i no increase of stock shall be valid unless with his approval ;* and any decrease of stock must also be approved by him.s The oath required by Section 5147 of each Director when appointed or elected shall be sent to and filed with the Comptroller. He may compel a National Bank to close its business and wind up its affairs, either in voluntary liquidation or under a receiver, whenever there is a deficiency in its surplus.* It is his duty to receipt for bonds deposited by the banks to secure circulation ;5 and he shall keep a registry of the bonds transferred by the Treasurer ;8 and notify the respective banks of such transfers.' For the proper performance of his duties, he shall have access to the books of the Treasurer of the United States. 8 Every bank shall examine and compare the list of bonds pledged by it with the books of the Comptroller, and if found correct, certify that fact to the Treasurer. ' It is the duty of the Comptroller to attend to the collection of the interest on the bonds deposited to secure the circulation of the bank, to require the deposit of additional bonds when necessary, to permit the exchange of bonds, and to return the bonds on the surrender of the circulating notes. i" He shall satisfy himself of the correctness of the organiza- tion of a bank asking authority to become a ITational Bank,ii and shall give or withhold such permission as the circumstances require. 1^ The duty of delivering to each bank its circulating notes devolves upon him;i* which notes he shall cause to be engraved;!* ]xe shall have the custody of the plates from which the notes are printed ;i ^ and he shall make an annual examina- tion of such plates to see that they are. properly kepf « He shall make a requisition for the return of circulation to equal- ' Sec. 5140. ' Sec. 5166. ' Sec. 5143. •» Sec. 5167. » Sec. 5143. " Sec. 5168. ^ Sec. 5151. " Sec. 5169. « Sec. 5153. " Sec. 5171. « Sec. 5163. " Sec. 5173. ' Sec. 5164. '» Sec. 5173. 8 Sec. 5165. '« Sec. 5175. 34 NATIONAL BANKS ize the apportionment provided by law;^ and prescribe rules for the removal of banks from one State to another.* He shall replace worn out notes ;S shall issue gold notes to banks entitled thereto;* shall notify banks to make good their reserve, and wlien such reserve is below the minimum, ^ or if the bank fails to name a bank where its circulating notes will be redeemed, or fails to redeem such notes,* or neglects to pay up its capital stock, and shall refuse to go into liquidation,' he may appoint a receiver for the same. He shall approve of the selection of a redemption agency by a bank; shall require the banks to make good their capital when impaired. A list of the shareholders of the bank shall be sent to him.^ The banks shall make five reports during the year to the Comptroller of their condition; and he may at any time call for a special report.' All dividend reports shall be sent to him.i* Upon failure so to do he may levy a fine upon the bank. 11 The vote of the bank to go into liquidation must be certified to the Comptroller. It is his duty, on receipt of notice of the failure of a bank to redeem its circulating notes when prop- erly presented, to send an agent to examine into the facts of such failure; and upon beipg satisfied that it has thus failed, he may appoint a receiver. 12 He shall give notice of the appointment of a receiver ;i * and shall from time to time make dividends to creditors of the bank.i* He may be enjoined in proceedings against the bank by the District Court of the district in which the bank is-located, upon its petition.i^ As the penalty for a violation of the JS^ational banking law, he may bring suit in the proper district against the bank to ' Sec. 5180. « Sec. 5211. » Sec. 5181. 1" Sec. 5313. » Sec. 5184 " Sec. 5313. • Sec. 5185. 12 Sees. 5334, 5336. » Sec. 5191. 13 Sec. 5335. • Sec. 5195. " Sec. 5336. ' Sec. 6205 « Sec. 5237. • Sec. 5310. THE COMPTEOLLEE OF THE CUEEENOY. 36 forfeit its frandiises.* He may appoint occasional examiners of banks as often as he shall deem it necessary.* "Whenever any bank is dissolved under Sec. 5239, or it prop- erly appears that a judgment against the bank has remained unpaid for thirty days, or he is satisfied after due examination that the bank is insolvent, the Comptroller may appoint a receiver.* All Savings Banks or Savings and Trust Companies estab- lished under the authority of Congress, must make to the Comptroller the same reports as do National Banks under Sections 5211, 5212 and 5213 of the Act.* It ■will appear from the foregoing enumeration of the powers vested in the Comptroller that he has charge of and authority over all National hanks from the first step in their creation until the closing act of their existence. 1. It is for the Comptroller to decide upon the suflSciency of the evidence of compliance with the act as to the organization of a National Bank. His certificate removes any objection which otherwise might have been made to the evidence upon which he acted. The objection that the organization certificate appears to have been acknowledged before a Notary Public, who is shown to have been a shareholder in the bank, is one which might have been raised by or before the Comptroller, but of which the Court can take no cognizance after he has given his certifi- cate of compliance. Thatcher «. West River National Bank, 19 Mich. 196. 3. The production of the certificate of the Comptroller, showing that its organization is completed, and that it is authorized to carry on the business of banking under the act, is sufficient proof of the incorporation of a National Bank, in a suit brought by it. National Bank of New Haven «. The Phoenix, etc., 6 Hun, 71. 3. It is for the Comptroller to decide when it is necessary to institute proceedings against the stockholders to enforce their personal liability, and whether the whole or a part, and if only a part, how much shall be collected. These questions are referred to his judgment and discretion, and his determination is conclusive; the stockholders cannot controvert it. It is not to be questioned in the litigation that may ensue. He may make it at such time as he may deem proper, and upon such data as shall be satisfactory to him. This action upon his part is indispensable when- ever the personal liability of the stockholders is sought to be enforced, and must precede the institution of suit by the receiver. Kennedy v. Gibson, 8 Wall. 498. The order of the Comptroller prescribing to what extent the individual > Sec. 5239. s 3^ June, 1876, 0. 156, § 1, v 20, p. 63. » Sec. 5240. * Ibid. §. 6. 36 HATIONAL BANKS. liability of the stockholders of an insolvent National Bank shall be enforced, is conclusive. National Bank v. Case, 99 U. S. 638. 4. The action of the Comptroller in the appointment of a receiver of the bank cannot be questioned by the debtors of the bank until set aside by the bank in contest brought by it as provided for in section 5237 of the Act. The Comptroller appoints the receiver and can therefore remove hita. Cadle v. Baker, 30 Wall. 650. When a National Bank is insolvent, the order of the Comptroller declar- ing to what extent the individual liability of the stockholders shall be enforced, is conclusive upon them, and they will not be heard to question it. Nor can a debtor who is sued question the action or non-action of the Comptroller as regards the stockholders. Kennedy v. Gibson, 8 Wall. 498; Casey v. Galli, 94 U. S. 673; Bailey v. Sawyer, 9 Legal News, 191; s. c, U. 8. 0. C. of Minn. A certificate of the Comptroller, approved and concurred in by the Secre- tary of the Treasury, reciting the existence of all the facts of which the former is required by the act to be satisfied to authorize him to appoint a receiver, is sufficient evidence of the validity of the appointment of the receiver in an action brought by him as such. Piatt «. Beebe, 57 N. Y. 339. 5. The Comptroller is the only person who can bring a suit to have the charter of a National Bank forfeited for violation of its organic act. Shoemaker v. National Mechanics' Bank, 3 Abb. (TJ. S.) 416; Union, etc. v. Rocky, etc., 1 Colo. 531. 6. It is doubtful whether it is within the competency of the Comptroller to submit himself, in the exercise of duties specially confided to him by acts of Congress, to the control of the courts, and especially of those which can assert no such jurisdiction by reason of their territorial limits. But he has no authority to subject the United States to such jurisdiction, and to submit the rights of the Government to litigation in any court, without some provision of law authorizing him to do so. Where the liability of the United States for demands is denied, or payment refused, the Court of Claims has jurisdiction, and no other court has. The United States cannot be subjected to litigation growing out of its relations to National banks in all the various courts in which their affairs may be the subject of ■Jhdicial controversy. Case v. Terrell, 11 Wall. 199. 7. The Comptroller must authorize any increase of the capital stock of a National Bank ; and such increase must be certified by him as prescribed in Sec. 5142. Charleston t). Peoples' National Bank, 5 So. Car. 103. 8. A suit against the bank is abated by a decree dissolving the corpora- tion, and forfeiting its rights and franchises in an action brought by flie Comptroller for that purpose. National Bank v. Colby, 21 Wall. 609. DISTKIOT COITETS; JUEISDICTIOM. 37 ^ SECTION 380. CONDUCT OF SUITS INVOLVING NATIONAL BANKS. All suits and proceedings arising out of the provisions of law governing National Banking Associations, in which the United States or any of its officers or agents shall be parties, shall be conducted by the District Attorneys of the several districts, under the direction and supervision of the Solicitor of the Treasury. 35tli Feb., 1865, c, 58, § 55, v, 13, p. 680; 3d June, 1864, c. 106, § 56, v. 15, p. 116. This section is in so far but directoiy, that it cannot be set up by stock- holders to defeat a suit brought against them by a receiver, under the act, which receiver, with the approval of the Treasury Department, and after the matter had been submitted to the Solicitor of the Treasury, had em- ployed private counsel by whom alone the suit was conducted. Kennedy ■0. Gibson, 8 "Wall. 498. ECTION 563. DISTEIOT COUETS; JUEISDICTION. The District Courts shall have jurisdiction as follows: Fifteenth. Of all suits by or against any association estab- lished under any law providing for National Banking Associ- ations within the district for which the court is held. 24th September! 1789, c. 20, § 9, v. 1, p. 76; 3d March, 1815, c. 101, § 4, v. 8, p. 345; 23d August, 1843, c. 188, § 3, v. 5, p. 517; 38th February, 1871, c. 100, § 57, V. 16, p. 456; 3d March, 1875, o. 137, §§ 1, 9, v. 18, pp. 470, 473; 3d June, 1364, c. 106, §57, v. 13, p. 116. The District Court of the United States is a court of competent jurisdic- tion to authorize the receiver of a National Bank to compromise a doubt- ful claim. Matter of Piatt, 1 Ben. 534. Under this section the receiver may file a bill against the shareholders of the bank for the purpose of enforcing their stock liability. Kennedy «. Gibson, 8 Wall. 498; see, also, Cadle t. Tracy, 11 Blatchf 101, 88 NATIONAL BANKS. SECTION 629. oiKCDiT couet; jurisdiction. The Circuit Court shall have original jurisdiction as follows: ******** Tenth. Of all suits by or against any banking association established in the district for which the court is held, under any law providing for National Banking Associations. 34th September, 1789, c. 30, § 11, v. 1, p. 78 ; 3d March, 1875, c. 137, §§ 1, 2, 3, V. 18, pp. 470, 473; 3d June, 1864, c. 106, § 57, v. 13, p. 116. Eleventh. Of all suits brought by \or against] any banking association established in the district for which the court is held, under the provisions of Title " The National Banks," to enjoin the Comptroller of the Currency, or any receiver acting under his direction, as provided by said title. (See § 5237.) 1. National Banks, by reason of their character as such, may sue in the Federal Courts. First National Bank o. Douglas Co., 3 Dill. 398; Ken- nedy v. Gibson, 8 Wall. 498-506. A National Bank does not sue by virtue of any right conferred by the judiciary act, but by virtue of the right conferred upon it by the act of 1864, authorizing and creating it, and which constitutes its charter. Under the latter act, the right of a National Bank to bring an action in the Fed- eral Courts, is clear. Commercial National Bank of Cleveland v. Sim- mons, 8 Legal News, 164. A National Bank may bring suit in the Federal Courts outside of the district in which it is located. Manufacturers' National Bank o. Baack, 8 Blatchf 137. The Circuit Courts of the United States have jurisdiction of all suits by or against National Banks within their respective districts, irrespective of conditions as to the amount in controversy and the citizenship of the par- ties. Mitchell b. "Walker, 19 Alb. L. J. 193. 3. A United States Circuit Court has jurisdiction of a bill filed by a stockholder of a National Bank, to enjoin the officers of the bank from misapplying its funds to the prejudice of the interests of the stockholders therein, by acts which are not warranted by the charter or amount to a breach of trust. Shoemaker v. National Mechanics' Bank, 3 Abb. (U. S.) 416. The receiver of a National Bank may, under this section, enforce the liability of the stockholders by a bill in equity. Kennedy v. Gibson, 8 Wall. 498. EEMOVAL OF SUITS AGAINST OOEPOEATIONS. 39 SECTION 640. EEMOyAL OF SUITS AGAINST COEPOEATIONS OEGANIZED UNDEE A LAW OF THE UNITED STATES. Any suit commenced in any court other than a Circuit or District Court of the United States, against any corporation other than a banking corporation, organized under a law of tlie United States, or against any member thereof as such member for any alleged liability of such corporation, or of such member as a member thereof, may be removed, for trial, in the Circuit Court for the district where such suit is pending, upon the petition of such defendant, verified by oath, stating that such defendant has a defense arising under or by virtue of the Constitution or of any treaty or law of the United States. Such removal, in all other respects, shall be governed by the provisions of the preceding section. 27th July, 1868, c. 255, § 3, v. 15, p. 327; 27th July, 1866, o. 388, § 1. v. 14, p. 306. 1. A National Bank, as such, has no right to remove a case from a State Court into the Federal Courts. In this action the suit was begun by the bank in the State Court of the district in which the bank was located; and afterward the bank attempted to remove the case into the United States Circuit Court, upon the ground thfit it was a National Bank. After argument the case was remanded to the State Court. Petillon v. Noble, 9 Legal News, 314. (Biss.) The same rule was followed where the application was made by the receiver of a National Bank. Bird's Ex'rs v. Cockrem, 3 Woods, 33. It now the well settled law by decisions of Justices of the Supreme Court and circuit judges at their circuits, although there is no decision to that effect by the Supreme Court, that this Statute (Sec. 640) remains in force, except so far as it is repugnant to, and thereby constructively repealed by the act of March 3, 1875; and if so, corporations like this defendant, are expressly excepted from the right of removal. The defendant bank urged its right to remove the case from the State to the Federal Court, on the ground that it was a National Bank. Wilder o. Union National Bank, 12 Legal News, 75. (Bias.) 40 NATIONAL BANKS. SECTION 736. PEOOEEDINGS TO ENJOIN COMPTEOLLEE OF THE CPEEKNCT. All proceedings by any National Banking Association to enjoin the Comptroller of the Currency, under the provisions of any law relating to National Banking Associations, shall be had in the district where such association Is located. 3d June, 1864, c. 106, §§ 50, 57, v. 13, pp. 115, 116. SECTION 884. INSTEUMENTS AND PAPEES OF OOMPTEOLLEB OF THE CUEEENOT. Every certificate, assignment, and conveyance executed by the Comptroller of the Currency, in pursuance of law, and sealed with his seal of office, shall be received in evidence in all places and courts; and all copies of .papers in his office, certified by him and authenticated by the said seal, shall in all cases be evidence equally with the originals. An impression of such seal directly on the paper shall be as valid as if made on wax or wafer. 8d June, 1864, e. 106, § 3, v. 13, p. 101. 1. The certificate of the Comptroller, authorizing a National Bank to do business, and proof of the fact that the bank did business, makes a prima facia case under a plea of nul iiel corporation. Mix v. National Bank of Bloomington, 91 111. 30; 5 Mo. Jur. 650. A copy of the certificate of organization of a National Bank, which is certified by the Comptroller and authenticated by the seal of his office, is competent evidence in a State Court. Tapley v. Martin, 116 Mass, 375 ; First National Bank v. Kidd, 30 Minn. 384. The certificate of the Comptroller is sufficient evidence of the appoint- ment of the receiver in all actions brought by him as such receiver. Piatt D. Beebe, 57 N. Y. 839; Merchants v. Cardozo, 3 Jones & S. 163. The certificate of the Comptroller, as to the organization of the bank, is conclusive in suits against either stockholders or creditors. Such certificate is also competent evidence as to the name of the corpor- tion. Thatcher v. West River National Bank, 19 Mich. 196 ; "Washington Co. National Bank v. Lee, 113 Mass. 531; National Bank v. The Phoenix, 6 Hun, 71. OrFIOEES MAT BNTEB PBEMISES. 41 SECTION 3177. OFFIOEES MAT ENTEB PEEMISES WHEEE TAXABLE AKTI0LE8 AEE KEPT, Any Collector, Deputy Collector, or Inspector may enter, in the daytime, any building or place where any articles or objects subject to tax are made, produced, or kept, within his district, so far as it may be necessary, for the purpose of exam- ining said articles or objects. And any owner of such build- ing or place, or person having the agency or superintendence of the same, who refuses to admit such officer, or to suffer him to examine such article or articles, sliall, for every such refusal, forfeit five hundred dollars. And when such premises are open at night, such officers may enter them while so open, in the performance of their official duties. And if any person shall forcibly obstruct or hinder any Collector, Deputy Col- lector, or Inspector,, in the execution of any power and author- ity vested in him by law, or shall forcibly rescue or cause to be rescued any property, articles or objects, after the same shall have been seized by him, or shall attempt or endeavor so to do, the person so offending, excepting in cases otherwise provided for, shall for every such offense, forfeit and pay the sum of five hundred dollars, or double the value of the prop- erty so rescued, or be imprisoned for a term not exceeding^ two years, at the discretion of the Court. 30th June, 1864, c. 173, §§ 87, 38, v. 13, p. 238. 1. The clerk of the Supervisor of Internal Revenue called at a National Bank and requested permission to examine the checks of its depositors to ascertain if any of them were unstamped. The hank refused him such permission. Suit was then brought to enforce the penalty prescribed by Sec. 3177, in which it was held : That while banks are not exempt from examination by the Internal Revenue officers, as is provided in that sec- tion, the clerk of the Supervisor is not such officer, and therefore the bank was not liable. United States n. Khawn, 8 Legal News, 373 ; s. c. Legal Intelligencer, 258. Paid bank checks properly stamped at the time when they were made, signed and issued, are not in the purview of this statute, and the officers named therein have no right to demand from the bank an inspection of the same. U. S. v. Mann, 95 U. S. 580; s. c, 17 Alb. L. J. 85. 42 NATIONAL BANKS. SECTION 3407. DEFINITION OF WOEDS " BANK " AllD "BANKER." Every incorporated or other bank, and every person, firm, or company having a place of business where credits are opened by the deposit or collection of money or currency, sub- ject to be paid or remitted upon draft, check, or order, or where money is advanced or loaned on stocks, bonds, bullion, bills of exchange, or promissory notes, or where stocks, bonds, bullion, bills of exchange, or promissory notes are received for discount or for sale, shall be regarded as a bank or as a banker. 30th June, 1864, c. 173, § 79, v. 13, p. 251 ; 18th July, 1866, c. 184, § 9, v. 14, p. 115. 1. A corppration whose business is confined to the investment of its capital in bonds secured by mortgage on real estate, and to the negotiation, sale, and guaranty of them, is not a bank or banker within the meaning of this section. Belden o. Equitable Trust Co., 94 U. S. 419. Bankers confining themselves to the business of banking only (as such business is described in this section) are only liable to pay the banker's license fees and percentage. Northup v. Shook, 10 Blatchf. 343. The term " capital " employed by a banker in the business of banking, as used in this section, does not include moneys borrowed by him from time to time temporarily in the ordinary course of his business. It applies only to the property or moneys of the banker set apart from other uses and permanently invested in the business. Bailey v. Clark, 7 Legal News, 339. SECTION 3410. CAPITAL OF BANKS EXPIEED OE CONVEETED INTO NATIONAL BANKS. The capital of any State Bank or banking association, which has ceased or shall cease to exist, or which has been or shall be converted into a l^ational Bank, shall be assumed to be the capital as it existed immediately before such bank ceased to exist or was converted as aforesaid. 3d March, 1865, c. 78, § 14, v. 13, p. 486; 13th July, 1866, c. 184, § 9 6t», V. 14, p. 146. TAX ON NOTES. 43 SBCTIOISr 3413. TAX ON NOTES OF PERSONS OK STATE BANKS USED AS OIEO0LA- TION, ETO. Every National Banking Association, State Bank, or State Banking Association, sliall pay a tax of ten per centum on the amount of notes of any person, or of any State Bank or State Banking Association, used for circulation and paid out by them. 3d March, 1865, c. 78, § 6, v. 18, p. 484; 13th July, 1866, c. 184, § 9 his, v. 14, p. 146; 26th March, 1867, o. 8, § 3, v. 15, p. 6; 8th February, 1875, c. 36, § 19, V, 18, p. 311 ; 3d March, 1875, c. 167, v. 18, p. 507. [An Act to atjthoeize the Seceetaet of the Teeasuet to Adjust and Remit oeetain Taxes and Penalties claimed TO BE DUE FEOM MiNING AND OTHEE CoEPOEATIONS AND FOE OTHEE PUEPOSES : Be it enacted iy the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury be, and he is hereby, authorized and directed to settle and relfease any claims for tax on circu- lation of evidences of indebtedness made against any mining, manufacturing or other corporations other than against any National Banking- Association, State Bank or banking-associa- tion, by such corporation paying the tax, without penalty, that shall have accrued thereon since JSTovember first, eighteen hundred and seventy- three; and that the provisions of section three thousand four hundred and twelve of the Revised Statutes of the United States shall not be construed in pending cases, except as to National Banking- Associations, to apply to such evidences of indebtedness issued and re-issued prior to the passage of this act, but said section shall be construed as applying to such evidences of indebtedness issued after the passage hereof. Approved March 3d, 1875.] Section 9 of the act of July 13, 1866 (now Sec. 3413), does not lay a direct tax. Congress having undertaken, in the exercise of undisputed constitu- tional power, to provide a currency for the whole country, may constitu- tionally secure the benefit of it to the people by appropriate legislation, 44 NATIONAL BANKS. and to that end may restrain, by suitable enactments, the circulation of any notes not issued under its authority. Veazie Bank v. Fenno, 8 Wall. 533. National Banks have been National favorites. They were established for the pi(rpose, in part, of providing a currency for the whole country, and in part to create a market for the loans of the General Government. It could not have been intended, therefore, to expose them to the hazard of unfriendly legislation by the States, or to ruinous competition with State Banks. On the contrary, much has been done to insure their taking the place of State Banks. The latter have been substantially taxed out of existence. A duty has been imposed upon their issues so large as to man- ifest a purpose to compel a withdrawal of all issues from circulation. TifiFany «. National Bank of Missouri, 18 Wall. 409 ; First National Bank of Clarion v. Gruber, 87 Pa. St. 477. SECTION 8418. TAX ON NOTES OF TOWN, CITY OE MUNICIPAL OOEPOEATIONS PAID out BY BANKS, ETC. Every National Banking Association, State Bank or banker, or association, shall pay a tax of ten per centum on the amount of notes of any town, city or municipal corporation, paid out by them. National Bfmks v. United States, 101 U. S. 1. 26th March, 1867, c. 8, § 3, v. 15, p. 6; 8th February, 1875, c. 86, § 19, v. 18, p. 311. SECTION 3416. STATE BANKS CONVEETED INTO NATIONAL BANKS; EETUENS, HOW MADE. Whenever any State Bank or Banking Association has been converted into a National Banking Association, and such National Banking Association has assumed the liabilities of such State Bank or Banking Association, including the redemption of its bills, by any agreement or understanding whatever with the representatives of such State Bank or Bank- ing Association, such National Banking Association shall be held to make the required return and payment on the circula- tion outstanding, so long as such circulation shall exceed five per centum of the capital before such conversion of such State Bank or Banking Association. 3d March, 1865, c. 78, § 14, v. 13, p. 486; 13th July, 1866, c. 184, § 9 bis, V. 14, p. 146. FORMATION OF NATIONAL BANKING ASSOCIATIONS. 45 SECTION 3417. PEOVISIONS FOE BANK TAX AND EETTTENS NOT TO APPLY TO NATIONAL BANKS. The provisions of this chapter, relating to the tax on the deposits, capital, and circulation of banks, and to their returns, except as contained in sections thirty-four hundred and ten, thirty-four hundred and eleven, thirty -four hundred and twelve, [thirty-four hundred and thirteen,] and thirty-four hundred and sixteen, and such parts of sections thirty-four hundred and fourteen, and thirty-four hundred and fifteen as relate to the tax of ten per centum on certain notes, shall not apply to associations which are taxed under and by virtue of title, "National Banks." 30th June, 1864, c. 178, § 110, v. 13, p. 378: 13th July, 1866, c. 184, § 9, v. 14, p. 146; 18th February, 1875, o. 80, v. 18, p. 319. SECTION 3811. . EEP0ET8 ON NATIONAL BANKS. When the annual report of the [Secretary of the Treasv/ry] [Comptroller of the Currency] upon the National Banks [and banks under State and Territorial laws] is completed, or while it is in process of completion, if thereby the business may be sooner dispatched, the work of printing shall be commenced, under the superintendence of the Secretary, and the whole shall be printed and ready for delivery on or before the first day of December next after the close of the year to which the report relates. 30th January, 1868, c. 14, § 3, v. 13, p. 637; 18th February, 1875, c. 80, v. 18, p. 319. SECTION 5133. FORMATION OF NATIONAL BANKING ASSOCIATIONS. Associations for carrying on the business of banking under this Title may be formed by any number of natural persons, 46 NATIONAL BANKS. not less in any case than five. They shall enter into articles of association, which shall specify in general terms the object for which the association is formed, and may contain any other provisions, not inconsistent with law, which the association may see fit to adopt for the regulation of its business and the conduct of its aflairs. These articles shall be signed by the persons uniting to form the association, and a copy of them shall be forwarded to the Comptroller of the Currency, to be filed and preserved in his office. [See Sec. 324.] 3d June, 1864, o. 106, § 5, v. 13, p. 100; SOth June, 1874, c. 343, v. 18, p. 123. The act of June 20, 1874, c. 343, v. 18, p. 123, declares " That the Act entitled ' An Act to provide a National cur- rency secured by a pledge of United States bonds, and to- provide for the circulation and redemption thereof,' approved June third, eighteen hundred and sixty -four, shall hereafter be known as ' The National-Bank Act.' " 1. Congress has power to create National Banks, and to make any provis- ions whicii tend to promote their efficiency, and to protect them, not only against State legislation, but also against suits or proceedings in State Courts by which that efficiency would be impaired. Chesapeake Bank v. First National Bank, 40 Md. 269. Congress having legally undertaken to provide a currency for the whole country, may secure the benefit of it to the people by appropriate legisla- tion. Veazie Bank ». Fenno, 8 Wall. 533. 3. Corporations are limited to the exercise of the powers expressly dele- gated to them, or necessarily incident thereto; they can act only through agents; and such agents can act only within the scope of the powers dele^ gated to them respectively. The leading object of framing the law was to confine those corporations to a strictly legitimate banking business ; to make them safe in regard to their circulating notes, safe as places of deposit, and safe so far as those investing their capital in them as stock- holders were concerned. Public policy demands that those institutions be held strictly within the limits of the law prescribed for their organization and control, as any other policy tends to endanger the safety of deposits^ and to disturb the public, credit. Adams v. Cook Co. National Bank, Blodgett, J., M8S., U. S. C. C, N. D. of 111. 3. The National Banks organized under the act are instruments designed to be used to aid the Government in the administration of an important branch of the public service. They are means appropriate to that end. Of the degree of the necessity which existed for creating them, Congress i* REQUISITES OF OEGAKIZATION CEKTIFICATE. 47 the sole judge. Being such means, brought into existence for this purpose, and intended to be so employed, the States can exercise no control over them, nor in anywise affect their operation, except in so far as Congress may see proper to permit. Anything beyond this is an abuse, because it is the usurpation of power which a single State cannot give. Against the National will the States have no power by taxation or otherwise to retard, impede, burthen, or in any manner control the operatioa of the constitu- tional laws enacted by Congress to carry into execution the powers vested in the General Government. Farmers, etc., National Bank s. Dearing, 91 U. S. 29. SECTION 5134. EEQTJISITES OF OEGANIZATION OEBTIFIOATB. The persons uniting to form such an association shall, under their hands, make an organization certificate, which shall spe- cifically state— First. The name assumed by such association ; which name shall be subject to the approval of the Comptroller of the Currency. Second. The place where its operations of discount and deposit are to be carried on, designating the State, Territory,, or district, and the particular county and city, town or village. Third. The amount of capital stock and the number of shares into which the same is to be divided. Fourth. The names and places of residence of the share- holders and the number of shares held by each of them. Fifth. The fact that the certificate is made to enable such persons to avail themselves of the advantages of this Title. 3d June, 1864, c. 106, § 6, v. 13, p. 101. 1. Representations of the cashier of a National Bank as to the goodness of a promissory note, endorsed by the bank, will bind the bank, although such representations were made not over its counter nor in its oflBce, but in a distant city. Houghton «. Pirst National Bank of Elkhorn, 26 Wis. 663; see Kennedys. Otoe Co. National Bank, 7 Neb. 59; Bissell «. First National Bank of Franklin, 69 Pa. St. 415. A check was certified by the cashier of one bank at the office of another banking house in the same city. Upon objection that he had no right to make such certification outside of his own office, it was held : That this provision of the act must be construed reasonably. The business of every bank away from its office — frequently large and important — is unavoid- ably done In the proper place by the cashier in person, or by correspond- 48 NATIONAL BANKS. ents, or other agents. In this case the gold, purchased with such certified check, must have been bought where it was for sale. The power to pay was vital to the power to buy and inseparable from it. Merchants' Bank V. State Bank, 10 Wall. 604. 3. A National Bank is a citizen of the State in which by law it is located. The designation of its place of business in the certificate of organization determines its locality, and it can have no other. Cooke v. State National Bank, 53 N. T. 96 ; Chatham National Bank b. Merchants' National Bank, 4 Thomp. & C. 196 ; Davis v. Cook, 9 Nev. 134. A National Bank organized in another State is prohibited from keeping an office of discount or deposit in the city of New York, and cannot main- tain an action upon any note discounted by it at such office. This prohi- bition arises from the fact that the bank is a foreign corporation, and from the provisions of Revised Statutes (v. 1, 3d ed.), 708 of New York. National Bank of Fairhaven «. The Phoenix, etc., 6 Hun, 71. The general business of a National Bank must be transacted at the place of its location. At the same time we know that in the course of business between banks occasionally-the officers do give instructions away from the place of business of the bank. If the bank doing such business sends a statement of the same to the other bank, and it, through its proper officer, recognizes the validity of the same, it is bound by such recognition. Judge Dktjmmond, in Burton v. Burley, 13 Leg. Ns. 178 ; s. c, 9 Rep. 301. A National Bank located in New Jersey for the convenience of persons in Philadelphia, kept a clerk in that city who received deposits : held, That the bank did not become located in Philadelphia so as to be liable for taxes. The fact that it violated the law did not make it a citizen of Phil- adelphia. National Bank of Camden v. Pierce, 18 Alb. Law J. 16, (U. S. C. C. W. D. Penn.) 8. National Banks are foreign corporations, and hence are liable to attachment under State laws. Bowen v. First National Bank, 34 How. Pr. 408. And must give security for costs. National Park Bank «. Gunst, 1 Abb. N. Cas. 393. A National Bank cannot be sued in the Federal Courts outside of the district wherein it is located. Main v. Second National Bank, 6 Biss. 36. 4. Until an organization certificate be made in compliance with the statute, there is no legal organization. Persons not signing the same are not members of the association. Burrows v. Smith, 10 N. Y. 550. SECTION 5135. HOW CEETEFIOATE SHALL BE ACKNOWLEDSED AND ITLED. The organization certificate shall be acknowledged before a judge of some court of record, or Notary Public; and shall be, together with the acknowledgment thereof, authenticated by COEPOEATB POWEES OF ASSOCIATIONS. 49 the seal of such court, or Notary, transmitted by the Comp- troller of the Currency, who shall record and carefully pre- serve the same in his office. [See Sec. 885.] 3d June, 1864, c. 106, § 6, v. 13, p. 101. 1. It is for the Comptroller to decide upon the sufficiency of the evi- dence of compliance with the act as to the organization of a National Bank. His certificate removes any objection which might otherwise have been made to the evidence upon which he acted. The objection that the organization certificate appears to have been acknowledged before a Notary Public, who is shown to have been a stockholder in the bank, is one which might have been made by or before the Comptroller, but of which the court can take no cognizance after he has given his certificate of compli- ance. Thatcher s. West River National Bank, 19 Mich. 196. SECTION 5136. COEPOEATB POWERS OF ASSOCIATIONS. Upon duly making and filing articles of association and an organization certificate, the association shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power — First. To adopt and use a corporate seal. Second. To have succession for the period of twenty years from its organization, unless it is 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 its franchise becomes forfeited by some violation of law. Third. To make contracts. Fourth. To sue and be sued, complain and defend, in any court of law and equity,' as fully as natural persons. Fifth. To elect or appoint directors, and by its board of directors to appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure and appoint others to fill their places. Sixth. To prescribe, by its board of directors, by-laws not inconsistent with law, regulating the manner in which its stock 4 bo NATIONAL BANKS, shall be transferred, its directors elected or appointed, its oflS- cers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed. Seventh. To exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of bank- ing; by discounting 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; and by obtaining, issu- ing, and circulating notes according to the provisions of this Title. But no association shall transact any business except such as is incidental and necessarily preliminary to its organization, until it has been authorized by the Comptroller of the- Cur- rency to commence the business of banking 3d June, 1864, c. 106, § 8, v. 13, p. 101. Powers of the Bank. 1. The seventh clause of Sec. 5136 contains five distinct grants of power, and neither grant is a limitation upon any other. Shoemaker v. National Mechanics' Bank. 2 Abb. (U. S.) 416. The extent of the powers of the bank are to be measured by the act. A bank cannot, even by a by-law, acquire a lien upon its own stock held by persons who are its debtors. Being against the spirit of the act, such a power cannot be implied from general expressions. Such a by-law it is beyond the power of the bank to make. Bullard a. Bank, 18 Wall. 589. Corporations, both for their powers and the mode of exercising them, depend upon the statutes creating them. Fowler «. Scully, 73 Pa. St. 456. The words " by discounting and negotiating promissory notes," etc., in Sec. 5136, are not to be read as limiting the mode of exercising the " inci- dental powers" necessary to carry on the business of banking, but as descriptive of the kind of banking which is authorized ; and the true mean- ing of the provision is that the bank may carry on banking "by discount- ing," etc., arid may exercise " all such incidental powers as shall be neces- sary" for that purpose. Shinkle s. First National Bank of Eipley, 32 Ohio St. 516. A National Bank has no powers except those conferred by the act under which it is created. Mathews v. Skinner, 63 Mo. 339. A bank can only exercise its powers in the manner prescribed in the law POWEES OF THE BAKE. 61 under -which it is organized. The rule is the same with all bodies having only a statutory existence. "When one mode of exercising an express power by a banking corpora- tion is prescribed in the law creating such corporation, by Implication this will seem to forbid the exercise of such power in any other way. Pridley v. Bowen, 87 111. 151. National Banks are designed to aid the government in the administra, tion of an important branch of the public service. The States can exercise no control over them, except so far as Congress may see fit to permit. Farmers' and Mechanics' National Bank v. Dearing, 1 Olto, 39. National Banks, as Federal agencies, are only exempted from State leg. islatiim so far as it may impair their efficiency in performing the functions by which they are designed to serve the Government of the United States. It is only when a State law incapacitates them from discharging these duties that it becomes unconstitutional. The Farmers' Bank of Maryland recovered a judgment against T. Under Sec. 5154 of the act it was afterwards converted into the Farmers' National Bank of Maryland. Thereafter it sued out scire faeiaa in its original name on such judgment. Held, That it had a right so to do. That the State statute giving the right to bring suit in its original name grants it that privilege, and is not ia conflict with the act of Congress. Thomas v. Farm- ers' Bank of Maryland, 46 Md. 43. 2. A National Bank is a quasi public institution. While it is the prop- erty of its stockholders, and its profits inure to their benefit, it was never- theless intended by the law creating it that it should be for the public accommodation. It furnishes a place, supposed to be safe, in which the general public may deposit their moneys, and where they can obtain temporary loans upon giving proper security. There are three classes of persons to be protected : Depositors, the note holders, and the stockholders. A court of equity will not retain a bill filed for the specific performance of a contract for the sale and delivery of the shares of stock of such a bank. Foil's Appeal, 7 "Week. Jr., 103; Pa. St. Congress has power to create National Banks, and make any provisions which may tend to promote their efficiency, and to protect them not only against State legislation,. but also against suits or proceedings in State courts by which that efficiency would be impaired. Chesapeake Bank v. First National Bank, 40 Md. 269. 3. A National Bank has not the power to take a special deposit to be kept for the mere accommodation of the depositor. Wiley o. First National Bank of Brattleborough, 47 Vt. 546. The receiving of property as bailee is not within the ordinary business of a National Bank, or within the apparent authority of its officers. In the- absence of proof that special authority has been delegated by its board of directors, or has been exercised with their sanction or knowledge, or of evidence that it has been the practice of the bank to receive property for safe keeping, the bank is not responsible for property so received by its cashier. First National Bank v. Ocean National Bank, 60 N. Y. 278 62 NATIONAL BANKS. 4. Dealing in checks is the usual business of banking, and would be within the general powers of a bank without special mention. But by Sec. 5136, giving power to National Banks to discount, and negotiate promissory notes and other evidences of indebtedness, express authority is given to buy the checks of individuals drawn upon other banks, whether payable to bearer or to order. First National Bank v. Harris, 108 Mass. 514. A National Bank has the right to purchase commercial paper in the market in the usual course of business, and if there be any fraud in the making of such notes, it must be brought to the knowledge of the bank in order to bind it. Atlas National Bank ». Savery, 137 Mass. 75 ; s. c, 11 Legal News, 383 ; Smith v. Exchange Bank, 26 Ohio St. 141. A bank having power under its organic act to discount negotiable notes has also power to pui'chase such notes. Pape v. Capitol Bank, 20 Kansas, 440. National Banks have no power to buy and sell commercial paper; they may discount notes presented to them for that purpose, but their power does not extend to the purchase of^such paper. Lazear v. National Union Bank, 12 Legal News, 64. (Md.) In an action at law the fact was found that the note in question was a purchase and not a discount, or the lending of money on the credit of it. Seld, that a National Bank has no right to traffic in promissory notes as a species of personal property, or to acquire any title to such paper by a pur- chase made admittedly not in the way of discount or by lending money on it. The word "negotiating" gives no implied authority to speculate or traffic in paper of the character of the note in question, or in financial securities of any description. First National Bank of Rochester v. Pierson, 10 Legal News 27; b. c, 24 Minn. 140. 5. A National Bank is not by its charter, nor by its statutory, nor its incidental powers authorized to act as broker or agent in the purchase of bonds or stocks. First National of AUentown ®. Hoch, 7 Weekly Notes of Cas. 298 (Pa.); s. c. 30 Alb. L. J. 215. Dealing in stocks is not distinctly prohibited by the act, but such prohi- bition is implied from a failure to grant the power. Yet in adjusting a contested claim the bank may pay more than its value so as to obtain stocks in an honest effort to avoid a loss ; and then it may sell such stock in the market. Such transactions do not amount to a dealing in stocks. Sub- ject to the restrictions of 'the act the bank can do what a natural person may lawfully do. First National Bank of Charlotte v. National Exchange Bank, 3 Otto, 122. It is within the power of a National Bank to take United States bonds to be exchanged for other United States bonds which are -registered ; and if they are lost through neglect, the bank is liable. Terkes ». National Bank of Port Jervis, 4,L. & E. Rep. 198. (N. T.) A National Bank may hold collateral for the performance of contracts between third parties, and it will be estopped to say that such act was ultra vires. Bushnell v. Chautauqua County National Bank, 10 Hun, 378. A National Bank can properly and legally engage in the business of POWEES OF THE BANK. 53 dealing in and exchanging Government securities. Van Leuven ®. First National Banlr, 54 N. Y. 671. It has power to take United States bonds as collateral for loans and dis- counts. Third National Banli ». Boyd, 44 Md. 47. A National Bank has no authority to engage in the business of selling the bonds of railway companies on commission; such business is not within the scope of its corporate powers and is therefore prohibited. Nor is the bank responsible for the false representations of its cashier in regard to such bonds, as the act is ultra mres. In discussing this question the court say: "To the usual attributes of banking, consisting of the right to issue notes for circulation, to discount commercial paper and to receive deposits, this law adds the special power to buy and sell exchange, coin and bullion ; but we look in vain for any grant of power to engage in the business charged in this declaration. It is not embraced in the power to ' discount and negotiate ' promissory notes, drafts, bills of exchange and other evidences of debt. The ordinary mean- ing of the term 'to discount' is to take interest in advance, and in banking it is a mode of loaning money. It is the advance of money not due until some future period, less the interest which would be due thereon when payable. The power 'to negotiate ' a bill or note is the power to endorse and deliver it to another, so that the right of action thereon shall pass to the endorsee or holder. No construction can be given to these terms, as used in this statute, so broad as to comprehend the authority to sell bonds for third parties on commission, or to engage in business of that character. The appropriate place for the grant of such a power would be in the clause conferring authority to ' buy and sell,' but we find that limited to specific things, among which bonds are not mentioned, and upon the maxim Mx/pressio unius est exduaio alterius, and in view of the rule of interpreta- tion of corporate powers before stated, the carrying on of such a business is prohibited to these associations." Weckler v. First National Bank of Ilagerstown, 42 Md. 581. Note — The bond of a corporation is nothing more than the note of a corporation. Is not the principle of this case a prohibition upon the buy- ing and selling of the commercial paper of individuals, a practice very common among the New England banks? A National Bank in making a loan took stock in another corporation as collateral. Held, That it had a right so to do. Canfield i>. State National Bank, 1 N. W. Rep. 173. Dealing in railway stocks by National Banks is not expressly prohib- ited, but such a proliibition is implied from a failure to grant the power. In the honest exercise of the power to compronjise a doubtful debt owing to the bank, it can hardly be doubted that railway stocks may be accepted in payment and satisfaction, with a view to their subsequent sale and conversion into money, so as to make good or reduce the anticipated loss. First National Bank of Charlotte v. National Exchange Bank, 51 How. Pr. Rep. 320 54: NATIONAL BANKS. The power to buy or sell stocks of other corporations by a National Bank for its own use is nowhere delegated to it, nor is an incident of banking business, except as stocks are taken as security for a debt. A National Bank holding stocks as security may, for its own protection, on a foreclosure for default in payment of the debt, become the purchaser to prevent loss. Burley v. Bowen, Blodgbtt, J., M8S., U. S. C. C, N. D. of 111. 6. A loan of money by one National Bank upon collateral security of the stock of another National Bank, is not forbidden by the act. If the creditor bank causes such stock to be transferred to it on the books of the debtor bank it thereby becomes a stockholder in such debtor bank, and upon the failure of the latter, is liable as a stockholder thereof. National Bank v. Case, 99 U. 8. 638. A National Bank has no authority to lend its credit on personal security. NOTB. — The bank had loaned its draft for the accommodation of one of its customers, of which fact the plaintiflf had knowledge. Held, That an action against the bank on such draft would not lie. Johnson Bros. a. Charlotteville National Bank, 3 Hughes, 657. The power of a National Bank to borrow money or to give notes is neither expressly nor Impliedly given by the act. The business of the bank is to lend, not to borrow money ; to discount other's notes, not to get its own notes discounted. A bank under certain circumstances might become a temporary borrower of money on time ; yet such transacliuns would be so much out of the course of ordinary and legitimate banking S3 to require those making the loan to see to it that the agent acting for the bank had special authority to borrow money. The burden of proof in such case would be upon the lender. Adams v. Cook Co. National Bank, Judge BtODaBTT, MSS., U. S. 0. C, N. D. of 111. 7. Answering questions as to the insolvency of parties by the cashier of the bank, does not render the bank liable for deceit of the, cashier in his replies to such questions. Responding to such interrogatories is no part of the business of the cashier nor included within the scope thereof. The , plaintiff wanted the opinion of the cashier and not that of the bank. Hor- rigan v. First National Bank, 10 Leg. Ns. 1X2. The cases in which the question of how far and when the bank is bound by the acts or statements of its officers or directors are as follows : Atlantic State Bank b. Savery, 18 Hun, 36 ; Housatonio Bank v. Martin, 1 Mete. 394; National Security Bank v. Cushman, 121 Mass. 490; Newport National Bank «. Tweed, 4 Houston, (Del.) 225 ; Davis «. Randall, 116 Mass. 547 ; Olney v. Chadsey, 7 R. I. 224 ; Hodges v. First National Bank of Rich- mond, 22 Gratt, 51; Kennedy v. Otoe Co. National Bank, 7 Neb. 59; Van Leuven v. First National Bank of Kingston, 54 N. Y. 671 ; Claflin «. Bank, 25 N. T. 393; West St. Louis Sgs. Bank v. Shawnee Co. Bank,' 3 Dill. 403; Paquioque Bank v. Bethel Bank, 86 Conn. 325 ; State of Tenn. ■». Davis, 50 How. (N. Y.) 447; First National Bank v. Ocean National Bank, 60 N. Y. 278; Weckler «. First National Bank, 42 Md. 581 ; Houghton v. First Na- tional Bank of Elkhorn, 26 Wis. 663 ; Bank v. Parmelee, 16 Alb. L. J. 473 ; DIEEOTOES OF THE BANK. 55 Wiley ». First National Bank of Brattleboro, 47 Vt. 546; First National Bank of Carlisle e. Grraham, 79 Pa. St. 106 ; Dorsey v. Abrahams, 5 Rep. 63 ; s. 0., Pa. St. ; Chattahoncbee National Bank b. Sobley, 4 L. & Eq. Rep. 475 ; s. c, Ga. ; Yerkes «. National Bank of Port Jervis, 4 L. & E. Rep. 198. 8. To render the successors of a bank liable for its delinquencies, some- thing more must be shown than the mere fact that they succeeded it in business; and the party seeking to recover therefor must prove that they received some portion of its funds or property. Hopper ». Moore, 42 Iowa, 563. Directors of the Bank. 1. One who is elected a bank dii-eotor is presumed to accept the office. A majority of the directors constitute a quorum; and where a quorum is present a majority may act. Lockwood v. American Nat. Bk., 9 R. I. 308. If a director of a bank, who acts for the bank in discounting a note, has knowledge that the note was obtained by fraud, the bank is affected by his knowledge. But the mere fact that one of the directors of a bank knew that the note was so obtained, will not affect the bank, if such director takes no part in the making of such discount. National Security Bk. ■». Cushman, 121 Mass. 490 ; Commercial Bk. v. Cunningham, 24 Pick. 270 ; Washington Bk. «. Lewis, 22 Pick. 24; Housatonic Bk. v. Martin, 1 Mete. 294. The knowledge of one of the directors of the bank, which had purchased a note in good faith, that the indorsement was without authority, cannot be imputed to the bank, and it is entitled to recover upon such note. Atlantic State Bk. v. Savery, 18 Hun, 86. A director of a bank, who was also a member of a firm, procured at the bank the discount of a note belonging to the firm, not himself acting in making the discount. The note had been obtained from the maker by fraud, to the knowledge of such director, but he did not communicate this fact to the bank. Held, This his knowledge was not,constructive notice to the bank. First Nat Bk. of Hightstown v. Christopher, 11 Vroom, 435. If the director of a bank, who acts for the bank in discounting a note, has knowledge that the note was procured by fraud, the bank is affected with his knowledge. Nat. Security Bk. v. Cushman, 121 Mass. 490. 2. The officers of a National Bank are not bound to examine the accounts of the teller for the benefit of a gratuitous bailee. The purchase and sale of stocks by an officer of a bank are not ipso facto evidence of dishonesty ; but if such officer be found engaged in stock gam- bling, or buying and selling beyond his means, he ou'ght to be removed. Scott V. Nat. Bk. of Chester Valley, 72 Pa. St. 471. Where, after a cashier had taken the funds of the bank, the directors, ignorant of the loss, which a slight inspection of the books would have shown, published a statement indicating that the affairs of the bank were honestly conducted, and then the cashier gave bonds, and afterward stole further sums; it was held, in a suit against them, that the sureties were 56 NATIONAL BANKS. misled by the statement of the directors and were not bound. Graves «. Lebanon National Bank, 10 Bush. (Ky.) 33. It is the duty of the directors to know what is shown by the books of the bank. When they do not use ordinary diligence in learning about the conduct of the bank, and they do not control the subordinate officers of the bank, and a loss happens therefrom, the directors are liable. United Society v. Underwood, 9 Buah. (Ky.) 609. Aside from statutory or constitutional provisions, a director or officer of an incorporated bank is not individually responsible in an action at law for injury resulting to a creditor or depositor from the management of the bank, unless the injury is occasioned by his malicious or fraudulent act. Sec. 37 of Article 13 of the Constitution of Missouri, which under cer- tain circumstances makes the officers of the banks individually responsi. ble, is not self-acting. Fusz s. Spaunhorst, 67 Mo. 356. If the directors of a bank declare a dividend under circumstances which show that the act was one of fraud or folly, they will be held liable to the corporation for the loss resulting therefrom. Gunkle's Appeal 48 Pa. St. 13. Where it is sought to hold one, who while president of a bank had loaned moneys of the bank to an irresponsible person, liable for the same on the basis of his representations to the cashier at the time of the loans that he was interested with the borrower and would see the amounts repaid, it is error to permit the party to testify whether he ever regarded himself as liable; his opinion respecting his legal liability is entitled to no consid- eration. A bank president, who, while in general charge of the business, with the cashier under his authority, has permitted and directed the drawing of moneys from the bank without security by one known or supposed to be irresponsible, and with whom he was interested in the business for which the money was obtained, and who requested the cashier to say nothing to the directors about it, is held personally liable to the bank for the moneys thus paid out by him in violation of his trust. The fact that the moneys thus drawn out were by the cashier, by the direction and on the authority of the president, charged on the books of the bank to an iri-esponsible borrower,, would not necessarily determine the transaction as a loan to him by the bank; but the bank, in the absence of any ratification or acquiescence on its part, would have a right under the circumstances to repudiate it as a transaction with the nominal borrower, and to insist on repayment by its president. And such president, if he persuaded the cashier not to make known the facts to the directors, could claim nothing because of the cash- ier's knowledge; that officer's silence might, under such circumstances, make him accessory to the fraud, but could not tend to excuse the principal. The question of the effect to be given to the long silence of the bank directors after the charge to the nominal borrower upon the bank books, is one of ratification, and should be submitted to the jury as such. First Nat. Bk. of Sturges v. Reed, 36 Mich. 363. 8. Directors cannot use funds of a bank in payment of a note made by them to the president of the corporation as payee for its benefit. DIEEOTOfiS OF THE BANK. 57 The promise of a third person to pay a note, and to release the makers from responsibility, does not lessen their liability unless the creditor con- sent When a note is made by the directors of one corporation and is trans- ferred to another, and one of the makers is also payee and indorser, and is president of both corporations, he is not in a position to consent for the corporation creditor to any arrangement which will release his own per- sonal liability or that of his co-directors, and thus to impair the security of the creditor. Gallery v. Nat. Exchange Bk. of Albion, 41 Mich. 169. The president and cashier of a National Bank, with the entire control of its finances, have no power to use the property of the bank in the private business of either, nor can they bind the bank by any contract to which either of them is a party. The president, having agreed to buy a director's stock, received the stock and handed it to the cashier to hold in place of the director's note for the same amount, directing the cashier to surrender the note, and he, the president, would pay the amount to the bank. The cashiir received the stock and surrendered the note. Held, That the director was not discharged from liability to the bank on his note. Rhodes V. Webb, 34 Minn. 293. It is not negligence for a bank to instruct its cashier to select and hire and pay out of his salary all the clerks and other servants employed in the banking house ; no negligence being shown in the selection of the cashier. Smith V. First Nat. Bk. of Westfleld, 99 Mass. 605. When a National Bank makes to one of its directors a loan of money, which in amount and in the rate of interest is in contravention of the National Banking Act, the borrower is not estopped to defend against the recovery of interest. Bank of Cadiz v. Blemmons, 34 Ohio St. 143. 4. As a rule the officers of a bank are held out to the public as having sufficient authority to act according to the usage and course of business of such institutions, and their acts, within the scope of their authority, bind the bank in favor of persons having no knowledge to the contrary. No officer of a bank can bind it by a promise to pay a debt which the corpor- ation does not owe and was not liable for, unless the bank authorized or has ratified the act ; but ratification is equivalent to original authority to act in the matter, and corporations are bound in the same manner as nat- ural persons. Rich v. State Nat. Bk., 7 Neb. 201. The act does not define the powers and duties of either the president or cashier. In the absence of any specific definition of the duties of such officers, they will be held to possess only such powers as are in the very nature of things inherent in such positions ; and all other powers needful in .the management of the bank remain with the directors. Hodges Ex'r V. First Nat. Bk. of Richmond, 23 Gratt. 51. A bond designed to indemnify a bank against the neglect or misconduct of its teller, but running to the president and directors of the bank, applies to them only in their official capacity, and inures to the benefit of the bank. New Orleans Nat. Bk. «. Wells, 38 La. Ann. 736. Where those engaged in organizing a National Bank promised to pay 58 NATIONAL BANKS. the plaintiff for expenditures and services made and performed prior to its organization, and the bank after it is formed adopts such undertalcing, it is bound to carry it out. McDonough ®. Bk. of Houston, 34 Texas, 309. The officers of the bank have no right to refuse to transfer the stock of a shareholder, upon a sale thereof, to a party buying the same. Should they so do, either the seller or the purchaser can compel a transfer on the books of the bank. Johnson v. Laflin, 17 Alb. L. J. 146. An information in the nature of a quo warranto will not lie in a State court to try the right to the office of director in a National Bank. State v. €urtis, 35 Conn. 874. The officers and directors of a corporate body are trustees for the stock- holders, and cannot, without being guilty of fraud, secure to themselves advantages not common to the latter. The law will not permit them to make a private profit for themselves in the discharge of their official duties. When agents and others acting in a fiduciary capacity understand that these rules will be enforced even without proof of actual fraud, the honest will keep clear of all dealings falling within their prohibition, and those dishonestly inclined will conclude that it is useless to exercise their wits in contrivances to evade it. Farmers' and Merchants' Bk. v. Downey, 53 Cal. 466; Kohler «. Black River F. I. C, 3 Black. 721; Bain v. Brown, 56 N. Y. 385. The president, cashier or director of a National Bank may borrow money from the bank, as any other person may, and execute a valid note / for the same that will bind them as well as the bank receiving it;' and such notes are not void, nor in the absence of fraud can such a note be repudi- ated or avoided by the bank by reason of that relation. Blair v. First Nat Bk. of Mansfield, 10 Leg. Ns. 84. It is within the power of the board of directors to remove the presi- dent of the bank from office, although they have adopted no by-laws. The act gives the right to make such removal. Taylor v. Hutton, 43 Barb. 195. The directors may discharge any employee at any time for cause. A National Bank cannot hire its officers for any specified time. Har- rington v. First Nat. Bk., 1 Tliomp. & 0. 861. The moment a receiver is appointed the directors and officers of the bank cease to have any power in the premises, and the entire control of the bank and its assets is vested in the proper officers of the United States. Bk. of Bethel v. Paquioque Bk., 14 Wall. 383. After the rights of parties have become fixed, statements by officers of the bank are immaterial. Justh v. Nat. Bk. of the Commonwealth, 36 N. Y. Sup. a. 373. President of the Bank. I., the president of a bank, borrowed money for his own use of M. on du- plicate certificates of bank stock of his own bank issued to a person not the owner of the stock, which money was received by the bank with the full knowledge on the part of both the president and cashier that the trans- lation was fraudulent. Held, In a suit brought by M., that the bank was PRESIDENT OF THE BANK. 59 liable as for money received by it without consideration. Manhattan Life Ins. Co. V. Farmers' and Citizens' Nat. Bk., 10 Blatch. 344. If the president of a bank individually agrees with a party, on his appli- cation to loan him $600 for one year and to know on what terms he can get it on his note for that amount satisfactorily indorsed, to let him have it at twelve per cent, and when the note is presented takes it and gives him a check for $564; the contract will be usurious and void as against the indorser, although the bank had no other knowledge as to the transaction than that possessed by the president. Newport Nat. Bk. v. Tweed, 4 Houston, (Del.) 235. The president has no authority, by virtue of his office, to release the claims of the bank as against a debtor. That power rests with the board of directors ; and in order to bind the bank the consent of the board, either directly or by implication, must be first obtained. Olney v. Chadsey, 7 R. I. 224. Where Government securities were handed to the president of a bank to exchange for others, and he gave a receipt for the same on the bank paper, but signed his individual name thereto. Held, In an action to recover the value of such securities, that the bank was bound, the act of the president being its act. Van Leuven «. First Nat. Bk. of Kingston, 54 N. Y. 671. 3. An oral agreement by the president of a bank that he will not enforce a draft as against the drawer is not competent. Davis v. Eandall, 115 Mass. 547. ' "Where the president of the bank falsely reported the payment of a debt from the bank to a third party, and thereupon the bank paid the same amount to the president, it was afterward discovered that such payment had not been made, and the bank was compelled to pay such party. The bank then sued the president for money had and received. Held, That the action would lie ; that the statute of limitations did not run against the claim until the fraud was discovered by the bank ; that the defendant was chargeable with interest from the time he so obtained the money. Atlantic Nat. Bk. V. Harris, 118 Mass. 147. The president of a bank has no right to certify his own check. Such an act is a gross violation of his duty ; and the paper bears on its face notice to every one into whose hands it may come that the certification is a fraud. Claflln V. Bank, 35 N. T. 393 ; see West St. Louis Sgs. Bk. v. Shawnee Co. Bk., 3 Dill. 403. . I., the president of a National Bank in Nebraska City obtained of K., in the city of Omaha, his (K.'s) note for $2,000, payable to I. or order on demand for the purpose of purchasing stock in the bank of which he was president. I. procured the note to be discounted by his bank, and the pro- ceeds placed to his credit therein, and afterward checked out the money. None of the other officers of the bank were aware of the character of the note, or that it had been given for stock. Held, In an action upon the note, that the bank was entitled to recover. Representations of the president of a bank made in transacting its business are admissible in evidence against the bank ; but statements made by him away from the bank, and in which 60 NATIONAL BANKS. the bank had no interest, are not admissible. Like other agents, the pres- ident of a bank must act within the scope of his authority, in order to bind his principal, unless his acts have been ratified. Kennedy v. Otoe Co. Nat. Bk., 7 Neb. 59. The president of a bank has no authority -oirtute offieii to make any admissions which will release the maker of a note to the bank from his liability upon such note. Hodges Ex'rs v. First Nat. Bk. of Richmond, 32 Gratt. 51. The general management of the business of a National Bank and the interest therein of the stockholders are confided to the care of the board of directors, and there is in the Banking Act no specification of powers or duties to be exercised by the president or cashier. The election or appoint- ment of such officers is provided for by the Act ; which also provides that the board may define their duties. And unless the records of the bank show that the duties of these officers have been defined, we must regard them as having only such powers as may be incident to their offices respectively, in their very nature ; and we must regard all other powers needful to the management of the concerns and business of the bank as residing alone in the directory. The president of a bank has very little inherent power. He is generally, if not always, a member of the board of directors, and chosen by the board from their own number. It is his duty to preside at all jneetings of the board. Inherently, he has no other power than one, over and beyond another director, namely, charge of the liti- gation of the bank. Hodges Ex'rs v. First Nat. Bk. of Richmond, 32 Gratt. 51. When the paper shows upon its face that it is given in a transaction not in the usual course of the business of the bank, it is not bound thereby, though signed by the president as such officer. Bank v. Hoch, 9 Rep. (Fa.) 153. 3. The president of a bank may contract, on sufficient consideration, with the defendant in a judgment in favor of the bank to enter a remittitur of the judgment. Verbal authority from the plaintiff is sufficient to em- power his attorney of record to enter a remittitur of a judgment ; and if the plaintiff is a corporation, verbal authority from its president is sufficient. Case v. Hawkins, 53 Miss. 702. Cashier of the Bank. 1. The cashier of a bank is an executive officer by whom its debts are- received and paid, and its securities taken and transferred, and his acts to be binding upon the bank must be done within the ordinary course of his duties. His ordinary duties are to keep all the funds of the bank, its notes, bills, and other choses in action, to be used from time to time for the ordinary or extraordinary exigencies of the bank. He usually receives, directly or through the subordinate officers of the bank, all moneys or notes of the bank, delivers up all discounted notes and other securities when they have been paid, draws checks to withdraw the funds of the bank CASHIER OF THE BANK. 61 where they have been deposited, and as the executive of the bank, trans- acts most of its business. U. S. v. City Bk. of Columbus, 21 How. a56. It is the duty of the cashier to receive all the fuuds which come into the bank, and to enter them upon its books. Tlxe authority to receive implies and carries with it authority to give certificates of deposit and other vouchers, Where the money is in bank, he has the same authority to cer- tify a check to be good, charge the amount to the drawer, appropriate it to the payment of the check, and make the proper entry on the books of the bank. This he is authorized to do virtute offiaii. The power is inherent in the oflSce. Tlie cashier is the executive ofBcer, through whom the whole financial operations of the bank are conducted. He receives and pays out its mon- eys, collects and pays its debts, and receives and transfers its commercial securities. Tellers and other subordinate officers may be appointed, but they are under his direction, and are, as it were, the arms by which desig- nated portions of his various functions are discharged. A teller may be clothed with tlie power to certify checks, but this in itself would not affect the right of the cashier to do the same thing. The directors may limit his authority as they deem proper, but this would not affect those to whom the limitation was unknown. Merchants' Bk. v. State Bk., 10 Wall. 604. In all transactions in which the bank may lawfully en^apje the cashier is the managmg agent of the bank. Any verbal understanding between the cashier and the directors will not avail to limit his authority, when his acts are performed over the counter of the bank and are of a public char- acter, and numerous and long continued. In such a case it is reasonable to presume that his acts are in conformity with the instructions of the directors. The bank will be bound by the acts of the cashier, if the direc- tors, either through inattention or otherwise, suffer the cashier to pursue a particular line of conduct for a considerable period without objection. Caldwell v. N. Mohawk Bank, 64 Barb. 333. Ordinarily the cashier, being the ostensible executive officer of the bank, is presumed to have, in the absence of positive restrictions, all the power necessary for such an officer in the transaction oi the legitimate business of banking. Thus he is generally understood to have authority to indorse the commercial paper of his bank, and bind the bank by his indorsement. So too, in the absence of restrictions, if he has procured a hona fide redis- count of the paper of the bank, his acts will be binding, because of his implied power to transact such business ; but certainly he is not presumed to have power, by reason of his official position, to bind his bank as an accommodation indorser of his own promissory note. Such a transaction would not be within the scope of his general powers ; and one who accepts an indorsement of that character, if a contest arises, must prove actual authority before he can recover. There are no presumptions in favor of such a delegation of power. The very form of the paper itself carries notice to a purchaser of a possible want of power to make the indorsement, and is sufficient to put him on his guard. If he fails to avail himself of the notice, and obtain the information which is thus suggested to him, it 62 NATIONAL BANKS. ' is his own fault, and as against an innocent party, he must bear the loss. West St. Louis Sgs. Bk. r>. Shawnee, 95 TJ. 8. 557. It is within the general authority of the cashier of a bank to sign in its behalf a blank transfer upon a certificate of stockin the name of the bank, held by it as collateral security for a loan, and deliver the certificate to the pledgor on payment of the loan. The signing of a transfer in blank on a certificate of stock is a warranty of the genuineness of the certificate. Mathews d. Mass. Nat. Bk., 1 Holmes, 396. A cashier is not an insurer of the honesty and fidelity of subordinates in the bank; while it is his duty to superviseand control the affairs of the bank and its officers under him in the discharge of their duty, he is held only to such reasonable and practicable diligence as a prudent man would exercise in the supervision of those under him. He is not required, for example, to examine by actual inspection every original entry made by his subordinates. Batchelor i}. Planters' Nat. Bk., 10 Rep, 16. (Ky. 1880.) The authority of the cashier of a bank to certify checks is confined to checks in the ordinary course of business and does not extend to one given as collateral security, the fact appearing oa its face. The recital on the face of the check that it was given as security is suffi- cient to put the holder upon inquiry as to any special authority of the cashier to certify the same, borsey ». Abrahams, 5 Rep. 53. (Penn.) Kepresentations by the cashier of a National Bank as to the goodness of a promissory note, endorsed by the bank, will bind the bank, although such representations were made not over its counter, nor in its office, but in a distant city. Houghton v. First Nat. Bk. of Elkhorn, 26 Wis. 663; see Kennedy ®. Otoe Co. Nat. Bk., 7 Neb. 59. The cashier of a National Bank may bind his bank by receiving United States bonds to be exchanged for other United States bonds, which are registered. Such an act is within the power of the bank, and in case of their loss through neglect, the bank is liable. Terkes «. Nat. Bk. of Port Jervis, 4 L. & E. Rep. 198. The plaintiff applied to the cashier of a National Bank for information concerning the solvency of a firm. The cashier replied favorably as to their credit, and upon this assurance the plaintiflf from time to time bought large amounts of the bills and acceptances of said firm.- Eight months later the firm failed, and the plaintiff lost $3,000 by his investments. Thereupon he brought suit against the cashier and the bank for deceit. Held, That an honest statement of a mere opinion, however erroneous, cannot furnish grounds for an action of this character. A party cannot be held in such a case to have given a continuing guaranty against future contingencies, nor to have bound himself to notify the other of jrhat the latter may well be assumed to be able to discover for himself. The bank cannot be held liable. Answering questions as to the solvency of parties is no part of the business of the cashier of a bank, nor fairly included within the scope of such business. The plaintiff wanted the information of the cashier and not that of the bank. It was his opinion OASHIEE OF THE BANK. 6& tliat was acted upon, and not that of the bank. "When the holder of paper has given credit to a third party upon the recommendation of the cashier of a bank, and the debtor stands ready and offers to pay the note at matu- rity, and the holder instructs the cashier to give the debtor an extension of time, which the debtor accepts and then fails; the cashier, though he had rendered himself liable by his i-ecommendation, is discharged by the release of the holder. Horrigan v. First Nat. Bk., 10 Leg. Ns. 112. (Tenn.) The plaintiff, who held certain shares of railway stock as trustee, kept an account with the Atlantic National Bank. These shares he placed in the hands of the cashier of the bank, with the knowledge and approval of its president, to be sold when he should direct, the proceeds to be placed to his credit. The bank was, through its ofllcers, in the habit of making similar transactions. Subsequently the cashier transferred the shares to his own name as cashier, the plaintiff consenting upon his representing that it was done to facilitate their sale. Thereafter the cashier pleilged the shares for his private loan. Seld, That the bank was liable to the plaintiff for the unauthorized and wrongful act of the cashier. (The case of TJ. S. 1). City Bank, 31 How. 356, distinguished.) "Williamson v. Mason, 13 Hun, 97. A National Bank that habitually receives special deposits as a matter of accommodation is bound by the acts of its cashier in receiving on special deposit a package of stocks and bonds. The bank, although acting with- out reward, becomes a bailee, and is responsible for gross negligence. Chattahoochee Nat. Bk. «. Schley, 4 L. & E. Rep. 475. (Ga.) The cashier of a National Bank has no authority as such to receive special deposits, and thus bind the bank for their safe keeping. First Nat. Bk. V. Ocean Nat. Bk., 60 N. Y. 378. A cashier of a bank has no legal authority by virtue of his position a& such cashier to compromise a claim of the bank, or to execute a composi- tion agreement and release therefor. Such a power is discretionary, call- ing oftentimes for the exercise of considerable reflection and a high degree of judgment. It is strictly a sacrifice of at least nominal property of the bank, and is a function of the board of directors and not of an executive officer. Chemical Nat. Bk. •». Kohner, 58 How. Pr. Rep. 367. The cashier of a bank, as such, has no authority in another State to settle an account, taking private notes and drafts and giving a receipt in full. In order to bind the bank, his power must be in the nature of an appoint- ment as agent. His authority as cashier is limited, and parties claiming a discharge otherwise than by payment, must show his authority to settle with them. Sandy River Bk. v. Merchants' Nat. Bk., 1 Biss. 146. A cashier cannot bind his bank by any contract, express or Implied, concerning the taking of special deposits, taken for the mere accommoda- tion of the depositor, as such act is not within the authorized business of the bank. Wiley «. First Nat. Bk. of Brattleboro, 47 Vt. 546; First Nat. Bk. of Carlisle v. Graham, 79 Pa. St. 106. A National Bank is not responsible for the false representations of ita 64 NATIONAL BANKS. cashier in regard to matters ultra vires of the bank. Weckler ». First Kat. Bk,, 42 Md. 581. The cashier of a bank is not presumed to have power by reason of his ofHcial position to bind the bank as an accommodation endorser of his own promissory note, and actual authority to make such indorsement must be shown before a recovery can be had. Bank v. Parmelee, 16 Alb. L. J. 473. A cashier, without special authority, cannot bind his bank by an official indorsement of his individual note ; and the onus is on the payee to show such authority. West St. Louis Bgs. Bk. v. Shawnee Co. Bk., 3 Dill. 403. Although the cashier of a bank may in the ordinary course of his busi- ness, without the action of the directors, dispose of the negotiable securi- ties of the bank, he has not the power to pledge its assets for the payment of an antecedent debt. State of Tenn. v. Davis, 50 How. (N. Y.) 447. A bona fide holder of paper cannot be affected by the fraud of the cashier of the bank. National Paquioque Bk, v. Bethel Bk., 36 Conn. 325. The assurance that the bank had collateral securities, and that the defendants would not be called upon to pay the debt is in the nature of an agreement to discharge the surety, and is not within the scope of the cash- ier's authority. Cochecho Nat. Bk. v. Haskell, 51 N. H. 116. An overdraft by an agent of his principal's account, with the knowledge of the cashier of the bank, the credit being given to the principal, amounts to a simple loan of money, and does not involve moral turpitude, whether the cashier had authority to extend such accommodation or not. The authority of the cashier cannot be questioned in an action by the bank to recover the money. Union, etc., ». Rocky, etc., 3 Colo. 348. 3. A note payable to " McMann, cashier," is a note payable to the bank. The cashier has authority to assign a note payable to the bank. If the cashier sends a note payable to the bank for discount, it is the same as if the bank made that request, and it is an act within the authority of the cashier, and binds, the bank, and it makes no difference what the bank did with the money. A bona fide 'purchaser of paper from the bank is not affected by want of authority from the discount committee to sell the paper. The cashier has no authority to indorse accommodation paper not pass- ing through the bank in its usual line of business, so as to bind the bank to the iudorser. Blair «. First Nat. Bk. of Mansfield, 10 Leg. Ns. 84. A bill drawn to the order of the " cashier '' of a National Bank is pay- able to the bank, and no indorsement is necessary to give the bank title. First Nat. Bk. «. Hall, 44 N. Y. 895. A bill of exchange directed to "John A. Welles, Cashier Farmers and Mechanics' Bank of Michigan," and accepted by writing across the face thereof "accepted, John A. Welles, cashier," is drawn upon and accepted by the bank, and not by Welles in his individual capacity. The extent of the general powers of the cashier of a bank is a question of law, and not of fact; and a charge is erroneous which refers it to a jury to determine whether a cashier, as such, had power to accept certain bills for the bank. The cashier of a bank has no power to accept bills of ex- CASHIEK OF THE BANK. 65 ■change, on behalf of the bank, for the accommodation, merely, of the drawers ; and the holder, with notice, of bills so accepted, cannot recover against the bank. It seems that persons dealing with the bank, are presumed to know the extent of the general powers of a cashier. Farmers and Mechanics' Bk. a. Troy City Bk., 1 Doug. (Mich.) 457. 4. The cashier of a National Bank does not hold his office for any specified time. The directors may remove him at their pleasure. The power that appoints him may remove him. Harrington «. First Nat. Bk., 1 Thomp. & 0. 361. 5. A cashier who has made sale of the corporate property, and holds the balance in his hands, must be deemed to be the agent of the board of •directors, and not of the respective shareholders, and cannot be charged by an individual stockholder as holding such balance for his benefit. Brown e. Adams, 5 Biss. 181. 6. The declarations of an officer of a bank in which a note has been lodged for collection, made before its maturity, are not admissible to affect the title of the holder. The bank officers are the agents of the holder to collect the note, and for no other purpose. Wilson v. Bowden, 113 Mass. 422. Where one pays a debt due by him to a bank, upon the detnand of an officer thereof, whom he finds employed in its business, to said officer, over its counter, without knowledge that the officer's authority is so limited that he has no authority to receive the money, it is a payment to the bank, and the latter is bound thereby. Plaintiff, to the knowledge of the defendant, a customer, employed in the bank a paying and a receiving teller, the general duty of the latter being to receive money paid or deposited. In his absence other officers or clerks acted in his place. Defendant, having overdrawn his account by mistake, received a letter from the paying teller requesting him to call ; he went to the bank, and, at the request of the paying teller, paid him over the counter the amount required to rectify the error ; this wag not entered on the books of the bank. It did not appear that the receiving teller was in the bank. In an action to recover the amount overdrawn, Jield, that the bank was bound by the payment. East Kiver Nat. Bk. ii. Gove, 57 N. T. 597. Notice to the cashier of a bank, who lends money of the bank on the security of stocks, that the stocks pledged are held in trust, is notice of that fact to the bank. Qastqn v. American Exchange Bk., 29 N. J. Eq. 98, An advertisement was "Bissell & Co., Bankers; R. L. Irwin, Cashier." Irwin was asked, at the banking house, to discount a draft payable to Big- sell & Co.'s order. Not being able to do it, at his request, on the street, after banking hours, the cashier of a bank discounted it, Irwin indorsing it "R. L. Irwin, Cashier." Irwin had actual charge of B. & Co.'s busi- ness, signed his name as cashier in their business transactions, etc. Seld, under the circumstances, that B. & Co. were bound by Irwin's indorsement. The cashier of an incorporated bank is the general executive officer to" manage its affairs in all things not particularly committed to the directors; 5 66 NATIONAL BANKS. he is the agent of the corporatioa and not of the directors. Bissell e. First Nat. Bk. of Franklin, 69 Pa. St. 415. " The declaration of a cashier or director to indorsers, as to the responsi- bility of the makers of a note, do not bind the bank, as they are not made in the course of their duties as officers or agents of the bank. And this is true although such declarations are willfully false. Mapes . Fulton Nat. Bk., 43 How. Pr. Kep. 316. 2. If a note payable at bank, is in the bank on the day of maturity, in the hands of the proper offlcer, this is a due presentment and demand. Hufifaker «. Nat. Bk. of Monticello, 13 Bush, (Ky.) 644. In an action on a negotiable promissory note, brought by a National Bank, which had purchased the same, against an indorser thereof, the defendant cannot raise the defense, that the plaintiff being a National bank, had no authority or power to purchase the note in suit, and therefore it had no title to the note. Nat. Pemberton Bk. v. Porter, (Mass.) 7 Cent. L. J. 334. On a note payable to the "First National Bank,'' the plaintiff was allowed to amend its declaration by alleging that the defendant promised the plaintiff by such a name. On a joint and several note the bank may sue one of the co-sureties, alleging that he made the note, and not making the other parties defend- ants or setting up the contract of suretyship. First Nat. Bk. of Biddeford V. McKenney, 67 Me. 373. 3. Where on the promise of the maker of a renewal note, that the indorsers of the original note should come in and indorse the renewal note, the latter was discounted and the original note marked paid; and thereafter the note was again renewed with the same promise, and an excuse given for the noncompliance with the first promise, the bank all the time holding the original note: It was held. On a suit brought on the original note that it was a question of fact, and not of law, whether the note was paid. Auburn City Nat. Bk. e. Hunsiker, 72 N. Y. 253. ■ 4. The payee of a promissory note may, although he has written an assignment on the back of it, maintain an action thereon in his own name. The possession of the note in such case is prima facie evidence that he is the bona fide holder of it, and he may strike out any assignment written upon it by him. Where an assignment by the payee upon a bill or draft is shown to have been for collection only, it will not transfer the title so as to defeat an action thereon in the name of the payee. Where a bill is drawn payable to a bank for the accommodatioft of a PEOMI8S0ET NOTES. 93 third person, who discounts the same to the bank in the usual course of trade, the drawer cannot defend on the ground that he received no consid- eration for the same, when sued by the bank. Best v. Nokomis Nat. Bk., 76 III. 608. Fraud that impeaches the consideration of a note constitutes a defense in an action on the same by the payee. But where the answer showed that the payee has delivered the property given for the note to a third party without legal compulsion, it was held that no failure of considera- tion was shown. First Nat. Bk. of Helena v. How, I'Mont. 604. Fraud practiced by the payee on the maker in obtaining the execution of a promissory note, payable in bank, is no defense in an action thereon by an innocent holder for a valuable consideration, who is not shown to have obtained the note after maturity. First Nat. Bk. of Lawrenoeburgh e. Lotton, 67 Ind. 256. One who, supposing that he is authorizing "his name to be signed to a simple acceptance of an appointment as an agent, authorizes the signing of his name to a promissory note payable in bank, is guilty of negligence, and is liable to a bona fide indorser of such note for value and before maturity. Indiana Nat. Bk. v. Weckerly, 67 Ind. 345. Whether there has been an alteration in a note ; whether, if one, it was made before the note passed from the hands of the maker or afterwards ; whether he consented to such alteration or not, or whether the same was fraudulent or not, are questions for the jury. Whether such alteration is material or not, is a question of law for the court. Belfast Nat. Bk. v. Harriman, 68 Me. 522. The defendant was induced to sign his name as maker to a negotiable promissory note, by the false and fraudulent representations that it was a . First Nat. Bk., 9 Rep. 589. (Pa.) 6. Where fraud or illegality in the inception of a note is pleaded in an action thereon, and the plea is supported by evidence, the burden of proof PEOMISSOBY NOTES. 95 is upon the plaintifif to show that he gave value for it, and that he is abona fide purchaser for value. Rock Island Nat. Bk. v. Nelson, 41 Iowa, 563. Where the execution of a promissory note in suit is denied under oath, the burden of proof is on the plaintiff, and he has the right ,to open and close. Such note should be admitted in evidence on behalf of the plaintiff, upon his introducing any evidence, however slight, of its execution ; and the defendant has, no right to introduce any evidence, denying its execu- tion, until the plaintiff has closed. In an action against A., on a promissory note executed by B. in the name of A., in the renewal of a prior joint note executed by them, the court instructed the jury that, if from the evidence they believed that A. and B. had been carrying the note alleged to have been renewed, and that A. had informed the payee's agent that, if it became necessary to renew the note, B. had authority to execute the renewal in the name of both A. and B., and that the note in suit had been so executed prior to any revoca- tion of such authority, A. was bound thereby. Pate v. First Nat. Bk. of Aurora, 63 Ind. 354. When the execution of a note is denied, the onus is upon the plaintiff to show its execution by the defendant, or his ratification of it with full knowledge of the facts. Cravens o. Gillilan, 63 Mo. 28. A note payable to bearer, though over-due and dishonored, passes, by delivery, the legal title to the holder, subject to such equities as may be asserted by reason of its dishonor. Any one disputing the title of the holder of such paper, takes the burden of establishing by sufficient evidence the facts necessary to defeat it. Nat. Bk. of Washington v. Texas, 20 Wall. 72. 7. A stipulation in a promissory note for the payment of a certain sum as attorney's fees, if suit is commenced thereon, is valid, and may be enforced in an action on the note. Farmers' Nat. Bk. of Salem v. Rasmus- sen, 1 Dakota, 60. An instrument whereby the maker promises to pay a specified sum, and agrees if the sum be not paid at maturity, and the note is placed in the hands of an attorney for collection, to pay ten per cent, in addition as an attorney's fee, is not a promissory note, because a part of the amount agreed to be paid is uncertain and contingent. Where one authorizes another " to use or sign his name " for the pur- pose of obtaining accommodation at the bank, he of necessity authorizes the execution of a note, and the law will give effect to such purpose in the usual and ordinary way. But such power does not authorize the execution of an instrument which is not a commercial note, as instanced above. An unauthorized signing may be made good by subsequent ratification with a knowledge of all the facts. Such a ratification has relation to the original promise, and becomes a part thereof. The authority to sign a note need not appear on its face. First Nat. Bk. of Trenton «. Gay, 63 Mo. 33, 8. A surviving partner cannot bind the co-survivors by signing the firm name to a note without their express authority or ratification. Jenness v. First Nat. Bk, of Detroit, 40 Mich. 347. 96 NATIONAL BANKS. If a stranger to a note put his name on the back of it before it is indorsed by the payee, he is liable as joint maker, and not as indorser. Sibley v. Muskegon Nat. Bk., 41 Mich. 196. An instrument in the form of a promissory note, beginning: "We as trustees, but not individually, promise to pay," and signed " A.. B. and C, trustees," does not make the signers thereof personally liable. - Shoe and Leather Nat. Bk. v. Dix, 133 Mass. 148. 9. The plaintiff purchased from the defendant the supposed note of W., giving his own in exchange. He sued upon it and was defeated, as the signature of "W. was a forgery. He defended against his own note and was beaten. He then brought an action against the defendent, in which he recovered the amount of his own note and the costs in his suit against W; but failed to recover the costs of his unsuccessful defense on his own note. Whitney «. Nat. Bk. of Potsdam, 45 N. Y. 303. A,, through fraud, obtained from B. a note signed by B., and payable to the order of C, forged the indorsement of C. and got the note discounted at a bank. On the maturity of the note B. paid it to the bank. Seld, That B. could maintain an action against the bank for money had and received, although the bank acted in good faith in taking the note. Carpenter v. Northborough Nat. Bk., 1^3 Mass. 66. In an action for money paid under mutual mistake of facts, it is no defense that the mistake arose from a want of care on the part of the plaintiff. Where the plaintiff a bank at Troy, being the correspondent of the defendant a bank at New York, received a note for collection from a maker residing some thirty miles from Troy, and sent the note to its correspond, ing bank at the residence of the maker, and the note not having been paid at maturity, such corresponding bank caused it to be protested and notices of protest to be duly sent to the indorsers in New York, and also mailed both to the plaintiff and the defendant; but the plaintiff", by some miscar- liage, failing to receive such notice, and supposing therefore that the note had been paid to its correspondent, remitted a sum equal to its amount to the defendant as collected : Seld, That the plaintiff may recover from the defendant the sum so remitted as money paid under mistake of fact. Although the plaintiff was the agent of the defendant for the collection _ of the note, the mistake did not arise from any negligent performance of its duty as such agent, and in such case the relation of principal and agent between the parties does not change the rule. Union Nat. Bk. of Troy b. Sixth Nat. Bk. of N. Y., 43 N. Y. 452. 10. The right to sue upon a note executed exclusively for the benefit of a bank vests in the bank, and the indorsement of its cashier, to whom, as cashier, such note is made payable, is not necessary. Laoey o. Central Nat. Bk., 4 Neb. 179. The addition of the word "cashier" to the name of the payee in com- mercial paper imports that the bank, of which the person named is cashier, is intended as payee. An indorsement by such cashier is not necessary to give the bank title. PBOMISSOBT NOTES. 97 Fraudulent diversion of a bill from the purpose for which it -was drawn is no defense to an action by a bona fide holder thereof. First Nat. Bk. of Angelicas. Hall, 44 N. T. 395. 11. A promissory note payable to " A. B., Trustee," is not commercial paper. The word " trustee " on the face of the note shows that it was con- nected with some trust, and is sufficient to put a purchaser upon inquiry, and if it turns out that the trustee sold In fraud of his trust, the purchaser acquires no title. Third Nat. Bk. of Baltimore «. Lange, (Md.) 18 Am. Law Keg. (n. s.) 383. A school district order' is not a negotiable instrument, and cannot be sued upon by a holder who is not the payee named therein. First Nat. Bk. B. Rush School District, 2 L. & E. Rep. 148. (Pa. St.) A promissory note in the ordinary form, signed by a married woman, made payable to the order of her husband and indorsed and presented for discount by him, is •prima facie a nullity; to give it vitality and effect it must be made to appear by evidence aliunde the instrument that it was made in her separate business, or for the benefit of her separate estate. The fact that she has a separate estate is not alone sufficient to give it vitality. Second Nat. Bk. «. Miller, 63 N. Y. 639. A provision in a note that it is negotiable and payable at a certain place designated has no effect upon the negotiability of the note, and does not lestrain or limit its negotiability. Schoharie Oo. Nat. Bk. o. Bevard, 51 Iowa, 257. 12. Considerations of public policy authorize a distinction between cases where a bank receives forged notes purporting to be its own and those where it receives the notes of other banks on deposit. It is bound to know its own paper, and the receipt of forged notes purporting to be its own, must be deemed an adoption of them. Third Nat. Bk. of St. Louis B. Allen, 59 Mo. 310. 13. The mere discounting of a note and giving a parly credit on the books of the bank for the amount thereof does not constitute the bank a holder for value. Central Nat. Bk. b. Valentine, 18 Hun, 417. When sued the makers of a promissory note set up a defense which was good, unless the bank was a hona -fide holder. The bank took the note as collateral security and in renewal of a former note, and gave no other con- sideration therefor. Held,, That the facts of the defense should have been given to the jury, as the bank was not a lonafide holder for value. Eoyer ®. Keystone Nat. Bk., 83 Pa. St. 248. An agreement upon the part of a bank to carry a note is not an agree- ment to suspend the right of action upon and to extend the time of pay- ment of the note itself; but simply that it will, from time to time, accord- ing to the mode of discounting paper, discount a like note which it will accept in place of the one then held, if presented when the latter comes due, and the discount paid; and in case of failure of parties to the note to present a new note when the one held becomes due, the latter becomes pay- able according to its terms, and all parties thereto are at once liable for its 7 98 NATIONAL BANKS. payment. Such an agreement therefore does not discharge an indorser> Second Nat. Bk. of Oswego v. Poucher, 56 N. T. 348. PlaintifiE' discounted a note for $7,000, made by one 0. to his own order and indorsed by defendants, but not by C. Before the note became due C. became insolvent, and defendants renewed the note by paying $1,000 and giving their own note for the balance. In an action on the latter note, Jield, That the title of plaintiff to the first note was perfect without the indorsement of C. ; that the note was as valid against the maker and all per- sons having knowledge of the facts as if payable to bearer, and that defend- ants could not set up against a honafide holder that they did not know the contents of the former note, as they were plainly apparent on its face, and no fraud or deception was practiced upon them. Irving Nat. Bk. o. Alley, 9 N. T. Week. Dig. 493. The plaintiff, a National Bank, agreed with B. to procure to be dis- counted for him a note indorsed for B.'s accommodation by the defendant "W. on plaintiff's receiving a commission of five per cent. The plaintiff indorsed the note and sent it to a National Bank, by which it was dis- counted. The note not being paid, was protested, and notice sent to plaintiff, which subsequently took it up. On trial to recover the amount of the note, it was insisted that the transaction was usurious ; that plaintiff had no power to sell its indorsement and procure notes to be discounted upon payment of a commission; and that the taking up of the note by it was a purchase of it, which by its charter it had no right to make. Held, That the ti-ansaction as a matter of fact was not usurious ; that the plain- tiff's title did not depend upon the alleged unlawful agreement to loan its credit and procure the discount ; that it got title through the National Bank, a bona fide holder for value ; and that it must therefore be held to be the lawful owner of the note and entitled to enforce it. Nat. Bk. of Glovers- ville V. "Wells, 15 Hun, 51. In an action upon certain promissory notes, brought by plaintiff as indorsee against the maker, the answer set up a defense as between the original parties, and that the plaintiff was not a bona fide holder for value. Upon the trial, after plaintifi 's president had been examined as a witness as to the circumstances under which the note was received by it, a stipula- tion was entered into, in substance, that the decision should turn exclu- sively upon the question, whether, upon the evidence already in, plaintifi was a bona fide holder for value. No evidence had been given touching the defense set up in the answer. Meld, That the stipulation must he deemed to have been made with reference to said defense, and required plaintiff to prove, in order to recover, that it was a bona fide holder for value in the sense that would preclude defendant from setting up, as against it, any defense he might have as against the payees. The payees were indebted to plaintiff upon a call loan. Upon being called "Upon to pay they proposed to give additional security if plaintiff would allow the loan to remain a little longer ; they thereupon brought the notes in suit to the plaintiff, which were placed with other collaterals. Held, That as no definite extension was agreed upon there was no valid PEOMISSOKY NOTES. »» agreement for forbearance, and that the plaintiflf was not a bona fide holder for value. Atlantic Nat. Bk. of N. T. «. Franklin, 55 N. Y. 335. 14. It is no defense to a suit against the maker of a negotiable promis- sory note by a National Bank, which had discounted the same for an indorser, that since the commencement of the suit the indorser had paid the bank and taken up the note, and taken an assignment of the suit and is prosecuting it for his own benefit. Such bank has power to free itself from litigation and realize its money on a protested note by such au arrangement. The payment by the indorser to the bank does not operate in any manner to discharge the contract or liability of the defendant. Ticonic Nat. Bk. v. Bagley, 68 Me. 249. 15. Upon a note executed by several parties to secure advances to an individual named, was an agreement in writing, making the note void on certain conditions. Subsequently, and before the advances were made, three of the makers executed a bond to indemnify the payee for any loss he might suffer by a breach of the agreement. In an action against the obligors of the bond, it was held, That in legal effect the bond became a part of the original agreement, and amounted to a waiver of any condition in the agreement inconsistent therewith. That the obligors would have a complete legal defense to the note under the agreement, is no defense to an action on the bond. The latter created an absolute, unqualified liability and restored the note to the character it possessed before the execution of the agreement. First Nat. Bk. of Tama City V. Schlichting, 40 Iowa, 51. A person may be a joint maker and also the payee or indorser of a promissory note, and his rights and liabilities in one capacity may be different from that of the other, or in other words, responsible to the holder in each capacity, so far that a judgment for or against him as indorser would not extinguish the liability of the other parties as joint makers. Hence a judgment against two members of a firm as indorsers does not merge the note so that suit, cannot be maintained as against a third member as maker. Merchants' Nat. Bk. «. Bandall, 1 Wilson, (Ind.) 166. The fact that a promissory note, the principal of which is payable in four years, with interest annually, bears no indorsement of the receipt of either of three instalments of interest which have fallen due, does not of itself render the note subject, in the hands of a third person, who took it as collateral security, to equities existing between the original parties to it; but it is a circumstance for the consideration of the jury on the issue whether he took it in good faith and without notice of such defense. "Interest" is an incident of the debt and differs from it in many respects. It is not subject to protest and notice to indorsers, or to days of grace, according to the law merchant. Nat. Bk. of North Am. v. Kirby, 108 Mass. 497. Railroad bonds, which contained an absolute promise to pay the sums named therein on a fixed day, are negotiable paper, although an election was given to the promisees, upon a surrender of the instrument, six 100 NATIONAL BANKS. months before its maturity, to exchange it for stock. "Where such bonds ■were stolen from the owner, and afterwards pledged to the bank as col- lateral security for notes discounted by it, in a suit to recover the bonds, by the owner against the bank : It was held, That the bank could hold the bonds as a bona fide purchaser, and that the agreement to exchange the bonds for stock, and the absence of certificates of scrip preferred stock, originally pinned to the bonds, was not suflBcient to put the bank upon inquiry as to the title of the holder. Hotchkiss ». Nat. Bk., 21 Wall. 354. Accommodation Paper, 1. The cashier of a National Bank has no authority to indorse accom- modation paper, not passing through the bank in the usual course of business, so as to bind the bank to the indorser. Blair v. First Nat. £k. of Mansfield, 10 Leg. Ns. 84. NoTB. — In this case the bank, through its cashier, made an accommoda- tion indorsement, and then discounted the paper through its usual channels, passing the proceeds to its own credit and at once giving credit to the party to whom the accommodation was given, the bank thus receiv- ing no benefit from the transaction. Held, That such accommodation indorsement was void as to those holders who could be charged with notice, and valid as to bona fide purchasers without notice. Query — Under section 5303 of the act can a National Bank make anp indorsement ? As against a purchaser in good faith for value, before maturity, the bank is bound by the indorsement of its cashier, although such indorsement be made upon a note not belonging to the bank, and merely for the accom- modation of the payee or prior indorser. Houghton v. First Nat. Bk. of Elkhorn, 36 Wis. 663. The cashier of a bank is not presumed to have the power, by reason of his official position, to bind the bank as an accommodation indorser of his own promissory note, and actual authority to make such indorsement must be shown before recovery can be had thereon. Bank v. Parmelee, 16 Alb. Law J. 473. A banking corporation may become the indorser of, and procure paper •owned by it, to be discounted for the use and benefit of such corporation. But it is not authorized to make an accommodation indorsement; and •where a banking corporation indorsed and procured the paper of a third party, to be discounted for the benefit and accommodation of the latter, and it did not appear that the holder discounted the paper without notice of the character of the indorsement: Seld, That the bank was not liable as indorser. If it had been proved that the party discounting the paper advanced the money upon it, to and at the request of the bank, in good faith, and rely- ing on its representations that the paper belonged to and was indorsed ACCOMMODATION PAPEK. 101 and discounted for its use and benefit, the banking corporation would have been liable on the contract of indorsement. Bk. of Genesee v. Patchin Bk., 13 N. Y. 309 ; 8. c, 19 N. Y. 312. The cashier of a bank has no power to accept bills of exchange on be- half of the bank for the accommodation merely of the drawees ; and the holder, with notice, of bills so accepted cannot recover against the bank. Farmers and Mechanics' Bk. v. Troy City Bk., 1 Doug. (Mich.) 457. 3. If the maker of an indorsed note carries it to the bank for discount for his own account, this is notice to the bank that the indorsement thereon appearing is an accommodation indorsement. Such is the presumption of law if there be nothing in the transaction to repel it. If such indorse- ment be that of a firm the bank discounting the note under such circum- stances must, at its peril, ascertain whether there was any special authority, express or implied, for one partner to sign the firm name as an accom- modation indorser. Lemoine v. Bk. of North America, 3 Dillon, 44. See N. Y. Iron Mine Co. v. First Nat. Bk. of Negaunee, 39 Mich. 644. In an action upon two checks drawn by the president of the bank as an individual, and by him, as president of the bank, certified as good : It was held, That upon well settled principles, the president had no power to accept his own drafts or checks in behalf of the bank. The act was a palpable excess of authority, and any person taking the paper was bound to inquire as to the power of the agent to so contract. That the plaintiffs had distinct notice, by the face of the certificate and the signature thereon, that the acceptance was improperly and irregularly made — it was patent upon the face of the paper that the acceptance was a fraud. That the president of the bank in accepting such checks was violating his duty and using his official character for his personal benefit, and thereby per- petrating an act of dishonesty in palpable violation of his trust. That no business man of common intelligence could take these checks in good faith, and without suspicion or notice of this fraud. Claflin v. Farmers and Citizens' Bk., S5 N.Y. 293. 3. An accommodation indorser of promissory notes discounted by a bank cannot, in the absence of any special equities, require the bank first to resort to a mortgage on real estate held by it as collateral, before main- taining an action on the indorsement. The fact that the avails of the note are passed to the credit of the maker to take up other paper does not affect the right of the bank in this partioul ar. If the indorser desires the benefit of any security held by the creditor, hemust first pay the paper, assert hiS' right of subrogation, and himself enforce the security. First Nat. Bk. v. Wood, 71 N. Y. 405 ; First Nat. Bk. of Buffalo V. Albeger, 71 N. Y. 606. 4. The acceptor is liable to the party who, in good faith and for value discounted the bill before its acceptance, although such party knew it was to be accepted for the accommodation of the drawer. First Nat. Bk. of Portland v. Schuyler, 39 N. Y. Supr. Ct. 440. An accommodation indorser of a note which is diverted from the use for which it was made and indorsed, cannot set up such defense as against 102 NATIONAL BANKS. a bonafide holder forvalue, who purchased it before maturity. Merchant's Nat. Bk. of Syracuse v. Comstock, 55 N. Y. 24. It is no defense to a suit against the acceptor of -a draft which has been discounted, and upon which money has been advanced by the plaintiff, that the draft was accepted for the accommodation of the drawer. Davis, Receiver, v. Randall, 115 Mass. 547. And this is the rule, although the holder had, when he took the note full notice of the circumstances under which it was made. Thatcher v. West River Nat. Bk. of Jamaica, 19 Mich. 196. 5. Where a party knowingly takes as collateral security drafts of a National Bank drawn for the accommodation of a customer, he cannot recover in a suit against the bank in the hands of a receiver. A National Bank has no authority to lend its credit on personal security. Johnson Bros. v. Charlotteville Nat. Bk., 3 Hughes, 657. Where the accommodation indorser consents that the original note may be supplanted by new paper, and the former remain as security for the latter, his liability is not extinguished upon such original paper. Nat. Bk. of Newb'urgh v. Biglef, 18 Hun, 400. 6. In an action upon a promissory note made by the defendant for the accommodation of the payee, and discounted by the plaintiff, the defendant offered to prove that, when the note was made, the president of the plaintiff, agreed that he should not be called upon to pay it. Held, That the evidence was inadmissible, (1) because the president had no authority to make such a promise, (3) because it contradicted the written instrument. First Nat. Bk. of Whitehall v. Tisdale, 18 Hun, 151, (citing Bk. of U. S. v. Dunn, 6 Peters, 51 ; and Bk. of Metropolis ®. Jones, 8 Peters, 13.) Surety and Indorser. 1. The surety upon a usurious note is bound to the same extent as is the maker. First Nat. Bk. e. Garlinghouse, 33 Ohio St. 493. An indorser when sued on a note may set off all usury paid by the maker to the bank. Brown v. Second Nat. Bk. of Erii, 72 Pa. St. 309. If an indorser pay a debt, part of which is usury, he can recover from his principal that Vhich it was the duty of the. indorser to pay — namely, the principal. Citizens' Nat. Bk. of Piqua v. Leming, 8 Int. Rev. Rec. 133. A note upon which illegal interest has been paid is valid as to the sure- ties as well as to the principal. Wiley v. Starbuck, 44 Ind. 398. The judgment in an action instituted by the holder of negotiable paper against the iudorsers, is not a bar to a subsequent action by the holder against the maker, the latter not having been made a party to the first action, nor notified of its pendency. Brooklyn City, etc., v. Nat. Bk. of the Republic, 7 Week. Jur. 379, U. S. S. C. 3. Sureties on the bond of a cashier are released by negligence of the directors. Graves v. Lebanon, 10 Bush. 22. (Ky.) i Oontra, as to release of sureties, Tapley v. Martin, 116 Mass. 375 j Atlas Bk. 0. Brownell, 9 R. I. 168. SURETY AND INDOESEE. 103 A bond with no date except the year is presumed to be made on the last day thereof. Graves v. Lebanon Nat. Bk., 10 Bush. 23. A teller of a bank was a defaulter to it at the time the sureties entered into a new bond for the faithful performance of his duties, etc. Held, If the bank fraudulently concealed the fact that he was then a defaulter, the sureties would not be liable for a subsequent default. But where the bank had no reason to suspect the teller, and there was no request by the surety to investigate his accounts, omission by the banto to make such investigation, would not discharge the surety. The teller having authority to issue "due bills" for the bank for a special purpose, issued them to raise money for himself; neither he nor his surety could set up a want of power in the bank to issue them ; nor that the due bills were not properly stamped. Where the default of the principal would forfeit the bond as to him, it would forfeit it as to the surety. "Wayne «. Com. Nat. Bk., 53 Pa. St. 343. The bank need not accept a bond in writing. Graves v. Lebanon Nat. Bk., 10 Bush. 33. 3. Defendant was sued as indorser upon a note containing a statement that the maker had deposited with the payer certain collaterals with authority to the latter to sell, without notice, in case of non-payment ; these collaterals came to plaintiff's hands when it became the holder of the note. When payment of the note was demanded of the maker, he de- manded of the notary presenting it a return of the collaterals, stating his readiness and willingness to pay upon production thereof; the notary did not have them. Seld, That the demand and refusal to pay were insufficient to cli arge the indorser. That to constitute a valid demand the collaterals should have been produced, or had in readiness to be surrendered upon payment. Ocean Nat. Bk. v. Fant, 50 N. T. 474. An indorser of notes held by a National Bank, secured by a mortgage, has a right to have the proceeds arising from a judicial sale of the mort- gaged premises applied to the payment of such notes in his relief. Fow- ler V. Scully, 23 P. F. Smith, (Pa.) 456; Woods v. People's Nat. Bk. of Pitts- burgh, 9 Leg. Ns. 125; s. c, 83 Pa. St. 57. A shareholder indebted to the bank attempted to transfer his stock, but as the by-laws forbid such transfer by one so indebted, such attempt was invalid. The indorser paid the note by which the indebtedness was created. Held, That he was subrogated to the rights of the bank so far as such shares were concerned. Young v. Vough, 23 N. J. Equity, 325. 4. Notice of dishonor of a promissory note, however directed and posted, is seasonable to charge an indorser if sent so as to be received by the same mail by which it would have been received if properly directed and posted. Thus, where the notice was posted on the day of maturity, addressed to E., where the indorser had formerly resided, and thence for- warded on the following day by the mail of the same hour to 0., where the indorser then lived, and where he received it, it was held, that the notice was seasonable. First Nat. Bk. of N. Bennington «. Wood, 51 Vt. 471. 104 NATIONAL BANKS. The consequences of a neglect to give notice of non-payment of a bill or note may be waived by the person entitled to take advantage of such neglect; and such waiver may be inferred from a promise made after maturity to pay the note with full knowledge of the facts or under cir- cumstances from which it is to be inferred that the party ought to have had such knowledge. . Givens v. Merchants' Nat. Bk., 85 111. 443. There is no presumption of law that a drop letter was deposited in the postofQce on the day of the date of its postmark. If the last indorser desires to charge the prior indorser with the notice by drop letter, he must deposit the letter in the postoflice on the day he receives the notice. Shelburne Palls Nat. Bk v. Townsley, 103 Mass. 177. To prove notice of dishonor to the indorsers of a note, the certificate of a notary public, made at the time of protesting the note for non-payment and annexed to the protest itself, may be given in evidence in connection with the testimony of the notary to the effect that the certificate is genu- ine, and that although he has no recollection of the facts stated therein or any of them, he is satisfied of their truth, because he would not have cer- tified to them had he not been convinced of their truth at the time. Where the mail was used as a means of conveying notice to the indorsers, and it is in evidence that the notice did not in fact reach them, the plaintiff must make it appear that the letters or notices were in a condition to pass to the indorsers in the ordinary course of the postal service; that is, that they were properly directed and stamped. Allen v. Georgia Nat. Bk., 6(^ Ga. 347. The want of a notarial seal will not render the certificate of protest inad- missible in evidence, when such notary is a resident of the State. Second Nat. Bk. ■». Chancellor, 9 W. Va. 69. Notice of protest must be personally served upon the indorser, where he resides in the same city or village with the person whose duty is to give the notice, and notice given through the postoffloe is insufficient to bind him. The rule is the same where both parties receive their mail at the same postoffloe, although the indorser lives without the limits of such vil- lage or city. Forbes «. Omaha Nat. Bk., (Neb.) 6 N. W. Rep. 393. (Note.— Cases /or; Ireland v. Kip, 10 John. 489; s. c, 11 John. 331; Sheldon, Ex'r, ®. Benham, 4 Hill. 129 ; Shelburne Falls Nat. Bk. fl. Towns- ley, 103 Mass. 177 ; Supreme Courts of Conn., Me., La. and Tenn. Cases against : Supreme Courts of \S. S., Pa., Mo. and S. C.) Notice of dishonor of a promissory note was sent by mail addressed to the indorser in care of the maker at Adam's Cut, where there was no post- office; under information received by the notary, after the exercise of due diligence, tbit Adam's Cut was the indorser's postoffloe — the postofflce nearest Adam's Cut was one of the indorser's postofflces — the notice never reached the indorser or the maker. Held, That due diligence had been used, and that the indorser was not discharged. Central Nat. Bk v. Adams, 11 So. Car. 453. That all the property of the maker of a promissory note has been assigned BUEETY AND INDOKSEE. 105 to an indorser of such note for the benefit of all the maker's creditors equally, does not dispense with the necessity of demand and notice, when that property is not sufficient to meet all the liabilities of the maker. A waiver of demand and notice by the indorser must be by words or acts that clearly show that such was the intention. M. was indorser upon a series of notes made by C, who had assigned all his property for the benefit of all his creditors equally to M. After the assignment M. told the bank, the holder of the notes, to bring them to him as they matured, and he would pay them or waive protest on them. This was done on all the notes except the last. At twelve o'clock of the day this one came due the bank presented it to M, for payment, who said that he would not pay it or waive protest on it, because the signature was not his, but was a forgery. Held, That the necessity of demand and notice was not dispensed with. Second Nat. Bk. of Cleveland «. McGuire, 33 Ohio St. 295. C. being indebted to D., drew a draft on Qt. for the amount of the debt, payable in thirty days, and delivered the draft to D., who placed it in the bank for collection. Before maturity of the draft D. was notified that it had been paid, and drew out a portion of the money. C, who was insolv- ent, upon being notified of the payment, called at the bank before the matu- rity of the draft and expressed surprise at its payment before maturity, and stated to the officers of the bank that he was anxious to protect the draft, and that if it was not paid that he " had some money which he intended to keep for the protection of the draft ;" he was informed that it had been paid. Afterward it was discovered that the draft had not been paid. Seldy in a suit by the bank against B., that, as D. had lost no rights as against C. in consequence of the mistake, the bank could recover. DeNayer v. State Nat. Bk., 8 Neb. 104. 5. Sureties upon a promissory which stipulated " that a reasonable sum, to be fixed by the court for attorneys' fees, shall be allowed and taxed as costs against the parties making this note," in default of payment by the principal maker, were bound for the payment of attorneys' fees adjudged to be due. The authority of one partner to bind the firm as sureties upon a note may be established by evidence tending to show that such authority had been habitually exercised in previous transactions, with the knowledge of the other partner and without his objection. "Where authority did not exist, the act of the partner may be afterward ratified, and the ratification may be proved by circumstantial evidence. First Nat. Bk. of Ft. Dodge s. Breese, 39 Iowa, 640. 6. An indorser's consent to the alternation of paper need not be in writ- ing. Three notes drawn to the same payees were indorsed by all of them, but after one had been negotiated, two of the indorsers were allowed to have their names erased. This was done with the consent of all the indorsers but one, and he, on being Informed of it, recognized his liability on the paper. Meld, That he thereby ratified the alteration of the first note and authorized the negotiation of the other two with the same change. Indorsers of negotiable paper, who are named as payees in it, are liable on 106 NATIONAL BANKS. it only as indorsees, and are entitled to notice of dishonor. Stewart e. First Nat Bk. of Port Huron, 40 Mich. 348. The payment of interest in advance after the maturity of the note is not in itself evidence of an agreement for an extension of the note ; but the taking of a renewal note from the principal debtor, and receiving interest upon it from its date to its maturity, is evidence of a contract to receive it in payment of the original, or for delay on the original, until the maturity of the renewal note, and unless rebutted, is conclusive evidence, and the efifect of it is to discharge a surety on the original note. When the creditor receives the renewal note as conditional payment, he thereby agrees that if it be paid at maturity the original shall be satisfied, and assumes an obligation to wait upon the makers of the original until the maturity of the renewal note. The taking of a renewal note from the principal debtor by way of con- ditional payment of an existing note, and the receipt of the interest in advance upon it, amount to an extension of the original and effect a dis- charge of the surety. First Nat. Bk. of Springfield v. Leavitt, 65 Mo. 562. A surety cannot avail himself of usurious interest paid by his principal on a non-negotiable note after the execution of the note, in reduction thereof. Lamoille Co. Nat. Bk. v. Bingham, 50 Vt. 105. 7. In a suit by a bank against indorsers of a note discounted for the accommodation of the drawer, the aflSdavit of defense was that "at and before the time that the defendants indorsed the note " they inquired of the cashier and one of the directors of the bank whether it would be safe for them to indorse, and that these officers informed them that they con- sidered the drawer perfectly good, and they would be safe in indorsing; that the officers knew that the representations were false, and that they made them to deceive defendants, who would not have indorsed but for the representations. Held, To be insufficient. Such declarations, although willfully false, made by the officers, not in the course of their duties as officers or agents of the bank, cannot aflEect the bank. Mapes v. Second Nat. Bk. of Titusville, 80 Pa. St. 163. 8, The action was against an indorser on a note for $5,000. The note when indorsed was for $2,000, and was fraudulently raised by the maker to $5,000 before it was negotiated. The indorsement was made by the ■ defendant for the accommodation of the maker, and to use in taking up other accommodation paper held by the plaintiif on which the defendant was indorser. It was found that the defendant had been guilty of no negligence, and therefore held that the defendant was not estopped to say that he never made the contract in evidenee. .^Itna Nat. Bk. v. Winchester, 3 L. & Eq. Rep. 597. (Conn.) A person indorsed a note for $500 for the maker's accommodation. The maker then, by the use of chemicals, rendered the amount invisible and filled it in for $2,000. In this shape the bank discounted it. The cheat being discovered before maturity, the bank restored the invisible words by the use of other chemicals, and when due protested it. Seld, In a suit against the indorser on the note for $500, that the bank could not recover. SUEETY AUD INBOKSEK. 107 That the plaintiff accepted no other note than the one for $3,000, and such note the defendant never indorsed. Citizens' Nat. Bk. v. Richmond, 121 Maas. 110. 9. Fraud practiced by the payee on the maker, in obtaining the execu- tion of a promissory note payable [in bank, is no defense to an action tliereon by an indorser who is alleged to be a bona fide indorsee for value and before maturity. First Nat. Bk. of Lawrenceburgh «. Lotton, 67 Ind. 256. An accommodation indorser of a note which has been diverted from the purpose for which it was made and indorsed, cannot defend as against a iiona fide holder who purchased it before maturity for value, upon the ground of such diversion. Merchants' Nat. Bk. of Syracuse «. Comstock, 55 N. T. 24. 10. "Where it is proved that the indorser of a check indorsed it for no other purpose than to identify the person who presented it to the bank, who was in the habit of collecting for the parties to whose order the check was drawn. Held, That the responsibility of the indorser was as to the identity of the collector, but not as to his authority to sign the check for the parties to whose order it was given. Commercial Press v. Crescent City Nat. Bk., 36 La. Ann. 744. 11. In an action against an indorser upon a promissory note made pay- a,ble at a bank, it appeared that, upon the day the note fell due, the indorser was ready to pay it, and sent the maker to the bank several times during banking hours to see if the note was there and to ascertain the amount. The note was not presented for payment until an hour after the close of the customary banking hours, when the holder was admitted into the bank, found the cashier and demanded payment, which was refused on the ground that no funds had been left with the bank with which to pay. Held, That the demand was sufficient to charge the indorser. It seems, that had the maker gone to the bank prepared to pay, and waited there for that purpose until the close of banking hours, or. had he placed funds in the bank and allowed them to remain there until the close of business hours, and then withdraw them in consequence of the non- presentment of the note, the indorser would have been discharged. Salt Springs Nat. Bk. v. Burton, 58 N. Y. 430. While the rule is undoubted that a subsequent indorser guarantees pre- ceding indorsements, it cannot apply to a case where in fact there was no previous indorsement at the time of the alleged second indorsement. Third Nat. Bk. of Baltimore ». Lange, 18 Am. Law Reg. 382. (n. s.) In a suit by a bank against indorsers on a discounted note, the defend- ants gave in evidence that the maker had remitted money by mail directed to the cashier of the bank in part payment of a note of which this was a renewal. If the bank had authorized the sending by mail at its risk, this would be prima facie, and if not rebutted, sufficient evidence of payment. The bank not having requested the money to be sent by mail, the maker took the risk of so sending it. The evidence was that the money was put into an envelope directed to 108 NATIOHAL BANKS. the cashier, the envelope was then inclosed in a registered envelope and directed to the postmaster at Bellefonte, where the bank was located, and sent by mail. There was no evidence that the letter had been received by the postmaster at Bellefonte ; the cashier was a witness for the plaintiff, and was not asked whether the money had been received. Held, Not suffi- cient evidence of payment to be submitted to the jury. That the two post- masters were the agents of the maker for the transmission of the money. That there is no presumption of law that a letter mailed to one at the place he usually receives his letters, was received by him. First Nat. Bk. of Bellefonte v. McMannigle,'69 Pa. St. 156. An indorser of a' promissory note is not discharged by the fact that on the day it fell due, but before demand and protest, the maker intended to pay, and would have paid it, but was persuaded by the holder to apply the money designed for that purpose upon another demand held by the latter against him. Second Nat. Bk. of Oswego v. Poucher, 56 N. Y. 348. An indorser of a promissory note is a competent witness to prove an agreement in writing made with its holder at the time of his indorsement, that he shall not be held liable thereon, where the paper has not afterwards been put into circulation, but is held by the party to whom the indorse- ment was made. Such an agreement and the indorsement taken together, are equivalent, so far as the holder of th^ note is concerned, to an indorse- ment without recourse to the indorser. Davis v. Brown, 94 U. S. 423, Lien. 1. In the very nature of such transactions, a banker's lien cannot extend to the money left on deposit with him, according to the custom and usage of banks. Such lien is confined to securities and valuables which may be in the bankers custody as collaterals. The credit must be given on the faith of the securities or valuables either in possession or expectancy. Where a party procured his own note to be discounted at a bank, and the money received was placed in the bank as a deposit to his credit, and he afterward became insolvent before the maturity of the note, it was held. That the bank might be entitled to an equitable set off of its debt against the depositor, but not as against the rights of third parties, holders of the checks of depositor which have been presented for payment. Fourth Nat. Bk. V. City Nat. Bk., 68 111. 398. A bank may hold dividends for the indebtedness of the shareholder to it. Before action is commenced for dividends the plaintiff must make a demand for the same. Hagar v. Union Nat. Bk., 63 Me. 509. A bank has no lien upon a customer's deposit for his indebtedness to the bank not yet due. Jordan v. Nat. Shoe and Leather Bk., 74 N. T. 467. 2. Loans by National Banks to their stockholders do not give a lien to the bank on the stock of such stockholders. Bank v. Lanier, 11 Wall. 369. A National Bank cannot even by provision framed with a direct view to that effect in its articles of association and by direct by-laws, acquire a LIEN. 109 ii^n on its own stock held by persons who are its debtors. BuUard e. Bank, 18 Wall. 589. After the purchase of its stock, the bank can acquire no lien on its shares, except for the purpose of preventing a loss on a debt previously contracted in good faith. Such lien is prohibited by Sec. 5,201 of the act Conklin «. Second Nat. Bk. of Oswego, 45 N. T. 655; Kosenbach v. Salt Springs Nat. Bk., 53 Barb. 495. A bank can neither create nor hold a lien upon its shares of stock to pay a subsequent indebtedness from the stockholder to the bank as against the pledgee of .such stock for value. Second Nat. Bk. v. Nat. State Bk., 7 Leg. Ns. 70. (Ky.) a. The United States has a first lien upon all the assets of the bank after the expenses of administration to reimburse it for payment of the circula- ting notes, taxes, etc. Nat. Bk. v. Colby, 21 Wall. 609. The United States has a prior lien over other creditors on the proceeds of the sale of bonds deposited as security for the circulation of National Bank bills, as well as a prior claim in the distribution of the bank's assets for the payment of claims of the Government against such bank, and may apply the proceeds of such assets to the payment of its claim pro tanto for postal funds or money order funds deposited in such bank by the local postmaster. United States v. Cook Co. Nat. Bk., 11 Leg. Ns. 344. The United States has a paramount lien on the assets of a National Bank for the payment of its circulating notes. (The plaintiff in this case was an attaching creditor.) Schmidt v. First Nat. Bk. of Selma, 22 La. Ann. 314. 4. A bank, while engaged in business, pledged certain notes constitut- ing a part of its assets to a creditor to secure indebtedness to him. The bank afterward failed, and the receiver brought an action to recover the notes. Held, That he could not recover the notes until the whole indebt- edness was paid. Casey ». LaSociete, 7 Leg. Ns. 313 ; s. c, 2 Woods, 77. Possession is of the essence of a pledge ; and, without it, no privilege can exist against third persons. Where it was agreed that a bank should deposit hills and notes with its president and his partner by way of pledge to secure a loan made by a third party, and the president delivers them back to the bank officers for collection, with power to substitute other securities therefor, it is not such a delivery and possession as will create a lien In favor of the bank. Casey v. CavarOc, 96 U. 8. 467 ;' Casey ». Nat. Bk., 96 U. S. 492. But if actual delivery of negotiable paper and other securities be made, a pledge is thereby constituted. Casey v. Schneider, 96 U. S. 496. A simple contract creditor of a firm has no specific lien upon the assets of the firm. Hence, an assignment in good faith by one of its members of his interest in the firm property in payment of a just debt for which he is solely liable, will pass the title to such interest. Case v. Beauregard, 99 U. S. 119. A bank has an equitable right analagous to the doctrine of stoppage in transitu over the credit it gives to a borrower, who becomes insolvent, 110 MATIONAL BANKS. upon the proceeds of a note which it has discounted for him. Dougherty Bros. «. Central Nat Bk., 13 Leg. Na. 2. (Penn.) Chattel Mortgages. 1. A chattel mortgage taken by a National Bank to secure a pre-existing deht is valid. Spafford ». First Nat. Bk., 37 Iowa, 181. A National Bank may take a pledge of chattels to secure a present loan. Where the manufacturer of a locomotive leased it to the railroad by an unrecorded instrumentjand afterwards the railway pledged it to the bank for money borrowed : It was held, That the right of the bank was superior to that of the manufacturers. Pittsburgh L. & C. Works a. State Nat. Bk., 8 Leg. Ns. 41. A bank may loan on the personal obligation of the borrower, secured by the pledge of the stock of another corporation. Shoemaker v. Nat. Mechanics' Bk., 3 Abb. 416. A National Bank had taken a chattel mortgage to secure a previously existing debt. In a suit to enforce the same the court said : " There being no express prohibition, we hold the mortgage valid, and that the authority of the bank to take hold and enforce it for a previously contracted debt, exists under the implied power to protect itself from loss, save its property and securities from sacrifice, and. successfully to execute the purposes of its creation.'' Spatford v. First Nat. Bk., 37 Iowa, 181. 2. The power to deal in stocks of other corporations is not given, either expressly or impliedly, by the act. But a bank holding such stock in pledge may purchase the same at a sale thereof, in order to prevent a loss upon the indebtedness secured thereby. Burley ». Bowen, (Judge Blodgbtt, MSS.) N. Dist. 111. 8. A National Bank holding coin in pledge may sell and assign its specific property therein, and the assignee will take all the legal rights of the bank, its assignor. Merchants' Bk. ■». State Bk., 10 Wall. 604. 4; A mortga'ge made to an indorser by the maker of a note, merely to secure the indorserj may be discharged by the latter at his pleasure, but where it is agreed that the indorser shall hold the mortgage, not only for his own security but for the security of the creditor, a conveyance of the mortgaged property to a party who knew of the agreement, will not defeat the equitable rights of the creditor. Hartford and N. T. Tr. Co. v. First Nat. Bk. of Hartford, 46 Conn. 569. An agreement between persons insolvent and a bank, whereby the insolvents, for the purpose of securing their existing indebtedness to the bank, as well as to obtain future advances, promised its president to deliver to the bank whenever it may desire, the entire stock of goods which they may have at the time on hand in a store kept by them, the goods being in the meantime retained in their possession, is void, as against their other creditors. Such an agreement does not create any lien upon the property, or entitle the bank to any preference over other creditors in the. event of the debtors being afterwards proceeded against under the SPECIAL DEPOSITS. Ill bankrupt act. Any subsequent sale made in pursuance of the agreement does not take effect by relation at its date. A mortgage of personal property, consisting of goods in a retail store, executed in Kansas, to secure the payment of certain promissory notes, i» void as against creditors of the mortgagors, by statute, if the mortgage is not deposited in the office of the register of deeds of the county where the property is situated or the mortgagors reside ; and is void, independent of the statute, if the mortgagors remain in possession of the goods by the terms of the mortgage, and continue to sell the goods mortgaged by the consent of the mortgagees. Bk. of Leavenv?orth b. Hunt, 11 Wall. 391. An innocent mortgagee will not be compelled to suffer by reason of a wrongful confusion of the goods by the act of the mortgagor. A chattel mortgage on logs and lumber lying in a river, described as being at a cer- tain place on said river, as containing a certain number of feet, and as being marked with a certain mark, is sufficiently definite, as between mortgagees and third parties or creditors of the mortgagor. Merchants' Nat. Bk. of St. Paul v. McLaughlin, 9 Rep. 773. (U. S. 0. 0.) A chattel mortgage for the purchase price of machinery placed in a mill, and removable without material injury to the building, the mortgage being given before it was so placed, is entitled to priority over a mortgage on the realty. First Nat. Bank a. Elmore, 9 Rep. IID. (Iowa.) Special Deposits. The taking of special deposits to keep merely for the accommodation of the depositor is not ivithin the authorized business of National Banks ; and the cashiers of such banks have no power to bind them on any express contract accompanying, or any implied contractt arising out of such tak- ing. Wiley «. First Nat. Bk. of Battleboro, 47 Vt. 546; First Nat. Bk. of Carlisle ». Graham, 79 Pa. St. 106. Where a National Bank receives a special deposit for safe keeping with- out reward it is liable only for gross negligence, and the burden of proving this gross negligence is on the plaintiff. The bank under such circum- stances is not responsible for that care which every attentive and diligent person takes of his own goods, but only for that care which the most inat. tentive take. li seems, that the removal by such bailee of the special deposit from one depository to another considered more safe does not increase the bailee's liability. First Nat. Bk. of AUentown v. Rex, 89 Pa. St. 808. - A depositary without special contract or reward is liable for the loss of the deposit only in case of gross negligence. He must take the same care of such deposit as he- does of his own goods. A bank acting as such depositary and using the same care to protect the deposit as it does to protect its own goods, is not liable for a theft of the same, even if committed by its own officers. A bank received bonds as a special deposit without reward. They were put in the vault with the valuables of the bank. The teller, against whom 112 NATIONAL BANKS. there had been no previous suspicion, stole them. After he had absconded, it was discovered that his accounts had not been honestly kept for two jears prior to the theft. EeM, That the bank was not liable for the value of the bonds; nor bound to examine the teller's accounts for the benefit of a gratuitous bailee. Purchase and sale of stocks by an officer of a bank is not ipso facto evi- <3ence of dishonesty; but if such officer be found engaged in stock gamb- ling, or buying and selling beyond his means, he ought to be removed. Scott V. Nat. Bk. of Chester Valley, 73 Pa. St. 471 ; Lancaster Co. Nat. Bk. ■0. Smith, 63 Pa. St. 47. A special deposit of gold coin was made in a National Bank, to be returned when called for. The cashier, without the knowledge of any other officer of the bank, embezzled the funds. Held, That the bank being guilty of no negligence in the premises, was not liable. Smith v. First Nat. Bk., 99 Mass. 605. The cashier, without special authority of the board of directors, has no power to bind the bank by receipt of special deposits. A gratuitous bailee is liable for gross negligence only. The declarations of the president, after the loss, as to the manner in which it occurred are not binding on the bank. First Nat. Bk. v. Ocean Nat. Bk., 60 N. T. 378. When the bank receives nothing for keeping the special deposit, it is liable for negligentia cfassa only. DeHaven ®. Kensington Nat. Bk., 81 Pa. St. 95; Dearbourn «. Union Nat. Bk., 58 Me. 273; s. c, 61 Me. 369; Ray «. Bk. of Kentucky, 10 Bush. 344; Jenkins t. Nat. Village Bk., 58 Me. 375. National Banks are not responsible for the safe keeping of special deposits, made according to usage, for the accommodation of depositors and with the knowledge and acquiescence of the board of directors, but without profit to the bank — there being no authority in the act for the receiving of such deposits. Whitney v. First Nat. Bk. of Brattleboro, 50 Vt. 888; B. c, 18 Alb. L. J. 471. 2. A bank took bonds as collateral for loans or discounts made from time to time. The bonds were stolen at a time when the owners of them owed the bank nothing. Held, That the bank had the power to make such a contract; that it was liable for the loss of the bonds if it had failed to use common prudence in the care of the bonds; that the measure of damages was the value of the bonds at the time they were stolen; that whether the bank had used due care was solely a question of fact for the jury. Third Nat. Bk. of Baltimore v. Boyd, 44 Md. 47 ; s. C.,.16 Law Reg. 371. A National Bank has power to agree to receive, as a gratuitous bailee, securities to be deposited in its vault for safe keeping, and is liable to the depositor thereof if such securities are lost through its gross negligence. Pattison ». Syracuse Nat. Bk., 17 Hun, 419 ; Affirmed in Court of Appeals, but not yet reported. The plaintiffs handed United States bonds to the cashier of the defend- ant to be exchanged for registered bonds. Before the exchange was made the bonds were stolen. Action was brought against the bank to recover the value of the bonds. Hdd, That the defendant was liable; that it had SPECIAL DEPOSITS. 113 the power to agree to make the exchange ; that the agreement of the cashier to so do was binding on the bank; that business corporations have the powers conferred upon them by their charters, and such other incidental powers, not prohibited, as are proper, usual and necessary for the transac- tion of tbeir corporate business. Terkes v. Nat. Bk. of Port Jeiris, 4 L. & E. Rep. 198. (N.T.) When the bank, in consideration of the depositor keeping an account with it, receives an article for safe keeping, there is sufficient consideration to make the special deposit an obligatory one. The depositor is not affected by a by-law of which he is ignorant. He is entitled to such security as the course of dealing shows the parties intended. A bailee for hire, using due care, is not liable for goods stolen. The burden of proof is on the bank to show what became of a package received by it as bailee. If the bank hands the package to the wrong person, it is liable. The bank is not responsible for the carelessness of an officer in those things which are outside of his duties. White ®. Com. Nat. Bk., 4 Brewster, (Pa.) 234. The defendant had sent a circular to plaintiff asking for its deposits, and promising to buy and sell such bonds, stocks and gold as the plaintiff desired without charge. The plaintiff acceeded, and had in the possession of the defendant a large amount of securities, when the bank was robbed. Held, That this was a bailment by which both parties were to be benefited ; that the defendant was bound to take such precautions for the safety of what was intrusted to its care as would be dictated by common prudence and the exercise of ordinary diligence; that whether the defendant did or did not do so, was a question of fact for the jury ; and they having decided against the defendant, the court saw no reason to disturb the verdict. First Nat. Bk. of Lyons «. Ocean Nat. Bk., 48 How. Pr. Rep. 148. A special deposit of bonds was left by a customer with the cashier of a National Bank for safe keeping with the knowledge of its directors, and the cashier gave a receipt therefor. The bonds were subsequently stolen, and the bank offered no satisfactory explanation of the manner of the theft. Held, That there was sufficient evidence of gross negligence to be sub- mitted to the jury; that a recovery could be had against the bank if the bonds were stolen through the gross negligence of its officers. Note. — In this case it did not appear whether the bonds had been lost, stolen or abstracted. After their loss was discovered the president and cashier told the plaintiff that she should lose nothing. For two years thereafter the interest on the bonds was paid her. The court affirmed a judgment in favor of the plaintiff. First Nat. Bk. of Carlisle a G^raham, 85 Pa. St 91. A National Bank that habitually receives special deposits for safe keep- ing as a matter of accommodation is bound by the act of its cashier in receiving on special deposit a package of stocks and bonds. The bank, though acting without reward, becomes a bailee and is responsible for gross negligence. If a person withdraw from a Dank a special deposit in pursuance of 8 114 NATIONAL BANKS. authority conferred on him by the depositor, the bank is discharged, though the authority be unknown at the time to the corporation or to the officer representing it in the transaction. "Written authority signed by the depositor on the certificate of deposit, "Will 'pay above dividends or coupons to A. B. for my account,'' will not justify the bank in parting with the possession of the bonds themselves to the person named. Chattahooche Nat. Bk. v. Schley, 58 Ga. 369 ; s. c, 4 L. & E. Kep. 475. A National Bank is liable for damages occasioned by the loss, throughi gross negligence, of a special deposit made in it with the knowledge and acquiescence of its officers and directors. Gross negligence on the part of a gratuitous bailee, though not a fraud,, is in legal effect the same thing. The doctrine of ultra vires has no appli- cation in favor of corporations for wrongs committed by them. Section 5338 of this act, which provides that it shall be lawful for a National Bank, after its failure, to "deliver special deposits,,' is as effectual a recog- nition of its power to receive them as an express declaration to that effect would have been. The history of banking discloses that the original deposits of the first banks were in specie, money, bullion, plate, etc., for safe keeping and to be specifically returned. The phrase " special deposits," so employed, embraces the public seouri- ties of the United States. Nat. Bk. v. Graham, 100 U. S. 699. Guaranty. 1. A National bank upon the deposit of collateral security with it, has- no power to guarantee the obligation of the person making such deposit. It may loan its money upon personal security, but a National Bank cannot thus loan its credit. Seligman v. Nat. Bk., 6 Weekly Jr. 584; b. o., 9 Rep. 72. (U. S. S. C.) A guaranty against loss or liability for signing as sureties, given by a bank president, in his own name and without authority from the directors, to those whom he had solicited to sign a note given to the bank to retire a. prior note held by it against their principal, is the individual contract of the president and is not binding on the bank. Such a guaranty, if made by the bank and binding on it, would be a bar to any suit by the bank against the sureties. It is doubtful whether, under the Act, a National Bank could give such a guaranty in a case where the effect would be to make the paper discounted the paper of one party only, secured by mortgage on real estate. A guaranty to sureties against loss is within the statute of frauds, and the written contract of the president cannot be made binding on the bank by parol. First Nat. Bk. v. Bennett, 33 Mich. 530. The defendant gave to G. and C. a written guaranty of the future accept- ance of S. G. and C. made two drafts on S. to the order of the plaintiff, which S. accepted and the plaintiff cashed. The drafts not being paid, suit was brought on the written guaranty. Seld, That the guaranty being ESTOPPEL. 115 assignable under the Iowa Statute, the plaintiff could sue thereon. (The rule is the same in New York and Vermont.) That the course of dealing between the parties was such as to justify the finding that the guarantors had notice of the acceptance — ^the guaranty being continuous, the notice was continuous. That each partner is the general agent of the firm, and has authority to bind it by a contract of guaranty, if such contract is within the scope of its business, and no understanding between the partners can vary the rule. First Nat. Bk. of Dubuque v. Carpenter, 41 Iowa, 518. '' Where the president of a National Bank wrote upon the back of a promissory note a guaranty, and signed the same as president of the bank. Held, That in a commercial sense this was not an Indorsement, and that therefore the assignee took no other or greater rights thereunder than had his assignor. Central Ti-ust Co. v. First Nat. Bk. of Wyandotte, 12 Leg. Ns. 232. (U. S. S. C.) 2. N. and G. made their note to the bank for $1,500, payable at six months, and the bank discounted the same. In two months thereafter N., one of the makers, took it up. A month later he reproduced it to the bank, and at his request it was rediscounted. When due N. asked for an exten- sion, and it was granted on the consideration that N. should guarantee its payment. This he did verbally. In a, suit upon such guai-anty it was Tield, That if the guaranty was of the existing debt of another, it was not binding because of the statute of frauds; but if the contract of the defend- ant was such as paid the original debt, and he thereafter became sole debtor, so that his promise was not collateral to that of another, it was without the statute of fraud and was binding. First Nat. Bk. of Utah «. Kinner, 1 Utah, 100. When the priority of one legal right over another, depending upon the order of events on the same day is involved, the rule that for most pur- poses the law regards the entire day as an indivisible unit is necessarily departed from. One afternoon A. became guarantor to the bank for any overdrafts or paper of B. to the amount of $50,000. In the forenoon of that day the check of B. for $10,997 was received by the bank. It claimed that such check was within the guaranty, as it was the custom of banks to hold checks until after banking hours before crediting them up. The jury found that at the time the check was left at the bank it was offered and received as a deposit. Seld, That such check was not within the contract of guaranty. Nat. Bk. v. Burkhardt, 100 U. S. 686. Estoppel. Where, in an action upon a promissory note made by the defendant, it appears that he has been in the habit of dealing with the plaintiff as a cor- poration, and did so deal with it in respect to the note in suit, he is estopped from denying the fact of its incorporation. Nat. Bk. of Fair- haven V. The Phoenix W. Co., 6 Hun, 71. Where a shareholder of a corporation is called upon to respond to a 116 NATIOBTAL BANKS. liability as such, and where a party has contracted with a corporation, and is sued upon the contract, neither is permitted to deny the existence or the legal validity of such corporation. To hold otherwise would be contrary to the plainest principles of reason and good faith and involve a mockery of justice. Parties must take the consequences of the position they assume. They are estopped to deny the reality Of the state of things which they have made to appear to exist, and upon which others have been led to rely. Sotind ethics require that the apparent, in its eflFects and conse- quences, should be as if it were real, and the law properly so regards it. (Citing many cases.) Casey v. Galli, 94 TJ. S. 673-680. A stockholder of a banking corporation, which is a corporation de facto, who participates in its transactions and receives dividends, will, by such acts, be estopped to insist, when sued by its creditors, that the corporation was not legal. Whether the bank has been regularly organized or not, is not a defense that can be availed of by a stockholder as against a bona fide creditor, if it appears there was a corporation de facto. Wheelock v. Kost, 77 111. 296. If a shareholder places his shares in the hands of another upon a secret trust, allows that other for years to act as director upon- the faith of his ownership of such shares, the real owner is estopped to say that such other person is not the actual owner, as against a creditor who trusted him upon the faith of such ownership. Young v. Yough, 33 N. J. Eq. 325. The maker of a note which is in terms payable at a bank, cannot in an action brought by it thereon raise the question of its incorporation. He is estopped to deny itr The Platte Valley Bk. v. Harding, 1 Neb. 461. An estoppel arising out of the judgment of a court of competent juris- diction, is equally conclusive upon all the parties to the action and their privies. It may not be invoked or repudiated at the pleasure of one of the parties, as his interest may happen to require. Brooklyn City, etc., 9. Nat. Bk., etc., 7 Week. Jur. 379. (U. S. Supr. Ct.) A debtor is estopped when sued for money obtained from the bank to say that in making the loan the bank exceeded its powers and acted beyond its authority. It does not lie with one who has thus obtained the funds of the bank and impaired the security of its depositors and the public, to consummate a fraud against them by such a plea. Allen v. Freedmen's, etc., 14 Fla. 418. One who has taken a note payable at a National bank, and then sold it to the bank, is estopped to deny the organization of the bank. Huflfaker . City Nat. Bk., 6 Thomp. & C. 346. A. borrowed money of a bank, giving his memorandum check on a third person as evidence of the amount of the loan, and delivered a certificate of stock, with a transfer on the back and a power of attorney signed in blank, as collateral security for the loan. The bank then supposed A. to be solvent. Four days after, when the loan came due, A. paid the interest in cash, and offered in payment of the principal a check upon a third person. The cashier of the bank, supposing that the check was drawn against funds, delivered to him the certificate of stock in the same condi- tion in which it was received, and also delivered to him the memorandum check marked as paid. A. had at this time no funds with the person on whom the check was drawn, and had no reasonable expectation of having any to meet the check, and in fact was insolvent. Later in the day A. 124 NATIONAL BANKS. redelivered the certificate of stock, but not the memorandum check, to the hank. Held, That the transaction did not amount to a payment of the loan, and that the bank was entitled to retain the certificate of stock as security for the loan as against the trustee of the estate of A. in bank- ruptcy. Holmes o. First Nat. Bk. of Fall River, 136 Mass. 353. An assignee in bankruptcy may sue a National Bank for usurious interest, he being within the terms " legal representations " as used in sec. 5198 of the act. Wright ». First Nat. Bk. of Greensburg, 18 Alb. L. J. 115 ; Tiffany «. Nat. Bk., 18 Wall. 409; Crocker v. First Nat. Bk., 8 Cent. L. J. 537. In order to invalidate a security taken for a debt, by reason of a fraudu- lent preference, it is not enough that the creditor has some cause to suspect the insolvency of his debtor ; he must have such a knowledge of facts as to induce a reasonable belief of the debtor's insolvency. Grant n. First Nat. Bk. of Monmouth, 97 U. S. 80. The bank advanced to H., who was a banker, the sum of $10,000, less the usual charge of one-eighth of one per cent. On the afternoon of the same day H. placed certain securities in an envelope accompanied by a note, saying: " A disappointment gives us reason to fear that our check of this dale may not be paid. I leave with you the inclosed as security," Edd, That the securities were transferred with a view to give a fraudulent preference, and that the bank had reasonable cause to believe that H. was insolvent when it received and appropriated the securities presented to it. The Merchants' Nat. Bk. b. Cook, 10 Leg. Ns. 83; s. c, 95 U. S. 343. B. drew a check on the bank just prior to his assignment, which was not presented until after his assignment. Meld, That the amount remaining in the bank passed to the assignee of B., as the mere drawing of the check was not an appropriation. First Nat. Bk. ■». Gish's assignee, 72 Pa. St. 13. Under section 5343, a transfer of the property of the bank is void if insolvency is in contemplation of the bank making the transfer, although the party to whom it is made did not know or contemplate the insolvency of the bank. Case e. Citizens' Bk., 3 Woods, 33. 4. The bank, after knowledge of his insolvency, took from the debtor a note with power of attorney to confess judgment, on which it entered a judgment on the next day and levied upon and sold the property of the debtor to satisfy the same. The assignee in bankruptcy of the debtor brought suit to recover the money. Meld, That the acts constituted a fraudulent preference. Also held, that moneys received by the bank as collections for the debtor, and by it turned over to the sheriff to be levied upon, was a fraudulent preference, and did not raise the question of set off. Also held, that the taking a check from the bankrupt and crediting the amount of the check then on deposit on the bankrupt's note the day before taking judgment, was a payment by way of preference, and therefore void, and did not raise tlje question of set-off. Traders' Bk. ■». Campbell, 14 Wall. 87. 5. The holder of a note made by a corporation is not debarred from taking judgment against the corporation, by proceedings in bankruptcy against such corporation. BANKBUFTOT AND INSOLVENCY. 125 Nor is he barred from recovering judgment thereon against the maker by proving it in bankruptcy against an indorser. Athol Nat. Bk. v. Bing- ham Mfg. Co., 121 Mass. 399. A plea that the defendant is a petitioner in bankruptcy, does not in itself operate as a stay of proceedings. The plaintiff obtained judgment in 1871, and issued attachment thereon in 1874. The defendant moved to dismiss the attachment on the ground that he had been adjudged a bank- rupt. Seld, That he was too late, having at the proper time neglected to secure a stay of proceedings. First Nat. Bk. ®. Abner, 1 McArthur, 590. 6. B., after the filing of a petition in bankruptcy against him, deposited in a bank money which was afterwards drawn out on his checks. Held, That the payments were valid. The assignment transfers only the prop- erty which the bankrupt owned at the time of filing the petition. That after earnings are his own. That the burden is upon the assignee to prove that the property was the bankrupt's at the commencement of the pro- ceedings. Mays v. Manufacturers' Nat. Bk. of Philadelphia, 64 Pa. St. 74. 7. On the fifth day of July, 1873, J. and W. filed their petition in bank- ruptcy ; they had at that time a balance to their credit in defendant's bank. On the ninth of the same month they were adjudicated bankrupts. On the twelfth N. obtained a judgment for a money demand against them ; on the nineteenth, in proceedings supplementary to execution, an order was issued restraining defendants from transferring or making any disposition " of any property belonging to " J. and "W. ; and on the twenty-eighth a receiver was appointed, who demanded and claimed the said balance. On the first of October, 1873, plaintiff was appointed assignee of said bank- rupts. Defendant refused to pay over to him the balance, and still retains it. In an action to recover the same, Held, That by virtue of the bank- rupt act, title to the deposit vested in plaintiff on the fifth of July, and the order subsequently served on the defendant, did not restrain it from paying it over to him, as it was not then the property of J. and W., and that, there- fore, the order was no defense. Morris v. First Nat. Bk. of N. T., 68 N. T. 362. A check on the respondent bank was deposited in the appellant's bank October 26, 1878, and was sent to respondent the same day. Respondent debited the same to the drawee's account and returned the check to the drawer, and sent draft for the amount to the appellant. The latter received ■the draft October 31st, and on the same day an injunction issued in this action was served on respondent, restraining it from doing further busi- ness. It appeared that the bank had invested the funds deposited by the -drawer, and had none of those identical funds in its possession when the check was presented. Seld, That no actual setting apart or appropriation of any specific funds of the drawer or of the bank being shown, appellant was not entitled to a preference over other creditors, and that it could not be claimed that appellant, by sending the check to respondent by mail, con- stituted the latter its agent to collect the check, hold the proceeds and for- ward them. People v. Merchants' and Mechanics' Bk. of Troy; In re Petition of Chemical Nat. Bk. of Troy, 9 N. Y. Week. Dig. 131. 126 NATIONAL BANKS. 8. Where a voluntary petition in bankruptcy has been filed, omitting the namea of certain members of a firm which it is asked shall be declared bankrupt, proceedings in invitum against the non-joining parties can only be had on the application of the petitioning debtors; a creditor cannot make such application. The non-joining of any partner leaves the creditors in full possession of their remedies against him irrespective of the bankruptcy proceedings; and the omission of the names of the partners in a petition may cause the court to refuse a discharge to the petitioners. Citizens' Nat. Bk. v. Cass, ft Rep. 579. (C. 0. U. S., W. D. Pa.) Set-off. 1. A banker who is a director of an insurance company can set off against its demand for money deposited with him, bearing interest and payable on call, the amount due on its policies issued to and held by him. The deposit being a general one, becomes a debt, and the title to the money is in the bank. Scammon v. Kimball, 3 Otto, 363. A set-off may be pleaded in an action brought by the receiver of an insolvent bank. Usurious interest can be set off in a suit on the contract, but the penalty cannot. The cause of action for the penalty does not arise out of a contract. Hade v. McVay, 31 Ohio St. 331. A depositor may set off his deposit as against his debt to the bank. Piatt V. Bentley, 11 Am. Law Reg. 171 ; New Amsterdam v. Tartter, 54 How. (N. Y.) 385 ; contra, Osborn v. Byrne, 43 Conn. 155. 3. In an action brought to enforce the individual liability of a share- holder of an insolvent bank, such shareholder cannot set off the amount due to him as a creditor of the bank. In re Empire City Bk., 18 N. T. 199; Sawyer v. Hoag, 17 "Wall. 610: Scammon . Baak, 8 Blatchf. 137. If the complaint contain no allegation that the bank is entitled to sue as a corporation, or that it is a corporation, the objection may be taken by way of answer. Not having alleged the right to sue, the plaintiff can offer no proof of such right. Second Nat. Bk. v. Wells, 53 How. Pr. Rep. 343. In an action upon promissory notes, it was held that the plaintiff bank was bound to prove its corporate existence ; that the omission might have been supplied at the argument; and that the judgment must be reversed, leaving the plaintiff to apply for a re-argument, upon which the missing proof may be furnished. New York National Exchange Bk. v. Jones, 9 Rep. 638. (N. T. Com. P.) 4. A banking corporation, organized under the Act, brought an action describing itself as the " Merchants' National Bank of Bangor," " a corpo- rate body organized under the laws of the United States of America, and having an established place of business at Bangor, in the State of Maine;" and to prove its corporate existence, introduced the certificate of the Comp- troller that it had been duly organized, and the testimony of the' book-keeper of a bank in Boston that the Merchants' National Bank of Bangor did a banking business under that name, that he had been in their banking house at Bangor, and was well acquainted with the cashier, and that his own bank was in the habit of receiving remittances from the Merchants' National Bank of Bangor. Seld, That the evidence was competent to show that the plaintiff was de facto a banking corporation and transact- ing business as such. Merchants' Nat. Bk. of Bangor v. Glendon Co, 120 Mass. 97. 9 130 NATIONAL BANKS. A National Bank brought an action describing itself as the " Washing- ton County National Banl:, a corporation duly established by law, and doing business in Greenwich, in the State of New York." And to prove its corporate existence introduced an organization certificate of the '' Wash- ington County National Bank of Greenwich,'' to " be located in the town of Greenwich, county of Washington, and State of New York," and the certificate of the Comptroller that such last named bank had been duly organized. Held, In the absence of evidence of the existence at Green- wich of another bank named the " Washington County National Bank of Greenwich," the evidence would warrant the inference of the due organi- zation of the plaintiff. Washington Co. Nat. Bk. v. Lee, 113 Mass. 521. 6. When a National banking association is insolvent, the order of the Comptroller of the Currency, declaring to what extent the individual liability of the stockholder shall be enforced, is conclusive. Casey n. Galli, 94 U. S. 673. Where his order is to collect an amount equal to the full par value of the stock, the suit by the receiver against the stockholder must be at law, and that amount will bear interest from the date of the order. In such a suit the stockholder is estopped from denying the existence or the validity of the corporation. Casey v. Galli, 94 U. S. 673. A plea is bad which sets up that the Comptroller has decided to pay a large amount of claims for which the bank is not responsible, and that, aside from these claims, there are means enough to meet the liabilities of the bank. Casey «. Galli, 94 U. S. 673. (The case of Bo wdens. Morris, 1 Hughes, 878, holding that the receiver must also show the insolvency of the bank, is thus overruled.) The 50th section of the banking act of 1864, which provides that suits under it shall be conducted by the district attorney of the district is direc- tory only. And where a bill was filed under such section by the receiver of a National Bank against the stockholders, by private counsel, such stockholders were not permitted to set up that fact to defeat the suit. The rights of the defendants were in no wise concerned. Kennedy v. Gibson, 8 Wall. 498. In such a suit the action of the Comptroller, touching the personal liability of the stockholders, must precede the institution of any suit by the receiver, and the fact must be averred in the bill. Kennedy v. Gibson, 8 Wall. 498. A copy of the certificate of organization of a National Bank, which is certified by the Comptroller of the Currency and authenticated by the seal of his oflBce, is competent evidence in a State court. Tapley v. Martin, 116 Mass. 275; First Nat. Bk. ■». Kidd, 20 Minn. 234. All instruments and papers executed by the Comptroller in pursuance of law, and sealed with his seal of office, shall be received in evidence in all places and courts, and copies shall have the same weight as evidence as if originals. R. S. 1874, § 884, ante. The certificate of the Comptroller as to the organization of the bank, 1» conclusive in suits against either stockholders or creditors. PLEADING AND BVIDENOE. 131 Such certificate is also competent evidence as to the name of the corpo- ration. Thatcher v. West River Nat. Bk., 19 Mich. 196 ; Washington Co. Nat. Bli. V. Lee, 113 Mass. 531. Contra, Nat. Bk. of the Metropolis v. Orcutt, 48 Barb. 356. The certificate of the Comptroller is sufficient evidence of the appoint- ment of a receiver in all actions brought by him as such receiver. Piatt V. Beebe, 57 N. Y. 339; Merchants'', etc., ®. Cardozo, 3 Jones & 8. 163. The certificate of the Comptroller, authorizing a National Bank to do business, and proof of the fact that the bank did business, makes a prima facie case under a plea of mil tiel corporation. Mix v. Nat. Bk. of Bloom- ington ( 111.), 3 Mo. Jur. 650. 6. Where an action was commenced upon a note and mortgage in which the defendant answered, pleading payment and praying that " the mort- gage sued on be cancelled and the clerk be directed to satisfy the same of record," whereupon the plaintiff dismissed the action; Md, that the de- fendant would have been entitled to the relief prayed for if properly sought; but that the answer, tohave entitled him to the relief after the dismissal of the action should have contained a description of the notes and mortgage. Union Nat. Bk. v. Carr, 49 Iowa, 859. In order to recover for usury paid, such payment must be alleged and proved. The right of action is in the party paying such usury, and in no other person. Nash v. Manufacturers' and Traders' Bk., 5 Hun, 568. Usury, as a defense, must be specially pleaded or set up in the answer. Atlantic, etc., E. E. Co. v. Carolina Nat. Bk., 19 Wall. 548. If a stockholder wishes to show that fraud was practiced upon him by which he was induced to purchase the stock standing in his name on the books of the bank, he must set forth the facts constituting the fraud. Hale V. Walker, 31 Iowa, 344. In order to recover for usury paid, such payment must be alleged and proved; the right of action is in the person paying the same, and in no other. Nash v. Manufacturers' and Traders' Bk., 5 Hun, 568. A plea is bad which sets up that the Comptroller has decided to pay a large amount of claims for which the bank is not responsible, and that aside from these claims there are means enough to meet the just liabilities, of the bank. Casey ». Galli, 94 U. S. 678. The right of set-off in an action is governed by the law of the place where the action is brought. Laws of set-off relate to the remedy, and not to the right, and therefore the law of the forum, and not the law of the place of the contract must govern. Second Nat. Bk. of Cincinnati v. Hem- ingray, 5 Rep. 404. (Ohio.) 7. In an affidavit of defense, in which reliance upon a breach of war- ranty or set-off is set up, the facts must be alleged so as to show a legal defense. Coulston v. City Nat. Bk. of Grand Rapids, 4 L. & E. Rep. 508. (Pa. St.) In such a case a paragraph of the answer admitting the deposit of the note for collection, and a failure to protest the same, but alleging the sub- sequent bankruptcy of the maker of the note, a composition by him with 132 NATIONAL BANKS, his creditors witliout receiving a discharge, and his then ownership of val- uahle property, constituted no har to the plaintiffs' cause of action, and the facts alleged were availahle, if at all, only in mitigation of damages. An answer of general denial puts in issue the existence of the hank mentioned in the note. Locke v. Merchants' Nat. Bk., 66 Ind. 353. 8. A circular issued hy the bank, offering to buy and sell securities, is no evidence of a consent on its part to become a general bailee and depositary of such securities for its correspondents. First Nat. Bk. v. Ocean Nat. Bk., 60 N. Y. 378. Although the receipt of the bank given upon a contract to exchange one kind of United States bonds for another, is not admissible for want of a stamp, the deposit and the facts connected with it may be shown aliunde. Leach v. Hale, 31 Iowa, 69. Where a National Bank receives a special deposit for safe-keeping, without reward, it is liable only for gross negligence, and the burden of proving this gross negligence is on the plaintiff. First Nat. Bk. of Allen- town ■». Eex, 89 Pa. St. 308. In a suit brought by the holder of a check against the bank for refusing payment of the same, the plaintiff must prove an acceptance by the bank or that the check was charged to the drawer. Bk. of Republic ®. Millard, 10 "Wallace, 152. But in Illinois it is held that the giving of a check is a separation of the sum named therein from the depositor's account, and a transfer of the title of the same to the payee, and hence a demand upon and a refusal by the bank gives a right of action against it. Union Nat. Bk. v. Oceana Co. Bk., 80 111. 212. , Before recovery can be had on a certificate of deposit, proof must be made of a demand and a refusal of payment. Brown v. McElroy, 52 Ind. 404; Nat. Bk. of Ft. Edward ». Washington Co. Nat. Bk., 5 Hun, 605. The burden of proof is on the bank to show what became«of a package received by it as bailee. White v. Com. Nat. Bk., 4 Brewster, (Penn.) 234. The refusal of a bank to return upon demand certain packages of coin, which had been specially deposited with it, is evidence of conversion, and if unexplained, is conclusive on the bank. Coffey v. National Bk., 40 Mo. 140. Where the acceptance of a draft or bill of exchange is declared upon, proof, that the defendant, upon whom it is drawn, promised to pay the same before it was drawn, and after it was drawn verbally promised the holder to pay it, is clearly sufficient to support the narration. A parol acceptance of a bill of exchange is as binding and conclusive as if the acceptance was in writing. A recovery can be had upon a parol accept- ance under the common counts. Sturges v. Fourth Nat. Bk., 75 111. 595. In a suit by the receiver upon the stock liability against a shareholder, the plaintiff makes a, prima facie case, so far as concerns the character of the defendant, by showing that his name appears upon the stock book of the bank. TurnbuU v. Payson, 10 Leg. Ns. 89 ; s. c, 95 U. S. 418. PLEADING AND EVIDENCE. 333 In such an action the stockholders cannot deny the yalidity of the cor- poration or its existence. Casey v. Ualli, 94 U. S. 673. A certificate of deposit is evidence of so high and satisfactory a character as to the sum deposited, that to escape its effect, the maker must over- come it by clear and satisfactory evidence. Where the testimony, aside from the certificate, is balanced as to the amount deposited, the certificate will turn the scale. First Nat. Bk. of Lacon ». Meyers, 83 111. 507. A party suing upon a promissory note, purchased before maturity, is presumed in the first instance to be a lonafide holder, but when the maker has shown that the note was obtained from him under duress, or that he was defrauded of it, the plaintiff will then be required to show under what circumstances and for what value he became the holder. If the evidence sliows clearly that the plaintiff is a iona fide holder for value, then all evidence of duress or fraud should be ruled out. Where the plaintiff, a bank, discounted a note for one of its customers, and placed the amount to his credit, and there was conflicting evidence as to whether or not it was agreed that the amount should be kept on deposit by such customer until the note was paid : Held, Tliat evidence to prove vthat the note was obtained from the maker by duress was improperly rejected. First Nat. Bk. of Cortland ®. Green, 43 N. T. 298. Proof of a want or failure of consideration between the maker and payee of a promissory note does not change the presumption that one to whom the latter had indorsed and delivered the note is a bona fide holder for value, but the burden of proof is upon the maker.' Mechanics and Traders' Nat. Bk. J). Crow, 60 N. Y. 85. Where fraud or illegality in the inception of a note is pleaded, and the plea is supported by evidence, the burden is upon the plaintiff to show that he is a boria fide purchaser for value before maturity. Rock Island Nat. Bk. V. Nelson, 41 Iowa, 563 ; Clinton Nat. Bk. o. Graves, 48 Iowa, 228. Where the execution of a note is denied, the onus is upon the plaintiff to show its execution by the defendant, or his ratification of it with full knowledge of the facts. Cravens e. Gillilan, 63 Mo. 28. In an action by a bank on a promissory note, to which the defense was payment by a sale of bonds of a corporation held as collateral security, parol evidence was, admitted, against defendant's objection, to show that the bank held the bonds also as collateral security for a previous note of which the note in suit was a renewal or was given as security, and that having a claim against the bankrupt estate of an indorser of the pre- vious note, the bank made an arrangement with the assignee in bankruptcy by which the bonds were sold at auction, the bank agreeing to bid a certain amount for them, and to prove the balance of the claim against the estate ; but no one bid any more, and the bank kept the bonds and proved the balance of its claim. Held, That this evidence was admissible. Held, also. That the fact that the bank received a dividend from the trustees of the property of the corporation, to whom a mortgage had been given to secure the bonds, was not evidence tending to show that the bonds were actually sold by the bank. Globe Nat. Bk. v. Ingalls, 126 Mass. 209. 134 NATIONAL BANKS. 9. A suit in equity against the directors of a National Bank to recover damages for the waste and loss of the corporate assets caused by the neg- lect of the directors in the discharge of their official duties should ordi- narily be brought by the corporation. The stockholders may bring such suit where the corporation is still under the control of the accused trustees. "When the suit is brought by the stockholders, the corporation is a neces- sary party defendant. If the corporation be an insolvent bank and a receiver has been appointed, be is a necessary party defendant. But the corporation, having no interest in the joinder of the receiver, cannot demur on the ground of his non-joinder. Hand v. Atlantic Nat. Bk., 55 How. Pr. Kep. 331. 10. If the cashier, with authority to buy coin, does so, and the coin goes into the funds of the bank, it is liable to the seller on the principle of quantum valebat. Merchants' Bk. v. State Bk., 10 Wall. 604. 11. To render a National Bank liable for the payment of the taxes due from its stockholders, it must be averred and proved that the bank has or had in its possession dividends or other money or property belonging to the delinquent shareholder. The bank is not absolutely, but is only con- ditionally liable for such taxes. Hershire v. First Nat. Bk., 35 Iowa, 373. 12. An action to recover damages for the fraudulent misappropriation or conversion of property by an officer of a National Bank is assignable ; and the officer may be arrested and held to bail at the suit of an assignee. A corporation may assign anything which if owned by a natural person could be by him assigned. Grocers' Nat. Bk. «. Clark, 33 How. Pr. 160. A National Bank, which purchases a promissory note from an indorsee, may maintain an action thereon in its own name against a prior party thereto, without regard to the question whether the purchase was one it was authorized to make. (NoTK. — In Massachusetts the holder of a note need not have the legal title nor be the equitable owner in order to sue on it. This distinguishes this case from Farmers' and M. Bk. v. Baldwin, 28 Minn. 198, and First Nat. Bk. of Rochester v. Pierson, 34 Minn. 140, as in the latter State the real owner of the note must be the plaintiff.) Nat. Pemberton Bk. v. Porter, 125 Mass. 338. 13. In an action against the maker and indorser on a promissory note not payable in bank, commenced on the second day after its maturity, the complaint alleged that the maker then was and long prior thereto had been insolvent. Held, On demurrer that the complaint was sufficient; that no demand on the maker was necessary, and the action was brought in time ; and that the maker and indorser cannot be joined in the same action unless the indorser be liable without suit having been first brought against the maker. Couch v. First Nat. Bk. of Thorntown, 64,Ind. 93. 14. Where several are liable on the same cause of action and several judgments are rendered, the replevy of one judgment is not a merger and satisfaction of the others. Nat. Bk. of Monticello v. Bryant, 5 L. & E. Rep. 110. (Ky.) SUITS. 135 Where several defendants are sued upon a contract, if a recovery be had, the judgment must be against all the defendants, and not against some of them. And if one such defendant, being a bankrupt, obtains a restrain- ing order under the bankrupt law, the judgment, if a recovery be had, must be against all the defendants; and upon proper motion, execution will be stayed as to the bankrupt until the question of his discharge shall be determined. Byers v. First Nat. Bk., 85 111. 433. The 28th and 29th days of February in every leap year are to be com- puted as one day. A judgment rendered by default on a ten days' service of summons is not a suiflcient service by reason of the law reckoning said two days one ; but is voidable only and not void. ' This irregularity is cured where the defendant neglects to take advantage of it before appeal. Help- henstine ■». Vincennes Nat. Bk., 6 Rep. 169. (Ind.) Where the proprietors of a bank were sued for failing to give notice of the dishonor of a note left with it for collection, and the material issue in the case is as to whether due notice was given to the plaintiff of the dis- honor of the note, a special verdict which does not find that due notice was given, or facts from which the court can pass upon it as a question of law, is not suflBcient to enable the court to render judgment upon it, and a new trial must be granted. Locke v. Merchants' Nat. Bk., 66 Ind. 353. Suits. 1. The Circuit Courts of the United States have jurisdiction of all suits by or against any banking association established in the district for which the court is held. R. S. 1874, § 629, clause 10. And such courts have jurisdiction of all suits brought by or against any banking association established in the district for which the court is held to enjoin the Comptroller or any receiver acting under his direction as provided by the title. National Banks. R. S. 1874, § 629, clause 11. The Circuit Court of the United States has jurisdiction of suits brought by or against National Banks within their respective districts, irrespective of conditions as to the amount in controversy and the citizenship of the parties. Mitchell v. Walker, 19 Alb. L. J. 182. The 57th Section of the act of 1864 is to be interpreted to give power to National Banks to sue as well as to be sued. Kennedy v. Gibson, 8 Wall. 498. A United States Circuit Court has jurisdiction of a bill filed by a stock- holder of a National Bank to enjoin the officers of the bank from misap- j)lying its funds to the prejudice of the interests of the stockholders therein by acts which are not warranted by the charter or amount to a breach of trust. Shoemaker v. Nat. Mechanics' Bk., 2 Abb. (U. S.) 416. A National Bank may bring suit in the Federal Courts outside of the district in which it is located against a defendant who is a citizen of such other district. Manufacturers' Nat. Bk. v. Baak, 8 Blatchf. 137 ; Davis v. Cook, 9 Nev. 184. National Banks, by reason of their character as such, may sue in the Federal Courts. First Nat. Bk. v. Douglas County, 3 Dill. 398. 136 NATIONAL BANKS. The right of a National Bank to sue is not derived from the Judiciary- Act, but from the National Banking Act. Under the latter act the right to bring actions in the Federal Court is clear. Com'l Nat. Bk. of Cleve- land V. Simmons, 8 Leg. ifs. 164; b. c, 10 Alb. L. J. 155. A National Bank may waive the right to be sued in its own district, a» by entering its appearance in a suit in a foreign district. Lee v. Citizens' Nat. Bk., 3 Cinn. (Ohio,) 398. An action cannot be brought in the United States Court against the receiver by a plaintiff residing in the same district. VanAntwerp v. Hul- bnrd, 8 Blatchf 383. The courts of the United States, in determining general questions of commercial law, are not controlled by the decisions of a State court, even in an action instituted by a National Bank, located in the State rendering such decision against one of its citizens, upon a negotiable note there exe- cuted and payable. Such decisions, not based upon local legislative enact- ments, are not " laws " within the meaning of the Federal Statute, which provides that " the laws of the several States, except where the constitu- tion, treaties or statutes of the United States otherwise require or provide, shall be regarded as rules of decisions in trials at common law in the courts of the United States, in cases where they apply." Swift v. Tyson, 16 Peters, 1, reaflSrmed; Brooklyn City, etc. ■B.Nat. Bk., etc., 7 Week. Jur. 379. (U. S. Sup. Ct.) 3. The District Court of the United States is a court of competent juris- diction to authorize the receiver of a National Bank to compromise a doubtful claim. Matter of Piatt, 1 Ben. 534. The District Courts of the United States have jurisdiction of all suits by or against any association established under any law providing for National Banking Associations within the district for which the court is held. K. S. U. S. 1874, § 563, clause 15. 3. State courts have jurisdiction of suits brought by National Banks, the banking act not taking away such right. First Nat. Bk. ■». Hubbard, 49' Vt. 1. The statutes of the United States are as much the law of the land- in any State as are those of the State; and although explusive jurisdiction for their enforcement may be given to the Federal courts, yet where it is not given, either expressly or by necessary implication, the State courts hav- ing competent jurisdiction in other respects, may be resorted to. In such cases the State courts do not exercise anew jurisdiction conferred upon them, but their ordinary jurisdiction derived from their constitution under- the State law. Claflin v. Houseman, 93 U. 8. 130. In an action against a National Bank in a State court, in which the court has no jurisdiction over the bank, the fact that the receiver, after- ward appointed by the Comptroller, is substituted for the bank, gives no right to the creditor to enter judgment against the receiver. Cadle v. Tracy, 11 Blatchf 101. A National Bank may be sued in any court of its locality having juris- diction in similar cases. Bk. of Bethel ®. Paquioque Bk., 14 Wall. 883; SUITS. J.37 ' Citizens' Nat. Bk. ■». Learning, 8 Inter. Rev. Rec. 133 ; White v. Common- wealth Nat. Bk., 4 Brews. (Penn.) 234. The power to bring suits in the United States Courts is permissive, and not exclusive or mandatory, and does not oust the jurisdiction of the State courts. The fourth clause of Section 5136 is of no force in this regard, since the authority to sue and be sued given by that section confers a corporate attribute and does not relate to jurisdiction. Cooke v. State Nat. Bk., 53 N. Y. 96 ; Affirming 50 Barb. 339 ; Nat. Park Bk. v. Gunst, 1 Abb. (N. C.) 393. In civil cases arising under the Constitution or laws of the United States, a State court has jurisdiction unless it be expressly prohibited. By Sec- tion 57 of the Act of 1864, a National Bank can be sued in the State courts only when the bank is located within the territorial jurisdiction of such court (omitted in Revision of 1874). Crocker v. Marine Nat. Bk., 101 Mass. 240. A State court cannot enforce the penalty imposed by the act for the tak- ing of unlawful interest. Missouri R. T. Co. v. First Nat. Bk., 74 111. 317; Newell V. Nat. Bk. of Somerset, 13 Bush. 57. Oontra, Ordway v. Central Nat. Bk., 47 Md. 317. National Banks and their receivers may be sued in the State courts of their domicile. Adams v. Daunis, 29 La. Ann. 315. And this although the bank has resolved to go into liquidation. Ordway «. Central Nat. Bk., 46 Md. 559. But it must be In the State court of the city or county wherein the bank is located. Crocker v. Marine Nat. Bk., 101 Mass. 240. State courts have jurisdiction of suits against National Banks to recover money paid as usury. Dow v. Irasburgh Nat. Bk. of Orleans, 50 Vt. 113. Congress has power to create National Banks and make any provisions which tend to promote their eflBciency, and to protect them not only against State legislation, but also against suits or proceedings in State courts by which their efficiency would be impaired. Chesapeake Bk. «. First Nat. Bk., 40 Md. 369. 4. Suit against a, National Bank is abated by a decree dissolving the corporation and forfeiting its rights and franchises in an action brought by the Compti'oller under Section 5339 of the act. Nat. Bk. v. Colby, 21 Wall. 609. 5. A receiver was appointed for a National Bank and entered upon the duties of his office. Subsequently suit was brought against the bank and service had upon the president. He did not defend nor inform the receiver of the existence of the action. The plaintiff obtained a judgment by default, after which the receiver came in and asked that the judgment be set aside and he be permitted to defend. This the court allowed him to do. Security Bk. e. Bk. of Commerce, 3 Hun, 287. A State bank paid to its president money which he falsely represented he had paid to an agent to whom the bank was indebted. After this, the State bank was changed into a National Bank, and the new association was sued by the agent and judgment recovered against it. Held, That the 138 NATIONAL BANKS. bank could maintain an action in its own name against tlie president for' money had and received — tlie fact' of tlie sale by the State bank and the pur chase of the chose in action by the plaintiff being alleged. Atlantic Nat. Bk. v. Harris, 118 Mass. 147. The act relating to the appointment of a receiver is not exclusive. Be- fore the Comptroller has acted, and under a creditor's bill, a court of chancery may appoint a receiver. Wright v. Merchants' Nat. Bk., 3 Cent. L. 3 . 351. (U. S. C. C. W. B. of Tenn.) A court has not power to order a receiver of a National Bank to com- pound the debt of a shareholder arising on his subscription to the stock of the bank. Price, Receiver, v. Yates, 19 Alb. L. J. 395. Where suit is commenced against a bank, and afterwards a receiver is appointed, he cannot take part in such action until made a party to the same. He is a stranger to the proceedings until this is done. Tracy v. First Nat. Bk. of Selma, 37 N. T. 523. A default in the payment of its notes, and the appointment of a receiver, does not cause the bank to lose its corporate existence ; but the bank may be sued, and it may defend, after it has been put into liquidation and a receiver has been appointed ; and such suit may be founded upon a demand ■which the receiver has refused to allow. Bk. of Bethel v. Paquioque Bk., 14 Wall. 883; Paquioque Bk. ■».. Bethel Bk., 36 Conn. 338; Security Bk. e. Bk. of Commerce, 3 Hun, 387. Suits may be brought by the receiver both at law and in equity, and he may sue in his own name or in the name of the bank for his use, although the act does not in terms give him authority to sue in his own name. Bk. of Bethel b. Paquioque Bk., 14 Wall. 383. A judgment against a bank while in the hands of a receiver does not give a lien upon its property, nor is any preference thereby gained by the judgment creditor over the other creditors of the bank. All must alike await the distribution of the Comptroller under the act. Bk. of Bethel o. Paquioque Bk., 14 Wall. 383; Venango Bk. v. Taylor, 56 Pa. St. 14. 6. On execution returned nulla bona, a State Court may grant an injunc- tion and appoint a receiver. Until a receiver has been appointed by the Federal Courts, neither law nor comity requires a State Court to suspend its equitable remedy to reach the assets of the bank and enforce its own final process until the Federal Court shall act; especially where, in the Federal Court, the case is madeby the stockholders of the bank, and the judgment creditor is not made a party thereto. Merchants and Planters' Nat. Bk. D. Trustees of Masonic Hall, (Ga.) 30 Alb. L. J. 337. A court of law has no power to inquire into the rights of a stockholder to a distributive share of the assets remaining after the affairs of the com- pany are adjusted. Brown v. Adams, 5 Biss. 181. A party owning land incumbered by a mortgage, which was of record, offered the same for sale at public auction, at which there were no bidders, for the alleged reason that those intending to bid were warned by the agent of the mortgagee that the party purchasing would buy a lawsuit, and that the property should not be sold. Held, That an action for dam- SUITS. 139 ages would not lie against the mortgagee. McCoy «. First Nat. Bk. of Mount Pleasant, 50 Iowa, 577. An information in the nature of a qito warranto will not lie in a State Court to try the right to the office of director of a bank organized under the National currency act. Section 57 of the act of 1864, which provides that suits against the National banks may be instituted in both the Federal and State Courts, does not confer jurisdiction in such a case. State «. Curtis, 35 Conn. 374. 7. When a bank receives a check drawn upon it, and charges it against the drawer, and settles with him on that basis, the payee of the check has a right of action against the bank for the amount of the check. Seventh Nat. Bk. s. Cook, 73 Pa. St. 488. A direction by a bank depositor to apply deposits to the payment of checks or notes, creates no tru.st in favor of holders, and a failure to comply with the direction is a breach for which the depositor alone can sue. ^tna Nat. Bk. v. Fourth Nat. Bk., 46 N. Y. 83. A promise by the drawee of a check, draft or bill of exchange to accept and pay the same, does not make the drawee liable to an action by a holder, unless the latter has taken the check, draft or bill on the faith of such promise. Carr «. Nat. Security Bk., 107 Mass. 45; Exchange Bk. ■». Rice, 107 Mass. 87. 8. In an action by a National Bank of New York against a National Bank of West Virginia: Beld, That the defendant had the right to remove the cause from the State Court to the Federal Court upon the ground that it was a non-resident corporation. A National Bank, when formed, has no other residence or domicile than that designated under the act, in the cer- tificate of organization, and that renders it a citizen and a corporation of the State in which it is located. Chatham Nat. Bk. v. Merchants' Nat. Bk., 4Thomp. &C. 196. A National Bank, as such, has no right to remove a case from a State Court into the Federal Courts. In this case the suit was begun by the bank in the State Court of the district in which it was located ; and there- after the bank attempted to remove the case into the United States Court. Petillon V. Noble, 9 Leg. Ns. 314. The same rule was applied to a like application made by the receiver of a National Bank. Bird's Bx'rs b. Cockrem, 2 Woods, 32. Banks organized under the acts of Congress as National Banks are not entitled by force of such acts to have any suit or proceeding in the State Courts, wherein they are parties defendant, removed to the Federal Court. By section 640 of the United States revised Statutes, 1874, such corpora- tions are expressly excepted from the right of removal. Wilder v. Union Nat. Bk., 12 Log. Ns. 75. 9. After an entry of judgment for costs against the plaintiff bank, a receiver was appointed by the Comptroller. The court ordered the receiver to pay such costs. Held, Error ; because he Is not a party to the record, and because he is not an officer of the court, and because he is bound to 140 NATIONAL BANKS. pay all moneys collected into the United States Treasury. Ocean Nat. Bk. 0. Carll, 7 Hun, 237. When the petition of a creditor for a preference assumes the form of a regular suit and is decided against him, costs will be taxed against him. In re Bank of Madison, 5 Biss. 515. 10. A National Bank having advanced money to the owner of a lot of whisky, the latter employed the bank to ship the whisky for him to New York to be sold, and out of the proceeds the bank was to retain the money advanced, and a reasonable commission for shipping and selling. The whisky was shipped and sold accordingly, and the proceeds received by the bank. Held, That the bank was liable to the owner of the whisky for the money so received, and this independently of the question whether Na- tional Banks are by their charters authorized to sell produce upon commis- sion. First Nat.' Bk. of Decatur v. Priest, 50 111. 331. The Courts of the United States are not bound by the decisions of State Courts upon questions of general commercial law. Dates v. National Bk., 100 U. S. 389. Ultra Vires. 1. A. National Bank has no powers other than those conferred by the act. Hence it cannot take a deed of trust upon real estate for a contempo- raneous loan. If it does so, and attempts to enforce the power of sale, a court of equity will enjoin the sale. Matthews v. Skinner, 62 Mo. 339. But see Nat. Bk. i>. Matthews, 98 U. S. 621. A court has no power to order a receiver of a National Bank to com- pound the debt of a shareholder arising on his subscription to the stock of the bank. Price, Receiver, b. Yates, 19 Alb. Law J. 895. 3. The board of directors is the only power that can release the claims of the bank against any of its debtors. The president has no authority to execute such a release. Olney v. Chadsey, 7 R. I. 234. A National Bank organized and doing business in another State, is pro- hibited by the statutes of the State of New York (1 R. S., 2d ed. 708 j from keeping an office of discount or deposit in that Stat^, and cannot main- tain an action upon any note discounted by it at such office. Nat. Bk. of Pairhaven b. Phoenix W. Co., 6 Hun, 71. 8. A mortgage given to a National Bank to secui-e a pre-existing debt from the mortgagor, and also to secure a future loan to him, is, as to the latter, ultra vires. Woods v. People's Nat. Bk„ 9 Leg. Ns. 135 ; s. c, 83 Pa. St. 57 ; Fowler v. Sculley, 23 P. P. Smith ; (73 Pa. St.) 456. ( Pa.) 4. The doctrine of ultra vires has no application in favor of corpora- tions for wrongs commilted by them. Nat. Bk. v. Graham, 100 U. S. 699. The invalidity of a transaction with a National Bank, cannot be inquired into in an action between the parties based upon the transaction The question of ultra vires in such a case is one between the Federal Govern- ment and the bank exclusively. Bank «. Elmore, 9 Rep. 110. (Iowa) A National Bank may hold collateral for the performance of contracts MISCELLANEOUS. 14:1 between third parlies, and it will be estopped to say tliat such act was uUra vires. Bushnell v. Chautauqua, 10 Hun, 378. Where a National Bank became the transferee of a warehouse in which grain was stored, the bank, upon demand, refused to deliver to the holder of the grain receipts : Seld, That as the bank had converted the grain to its own use, it would not be heard to say that its acts as a ware- houseman were ultra vires. " The question is not whether the bank was acting under and in conformity with the provisions of its charter in receiving and forwarding grain, but whether the bank has wrongfully converted appellee's property to its own use. If, as the jury have found the bank has, then it does not matter whether the wrong was perpetrated while the bank was in the pursuit of its legitimate business or was acting against the provisions of its charter. German Nat. Bk. v. Meadowcroft, 1 N. W. Rep. 759. (111.) The selling of railroad bonds for third parties on commission is not within the authorized business of National Bank; and being beyond its powers, the bank can interpose the defense of ultra vires to an action brought against it for alleged false representation of its teller as to such bonds. Weckler v. First Nat. Bk. of Hagerstown, 42 Md. 581. Where a paper shows upon its face that it Is given in the course of a transaction not in the usual course of business of the bank, it is not bound thereby, though signed by the president of the bank as such officer. A bank is not authorized either by its charter or its incidental powers to act as broker or agent in the purchase of stocks or bonds. Bank v. Hoch, 9 Rep. 153. (Pa.) By-Laws. 1. A by-law that no shares of stock shall be transferred while the holder is indebted to the bank is valid ; and any attempted transfer by the share- holder, while so indebted, is void. Young v. Vough, 33 N. J. Eq. 325. A bank cannot even by a by-law acquire a lien on its own stock held by persons who are its debtors. Being against the spirit of the act, such a power cannot be implied from general expressions. Bullard v. Bank, 18 Wall. 589. Miscellaneous, 1. Where a contract in writing expresses, and its operation depends upon a contingenc}', upon the happening of the contingency, there is a meeting of the minds of the parties, and the contract need not be rewritten. A lease for a term of three years, rent payable monthly, contained a clause giving the lessee the privilege of renewal for a period of ten years more on the same terms. At the expiration of the term of three years the lessee continued in possession, and paid rent as before for five years and eleven months, at the expiration of which time he gave the lessor one month's notice of his intention to vacate the premises. Seld, That at the expiration of the first term, the lessee held over under the terms of the lease ; that by his acts he accepted the privilege of renewal, giving the 142 NATIONAL BANES. lease an extended operation and acceding to its terms, and that a new lease was unnecessary. Insurance and Law Building Co. e. Nat. Bk. of Mo., 5 Mo. App. C. 333. A. rented premises of B. for five years with a privilege of a renewal of the lease for five years, of which he availed himself, taking a further lease for five years, and within the last term removed the trade fixtures (a fire, proof safe and vault, etc.) erected by him. Held, In an action by the land- lord for damages for a breach of the covenant to return the premises in good order and condition, that the tenant surrendered the premises at the end of the first term, and the fixtures became the property of the landlord, not having been removed within the term ; and that the tenant, by accept- ing the premises in the condition they were at the commencement of the second term, is bound to deliver them up in like good order and condition. Watriss o. First Nat. Bk. of Cambridge, 6 Rep. 303 ; s. c, 124 Mass. 571. 3. Where the effect of an instrument is to transfer property beyond the reach of an execution, in trust for the benefit of assenting creditors, it is within the purview of the statute regulating voluntary assignments. Corn Exchange Nat. Bk. v. Philadelphia, etc., 9 Leg. Ns. 65. 3. The indorsement and delivery of a warehouse receipt, when the property it represents is a part of a larger bulk or mass of articles, does not vest the title until a separation has been had, so as to distinguish it from other property of a similar kind and quality. Where the subject matter of a sale is in bulk, and a certain quality is sold to be taken from a greater quantity, no title passes until the separation is made. In such cases equity follows the law, and if no title or interest passes to the vendee for want of identification, then no equitable lien can be created. Ferguson v. Louisville City Nat. Bk., 7 Rep. 561 ; s. c, 14 Bush. (Ky.) 70. A warehouse receipt is not, in a technical sense, like a bill of exchange, a negotiable instrument; it merely stands in the place of the property it represents ; and a delivery of the receipt has the same effect in transferring the title to the property as the delivery of the property. A warehouseman, on application of the owner, by mistake issued to the latter, at different dates, two warehouse receipts for the same property, the last of which the owner assigned for value to the plaintiff, to whom the defendant, the warehouseman, on demand delivered the property. After, ward, the assignee of the first receipt recovered the property in replevin from the plaintiff, who then sued to recover the value of the property. Held, That there being no privity of contract between the defendant as maker and the plaintiff as assignee of the receipt, the defendant, in the absence of all fraud, is not estopped from showing as against the plaintiff the mistake in giving the last receipt, as a defense to the action. Second Nat. Bk. of Toledo t. Walbridge, 19 Ohio St. 419. 4. M., desiring to borrow money from 8., gave his note to him ; it wa» discounted hona fide at a bank for S., and he gave M. his check for the amount. An inquest commenced afterwards found M. a lunatic for a time anterior to the discount of the note ; the finding was traversed. The bank had no notice of the finding or of the lunacy of M. HM, In a suit by the MISCELLANEOUS. 143 bank against M., on the note, that under the circumstances the insanity of M. was not a defense, the contract being executed and without fraud. That the inquisition- was but prima facie evidence of insanity. That reports in the neighborhood ttat M. was insane, were not evidence in a suit against him by the bank on the note. Persons not gui juris, or not having capacity to contract debts, are liable for torts, and may bind themselves for necessaries. Lancaster Co. Nat. Bk. V. Moore, 78 Pa. St. 407. The creditor of a lunatic is entitled to have the estate of such lunatic, not subject to exemption, sold to satisfy his debt. German Nat. Bk. «. Engeln's Committee, 14 Bush. 708. 5. A promissoiy note, executed by a wife to relieve her husband's goods from attachment, does not come within the statute rendering her liable to suit " on any contract made by her upon her personal credit for the bene- fit of herself, her family or her estate." Nat. Bk. of New England v. Smith, 43 Conn. 327. The right of a husband to receive, and of a bank to pay to him, divi^ dends declared upon shares of stock owned by and standing in the name of his wife, must be determined by the law of the country in which the bank is located and the dividends are declared, and not by the law of the country in which the husband and wife are domiciled. Graham v. First Nat. Bk. of Norfolk, 20 Hun, 326. A married woman may confess judgment under the statutes of New York. Where she is expressly authorized by statute " to sue and be sued in the same manner as if she were sole," she is impliedly authorized to use the requisite and ordinary agencies of suing and being sued ; that is, to appoint an attorney for that purpose. And when she confesses a judg- ment, she submits to be sued in that form and manner. First Nat. Bk. of Canandaigua v. Garlinghouse, 36 How. Pr. Rep. 369. By the rules of the common law a married woman, to whom a draft, note or other promises are made, cannot maintain an action thereon in her own name during coverture. The husband must join her in the suit. In this particular the common law is unchanged in the District of Columbia. At common law the husband owned the personal property of the wife and had the right to reduce it to possession. The act of Congress regulating the rights of married women in such district has no retroactive operation. Kimbro v. First Nat. Bk. of Washington, 1 MoArthur, 61. A married woman, who kept a deposit account in a bank, overdrew the same. Held, That by overdrawing her account she incurred a debt which was allowed upon the faith and credit of her separate estate, and she was as legally liable thereon as if she were sole. Davis v. First Nat. Bk. of Cheyenne, 5 Neb. 243. 6. The interposition of equity is not necessary where a trust fund is per- verted. The cestui que trvM can follow it by law as far as it can be traced. The United States, like an individual, is bound to return property which has been brought into its possession by the authorized act of its agent, and which it holds without consideration given therefor. 144: NATIONAL BANKS. Where money has gone into the coflfers of a sovereignty through the fraud of an agent thereof, that money cannot be held against the claim of the injured party. United States v. State Nat Bk. of Boston, 96 U. S. 30; Merchants' Bk. v. United States, 96 U. 8. 36. Equity will charge land, paid for in part with money known to have been stolen from a bank, with a trust in favor of the bank for the amount so used. Nat. Mahaiwe Bk. v. Barry, 125 Mass. 20. 7. If the owner of personal property, which has been attached on a writ against him, and duly sold by a deputy sheriff, makes an assignment of the property "and the proceeds thereof," the title to such proceeds vests in the assignee, subject to the attachment; and if, after dissolution of the attachment, the officer having been notified of the assignment, and demand having been made upon him by the assignee, fails to pay over such pro- ceeds, it is a neglect of official duty on his part, for which the sheriff is liable in an action by the assignee. First Ward Nat. Bk. v. Thomas, 125 Mass. 278. A. by contract in writing pledged to B. certain tobacco, reciting that it was A.'B"own property, and free from all ■ incumbrance and all of the crop" of a certain year. B. bon'owed money of C. and delivered the tobacco to him, and gave him an assignment of all his " right, title and Interest in and under the contract, together with all the property therein mentioned." Seld, That there was no implied warranty of title to the tobacco or of its quality as between B. and C. First Nat. Bk. of North- ampton V. Mass. Loan and Tr. Co., 123 Mass. 330. It is the duty of a bank to return a pledge or show good reasons why it does not. The seizure of a bank by military order, and the appointment of military commissioners who took possession of its assets, is a sufficient ground of defense to an action by the bailee. McLemore v. The Louisiana State Bk., 91 U. 8. 27. 8. The Act, Code of 1873, ch. 183, sec. 8, whiQh authorizes the waiver of the homestead exemption, is not in conflict with the eleventh article of the Constitution of the State ; and if a party, executing his bond or note, waives his homestead exemption as to the note or bond, neither he nor his wife can set up such exemption as against the note or bond. Reed v. Union Bk. of Winchester, 6 Rep. 606. (Va.) 9. Where, by an agreed statement of facts in the nature of a special verdict, the plaintiff's claim was admitted by the defendant, except the sum of $3,134,20: Seld, That that sum was the amount actually in dispute, and although judgment was rendered below for the entire claim, being more than $5,000, the writ of error must be dismissed for want of jurisdic- tion. Tintsman v. Nat. Bk., 100 U. 8. 6. 10. Defendant assigned a certificate of stock to the plaintiff's cashier " as security for the payment of any demands the Merchants' National Bank may from time to time have or hold against Edwin W. Hall." Seld, That the assignment was intended as a continuing security for all demands then existing against the said Hall, and for all renewals thereof, as well as for all that might thereafter be created in the ordinary conduct of his busi- MISCErXANEOUS. 145 ness with tlie bank, in the manner in which the banking business was usually done. Merchants' Nat. Bk. of Whitehall v. Hall, 18 Hun, 176. 11. A note payable in "Greenback currency" is payable in United States currency or in legal tender notes, and not in the issues of National Banks, and is of the same yalidity as if the term " dollars '' alone had been used. Burton v. Brooks, 35 Ark. 315. 13. A composition agreement was made by, certain creditors and the debtor, by which the debtor made an assignment, being allowed to retain a certain large balance for the purpose of carrying on his business, and the creditors agreed to take extension notes. A., the president of a bank, which was a large creditor, signed the agreement "A., attorney,'' but with- out revealing any principal. The bank did not assent to the composition in any way, though the other creditors supposed A.'s signature to be for the bank. In fact the claim of the bank had been paid just before A. aflfixed his signature, and with A.'s knowledge by B., with funds of the debtor. The debtor failed to meet his extension notes after the first or second series of them had been paid. On a bill filed by a creditor, held, That A. could not be compelled to make good the amount received by B., as it did not appear that even if the plaintiffs were induced to sign the agreement by the fact that A.'s signature was affixed, the plaintiffs condi- tion would have been improved by refusing to sign, or that had the amount paid by the debtor not been paid, the debtor would not have failed to meet his extension notes. Nat. Park Bk. of N. T. v. Kemble, 8 Reporter, 8. (U. S. C. C, E. D. of Pa.) 13. Where a clerk and master in chancery accepts an order on him to be paid out of the first purchase money coming into his hands from the sale of land in a certain cause on condition it is presented on the cLay the notes for said purchase money fall due, he is not liable on the acceptance, unless the order is presented on that day. First Nat. Bk. of Payetteville v. Clark, 5 Kep. 664. (Tenn.) 14. For failure to deliver a telegraph message, the company is liable only for damages which flow directly and naturally from the breach of contract. Before the company can be charged with special or peculiar damages, it must have had notice that they were likely to arise from a breach of the contract. Upon breach of the contract, nominal damages may be recovered if actual damages are not proved. First Nat. Bk. of Bamesville d. West. TJ. Tel. Co., 5 Rep. 660. (Ohio.) 15. A party engaged as a common carrier cannot, by declaring or stip- ulating that he shall not be so considered, divest himself of the liability attached to the fixed legal character of that occupation. Having undertaken to perform an entire service, any person or corpora- tion employed by the common carrier to perform that service, becomes the agent of the carrier, and not that of the consignor or consignee. Therefore, where an express company engaged to transport packages, etc., from one point to another, sends> its messenger in charge of them on 10 146 NATIONAL BANKS. the car set apart for Its use by the railroad company employed to perform the service, the latter company becomes the agent of the former. Bk. of Kentucky v. Adams Express Company, 93 U. S. 174. Before a party can rescind a contract he must restore the other party to the condition in which he stood before the contract was made, and this involves a restoration of everything received by him under the contract, whether money, goods or securities. The fact that money received under a stipulation and agreement settling the claim of parties thereto, is a portion of a debt due to one party from the other, which could be enforced were it not for the stipulation, will not avail to make retention of such money consistent with the recision of the stipulation. Therefore, in an action for the debt, where plaintiflF claims that the settlement is void for fraud, the retention of the money received under the settlement, although a portion of the debt sued for, negatives the recision of the settlement by the plaintiff, and makes the settlement a good defense. Gould o. Cayuga Co. Nat. Bk. (Sup. Ct. N. T.,) 7 Week Jur. 315. Possession is of the essence of a pledge; and without it, no privilege can exist as against third persons. The thing pledged may be in the temporary possession of the pledgor as special bailee, without defeating the legal possession of the pledgee; but where it has never been out of the pledgor's actual possession, and has always been subject to his disposal byway of collection, sale, substitution or exchange, no pledge or privilege exists as against third persons. When it was agreed that a bank should deposit bills and notes with its. president and his partner, by way of pledge, to secure a loan made by a third party, and the president delivers them back to the bank ofllcers for collection, with power to substitute other securities therefor, it is not such a delivery and possession as is necessary to create a privilege by the laws of Louisiana. Casey v. Cavaroc, 96 U. S. 467 ; Casey v. Nat. Bk., 96 U. 8. 493; Casey «. Schuchardt, 96 U. S. 494. A National Bank issued a letter of credit "on shipments of cattle." Two. drafts drawn against the letter were dishonored. Held, That the word "cattle" included "hogs." The court refused to pass upon the question as to whether a National Bank can issue a letter of credit. First Nat. Bk. of Becatur o. Home Sgs. Bk., 7 Leg. Ns. 174. (U. S. S. C.) A lessee, who during the term erects trade flxtues on the demised prem- ises and before the expiration of the first term, accepts a new lease of the premises, to commence at the expiration of the first term, containing dif- ferent terms and conditioiis, making no reference to the old lease, and reserving no right to him in such fixtures, and in which he covenants to deliver up the premises at the end of the term in as good condition " as the same now are," cannot remove the fixtures after the expiration of the first term, although his occupation has been continuous. The taking of the new lease and occupation thereunder was a surrender of the premises to the lessor at the end of the first term. Note. — The breach in this case consisted in the taking down and removal POWEE TO HOLD EEAL PEOPEETY. 147 of the safe, the furnace and the banking counters. Watriss v. Nat. Bk. of Cambridge, 121 Mass. 571. The M. N. Bk. received a dispatch requesting the payment of $500 to J. H. B. A person called upon S., introduced himself as J. H. B., and asked to be identified at the M. N. Bk. S. recognized him as a person whom he had met at W., as an employee of the mercantile house of M. & W., but did not recollect his name, and this person exhibited to him what pur- ported to be a dispatch addressed to J. H. B., which stated that the M. N. . Bk. would pay him $500. "Whereupon S. sent his bookkeeper to the bank to identify him as J. H. B. The bank paid the money. He was not J. H. B. 8. had no interest in the matter. The bank sued S. for the recovery of the $500. Held, That upon these facts the bank could not recover. If a person states what he knows to be untrue, or makes an assertion as to the truth or falsity of which he knows nothing whatever, and so induces another to act to his prejudice, a fraud in law is committed; but though the representation made is false, if the person making it had reason to and did believe it true, he has incurred no liability, for he has been guilty of no deceit, and the gist of the action is fraud. Merchants' Nat. Bk. of St. L. V. Sells, 3 Mo. App. Cas. 85. McA., as postmaster during the year 1873, deposited $24,000 of Grovern- ment funds in the defendant bank, he at the same time having with it an individual account. In June of that year the bank transferred $10,000 of the postmaster's account to the individual account of McA., closing the former account. The remaining $14,000 was placed in such individual account. The jury were instructed that if the bank received these funds, knowing them to be postofflce funds, it became indebted,to the United States for the amount, and could only relieve itself by showing that the funds had been drawn out and used for government purposes. The burden was upon the bank, and the fact that McA. may have drawn some of the funds upon his check as postmaster did not relieve the bank from its duty to see to It that they were applied' for government purposes. If McA. applied any of the moneys to his own use, and the bank had reason to suppose he was so doing, the fact that he drew them upon his postmaster check made no dif- ference. If the bank had received the moneys as government moneys and kept them to the credit of McA. as postmaster, and had paid them out in due course of business upon his check as postmaster, it would be pro- tected; but the fact of placing them to his individual credit and subject to his individual check for his individual purposes, puts the burden upon the bank to show that they were properly applied to government purposes. United States «. Home Nat. Bk. (Judge Blodgett MSS.), U. S. C. C, N D of 111. SECTION 5137. FOWEB TO HOLD EEAL PEOPEETY. A National banking association may purchase, hold, and convey real estate for the following purposes, and for no others: 148 KATIONAL BANKS. First — Such as shall be necessary for its immediate accom- modation in the transaction of its business. Second, — Such as shall be mortgaged to it in good faith by way of security for debts previously contracted. Thvrd — Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings. Fourth — Such as it shall purchase at sales under judgments, decrees, or mortgages held by the association, or shall purchase to secure dehts due to it. But no such association shall hold the possession of any real; estate under mortgage, or the title and possession of any real estate purchased to secure any debts due to it, for a longer period than five years. 3 June, 1864, c. 106, §. 38, v. 13, p. 107. 1. Under sections 5186-7 a National Bank has no power to take a deed of trust for a contemporaneous loan. Such authority is not conferred by the act, and the bank has no powers not directly or indirectly conferred upon it by Congress. An injunction will lie to restrain the exercise of a power of sale contained in a deed taken under such circumstances. Mathews v. Skinner, 63 Mo. 839. But see Union Nat. Bk. r>. Matthews, 98 U. S. 631. F. gave to a National Bank, not then being indebted to it, a mortgage to ^secure the bank for notes, thereafter to be discounted by it for him. Seld^ That National Banks can take no other than personal security for a present loan. Loaning upon real estate security by such a bank is ultra mres and the mortgage is void. No action can be maintained on the mortgage. This invalidity can be asserted by the assignee of F. Courts will not, -even with the consent of the defendant, enforce a contract in violation of a statute, although not expressly made void. If the plaintiflf cannot open his case without showing that he has broken the law, courts will not assist him to recover, whatever the justice of his claim may be. Fowler v. Scully, ■73 Pa. St. 456. The act prohibits National Banks from loaning money on real estate isecurity. They are limited to loans on personal security. Therefore, a mortgage given to an ofScer of such bank at the time of a loan by the bank, is void, and will not be enforced by the courts. A bank can only exercise its franchises and powers in the manner prescribed by the law under which it is organized. I*ridley v. Bowen, 87 111. 151. The act prohibits a National Bank from taking a mortgage of real estate, except for debts contracted prior to the giving of the mortgage. A mortgage given to secure future indebtedness is void. The Legislature, whose creature the bank is, may lawfully impose such a restriction in its charter. Crocker v. Whitney, 71 N. T. 161. A National Bank cannot take a mortgage upon real estate as a security for a debt concurrently created or for future advances. POWEB' TO HOLD EEAL PKOPEETY. 149 Where the mortgage was to secure prior debts and future advances, the conveyance is good for such prior debt and bad as to all advances. Kansas Valley Nat. Bk. ■». Roswell, 3 Dillon, 371. 3. Four persons, jointly indebted to two banks, by agreement, gave their individual notes, secured by mortgage, to each of the banks — the new notes being made to the order of a third party and by him indorsed to the banks. This was declared to be a payment, and not a renewal of the old notes. Seld, also that there was a sufficient consideration for the new notes. That the banks had the power to make the arrangement and take the new notes and mortgages in the way they did. Shinkle «. First Nat. Bk. of Ripley, 33 Ohio St. 516. The banking act gives a National Bank, the right to hold a real estate mortgage taken in good faith to secure debts previously contracted. Wor- chester Nat. Bk. ■». Cheeney, 87 111. 602 ; s. c, 11 Leg. Ns. 31, 4. National Bank may take mortgages upon real estate to secure debta previously contracted. A National Bank made a new maturity at a usuri- ous rate, and took notes therefor and mortgages made by the debtor to a third party. Held, That the usury only was avoided. That as to the principal the mortgage was valid, and could be enforced by the bank. Allen V. First Nat. Bk. of Xenia, 23 Ohio St. 97. The bank has a general power to commute debts really due for real estate. This power does not depend upoh whether, in the opinion of the jury, the debt was in danger and prudence required that the real estate should be taken in satisfaction of it. If the bank could not hold the real estate the debt would still be paid, and the property would not go back to the debtor. The State alone can take the benefit of the defect. If the conveyance is to trustees to sell, such act would not be forbidden either by the letter or the spirit of the act of incorporation. Baird v. The Bank of Washington, 11 S. & R. (Pa.) 411. A National Bankicannot loan on real estate security; but after a creditor has made default, or after a loan has been made,' the bank may bona fide, and for the purpose of securing the loan, take real estate security. Mer- chants' Nat. Bk. 0. Mears, 10 Leg. Ns. 180. 3. A mortgage given to a National Bank to secure a pre-existing debt from the mortgagor, and to secure a future loan to him, is, as to the latter, ultra mres. If the mortgaged premises be sold, the proceeds arising therefrom must be applied in discharge of such pre-existing debt, notwithstanding such proceeds arise from a sale by the sheriff. An indorser of notes held by a National Bank, secured by a mortgage, has a right to have the proceeds arising from a judicial sale of the mort- gaged premises by the bank applied to the payment of such notes in his relief. Woods i. People's Nat. Bk. of Pittsburgh, 9 Leg. Ns. 135 ; s. c, 83 Pa. St. 57; s. o., 11 Bank. Mag. 557. An indorsement of a promissory note by a married woman, by its terms 150 NATIONAL BANKS. charging her separate estate with the payment of the note, is not in any sense a mortgage. It is simply a personal security within the meaning of the act, and a National Bank is not prohibited from taking it. Third Nat. Bk. v. Blake, 73 N. T. 360. Where a National Bank sells real estate, it may take back a mortgage for the unpaid purchase money .» New Orleans v. Eaymond, 29 La. Ann. 355. A National Bank took an assignment of notes secured by a real estate mortgage, and then assigned them to the plaintiflf, who brought a suit in foreclosure. Seld, That the mortgage was not extinguished by the assign- ment to the bank. That it would not be presumed that the debt for which the notes were assigned to the bank was a present one. That the limitations of the act apply to transactions outside of banking. Richards v. Kountze, 4 Neb. 300. Through the intervention of a trustee, a debt due to the bank may be liquidated by the purchase and sale of the real estate securing the same. Zantzingers v. Gunton, 19 "Wall. 33. A National Bank refused to loan to a firm, but did loan to one of the firm upon his note indorsed by the other to the bank ; the first giving a mortgage to secure the second, with an agreement that in case of default the security should inure to the bank. Seld, Not to be within the prohi- bition of section 5137, and therefore legal and binding, and enforceable for the benefit of the bank. As against bankruptcy, the rights of the bank began with the execution of the note. First Nat. Bk. of Ft. Dodge o. Hair, 86 Iowa, 443. Should the principal in a note secured by a mortgage on the lands of the surety, go into bankruptcy, that fa;ct does not affect the rights of the parties under the mortgage. Citizens' Nat. Bk. of Piqua «. Leming, 8 Int. Rev. R. 133. Defendant was indebted to a National Bank, to partially secure which he gave a mbrtgage to the bank on real estate upon which there was a prior encumbrance of $3,000, that the debtor agreed to pay. Five hun- dred dollars of this $3,000 became due, and the bank, in order to protect its claim, paid it and took a note and mortgage upon real estate for that amount. Seld, In an action upon such note and mortgage, that they were valid; that the bank in taking them had not violated the act. Ornn v. Nat. Bk., 16 Kan. 341. A National Bank may acquire title to real estate even though encum- bered, if honestly done for the purpose of securing a debt due it, and it may do this by taking a conveyance directly or by sale under process of law. If the purpose is to speculate in real estate under the form or pretense of obtaining satisfaction of a previous debt, it is forbidden by law. Where commission merchants in St. Louis were indebted to a National Bank in the sum of $6,500, on drafts drawn upon them and accepted, which the bank had discounted in its usual course of business, and to POWER TO HOLD BEAL PBOPEETY. 151 secure such Indebtedness transferred to the bank a note of $20,000 on an- other party, secured by deed of trust upon real estate subject to further Hens, and such other party made a deed of the property to the bank in payment of the sum due him, the bank agreeing to discharge the other liens on the same. It was held. That the transaction was not forbidden by ■either the letter or the spirit of the National Banking Act. Mapes v. Scott, 88 111. 352. The bank may, under this section, purchase such real estate as may be necessary in order to secure a debt due to it, although in excess of such ■debt, if the security of the debt be the real object of the purchase. Upton ®. Nat. Bk. of So. Reading, 120 Mass. 153. An absolute conveyance of real property intended as a security for a loan, where the grantee executes a bond for reconveyance upon payment ■of the loan, constitutes an express mortgage ; and the property is subject to sale on execution under a judgment against the grantor. Clinton Nat. Bk. ■!!. Manwarring, 39 Iowa, 281. An action was begun in the District Court by a National Bank against ■S. and others, to foreclose a mortgage on real estate. After decree, the sheriff being about to execute an order of sale, an injunction was prayed for by the original defendants against the bank and the sheriff to restrain the sale, on the ground that the bank had taken the mortgage as security for a contemporaneous loan. The bill was dismissed. On error, the 4ecree dismissing the bill was affirmed. The mortgaged premises having been sold, an appeal was taken from the order confirming the sale. Held, That the question of the legality of the mortgage in the hands of the bank was rea adjudieata, and will not be reconsidered in an, action between the same parties. State Nat. Bk. of Lincoln u. Scofield, 4 N. W. Rep. N. s. 71, (Neb.); and Scofield «. Bank, 2 N. W. Rep. N.s. 888. A trust deed to secure a present indebtedness, and also to secure present advances within a given time and for a specified amount, is a good and Yalid security, unless some right intervenes before the advances are made. A judgment creates a lien on an equity of redemption from the time it is recorded. First Nat. Bk. v. Morsell, 1 McArthur, 155. Beveraed, 1 Otto, ■357, which see. 4. A loan of money by a National Bank on real estate security is valid as between the parties. The borrower is estopped to allege the want of power in the bank to take such a loan. For a violation of its charter by a National Bank the forfeiture of its franchises can only be enforced by the authority creating the bank. Union NaL Bk. V. Matthews, 98 U. S. 621; B. 0., 7 Rep. 357. 152 NATIOI^AL BANES. SECTION 5138. EEQITISITE AMOUNT OF OAPITAIi. No association shall be organized nnder this Title with a less capital than one hundred thousand dollars; except that banks with a capital of not less than fifty thousand dollars may, with the approval of the Secretary of the Treasury, be organized in any place the population of which does not exceed six thousand inhabitants. No association shall be organized in a city the population of which exceeds fifty thousand per- sons, with a less capital than two hundred thousand dollars. 3d June, 1864, c. 106, § 7, v. 13, p. 101. 1. The term " capital," as applied to the property of a National Bank, does not include moneys borrowed temporarily, in the usual course of its business, but applies only to the property or moneys of the bank set apart for other uses and permanently invested in the business. Bailey v. Clark, 7 Leg. Ns. 339. SECTION 5139. EHAEBS OF STOCK AND TEANSFEE3. The capital stock of each asssociation 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. 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 shaU be impaired. 8d June, 1864, c. 106, § 12, v. 13, p. 103. 1. Shares of stock in a National Bank are personal property, and although they are a species of property which, in one sense, is intangible and incorporeal, the law which created them could separate them from the person of the owner for the purpose of taxation and give them a situs- SHABES OF STOCK A] TBANSFEBS. 153 of their own. This was done by § 5139 of the act. Tappan, Collector, v. Merchants' Nat. Bk., 19 Wall. 490. Shares of stock in a National Bank are personal property, and on the death of its owners will go in the usual course of administration. Hobhs 0. Western Nat. Bank, 9 Rep. 467. (U. S. C. C.) It seems that shares in National Banks are in the nature of cTwses in action. They are mere demands for dividends as they become due. The certificates of stock are merely evidence of the holder's title to a given share in the property and franchises of the corporation of which he is a member. The bank is a trustee for the stockholders, who must come to its counter for their dividends and their share of the assets on final liquid- ation, and no transfer of stock can be completed until shown upon the books of the bank. First Nat. Bk. of Mendota v. Smith, 65 111. 44. 2. The personal liability of the officers and stockholders of a corpora- tion for a debt contracted by the corporation is inconsistent with the nature of bodies corporate, and can only arise by force of the statute. Salt Lake City Nat. Bk. ■». Hendrickson, 6 Rep. 312. (N. J.) 3. Where stock is by its terms traneferrable only on the books of the company, its delivery to an officer of the company with the request that he transfer it, is not sufficient to pass the legal title. Until it is actually transferred, the assignee has no legal right of action in his own name. Brown ®. Adams, 5 Biss. 181. If the transfer be bona fide, the moment it is completed on the books, that moment the transferrer ceases to be a stockholder. The officers of the bank have no right to veto this transfer, and either the seller or pur- chaser may compel a transfer on the books of the bank. Johnson v. Laf- lin, 17 Alb. L. J. 146. 4. The transferree of stock, who caused the transfer to be made to him- self on the books of the corporation, although he holds it as collateral security for a debt of his transferrer, is liable the same as if the equitable as well as the legal title to such stock were in him. Pullman v. Upton, 96 U. S. 328. A party who, by way of pledge or collateral security for a loan of money, accepts stock of a National Bank, which he causes to be transferred to himself on the books, incurs immediate liability as a stockholder, and he cannot relieve himself therefrom by making a colorable ti'ansfer of the stock with the understanding that at his request it shall be retransferred. A National Bank which had so accepted and caused to be transferred to it shares of stock of another National Bank, was, on the latter becoming insolvent, sued as a stockholder. Held, That a loan of money by a Na- tional Bank on such security is not prohibited by law ; and if it were, the defendant "could not set up its own illegal act to escape the responsibility resulting therefrom. National Bk. v. Case, 99 U. S. 638. ■• A transfer of shares in a failing corporation, made by the transferrer for the purpose of escaping his liability as a shareholder, to a person who, for any cause, is incapable of responding in respect to such liability, ia void as to the creditors of the company and as to other shareholders. 164 NAnONAL BANKS. although as between the transferrer and the transferree it was ' out and out.' '* National Bk. «. Case, 99 U. S. 628. Under the bankrupt laws, a transferree of National Bank shares is liable to creditors of the bank as a stockholder, if the shares stand in his name on the books of the bank at the time of its suspension, notwithstanding he took the transfer as security only for a debt which has since been paid. Bowden v. Farmers', etc., Bk. of Baltimore, 1 Hughes, 307. Until there is a transfer of shares on the books of the bank, the share- holder whose name there appears is liable for the debts of the bank; an actual sale and signing the ordinary power of attorney on the back of the ■certiflcate will not relieve the seller. Mann v. Cheeseman, Bank. Mag., Jan., 1875. In determining who are stockholders, the court will not look beyond the legal title, unless the transfer of the stock was made fraudulently for the purpose of avoiding responsibility. After the defendant once became a stockholder, he can only throw off the liabilities incident to that relation by transferring the stock in accordance with the statute. Adderly v. Storm, 6 Hill, 624. If the stock has been fraudulently transferred for the purpose of avoiding responsibility, and at the same time securing all the advantages of a stockholder, the real owner may be reached. Adderly v. Storm, 6 Hill, 624. The transferree of shares in a National Bank at the time of the failure ■of the bank is, where the transfer appears to be absolute on the books of the bank, liable for the debts of the bank to the extent of the shares held by him, notwithstanding he holds them by transfer or assignment as col- lateral security for a loan to the shareholder from whom he received the transfer. Hale v. "Walker, 31 Iowa, 344. The liability of a stockholder of a National Bank is several, and is fixed by his taking stock in the corporation. Bailey v. Sawyer, 9 Leg. Ns. 191. Primarily, a creditor of a National Bank may proceed against the party in whom the legal title to the stock is vested. Where shares in a banking association have been hypothecated and placed in the hands of the trans- ferree, he will be subject to all the liabilities of an ordinary owner, for the reason that the property is in his name, and the legal ownership appears to be in him. Thus, where a party made a loan to a National Bank, and made his promissory note, partly as an accommodation to the bank, to be held among its other 'assets, and fifty shares of its stock, equal in value to $5,000, were issued to him as security for his loan and as indemnity against liability on his note, it was ?ield. That he was liable to the creditors of the bank as a stockholder, whatever might be his relation to the corporators of the bank. Wheelock v. Kost, 77 111. 296. Where the holder of stock as collateral security transfers the shares to his own name, he makes himself liable as a stockholder for the benefit of creditors. The mere transfer of stock for a nominal price, or to one 'who holds for SHARES OF STOCK AND TEANSFEBS. 155 the assignor, will not relieve the actual owner from the liabilities of a stockholder to the creditors. The lender of money cannot set out his own violation of law to escape a responsibility resulting from such illegal act. Germania Nat. Bk. v. Case, 8 Rep. 449. (U. S.) The pledgee of stock may sell the same under the power of sale and relieve himself of liability, although at the time of such sale he knows such bank to be insolvent. Magruder o. Colston, 44 Md. 349. 5. If the shareholder transfer his stock to escape liability, such trans- fer is void as to creditors. Bowden ». Santos, 1 Hughes, 158. A fraudulent transfer of the shares held by the shareholder, in order to avoid liability for the debts of the corporation, leaves such shareholder still liable. Marcy v. Clark, 17 Mass. 329. 6. A person is presumed to be the owner of stock when his name appears on the books of a company as a stockholder; and when sued as such, the burden of disproving that presumption is cast upon him. Turn- bull V. Payson, 5 Otto, 418; s. c, 10 Leg. Ns. 89. 7. The capital stock or shares of a corporation, constitute a trust fund for the benefit of the general creditors of the corporation, which cannot be defeated by a simulated payment of the stock subscription or by any device short of actual payment in good faith. An arrangement by which the stock is nominally paid and the money immediately taken back as a loan to the stockholder, is a device to change the debt from a stock debt to a loan, and is not a valid payment against creditors of the corporation, though it inay be good as between the company and the stockholder. A stockholder indebted to an insolvent corporation for unpaid shares cannot set ofif against the trust fund of creditors a debt due him by the corporation. The fund arising from such unpaid shares must be equally divided among the creditors. The relations of a stockholder to the corpo- ration and to the public who deal with the latter, are such as to require good faith and fair dealing in every transaction between him and the cor- poration of which he is part owner and controller, which may injuriously aifect the rights of the creditors or of the general public, and a rigid scrutiny will be made into all such ti'ansactions in the interest of credifors. Sawyer v. Hoag, 17 Wall. 610. 8. A National Bank, having by its articles of association the right to make a by-law preventing the transfer of stock by one indebted to it, enacted a by-law to the effect that the stock thereof should be transferable on the books of the bank only, upon the return of the old certificate, and that such certificate should contain notice of such power. The certificates of stock issued did not state that they could not be transferred by one indebted, but did state that they were transferable on the books of the bank only and on surrender of the old certificate; and on the back they had a blank assignment and power of attorney under seal. The cashier had fifty shares. These he assigned in blank to a firm in which he was a partner, which firm pledged the shares for money loaned. The cashier, being indebted to his bank, afterwards, and without the return of 156 NATIONAL BANKS. the certiflcates tfansferred the stock on the books of the bank to the presi- dent thereof, who assumed the liabilities of the cashier. The stock pledged was sold on execution. The purchaser presented it to the bank and demanded the transfer on the books of the bank to him, which was refused. Held, The purchaser could compel the transfer. The bank had put it in the power of the cashier to injure an innocent third party, and so it must bear the loss. The attempted transfer to the president was void. The purchaser acquired all the right,s of the party with whom they were pledged and no more. Lee v. Citizens' Nat. Bk. of Piqua, 3 Cin. (0.) 298. When the charter of a corporation provides that the stock should be transferred in such manner as the board of directors may prescribe, and the board enact a by-law that the stock shall be transferred only on the books of the company, arid that in each certificate issued must be •' trans- ferrable only on the books of the company subject to the by-laws of the company." A creditor of a person in whose name stock stands on the books of the company, who causes an execution to be levied on such stock, will hold the same as against one who has assignment of the stock certificates, but not a transfer on the books. People's Bk. of Bloomington <;. Gridley, 1 Mo. Jur. 589; s. c„ 91 111. 457. 9. A stock certificate originally for two shares of stock in the name of C, which had been by him fraudulently altered so as to purport to be for two hundred shares, in the name of a certain bank, was received in good faith by the bank from C. as collateral security for a loan to him. On payment of the loan by C. the cashier of the bank, as such, signed a transfer in blank on the back of the certificate and delivered it to C. Afterwards the plaintiff in good faith received the same certificate from C. as collateral security for a loan then made to him. The plaintiff^s loan was not paid. On suit by him against the bank to recover the amount of his loss, Seld, That the bank was liable. The signing of a transfer in blank on a certificate of stock is a warranty of the genuineness of the certificate. Mathews v. Mass.- Nat. Bk., 1 Holmes, 396. The change from a State Bank to a National Bank does not pay off or refund the stock of the former ; unless provided for such stock is outstand- ing after the conversion. Maynard v. Bank, 7 Phila. 6. When sued by the receiver upon an assessment made by the Comptroller, the stockholder cannot deny the validity of the creation of the bank, nor question the decision of the Comptroller as to a deficiency of assets, nor show that the proceedings prior to the making of the assessment were irregular. Casey ■». Galli, 94 U. S. 673; Ocean Nat. Bk. v. Carll, 7 Hun, 237. Where the bank reduces its stock, it cannot keep a part of the money thus received as surplus funds or for other purposes, as against the wishes of the stockholders. Seeley v. New York Nat. Ex. Bank, 4 Abb. N. C. 61. A certificate of stock is merely evidence of an interest in the dividends as they are declared, and of a right to a pro rata distribution of the effects of the corporation on hand at the expiration of the charter. SHARES OF STOCK AND TRANSFERS. 157 When a dividend has once been declared, the directors cannot after- wards refuse to pay it because they have determined to establish a surplus fund with a view to benefit the corporation and its stockholders. A bank having wrongfully refused to permit the shares of a stockholder to be transferred upon its books, is liable for the value of the shares. Seeley v. New York Nat. Exchange Bk., 4 Abb. N. C. 61. Oontra, On the last proposition, see Meyers s. Valley Nat. Bk., 18 Nat. Bey. Keg. 34; 8. c, 18 Alb. L. J. 57, where it is held, that a judgment for conversion vests the title to the converted property in the virrong-doer; and as the wrong-doer in this case could not take such title, the assignee could not maintain the action. A bill in equity was filed to compel the specific performance of a con- tract for the sale and delivery of a certain number of shares of stock of a National Bank in order that the complainant might obtain a controlling interest in the bank. But the court dismissed the bill as against public policy. .Foil's Appeal (Pa. St. ), 7 Week. Jr. 103. Or. pledged to plaintiffs as security for a loan of money, stock of the de- fendants, a corporation of which he was a member, by mere delivery of the certificate of the stock and a power of attorney for its transfer. He was also indebted to the defendants. The statute required notice of the assign- ment to be given to defendants, and that defendants had a lien on their stock for debts due it from the stockholder. Or. died, insolvent. Both creditors proved their claims before the commissioners of his estate, and they de- ducted the value of the stock from the plaintiffs' claim, allowing the balance; they also allowed defendants' claim in full. Held, That there was nothing in the action of the commissioners that estopped the defend, ants, in a suit in which the plaintiffs claimed to be the owners of the stock, from asserting their right to a lieu on the stock under the statute. That equity required that if the defendants be allowed to keep the stock they should pay the plaintiffs the amount by which the plaintiffs' dividend had been reduced and their own to the same extent increased by the action of the commissioners in deducting the value of the stock from the plaintiffs' claim, and not from their own. A waiver is an intentional relinquishment of a known right. The existence of such an intent is a matter of fact that should be found by the court below, and not left to be inferred by the appellate court. First Nat. Bk. of Hartford v. Hartford Ins. Co., 45 Conn. 33. A certificate of shares in a National Bank was taken without the owner's knowledge, and, together with a forged power of attorney, delivered to a broker for sale. The broker employed an auctioneer who sold the stock to a purchaser. The broker then sent the stolen certificate with the forged power of attorney to the bank, requesting a new oertiflcate in the name of the auctioneer. The bank did so, and the new certificate was sent to the auctioneer, who delivered it to the broker with a power of attorney, who in turn delivered it to the purchaser, to whom the bank afterwards issued a new certificate. All parties acted in good faith and supposed the forged power of attorney to be genuine. 158 NATIONAL BANKS. The original owner then brought a bill in equity against the bank, and obtained a decree ordering it to procure and transfer to the plalntiflf the shares of stock and to make and deliver a certificate of the same. The bank thereupon Issued a certificate for the shares in question, and thereby increased its capital stock. It then brought a bill in equity against the broker, auctioneer and purchaser, setting forth the above facts. Held, That the bill could not be maintained. Machinists' Nat. Bk. ». Field, 128 Mass. 345. See Pratt, Ex'r. v. Machinists' Nat. Bk., 123 Mass. 110. 10. A National Bank cannot create by a by-law a lien in its favor on the stock of its shareholders for the security of debts due by them to the bank. A by-law declaring that no transfer of the stock of the bank shall be made without the consent of the board of directors by any shareholder who shall be liable to the bank as a debtor, if not void because it provides for a for- feiture of stock, is void because without express authority it attempts to impose a lien upon its stock. The power to declare a lien on stock by means of a by-law is neither expressly nor impliedly conferred upon National Banks. Yet the lien may exist if provided for in the, articles of association. Kosenback v. Salt Springs Nat. Bk., 53 Barb. 495. By the articles of association the bank had the right to prohibit the transfer of stock by one Indebted to it. Under that power a by-law was passed prohibiting a transfer by any shareholder so indebted. A share- holder, while owing the bank attempted to make a transfer of his stock, but the bank refused to permit it to be done. Whereupon he brought suit for damages based on such refusal. It was decided that the action would not lie, as the bank was justified in its refusal. Knight ». Old Nat. Bk. of Providence, 4 Am. Law Times, 240. A by-law that no shares shall be transferred while the holder is indebted to the bank, is valid ; and any attempted transfer by the shareholder while so indebted is void. An indorser who pays the note by which such debt is created Is subro- gated to the rights of the bank as against such shares. Toung v. Vough, 23 N. J. Eq. 325. The officers of a bank have no right to refuse to transfer stock on the books of the bank when a ionafide sale has been made. The court on the demand of either the seller or the buyer will compel the transfer. John- son «. Laflin, 17 Alb. L. J. 146. In Pennsylvania, a foreign executor, having filed a copy of the will of his testator, is entitled to make a transfer of stock on the books of corpor- ations " of or within " the commonwealth, including National Banks, with- out obtaining letters testamentary, or ancillary administration within the State. When a National Bank has not prescribed a special mode of trans- ferring its stock, a transfer thereof must be made according to the law of the State in which said bank is situate. Hobbs e. Bank, 9 Bep. 467. (U. 8. C. C.) FAILUEK TO PAT INSTALLMENTS. 169 SECTION 5140. HOW PAYMENT OF THE OAPITAl STOCK MUST BE MADE AND PEOVED. At least fifty per centum of the capital stock of every asso- ciation shall be paid in before it shall be authorized to com- mence business; and the remainder of the capital stock of such association shall be paid in installments of at leasb ten per centum each, on the whole amount of the capital, as frequently as one installment at the end of each succeeding month from the time it shall be authorized by the Comptroller of the Cur- rency to commence business ; and the payment of each install- ment shall be certified to the Comptroller, under oath by the president or cashier of the association. 3d June, 1864, c. 106, § 14, v. 13, p. 103. SECTION 5141. PBOOBEDINGS IF SHAEBHOLDBE FAILS TO PAT INSTALLMENTS. "Whenever any shareholder, or his assignee, fails to pay any installment on the stock when the same is required by the preceding section to be paid, the directors of such association may sell the stock of such delinquent shareholder at public auc- tion, having given three weeks' previous notice thereof in a newspaper published and of general circulation in the city or county where the association is located, or if no newspaper is published in said city or county, then in a newspaper pub- lished nearest thereto, to any person who will pay the highest price therefor, to be not less than the amount then due thereon, with the expenses of advertisement and sale; and the excess, if any, shall be paid to the delinquent shareholder. If no bid- der can be found who will pay for such stock the amount due thereon to the association, and the cost of advertisement and sale, the amount previously paid shall be forfeited to the asso- ciation, and such stock shall be sold as the directors may order, within six months from the time of such forfeiture, and if not sold it shall be canceled and deducted frOm the capital stock 160 NATIONAL BANKS. of the association. If any sucli cancellation and reduction shall reduce the capital of the association below the minimum of capital required by law, the capital stock shall, within thirty days from the date of such cancellation, be increased to the required amount; in default of which a receiver may be ap- pointed, according to the provisions of section, fifty-two hun- dred and thirty-four, to close up the business of the association. 3d June, 1864, c. 106, § 15, v. 13, p. 103. SECTION 5143. IN0EEA8E OF CAPITAL STOCK. Any association formed under this Title may, by its articles of association, provide for an increase of its capital from time to time, as may be deemed expedient, subject to the limit- ations of this Title. But the maximum of such increase to be provided in the articles of association shall be determined by the Comptroller of the Currency; and no increase of capi- tal shall be valid until the whole amount of such increase is paid in, and notice thereof has been transmitted to the Comptroller of the Currency, and his certificate obtained spec- ifying 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. 3d June, 1864, c. 106, § 13, p. 108. 1. There can be no increase of the capital stock of a National Bank until the Comptroller approves thereof and issues his certificate as pro- vided in the above section. Charleston «. Peoples' Nat. Bk., 5 (Rich.) S. Car. 103. SECTION 5143. EEDUOTION OF CAPITAL STOCK. Any association formed under this Title may, by the vote of shareholders owning two-thirds of its capital stock, reduce its capital to any sum not below the amount required by this Title to authorize the formation of associations; but no such reduc- ELECTION OF DIEECTOES. 161 tion shall be allowable which will reduce the capital of the association below the amount required for its outstanding cir- culation, 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. 3d June, 1864, c. 106, § 13, v. 13, p. 108. 1. When a National Bank reduces its capital stock it cannot, as against the wishes of the shareholders, retain as a surplus fund or for other pur- poses, the whole or any part of the money which it receives for the retired stock. Seeley «. New York Ex. Nat. Bk., Thomp. N. B. Cas. 804; 8. c, 4 Abh. N. C. 61. SECTION 5144. EIGHT OF SHAEEHOLDEES TO TOTE. In all elections of directors, and in deciding all questions at meetings of shareholders, 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 offi- cer, clerk, teller, or book-keeper of such association shall act as proxy; and no' shareholder whose liability is past due and unpaid shall be allowed to vote. 3d June, 1864, o. 106, § 11, v. 13, p. 103. SECTION 5145. ELECTION OF DIEEOTOES. The affairs of each association shall be managed by not less than five directors, who shall be elected by the shareholders at a meeting to be held at any time before the association is authorized by the Comptroller of the Currency to commence the business of banking; and afterward at meetings to be held on such day in January of-each year as is specified therefor in the articles of association. The directors shall hold office for one year, and until their successors are elected and have qualified. 3d June, 1864, c.'l06, §§ 9, 10, v. 13, p. 103. 11 162 NATIONAL BANKS. SECTION 6146. BEQOTSITE QUALIFICATIONS OF DIEEOTOES, ' Every director must, during his whole term of service, be a citizen of the United States, and at least three-fourths of the directors must have resided in the State, Territory, or District in which the association is located, for at least one year imme- diately preceding their election, and must be residents therein during their continuance in office. Every director must own, in his own right, at least ten shares of the capital stock of the association of which he is a director. Any director who ceases to be the owner of ten shares of the stock, or who becomes in any other manner disqualified, shall thereby vacate his place. 3d June, 1864, c. 106, §§ 9, 10 v. 13, p. 108. SECTION 5147. OATH BEQUIEED FROM DIEEOTOES. 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 williugly permit to be violated, any of the provisions of this Title, and that he is the owner in good faith, and in his own right, of the number of shares of stock required by this Title, 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. Such oath, subscribed by the director making it, and certified by the officer before whom it is taken, shall be immediately transmitted to the Comptroller of the Currency, and shall be filed and preserved in his Office. 3d June, 1864, c. 106, § 9, v. 13, p. 102. ELECTION OE OFEICERS. 163 SECTION 5148. FILLING VACANCIES. 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. 3ci June 1864, o. 106, § 10, v. 13, p. 102. SECTION 5149. PEOCEEDINGS WHERE NO ELECTION IS HELD ON THE PEOPEE DAT. If, from any cause an election of directors is not made at the the time appointed, the association shall not for that cause 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 news- paper published nearest thereto. If the articles of association do not fix the day on which the election shall be held, or if no election is held on the day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise; or if the directors fail to fix the day, share- holders representing two-thirds of the shares may do so. 3d June, 1864, c. 106, § 9, v. 13, p. 103. SECTION 5150. ELECTION OF PEESIDENT OF THB BOAED. One of the directors, to be chosen by the board, shall be the president of the board, 3d June, 1864, c. 106, § 9, v. 13, p. 102; 3d June. 1876, c. 156, § 2, v. 19, p. 63. 164 NATIONAL BANES. SECTION 5151. INDIVIDUAL LIABILITY OF SHABEHOLDEES. . The shareholders of every National banking association shall be held individually responsible, equally and rateably, 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 the amount invested -in such shares; except that shareholders of any bank- ing 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; and such surplus of twenty per centum shall be kept undiminished, and be in addition to the surplus provided for in this Title; and if at any time there is a deficiency in such surplus of twenty per centum, such association shall not pay any dividends to its shareholders until the deficiency is made good ; and in case of such deficiency, the Comptroller of the Currency may compel the association to close its business and wind up its affairs under the provi- sions of Chapter four of this Title. 3d June, 1864, c. 106, § 63, v. 18, p. 118. 1. The liability of the stockholder is fixed when he becomes a member of the corporation by taking stock therein, and is several and not joint. Bailey, Receiver, v. Sawyer, 9 Leg. Ns. 191. The original stockholders, by their acceptance of the charter, and sub- sequent purchasers by becoming members, assented and agreed to the act of incorporation. The defendant in this suit, in common with the other stockholders, by his acceptance of the charter, agreed to its terms, and ■especially to that feature of it, so strongly marlied, of the individual liability of the stockholders, equally with that of the corporate body, for the debts of the company. It is a liability which eveiy stockholder must ibe understood to assume and take upon himself, and to be under to those who deal with the company. Dealers contract with the corporation on the faith of that security for the performance of the contract. The credit they give is given, and they trust as well to the personal liability of the stock- holders as to the responsibility of the corporation for the fulfillment of the engagement; and each stockholder incurs that liability to the creditor the the moment the contract of such creditor with the company is consum- EXECUTORS, BTO., NOT PEE80NALLT LIABLE. 166 mated. Curran «. The State of Arkansas, 15 How. 304; Hawthorne fl. Calef, 3 Wall. 10. 3. The transfer of shares of the capital stock of a National Bank, made with Intent to exonerate the owner and transferrer from liability as a stock- holder to creditors, is void as against creditors of the bank. Bowen v. Santos, 1 Hughes, 158. 3. Where the name of an individual appears on the stock book of a corporation as a stockholder, the prima facie presumption is that he is the owner of the stock in a case where there is nothing to rebut that pre- sumption ; and in an action against him as a stockholder, the burden of proving that he is not a stockholder or of rebutting that presumption is cast upon the defendant. Turnbull v. Payson, 95 U. S. 418. The liability of the stockholders is several and not joint. The limit of their liability is the par value of the stock held by each one. Kennedy v. Gibson, 8 Wall. 505. 4. Stockholders in a banking corporation are only personally liable or their individual property chargeable for the debts of the corporation, to the extent, and as prescribed by the charter. By the act of becoming stock- holders they assent to the terms, and assume the liabilities imposed by the ° act creating the corporation. The obligations thus assumed are limited by the terms of the charter, and cannot be extended by implication beyond the terms of that instrument reasonably interpreted. Lowry «. Inman, 46 N. T. 119. When a National Bank becomes insolvent, and the Comptroller orders the individual liability of the shareholders to be enforced, his order de- claring to what extent such liability shall be enforced, is conclusive upon them. The amount to be paid rests in the judgment and discretion of the Comptroller, and his determination cannot be controverted by the stock- holders in suits against them. Casey «. Galli, 94 U. S. 677. SECTION 5153. EXECUTOES, TKUSTEES, ETC., NOT PEKSONALLT LIABLE. Persons holding stock as executors, administrators, guar- dians, or trustees, shall not be personally subject to any liabili- ties as stockholders; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such trust funds would be, if living and competent to act and hold the stock in his own name. 3d June, 1864, c. 106, § 63, v. 13, p. 118. 1. To protect, a trustee who is a shareholder in a National Bank from personal liability under this section, it must appear on the books of the bank that he is such trustee. 166 NATIONAL BANKS. In ordering the assessment on the stock, the stock certificates and stock ledger of the bank must be taken by the Comptroller, in the absence of fraud or mistake, as showing who the stockholders were at the time of the failure of the bank. The stockholder, in subscribing for or in accepting the stock, assents to becoming security for the creditors for the payment of the debts of the bank. A religious society purchased and held in its own name certain shares of a National Bank, using for that purpose a fund that had been pre- viously bequeathed it. Held, That the society was not a trustee, but was an ordinary stockholder, and as such was liable to assessment. Davis v. Essex B. Soc, 44 Conn. 583. W. died in January, 1871, a stockholder in a National Bank. The bank failed in December, 1871. An administrator was appointed, who settled the estate and made his final report. In January, 1877, the Comptroller made an assessment upon the stock of the bank, and then brought an action against the administrator. Held, That the administrator did not hold such stock in such a sense as to make him personally liable as a ■ shareholder. That the liability of W. was in the nature of a contract, and as such was a personal liability for which his estate was holden at his dteath. That the fact that the administrator had nothing in his hands was no bar to a judgment. That such judgment should be against him de bonis decedeniis. That this section was not intended to affect the liability of estates in the process of settlement to assessment, but only to prevent a personal liability from running against persons acting in a trust capacity, who had received the stock for the benefit of trust estates. Davis v. Weed, 44 Conn. 569. An executor, who was also a director in a National Bank, without any authority, sold at private sale to a third party stock in the bank belonging to the estate of the deceased, and took the proceeds of the sale and con- verted them to his own use. The stock was never transferred on the books of the bank. The executor became insolvent and was removed. His suc- cessor filed a bill to have the stock issued to him as executor. Setd, That the stock was personal property belonging to the estate. That by § 5139 stock was transferable only on the books of the bank. That the attempted transfer passed no title, and that the purchaser bought at his peril. Weyer o. Second Nat. Bk., 57 Ind. 198. SECTION 5153. DUTIES AND LIABILITIES WHEN DESIGNATED AS DEPOSITAKEES OF PUBLIC MONEYS. All National Banking Associations designated, for that pur- pose by the Secretary of the Treasury, shall be depositaries of public money, except receipts from customs, under such regu- OE&ANJZATION OF STATE BANKS AS NATIONAL BANKS. 167 iations as may be prescribed by the Secretary ; and they may also be employed as financial agents of the Government; and they shall perform all such reasonable duties, as depositaries of public moneys and financial agents of the Government, as may be required of them. The Secretary of the Treasury shall require the associations thus designated to give satisfac- tory security, by the deposit of United States bonds and other- wise, for the safe keeping and prompt payment of the public money deposited with them, and for the faithful performance of their duties as financial agents of the Government. And every association so designated as receiver or depositary of the public money, shall take and receive at par all of the National currency bills, by whatever association issued, which have been paid into the Government for internal revenue, or for loans or stocks. ( See §§ 3639-3649, 5489.) 3d June, 1864, c. 106, § 45, v. 13. p. 113. 1. Designating a National Bank as a depositary of public moneys does not constitute it an agent of the G-overnment. Nor is the Government liable for moneys lost by a failure of such bank. Branch v. U. S., 13 Bank. Mag. 61. SECTION 5154. OEGANIZATIOH OF STATE BANKS AS NATIONAL BANKING ASSOCIA- TIONS. Any bank incorporated by special law, or any banking insti- tution organized under a general law of any State, may become a National Association under this Title by the name prescribed in its Organization certificate; and in such case the articles of association and the organization certificate may be executed by a majority of the directors of the bank or banking institution; and the certificate shall declare that the owners of two-thirds of the capital stock have authorized the directors to make such certificate, and to change and convert the bank or banking institution into a National Association. A majority of the directors, after executing the articles of association and organization certificate, shall have power to exe- cute all other papers, and to do whatever may be required to make its organization perfect and complete as a National Association. 168 '^ ■ MAlTONAi BANKS. The shares of any such bank may continue to be for the same amount each as they were before the conversion, and the direc- tors may continue to be the directors of the association until others are elected or appointed in accordance with the pro- visions of this chapter; and any State Bank which is a stock- holder in any other bank, by authority of State laws, may con- tinue to hold its stock, although either bank, or both, may be organized under and have accepted the provisions of this Title. "When the Comptroller of the Currency has given tO such association a certificate, under his hand and oflBcial seal, that the provisions of this Title have been complied with, and that it is authorized to commence the business of banking, the association shall have the same powers and privileges, and shall be subject to the same duties, responsibilities, and rules, in all respects, as are prescribed for other associations origi- nally organized as National Banking Associations, and shall be held and regarded as such an association. But no such association shall have a less capital than the amount prescribed for associations organized under this Title. 3d June, 1864, c. 106, § 44, v. 13, p. 112. 1. No authority is necessary from the State to enable a State Bank to change to a National Bank. The option to do so is given by the 47th sec- tion of the section of the banking act of Congress, 18th statute, 113, now section 5154. The power there conferred is ample, and its validity cannot be doubted. The act is silent as to any assent or permission by the State. It was as competent for Congress to authorize the transmutation as to create such institutions originally. Casey v. Galli, 94 U. 8. 673. 2. By the reorganization of a State Bank into a National Bank, it loses none of its assets and escapes none of its liabilities. The change is a transit and not a creation: Trover will Ije against the bank after its reorganization for certain packages of coin specially deposited with it prior to the change. Coflfey v. Nat. Bk. of the State of Mo., 40 Mo. 140. The conversion of a State Bank into a National Bank is not a dissolu- tion of the one and the creation of the other as distinct acts ; it is a change only, which does not alter its relations to third parties. Such change does not pay off or refund its stock, and unless some act be done in the prem- ises, such stock of the State Bank is outstanding after the conversion. Maynard v. Bank, 7 Phila. 6. A reward ofiered by a State Bank, which was afterwards changed into a National Bank, binds the bank the same as if such conversion had not taken place. Kelsey v. Nat. Bk. of Crawford, 69 Pa. St. 426. STATS BANES HAYINQ BBANGHES. 169' A National Bank, organized from a State Bank, at the time of its organs izatiou took from such State Bank, among the discounted notes, one for a larger amount than the National Bank was authorized to loan to a single borrower. Held, That such note is not, nor is any note given in renewal thereof, to be regarded as within the meaning of section 5300, as given for money borrowed of a National Bank. Allen v. First Nat. Bk. of Xenia, 23 Ohio St. 97. The Farmers' Bank of Maryland recovered a judgment against Thomas. Under section 51S4 it was afterwards converted into a National Bank.^ Thereafter it sued out a icire facias in its original name on such judg. ment. Held, That it had a right so to do. That the State statute giving it the right to bring suit in its original name, grants it the privilege so to do, and such statute is not in conflict with the act of Congress. Thomas «. Farmers' Nat. Bk. of Md., 46 Md. 43. A State bank paid to its president money, which he falsely represented that he had paid to an agent to whom the bank was indebted. After this the State bank was duly changed into a National Bank, and the new asso- ciation was sued by the agent and judgment recovered against it. H^ld, That the bank could maintain an action in its own name for money had and received against such president. Atlantic Nat. Bk. v. Harris, 118 Mass. 147. A National banking association, organized from a State bank and receiving its assets, is liable for its debts. Where one was a debtor to a State bank and also its creditor by holding its notes, the mutual obligation continued, and the National Bank was bound to receive the notes, whether insolvent or not, in payment of its debts. Thorp n. Wegefarth, 56 Pa. St. 82. 3. The personal property of a banking corporation, which organized under the National banking act, upon the execution of the necessary papers and the approval of the proper officer, passes to the new body ; no other assign- ment is necessary. Watrisa v. First Nat. Bk. of Cambridge, 6 Kep. 308 ; s. c, 124 Mass. 571. SECTION 5155. STATE BANKS HAVING BEANOHES, It shall be lawful for any bank or banting association or- ganized under State laws, and having branches, the capital being joint and assigned to and used by the mother-bank and branches in definite proportions, to become a National banking association in conformity with existing laws, and to retain and keep in operation its branches, or such one or more of them as it may elect to retain; the amount of the circulation redeemable at the mother-bank, and each branch, to be regu- lated by the amount of capital assigned to and used by each. 3d March, 1865, c. 78, § 7, v. 13, p. 484. 170 NATIONAL BANKS. SECTION 5156. KESEBTATION OF EIGHTS OF ASSOCIATIONS ORGANIZED UNDEB ACT OF 1863. Nothing in this Title shall affect any appointments made, acts done, or proceedings had or commenced prior to the third day of June, eighteen hundred and sixty-four, in or to- ward the organization of any National banking association under the act of February twenty-five, eighteen hundred and sixty-three; but all associations which on the third day of June, eighteen hundred and sixty-four were organized or com- menced to be organSed under that act, shall enjoy all the rights and privileges granted, and be subject to all the duties, liabilities, and restrictions imposed by this Title, notwithstand- ing all the steps prescribed by this Title for the organization of associations were not pursued, if such associations were ■duly organized under that act. 3d June, 1864, c. 106, § 6ii,-v. 13, p. 118. DEFOSIX OV BONDS. 171 CHAPTER VIII. SECTION 5157. WHAT ASSOCIATIONS AEE GOVBENED BY CHAPTER? 2, 3, AND 4. The provisions of chapters two, three, and four of this Title, which are expressed without restrictive words, as applying to ■"National banking associations" or to "associations," apply to all associations organized to carry on the business of bank- ing under any act of Congress. 3d June, 1864, c. 106, § 4, v. 13, p. 100. SECTION 5158. EKGISTBEED BONDS INTENDED BY THE TEBIVI " UNITED STATES BONDS." The term " United States bonds," as used throughout this chapter shall be construed to mean registered bonds of the United States. 3d June, 1864, c. 106, § 4, v. 13, p. 100. ■ SECTION 5159. . DEPOSIT or BONDS EEQUIEED BEFOEE ISSITE OF OIEOtJLATING NOTES. Every association, after having complied with the provisions of this Title, preliminary to the commencement of the banking business, and before it shall be authorized to commence bank- ing business under this Title, shall transfer and deliver to the Treasurer of the United States, any United States registered bonds, bearing interest, to an amount not less than thirty thous- and dollars, and not less than one-third of the capital stock paid in. Such bonds shall be received by the Treasurer upon deposit, and shall be by him safely kept in his office, until they 172 NATIONAL BANKS. shall be otherwise disposed of, in pursuance of the provisions of this Title. 3d June, 1864, o. 106, § 16, v. 13, p. 104 ; 30th June, 1874, c. 343, v. 18, p. 124. 1. v. alleged that he claimed title to bonds deposited with the treasurer to secure its circulation by a National Bank by assignment from the bank ; that the United States Treasurer and the Comptroller refused to recognize his claim; that the latter had appointed K. as receiver of the bank; that the said parties intended to sell the bonds, redeem the circulating notes of the bank, and then pass the balance to the general fund. On demurrer to these allegations, it was held. That no relief could be granted as against the Treasurer or Comptroller, and hence none against the receiver; that the proceeds of the bonds could never come into the hands of the receiver, and he, therefore, had no concern in the suit. Van Antwerp «. Hurlburd, 8 Blatchf. 383. Nor can the court, at the suit of an individual, interfere with the action of the Comptroller in respect to the bonds deposited to secure the redemp- tion of the circulating notes of the bank. Van Antwerp i. Hurlburd, 7 Blatchf. 436. SECTION 5160. INOEEASE OB BEDtJOTION OF DEPOSIT TO 00EEE8P0ND WITH CAPITAL. The deposit of bonds made by each association shall be in- creased as its capital may be paid up or increased, so that every association shall at all times have on deposit with the Treas- urer registered United States bonds to the amount of at least one-third of its capital stock actually paid in. And any association that may desire to reduce its capital, or to close up its business and dissolve its organization, may take up its bonds upon returning to the Comptroller its circulating notes in the proportion hereinafter required, or may take up any excess of bonds beyond one-third of its capital stock, and upon which no circulating notes have been delivered. 3d June, 1864, o. 106, § 16, v. 13, p. 104. SECTION 5161. EXCHANGE OF COUPON FOB EEGISTEEED BONDS. To facilitate a compliance with the two preceding sections, the Secretary of the Treasury is authorized to receive from any EKGISTEY OF TEANSFERS. • 173 association, and cancel, any United States coupon bonds, and to issue in lieu thereof registered bonds of like amount, bearing a like rate of interest, and having the same time to run. 3d June, 1864, c. 106, § 16, v. 13, p. 104. SECTION 5163. MANNER OF MAKING TEANSFEE8 OF BONDS. All transfers of United States bonds, made by any associa- tion under the provisions of this Title, shaH be made to the Treasurer of the United States in trust for the association, with a memorandum written or printed on each bond, and signed by the cashier, or some other oflicer of the association making the deposit. A receipt shall be given to the associa- tion, by the Comptroller of the Currency, or by a clerk ap- pointed by him for that purpose, stating that the bond is held in trust for the association on whose behalf the transfer is made, and as security for the redemption and payment of any circulating notes that have been or may be delivered to such association. 'No assignment or transfer of any such bond by the Treasurer shall be deemed valid unless countersigned by the Comptroller of the Currency. 3d June, 1864, c. 106, § 19, v. 13, p. 105. SECTION 5163. EKGISTEY OF TEANSFEKa. The Comptroller of the Currency shall keep in his oflSce a book in which he shall cause to be entered, immediately upon countersigning it, every transfer or assignment by the Treas- urer, of any bonds belonging to a E'ational Banking Associa- tion, presented for his signature. He shall state in such entry the name of the association from whose accounts the transfer is made, the name of the party to whom it is made, and the par value of the bonds transferred. 8d June, 1864, o. 106, §§ 19, 20, v. 13, p. 105. 174 HATIOHAL BANKS, SECTION 5164 MOTICE OF TRANSFER TO BE GIVEN TO ASSOCIATION INTERESTED. The Comptroller of the Currency shall, immediately upon countersigning and entering any transfer or assignment by the Treasurer, of .any bonds belonging to a National Banking Association, advise by mail the association from whose ac- counts the transfer is made, of the kind and numerical desig- nation of the bonds, and the amount thereof so transferred. 3d June, 1864, c. 106, § 19. v. 13, p. 105. SECTION 5165, EXAMINATION OF REGISTRT AND BONDS. The Comptroller of the Currency shall have at all times,, during office hours, access to the books of the Treasurer of the United States for the purpose of ascertaining the correctness of any transfer or assignment of the bonds deposited by an asso- ciation, presented to the Comptroller to countersign; and the Treasurer shall have the like access to the book mentioned in section fifty-one hundred and sixty-three, during office hours, to ascertain the correctness of the entries in the same; and the Comptroller shall also at all times have access to the bonds on deposit with the Treasurer, to ascertain their amount and con- dition. 3d June, 1864, c. 106, § 20, y. 13, p. 105. SECTION 5166. ANNUAL EXAMINATION OF BONDS BY ASSOCIATIOllS. Every association having bonds deposited in the office of the Treasurer of the United States shall, once or oftener in each fiscal year, examine and compare the bonds pledged by the association with the books of the Comptroller of the Currency and with the accounts of the association, and, if they are found correct, to execute to the Treasurer a certificate setting forth CUSTODY OF BONDS, COLLECTION OF INTEBEST, ETC. 175 the different kinds and the amounts thereof, and that the same are in the possession and custody of the Treasurer at the date of the certificate. Such examination shall be made at such time or times, during the ordinary business hours, as the Treas- urer and the Comptroller, respectively, may select, and may be made by an officer or agent of such association, duly appointed in writing for that purpose; and his certificate before men- tioned shall be of like force and validity as if executed by the president or cashier. A duplicate of such certificate, signed by the Treasurer, shall be retained by the association. 3d June, 1864, c. 106, § 35, v. 13, p. 106. SECTION 5167. CUSTODY OF BONDS, COLLECTION OF INTEEEST, ETC. The bonds transferred to and deposited with the Treasurer of the United States, by any association, for the security of its circulating notes, shall be held exclusively for that purpose, until such notes are redeemed, except as provided in this Title. The Comptroller of the Currency shall give to any such asso- ciation powers of attorney to receive and appropriate to its own use the interest on the bonds which it has so transferred to the Treasurer; but such powers shall become inoperative when- ever such association fails to redeem its circulating notes. Whenever the market or cash value of any bonds thus depos- ited with the Treasurer is reduced below the amount of the circulation issued for the same, the Comptroller may demand and receive the amount of such depreciation in other United States bonds at cash value, or in money, from the association, to be deposited with the Treasurer as long as such depreciation continues. And the Comptroller, upon the terms prescribed by the Secretary of the Treasury, may permit an exchange to be made of any of the bonds deposited with the Treasurer by any association, for other bonds of the United States authorized to be received as security for circulating notes, if he is of opin- ion that such an exchange can be made without prejudice to the United States; and he may direct the return of any bonds 176 NATIONAL BANES. to the association which transferred the same, in sums of not less than one thousand dollars, apon the surrender to him and the cancellation of a proportionate amount of such circulating notes: Provided, That the remaining bonds which shall have been transferred by the association offering to surrender circu- lating notes are equal to the amount required for the cir- culating notes not surrendered by such association, and that the amount of bonds in the hands of the Treasurer is not diminished below the amount required to be kept on deposit with him, and that there has been no failure by the associa- tion to redeem its circulating notes, nor any other violation by it of the provisions of this Title, and that the market or cash value of the remaining bonds is not below the amount required for the circulation issued for the same. 3d June, 1864, c. 106, § 26, v. 13, p. 107. SECTION 5168. COMPTEOLLBB TO DETEEMINK IF ASSOCIATIONS CAN OOMMBNOK BUSINESS. Whenever a certificate is transmitted to the Comptroller of the currency, as provided in this Title, and the association trans- mitting the same notifies the Comptroller that at least fifty per centum of its capital stock has been duly paid in, and that such association has complied with all the provisions of this Title required to be complied with before an association shall be authorized to commence the business of banking, the Comp- troller shall examine into the condition of such association, ascertain especially the amount of money paid in on account of its capital, the name and place of residence of each of its directors, and the amount of the capital stock of which each is the owner in good faith, and generally whether such associa- tion has complied with all the provisions of this Title required to entitle it to engage in the business of banking; and shall cause to be made and attested by the oaths of a majority of the directors, and by the president or cashier of the association, a statement of all the facts necessary to enable the Comptroller (JKRTIFICATE OF AUTHOEITY TO COMMENCE BAMKINQ. 177 to determine whether the association is lawfully entitled to commence the business of banking. 3d June, 1864, c. 106, § 17, v. 13, p. 104. 1. The production of the certificate of the Comptroller is sufficient proof of the incorporation of the bank. National Bank v. The PhcBnix, etc., 8 Hun, 71 ; Thatcher v. West River Nat. Bk., 19 Mich. 196. The Comptroller is clothed with jurisdiction to decide as to the com- pleteness of the organization, and his certificate is conclusive upon the subject for all purposes of litigation. Casey v. Gralli, 94 U. S. 678. The bank sufficiently proves its iijcorporation by the production of the certificate of the Comptroller of the Currency, as provided for by Section 5168 of the act Nat. Bk. of Fairhaven n. Phcenix, etc., 6 Hun, 71. SECTION 5169. OEETIFIOATE GF AUTHOEITY TO COMMENCE BANKING TO BE ISSUED. If, upon a careful examination of the facts so reported, and of any other facts which may come to the knowledge of the Comptroller, whether by means of a special commission ap- pointed by him for. the purpose of inquiring into the condition of such association, or otherwise, it appears that such associa- tion is lawfully entitled to commence the business of banking, the Comptroller shall give to such association a certificate, under his hand and oflacial seal, that such association has com- plied with all the provisions required to be complied with before commencing the business of banking, and that such association is authorized to commence such business. But the Comptroller may withhold from an association his certificate authorizing the commencement of business, whenever he has reason to suppose that the shareholders have formed the same for any other than the legitimate objects contemplated by this Title. 3d June, 1864, c. 106, §§13, 18, v. 13, pp. 102, 104. 1. Documentary evidence of the existence of a corporation under the name of " The "West River National Bank of Jamaica," described as located in the town of Jamaica, county of Windham, and State of Vermont, is admissible under the general issue to prove the corporate existence of the party plaintiff styled in the declaration " The West River National Bank of Jamaica, Vermont." 12 178 NATIONAL BAHKS. It is no objection to the admission in evidence of the certificate of the organization of a National Bank, that the notary before whom it was acknowledged appears to be one of the shareholders of the bank. That is a question for the (Comptroller. His certificate of compliance with the act of Congress removes any objection which might otherwise have been made to the evidence on which he acted. The fact that a bank is shown to have been doing business before the date of the certificate of its organi- zation under the act of Congress, does not prove that it is a different body from that named in the certificate. The act makes full provision for banks incorporated under the State laws to organize as National Banks. Thatcher e. West River Nat. Bk. of Jamaica, 19 Mich. 196. No authority other than that confert'ed by Congress is required to enable a bank existing under a special or general State law to become a National Banking Association. Tlie certificate of the Comptroller is conclusive as to the completeness of the organization under the act of Congress in a suit against a stockholder to enforce his liability, or a party upon his contract with the bank. Casey v. Galli, 94 U. S. 673. SECTION 51. PUBLICATION OF CEETIFIOATB, The association shall cause the certificate issued under the preceding section to be published in some newspaper printed in the city or county where the association is located, for at least sixty days next after the issuing thereof; or, if no news- paper is published in such city or county, then in the news- paper published nearest thereto. 3d June, 1864, c. 106, § 18, v. 13, p. 104. SECTION 5171. DELIVBET OF CIBCULATINQ NOTES. Upon a deposit of bonds as prescribed by sections fifty-one hundred and fifty-nine and iifty-one hundred and sixty the association making the same shall be entitled to receive from the Comptroller of the Currency circulating notes of different denominations, in blank, registered and countersigned, as hereinafter provided, equal in amount to ninety per centum of the current market value of the United States bonds so trans- ferred and delivered, but not exceeding ninety per centum of the amount of the bonds at the par value thereof, if bearing PEINTING, ETC., OF THE CIEOULATING NOTES. 179 interest at a rate not less than five per centum per annum. Provided, That the amount of circulating notes to be fur- nished to each association shall be in proportion to its paid-up capital, as follows, and no more: First. To each association whose capital does not exceed five hundred thousand dollars, ninety per centum of such capital. Second, To each association whose capital exceeds five hun- dred thousand dollars, but does not exceed one million dollars, eighty per centum of such capital. Third. To each association whose capital exceeds one million of dollars, but does not exceed three million of dollars, seventy-five per centum of such capital. Fourth. To each association whose capital exceeds three million of dollars, sixty per centum of such capital. 3d March, 1865, c. 83, v. 13, p. 498; 3d March, 1875, c. 130, v. 18, p. 372. SECTION 5173. FEINTING, DENOMINATIONS AND FOEM OF THE OIECDLATING NOTES. In order to furnish suitable notes for circulation the Comp- troller of the Currency shall, under the direction of the Sec- retary of the Treasury, cause plates and dies to be engraved in the best manner to guard against counterfeiting and fraud- ulent alterations, and shall have printed therefrom, and num- bered, such quantity of circulating notes, in blank, of the denominations of one dollar, two dollars, three dollars, five dollars, ten dollars, twenty dollars, fifty dollars, one hundred dollars, five hundred dollars and one thousand dollars, as may be required to supply the associations entitled to receive the same. Such notes shall express upon thoir face that they are secured by United States bonds, deposited with the Treasurer of the United States, by the written or engraved signatures of the Treasurer and Register and by the imprint of the seal of the Treasury; and shall also express upon their face the promise of the association receiving the same to pay on de- mand, attested by the signatures of the president or vice- 180 NATIONAL BANKS. president and cashier; and shall bear such devices and such other statements, and shall be in such form as the Secretary of the Treasury shall by regulation direct, (See §§ 5415, 5443, R. S. U. S.) 3d June, 1864, o. 106, § 23, v. 13, p. 105; 20th June, 1874, c. 343, v. 18, p. 124; 3d March, 1875, c. 130, v. 18, p. 372. SECTION 5173. PLATES AND DIES TO BE UNDER CONTEOL OF COMPTEOLLEB. The plates and special dies to be procured by the Comp- troller of the Currency for the printing of such circulating notes shall remain under his control and direction, and the expenses necessarily incurred in executing the laws respecting the procuring of such notes and all other expenses of the Bureau of the Currency, shall be paid out of the proceeds of the taxes or duties assessed and collected on the circulation of National Banking Associations under this Title. 3d June. 1864, c. 106, § 41, v. 13, p. 111. SECTION 5174 AKNUAL EXAMINATION OF PLATES, DIES, ETC. The Comptroller of the Currency shall cause to be examined each year, the plates, dies, [outpieoes] [bed pieces] and other material from which the National Bank circulation is printed, in whole or in part, and file in his office annually a correct list of the same. Such material as shall have been used in the printing of the notes of associations which are in liquidation or hava closed business, shall be destroyed under such regulations as shall be prescribed by the Comptroller of the Currency and approved by the Secretary of the Treasury. The expenses of any such examination or destruction shall be paid out of any appropriation made by Congress for the special examination of National Banks and bank note plates. 8d March, 1873, c. 269, § 4, v. 17, p. 603 ; 27th February, 1877, c. 69, v. 19, p. 252. APFOETIONMKNT OF OIEOULATING NOTES. 181 SECTION 6175. LIMIT TO ISSUE OP NOTES UNDEB FIVE DOLLAES. ITot more than one-sixth part of the notes furnished to any association shall be of a less denomination than fire dollars. After specie payments are resumed no association shall be fur- nished with notes of a less denomination than five dollars. 3d June, 1864, c. 106, § 22, v. 13, p. 105. , SECTION 5176. LIMIT TO AMOUNT OF OIEOULATION OP CERTAIN BANKS. No banking association organized subsequent to the twelfth day of July, 1870, shall have a circulation in excess of five hundred thousand dollars. 12th July, 1870, c. 252, § 1, v. 16, p. 251. SECTION 5177. LIMIT TO AGGEEGATB AMOUNT OP OIEOULATING NOTES, The aggregate amoimt of droulating notes issued vrnder the aot of February twenty-f/oe, eighteen hundred and sixty- three, and under the aot of Jiirie three, eighteen hundred and sixty four, and under section one of the apt of July twelve, eighteen hundred and seventy, and wnder this Title, shall not exceed three hundred a/nd fifty four millions of dollars. 3d June, 1864, c. 106, § 33, v. 13, p. 105; Ibid. § 62, p. 118; 12th July, 1870, c. 252, § 1, V.16, p. 351; 20th June, 1874, c. 343, v. 18, p. 123. Repealed by 14th Jan., 1875, c. 15, § 3, v. 18, p. 296. (The limitation upon the circulation of National Bank notes was removed by the statute of January 14, 1875, c. 15, § 3, v. 18, p. 296.) SECTION 5178. APPORTIONMENT OF AGGEEGATE AMOUNT OF OIEOULATING NOTES. One hundred and fifty millions of dollars of the entire amount of circulating notes authorized to be issued shall be 182 NATIONAL BANKS. apportioned to associations in the States, in the Territories, and in the District of Columbia, according to representative population. One hundred and fifty millions shall be appor- tioned by the Secretary of the Treasury among associations formed in the several States, in the Territories and in the District of Columbia, having due regard to the existing capi- tal, resources and business of such States, Territories and District. The remaining fifty-four millions shall be appor- tioned among associations in States and Territories having under the apportionments above prescribed, less than their full proportion of the aggregate amount of notes authorized, which made due application for circulating notes prior to the twelfth day of July, eighteen hundred and seventy-one. Any remainder of such fifty-four millions shall be issued to bant- ing associations applying for circulating notes in other States or Territories having less than their proportion. 3d March, 1865, c. 83, v. 13, p. 498; 12th July, 1870, c. 253, § 1, v. 16, p. 351; 20tji June, 1874, c. 343, v. 18, pp. 134^125. SECTION" 5179. EQUALIZING THE APPOETIONMENT OF CIRCULATING NOTES. In order to secure a more equitable distribution of the Na- tional banking currency, there may be issued circulating notes to banking associations organized in States and Territories having less than their proportion, and the amount of circula- tion herein authorized shall, under the direction of the Secre- tary of the Treasury, as it may be required for this purpose, be withdrawn, as herein provided, from banking associations organized in States having more than their proportion, but the amount so withdrawn shall not exceed twenty-five million dollars: Provided, That no circulation shall be withdrawn under the provisions of this section until after the fifty -four millions granted in the first section of the act of July twelfth, eighteen hundred and seventy, shall have been taken up. 12th July, 1870, c. 253, § 6, v. 16, p. 253; 30th June, 1874, c. 343, v. 18, p. 134. HOW NOTES SHALL BE WITHDRAWN. 183 SECTION 5180. HOW THE NEOESSAET AMOUNT OF NOTES SHALL BE WITHDRAWN. The Comptroller of the Currency shall, under the direction of the Secretary of the Treasury, make a statement showing the amount of circulation in each State and Territory, and the amount necessary to be withdrawn from each association, and shall forthwith make a requisition for such amount upon such association, commencing with those having a circulation exceeding one million of dollars in States having an excess of circulation, and withdrawing this circulation in excess of one million of dollars, and then proceeding proportionately with other associations having a circulation exceeding three hun- dred thousand dollars in States having the largest excess of circulation, and reducing the circulation of such associations in States having the greatest proportion in excess, leaving un- disturbed the associations in States having a smaller proportion until those in greater excess have been reduced to the same grade, and continuing thus to make such reductions until the full amount of twenty -five millions has been withdrawn ; and the circulation so withdrawn shall be distributed among the States and Territories having less than their proportion so as to equalize the same. Upon failure of any association to return the amount of circulating notes so required within one year, the Comptroller shall sell at public auction, having given twenty days' notice thereof in one daily newspaper printed in Washington and one in New York City, an amount of the bonds deposited by that association as security for its circula- tion, equal to the circulation required to be withdrawn from the association, and not returned in compliance with such requisition, and he shall with the proceeds redeem so many of the notes of such association, as they come into the Treasury, as will equal the amount required and not returned; and shall pay the balance, if any, to the association. 13th July, 1870, c. 352, § 6, v. 16, p. 253. 184 HATIONAL BANKS. SECTION 5181. KEMOVAL OF -ASSOCIATION TO ANOTHER STATE. Any association located in any State having more than its proportion of circulation may he removed to any State having less than its proportion of circulation, under such rules and regulations as the Comptroller of the Currency, with the ap- proval of the Secretary of the Treasury shall prescribe: Pro- vided, That the amount of the issue of said banks shall not be deducted from the issue of fifty-four millions mentioned in section five thousand one hundred and seventy-eight. 13th July, 1870, c. 253, § 7, p. 354. SECTION 5182. FOE WHAT DEMANDS NATIONAL BANKING NOTES MAT BE EEOEIVED. After any association, receiving. circulating notes under this title, has caused its promise to pay such notes on demand to be signed by the president or vice-president and cashier there- of, in such manner as to make them obligatory promissory notes payable on demand at its place of business, such associ- ation may issue and circulate the same as money; and the same shall be received at par in all parts of the United States in payment of taxes, excises, public lands and all other dues to the United States, except duties on imports; and also for all salaries and other debts and demands owing by the United States to individuals, corporations and associations within the United States, except interest on the public debt and in re- demption of the National currency. 3d June, 1864, c. 106, § 33, v. 13, p. 106. SECTION 5183. ISSUE OF OTHER NOTES PEOHIEITED. No National Banking Association shall issue [post notes or} any other notes to circulate as money than such as are author- ized by the provisions of this title. OEGANIZATION OF ASSOCIATIONS TO ISSUE GOLD NOTES. 186 8d June, 1864, c. 106, § 33, v. 13, p. 106; 18tli February, 1875, c. 80, v. 18, p. 820. 1. Certifying a check as " good " is not within the prohibition of this section. Merchants' Bk. v. State Bk., 10 Wall. 604. A stamp is not required on the marking of a check as " good," such checks being specifically taxed another way. Merchant' Bk. v. State Bk., 10 "Wall. 604. SECTION 5184 DESTROYING AND EEPLAOING WOEN OUT AND MUTILATED NOTES. It shall be the duty of the Comptroller of the Currency to receive worn out or mutilated circulating notes issued by any Banking Association, and also on due proof of the destruction of any such circulating notes, to deliver in the place thereof to the association other blank circulating notes to an equal amount. Such worn out or mutilated notes, after a memoran- dum has been entered in the proper books in accordance with such regulations as may be established by the Comptroller, as well as all circulating notes which shall have been paid or sur- rendered to be canceled, shall be burned to ashes in presence of four persons, one to be appointed by the Secretary of the Treasury, one by the Comptroller of the Currency, one by the Treasurer of the United States, and one by the association, under such regulations as the Secretary of the Treasury may prescribe. A certificate of such burning, signed by the parties so appointed, shall be made in the books of the Comptroller, and a duplicate thereof forwarded to the association whose notes are thus canceled. .. 3d June, 1864, c. 106, § 33, v. 13, p. 106. SECTION 5185. OKGANIZATTON OF ASSOCIATIONS TO ISSUE GOLD NOTES AUTHORIZED. Associations may be organized in the manner prescribed by this title for the purpose of issuing notes payable in gold; and upoli the deposit of any United States bonds bearing interest payable in gold with the Treasurer of the United States in the manner prescribed for other associations, it shall be lawful for 186 NATIONAL BANKS. the Comptroller of the Currency to issue to the association making the deposit, circulafing notes of different denomina- tions, but none of them of less than five dollars, and not exceeding in amount eighty per centum of the par value of the bonds deposited, which shall express the promise of the association to pay them upon presentation at the ofiice at which they are issued in gold coin of the United States, and shall be redeemable. But no such association shall have a cir- culation of more than one million of dollars. 12th July, 1870, c. 282, § 3, v. 16, p. 252. REPEALED IN PART. LIMIT TO CIRCULATION OF GOLD BANKS EEMOVED. That SO much of Section 5185 of the E. S. of the U. S. as limits the circulation of banking associations organized for the purpose of issuing notes payable in gold severally to one mill- ion dollars, be, and the same is hereby repealed; and each of such existing banking associations may increase its circulating notes and new banking associations may be organized in accordance with existing law, without respect to such limit- ation. January 19, 1875, c. 19, v. 18, p. 302. SECTION 5186. THEIE LAWFUL MONET RESEEVB AND DUTY OF BECEIVINO NOTES OF OTHER ASSOCIATIONS. Every association organized imder the preceding section shall at all times keep on hand not less than twenty-five per centum of its outstanding circulation, in gold or silver coin of the United States; and shall receive at par in the payment of debts the gold notes of every other such association, which at the time of such payment is redeeming its circulating notes in gold coin of the United States, and shall be subject to all the provisions of this title: Provided, That in applying the same to associations organized for issuing gold notes, the terms "lawful money" and "lawful money of the United States" PENALTY FOE IMITATING NATIONAL BANK NOTES. 187 shall be construed to mean gold or silver coin of the United States; and the circulation of such associations shall not be within the limitation of circulation mentioned in this title. 12th July, 1870, c. 282, §§ 3, 4, 5, v. 16, pp. 252, 253. SECTION 5187. PENALTY FOB ISSUING OIECULATING NOTES TO UNATTTHOBIZED ASSO- CIATIONS. No officer acting under the provisions of this title shall coun- tersign or deliver to any association or any other company or person any circulating notes contemplated by this title, except in accordance with the true intent and meaning of its provis- ions. Every officer who violates this section shall be deemed guilty'of a high misdemeanor, and shall be fined not more than double the amount so countersigned and delivered, and imprisoned not less than one year and not more than fifteen years. 3d June, 1864, c. 106, § 27, v. 18, p. 107. SECTION 5188. PENALTY FOE IMTATING NATIONAL BANK NOTES. It shall not be lawful to design, engrave, print, or in any manner make or execute, or to utter, issue, distribute, circu- late, or use any business or professional card, notice, placard, circular, handbill or advertisement in the likeness or simili- tude of any circulating note or other obligation or security of any Banking Association organized or acting under the laws of the United States, which has or may be issued under this title or any act of Congress, or to write, print, or otherwise impress upon any such note, obligation or security, any busi- ness or professional card, notice or advertisement, or any notice or advertisement of any matter or thing whatever. Every person who violates this section shall be liable to a penalty of one hundred dollars, recoverable one-half to the use of the informer. 5th February 1867, c. 26, § 2, v. 14, p. 383. 188 NATIONAL BANKS. SECTION 5189. PENALTY FOE DEFACING, ETC., NATIONAL BANK NOTES. Every person who mutilates, cuts, defaces, disfigures, or per- forates with holes, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any National Banking Association, or who causes or procures the same to be done with intent to render such bank bill, draft, note or other evidence of debt unfit to be re-issued by said association, shall be liable to a penalty of fifty dollars, recoverable by the association. 3d June, 1864, c. 106, § 58, v. 13, p. 117. FBESCSIBED. 189 CHAPTEK IX. SECTION 5190. PLACE OB" BUSINESS. The usual business of each National Banking Association shall be transacted at an office or banking house located in the place specified in its organization certificate. 3d June, 1864, c. 106, § 8, v. 13, p. 101. 1. The cashier of one bank nray certify a check at the office of another bank in the same city, when he is obliged to go to such other bank to pur- chase the commodity for which the check is given. Such restriction must be given a reasonable construction. Many of the business affairs of the bank must be transacted by its agents at places other than its office. Mer- chants' Bk. ■». State Bk., 10 Wall. 604^651. The designation of its place of business in the certificate of organization determines its locality, and it can have no other. Cooke v. State Nat. Bk., 53 N. T. 96; Chatham Nat. Bk. v. Merchants' Nat. Bk,, 4 Thomp. & C. 196. Under the statutes of New York, a National Bank located in another State cannot keep an office of discount or deposit in the city of New York. Nat. Bk. of New Haven «. The Phoenix, 6 Hun, 71. The representations of a cashier as to the goodness of a promissory note, which were made by him while in a city other than that in which his bank- is located, bind his bank. Houghton v. First Nat. Bk. of Dlkhorn, 36 Wis. 663. The general business of a National Bank must be transacted at the place of its location. At the same time we know that in the course of business between banks occasionally the officers do give instructions away from the place of the business of the bank. If the bank doing such business, sends a statement of the same to the other bank, and it, through its proper officer, recognizes the validity of the same, it is bound by such recogni- tion. Burton «. Burley, 13 Leg. Ns. 178. SECTION 5191. "lawful MONET EESEEVE " PEESCEIBED. Every National Banking Association in either of the fol- lowing cities, Albany, Baltimore, Boston, Cincinnati, Chicago, 190 NATIONAL BANKS. Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh, Saint Louis, San Francisco and Washington, shall at all times have on hand, in lawful money of the United States, an amount equal to at least twenty-five per centum of the aggregate amount of its notes in circulation and its deposits. And every other association shall at all times have on hand, in lawful money of the United States, an amount equal to at least fifteen per centum of the aggregate amount of its notes in circulation and of its deposits. Whenever the lawful money of any association in any of the cities named shall be below the amount of twenty-five per centum of its circulation and deposits, and whenever the law- ful money of any other association shall be below fifteen per centum of its circulation and deposits, such association shall not increase its liabilities by making any new loans or dis- counts, otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividend of its profits until the required proportion between the aggregate amount of its outstanding notes of circulation and deposits and its lawful money of the United States has been restored. And the Comptroller of the Currency may notify any such association whose lawful money reserve shall be below the amount above required to be kept on hand to make good such reserve; and if such association shall fail for thirty days thereafter so to make good its reserve of lawful money, the Comptroller may with the concurrence of the Secretary of the Treasury appoint a receiver to wind up the business of the association, as pro- vided in section fifty-two hundred and thirty-four. 3d June, 1864, c. -106, § 31, v. 18, p. 108; 1st March, 1873, o. 33, v. 17, p. 82; 20th June, 1874, o. 848, v. 18, p. 123. SECTION 5193. WHAT MAT BE COUNTED TOWARD THE LAWFUL MONET BESEBVE. Three-fifths of the reserve of fifteen per centum required' by the preceding section to be kept may consist of balances due to an association available for the redemption of its cir- OEETIFIOATES OF DEPOSIT. 191 culating notes from associations, approved by the Comptroller of the Currency, organized under the act of June three, eighteen hundred and sixty-four, or under this Title, and doing business in the cities of Albany, Baltimore, Boston, Charles- ton, Chicago, Cincinnati, Cleveland, Detroit, Louisville, Mil- waukee, New Orleans, New York, Philadelphia, Pittsburgh, Richmond, Saint Louis, San Francisco and Washington. Clearing house certiiicates, representing specie or lawful money specially deposited for the purpose, of any clearing house association, shall also be deemed to be lawful money in the possession of any association belonging to such clearing house holding and owning such certificate, within the preced- ing section. 3rd June, 1864, o. 106, § 31, v. 13, p. 108; aoth June, 1874, c. 348, v. 18, p. 138. SECTION 5193. OEETAIN OEKTIFIOATES OF DEPOSIT MAT BE COUNTED. The Secretary of the Treasury may receive United States notes on deposit without interest, from any National Banking Association, in sums of not less than ten thousand dollars, and issue certificates therefor in such form as he may prescribe, in denominations of not less than five thousand dollars, and pay- able on demand in United States notes at the place where the deposits were made. The notes so deposited shall not be counted as part of the lawful money reserve of the association, but the certificates issued therefor may be counted as part of its lawful money reserve, and may be accepted in the settlement of clearing house balances at the places where the deposits therefor were made. 8th June, 1873, c. 346, §§ 1-3, v. 17, p 336. SECTION 5194 LIMTTATIOIT ON THE POWEE TO ISSUE SUOH OEETIFIOATES. The power conferred on the Secretary of the Treasury by the preceding section shall not be exercised so as to create 192 NATIONAL BANKS. any expansion or contraction of the currency; and United States notes for which certificates are issued under that section or other United States notes of like amount shall be held as special deposits in the Treasury and used only for the, redemp- tion of such certificates. 8th June, 1873, o. 346, § 3, v, 17, p. 336, SECTION 5195. PLACE FOR REDEMPTION OF CIKOITLATING NOTES TO BE DESI&NATED Each association organized in any of the cities named in section fifty-one hundred and ninety-one shall select, subject to the approval of the Comptroller of the Currency, an associa- tion in the City of New York, at which it will redeem its circulating notes at par, and may keep one-half of its lawful money reserve in cash deposits in the City of New York. But the foregoing provision shall not apply to associations organized and located in the City of San Francisco for the purpose of issuing notes payable in gold. Each association, not organized within the cities named, shall select, subject to the approval of the Comptroller, an association in either of the cities named, at which it will redeem its circulating notes at par. The Comptroller shall give public notice of the names of the associations selected at which redemptions are to be made by the respective associations, and of any change that may be made of the association at which the notes of any association are redeemed. Whenever any association fails either to make the selection or to redeem its notes as aforesaid, the Comptroller of the Currency may, upon receiv- ing satisfactory evidence thereof, appoint a receiver, in the manner provided for in section fifty-two hundred and thirty- four to wind up its affairs. But this section shall not relieve any association from its liability to redeem its circulating notes at its own counter at par in lawful money on demand. 3d June, 1864, c. 106, § 82, v. 18, p. 109; 20th June, 1874, c. 348, v. 18, p. 124. LIMITATION UPON RATE OF INTBEKST. 193 SECTION 5196. NATIONAL BANKS TO EECEIVE NOTES OF OTHEK NATIONAL BANKS. Every National Banking Association formed or existing under this Title shall take and receive at par for any debt or liability to it, any and all notes or bills issued by any lawfully organized National banking association. But this provision shall not apply to any association organized for the purpose of issuing notes payable in gold. 3d June, 1864, c. 106, § 32, v. 13, p. 109; 12th July, 1870, c. 282, § 5, v. 16, p. 253. BECTION 5197. LIMITATION UPON BATE OP INTEREST WHICH MAT BE TAKEN. Any association may take, receive, reserve and charge on any loan or discount made, or upon any note, bill of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State, Territory or Districtwhere the bank is located, and no more, except that where, by the laws of any State, a differ- ent rate is limited for banks of issue organized under State laws, the rate so limited shall be allowed for associations organized or existing in any such State under this Title. When no rate is fixed by the laws of the State or Territory or District, the bank may take, receive, reserve or charge a rate not exceeding seven per centum, and such interest may be taken in advance, reckoning the days for which the note, bill, or other evidence of debt, has to run. And the purchase, discount, or sale of a iona fide bill of exchange, payable at another place than the place of such purchase, discount or sale, at not more than the current rate of exchange for sight drafts, in addition to the interest, shall not be considered as taking or receiving a greater rate of interest. ^ 3d June, 1864, c. 106, § 30, v. 18, p. 108. (See authorities cited under next section.) 13 194 NATIONAL BANKS. SECTION 5198. CONSEQUENCES OF TAKING USUEIOUS INTEBEST. The taking, receiving, reserving, or charging a rate of inter- est greater than is allowed by the preceding section, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or whidi has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the associa- tion taking or receiving the same; provided such action is commenced within two years from the time the usuriom transactions occurred. That suits, actions, .and proceedings against any association under this Title, may be had in any circuit, district, or territorial court of the United States held within the district in which such association may be estab- lished, or in any State, county or municipal court in the county or city in which said association is located, having jurisdiction in similar cases. 3d June, 1864, c. 106, § 30, p. 108; 18th February, 1875, c. 80, v. 18, p. 320. Under sections 5197-8, National Banks may take the rate of interest allowed by the State to natural person* generally, and a higher rate if State banks of issue are authorized by the laws of the State to take it. Tiffany 11. Nat. Bk. of Mo., 18 Wall. 409. A National Bank made a loan to a corporation, which, if it had been made to an individual, would have been usurious under the laws of New York, so that the securities taken for such loan would have been void. But a statute of that State forbids a corporation to plead usury ; the eflFect of which is to permit a corporation to pay any rate of interest agreed upon. Held, That under the act the bank forfeited the interest on the loan. In re Wild, 11 Blatchf, 243. The provisions of sections 5197-8 supersede the State laws upon that subject. Davis b. Raudall, 115 Mass. 547. It is within the power of Congress to fix the rate of interest which a National Bank may take on a loan of money and to determine the pen- alty which shall follow a violation ; and when such power is exercised, it is exclusive of State legislation. The provisions of section 5198 apply as well to banks established in States where a rate of interest is fixed by law CONSEQUENCES OF TAKINa USUEIOUS INTEREST, 195 as to banks in States where no rate is fixed. The laws of New York, as to usury, do not apply to National Banks established within the limits of that State. Central Nat. Bk. ». Pratt, 115 Mass. 539. 2. If the president of a bank individually agrees with a party, on his application to loan him $600 for one year, and to know on what terms he can get it on his note for that amount satisfactorily indorsed, to let him have it at twelve per cent, and when the note is presented takes it and gives him a check for |564; the contract will be usurious and void as against the indorser, although the bank had no other knowledge as to the transaction than that possessed by the president. Newport Nat. Bk. b. Tweed, 4 Hous- ton, ( Del.) 99, 225 ; Pickett v. Merchants' Nat Bk. of Memphis, 32 Ark. 346; Wheelers. Nat. Bk., 96 U. S. 268. 3. Where a bank knowingly takbs usury, a forfeiture of the whole inter- est may be enforced by way of set-off. An accommodation indorser, when sued on his indorsement, has the same right as has the maker to set off such usury. Where the original loan was usurious, the taint of usury affects the the whole, and although the debt may have been renewed from time to time, forfeiture of the entire interest must follow and credit must be given upon the principal for all interest paid from the beginning of the transaction. Nat. Bk. of Auburn v. Lewis, 75 N. T. 516. Reversing, s. c, 10 Hun, 468. A discount of a note by a National Bank, at a greater than the legal rate, forfeits the whole interest. First Nat. Bk. v. Stauffer, 6 Week. Jur. 793. (U. S. C. C, W. D. Pa.) A National Bank discounting business paper at a greater rate than seven per cent, is liable to the forfeiture of double the excess on seven per cent, imposed by the act, although the excess is not usurious under the State law. Johnson v. Nat. Bk. of Gloversville, 74 N. Y. 329. The knowingly taking or receiving by a National Bank of a greater rate of interest than is allowed by the State in which the bank is located, is, under the act, usurious. The forfeiture is of the entire interest. The State courts have jurisdiction of cases arising under the act. When the usury, even by the consent of the debtor, is carried into the general account, the whole contract is tainted, although a note be afterwards given for the amount found due. Where a third party assumes the debt, and the amount he assumes is agreed upon, he cannot set up the usury. But if the amount is undetermined, he may do so. If the debtor comes into a court of equity for relief, he must pay the debt with legal interest. Pickett V. Merchants' Nat. Bk. of Memphis, 32 Ark. 346. On a usurious loan the bank can recover the principal only. When usury has been paid, the penalty is the recovery back of double the amount of the excess over legal interest. It is the actual payment on a usurious contract which consummates the usury from which the limita- tion of suit for the penalty commences to run. A National Bank dis- counted notes which were renewed from time to time usuriously. In a 196 NATIONAL BANKS. suit against the indorsee on tlie last note, he was allowed to set off all usury paid to the bank. Brown v. Second Nat. Bk. of Erie, 72 Pa. St. 209. If usury be plead in an action brought by a National Bank upon a note, and it appears that the usury was taken out of the proceeds of the note, the bank will recover the face of the note less the sums retained. But if upon a renewal of such a note the borrower had paid the usurious interest out of other moneys, the defendant may recoup double the amount of interest actually paid, or may recover the same amount in an independ- ent action. In either case the result is the same. The bank loses all interest. If the renewals be made by adding the usurious interest to the principal, then the bank will recover the amount of the last of the renewal series less all interest included in it. Nat. Bk. of Madison v. Davis, 10 Leg. Ns. 156. ( TJ. S. C. C, D. Ind.) ; s. c, 6 Cent. L. J. 106. The taking of usury forfeits all interest. If the rate of interest allowed to the State Banks is higher than that generally allowed, the National Banks may take such higher rate. Shunk v. First Nat. Bk. of Gallon, 33 Ohio St. 508. Sections 5197-8 do not provide for the forfeiture of the principal debt. The bank has a valid claim for such debt, although usurious interest has been taken. The provision of forfeiture in the act shows that it was the intention of Congress that such forfeiture should be the only penalty. Nat. Exchange Bk. v. Moore, 3 Bond, 170. The general rate of interest allowed to the State banks must govern National Banks. ' A National Bank having taken usurious interest may apply it on the principal at any time before due or before judgment is entered for the amount. The limitation of two years does not commence to run until the payment or the entry of judgment. Duncan v. First Nat. Bk., 11 Bank. Mag. 787. Where the statute required »• "memorandum in writing" if a greater rate of interest than six per cent, was taken, and the bank discounted notes in which the interest was stated to be at ten per cent. ; it was 7i.eld, That the transaction was not usurious. Newell ■». Nat. Bk. of Somerset, 12 Bush. 57. Usury forfeits the entire interest. Shunk v. First Nat. Bk. of Galion, 32 Ohio St. 508; Overholt v. Nat. Bk. of Mt. Pleasant, 83 Pa. St. 400; Cake v. First Nat. Bk. of Lebanon, 86 Pa. St. 303. A National Bank does not forfeit the whole debt by taking a greater rate of interest than is allowed by law. Cheek v. Merchants' Nat. Bk., 10 Heisk. (Tenn.) 618. If a National Bank makes a usurious loan, it can recover the principal only. The sole penalty for usury is that fixed by the act. If an indorser pays the whole debt (including usury) he can recover from the maker only the amount rightfully due the bank, namely, the principal. Citi- zens' Nat. Bk. of Piqua v. Leming, 8 Inter. Rev. Rec. 132. The discounting of a note by a National Bank at a usurious rate only avoids the note to the extent of the interest. State statutes concerning CONSEQUENCES OF TAKING USUEIOCS INTKKEST. 197 usury have no application to National Banks. On a usurious note the surety is bound to the same extent as is the maker. First Nat. Bk. of Columbus 0. Garlinghouse, 32 Ohio St. 492. The only penalty declared by section 5198 is the loss of all interest ; and the laws of the State can have no greater or other effect. Farmers' & M. Nat. Bk. V. Dearing, 91 TJ. S. 39. 4. Where upon suit on a renewal note the defendant attempted to set off usury paid on the old note, on it appearing that more than two years had elapsed since it was paid, it was held that such set off could not be made. Shinkle ». First Nat. Bk. of Ripley, 33 Ohio St. 516. Oontra, if within two years: Cake v. First Nat. Bk., 86 Pa. St. 303. Where on the renewal of paper, usury was exacted, it was held, That as the act subjects the bank to liability for taking usurious interest, but does not declare the contract void, the courts cannot so declare it, as that would be superadding a penalty not prescribed by the law. Oates i>. Nat. Bk., 100 U. S. 239. 5. In an action by a National Bank the defendant may set off the amount of usurious discounts on other transactions. The interest paid by the defendant beyond that allowed by the act belongs to him, and the bank can hold it only for his use. Lucas o. Government Nat. Bk., 78 Penn. St. 328. 6. Where illegal interest has been knowingly stipulated for, but not paid, then only the sum lent without interest can be recovered. But where such illegal sum has been paid, then twice the sum so paid can be recov- ered in a penal action against the offending bank, brought by the persons so paying the same or their legal representatives. In a, suit by a National Bank against all parties to a bill of exchange, discounted by it, to recover the amount thereof, the assignees of the ac- ceptor (the latter having made an assignment for the benefit of his cred- itors) cannot, having intervened as parties, set up by way of counterclaim or set oft, that the bank, in discounting a series of bills of their assignor, the proceeds of which it used to pay other bills, knowingly took and was paid a greater rate of interest than that allowed by law. The action must be debt, under Section 5198, in the name of the person paying the same, or . his "legal representatives." Barnet «. Muncie Nat. Bk., 98 U. S. 555 ; s. c, 11 Leg. Ns. 239. Where the bank has received excessive interest, it must pay back twice the whole interest received. An assignee in bankruptcy of the debtor may bring the action.' Crocker v. First Nat. Bk., 3 Am. Law Times (U. S.) 350 ; s. c, 11 Am. Law Reg. 169. The rule of damages in actions for this penalty is twice the excess of interest, and applies to those sums only which were paid within two years prior to the commencement of the suit. In a suit on a contract, all interest would be deducted where it was shown that usury had been taken. Hintermister v. First Nat. Bk., 64 N. Y. 813. 7. Usury paid to a bank must be alleged and proved in order to be 198 NATIONAL BANKS. recovered. The only person in whom the right of action exists is the per- son who paid the money. Nash v. Manufacturers' and Traders' Bk., 5 Hun, 568; Smith d. Exchange Bk. of Pittsburg, 26 Ohio St. 141. In order to work a forfeiture under the National Currency Act, it should appear afiSrmatively that the bank knowingly received or reserved an amount in excess of the statutory rate of interest and the current exchange for sight drafts. Wheeler v. Union Nat. Bk. of Pittsburgh, 10 Log. Ns. 381 ; s. c, 96 U. 8. 268 Usury as a defense, must be specially pleaded or set up in the answer to entitle it to any consideration. Atlantic etc. R. R. Co.«. Carolina Nat. Bk., 19 Wall. 548. 8. A State court has jurisdiction of an action brought by one paying usurious interest to a National Bflnk to recover back twice the interest as provided by the act. Bletz v. Columbia Nat. Bk. (Penn.), 11 Leg. Ns. 45 ; B. 0., 87 Pa. St. 87. In a suit brought against a State bank to enforce the penalty prescribed by section 5198 for taking a usurious rate of interest, it was Tield, That although the act gave jurisdiction of such suits to the State courts, the act of taking such interest was penal, and the penalty was provided solely by the Federal statute, and therefore that part of the act which conferred juris- diction on the State courts was unconstitutional. Ordway «. Central Nat. Bk., 8 Leg. Ns. 291 ; s. c, 47 Md. 317. Suit was brought in the State court to recover the penalty given by Sec- . tion 5198 for usury. Seld, That as the penalty was imposed by another State or by Congress, or by both, as shown by the declaration, a demurrer thereto was held to be well taken. Courts never execute the criminal laws of another country. The act confers jurisdiction upon the State courts only in which the bank is located. The power of the State courts is derived from the constitution and State laws, and not from the acts of Congress. Miss. River Tel. Co. v. First Nat. Bk., 7 Leg. Ns., 158; s. c, 74 111. 317. A bill to recover usury cannot be maintained against a National Bank. It is not subject to the laws of the State concerning usury, except so far as Congress may see fit to permit. Hambright v. Cleveland Nat. Bk., 66 Tenn. 40. 9. A note actually made and signed in Washington, but dated at Leaven- worth, Kansas, and sent to the Second National Bank of Leavenworth, and by it discounted, is to be governed, as respects a question of usury, by the law of Kansas. To take out interest in advance on discounting a note by a bank is not usurious. A contract for the loan of money at a rate of interest which is legal in the place where the contract was made, though the money is to be repaid in a State where the rate of interest is lower, is not usurious, provided it be not a mere device to evade the laws of the Slate where the money is to be repaid. Second Nat. Bk. v. Smoot, 3 McArthur, 371. When the maker and indorser of a note resides in New York, and the note is drawn, dated and payable in that State, the laws of New York must CONSEQUENCES OF TAKING USORIOHS INTEREST. 199 govern as to the rate of interest. If drawn " with interest,'' the rate will be seven per cent. ; if drawn without specifying the rate of interest, the same rate of discount must be legal. And where such a note is discounted by a Kew Jersey bank, the statute of New Jersey limiting the rate of interest to six per cent, does not render the note usurious and void when discounted at seven per cent. Hackettstown Nat. Bk. ■». Rea, 64 Barb. 175. A Massacbussetts corporation drew a bill upon defendants, residents of New York, who accepted it for the accommodation of the drawer, payable at a bank in New York. The drawer procured the bill to be discounted in Massachusetts at 9 per cent., which was a legal rate in that State, but was a usurious rate by the laws of New York. The bill was purchased by plaintifl', a National Bank in New York, at ten per cent, discount. In an action on the bill, it was lield. That as defendants accepted the bill for the drawer's accommodation they became simply sureties for its payment, and the drawer being a corporation could not under the laws of New York defend upon account of usury, and the same disability affected the defend- ants as its sureties. It seems that even if the drawer had not been a cor- poration the defense would not have been available. I'irst Nat. Bk. v. Morris, 4 Thomp. & C. (N. Y.) 182. S. owed the plaintiff and had indorsed to it as security for the debt a note of defendants, payable to his order. The note falling due, the defendants applied to S. to renew it, to which he consented, and defendants thereupon executed to him a new note for the amount, principal and interest, due on the first note. He took the new note, and exchanged it with the plaintiff for the first note. Held, That S. was not the agent of the plaintiff in making the renewal. That the Minnesota statute intends that the defense of usury may be interposed in an action on negotiable paper only when any other defense, if it exist, might be interposed. An indorser of a negotiable note transferred to him before maturity and without notice as security for a precedent debt, is a purchaser for value, if he surrenders other securities for the debt in consideration of the transfer of the note to him. First Nat. Bk. of Rochester u. Bentley, 6 N. W. Eep. 433. (Sup. C. Minn.) ._ 10. A surety cannot avail himself of usurious interest paid by his principal on a non-negotiable note after execution of the note, in reduction thereof Lamville Co. Nat. Bk. v. Bingham, 50 Vt. 105. A counter claim for usury can go no further back than two years prior to suit. The action -for the penalty must be brought within two years. Nat. State Bk. «. Boylan, 3 Abb. N. Cas. 216; Highley d. First Nat. Bk. of Bev- erly, 26 Ohio St. 75 ; Duncan v. First Nat. Bk., 11 Bank. Mag. 787. 11. An assignee in bankruptcy may sue a National Bank for usurious interest paid it by the bankrupt, he being within the term " legal repre- sentatives " as used in this section. Wright s. First Nat. Bk. of Greens- burg, 18 Alb. L. J. 115; Tiffany o. Nat. Bk., 18 Wall, 409; Crocker d. First Nat. Bk., 3 Cent. L. J. 527. 12. A claim approved by the Comptroller or put into judgment, bears 200 NATIONAL BANKS. interest from the date of its approval or entry, should the assets be suffi- cient to pay the claims in full. And should the Comptroller refuse to pay such interest it may be compounded upon suit brought. Nat. Bk. of Com. V. Mechanics Nat. Bank, 9 Leg. Ns. 369 ; affirmed, 94 U. S. 437. When the receiver of a National Bank realized enough from the assets to pay all claims against it and leave a surplus, the Comptroller ought to allow interest on the claims during the period of administration, before appropriating the surplus to the stockholders. The action should be in assumpsit against the bank, but not against the receiver or Comptroller. In such action interest can be recovered on a deposit although it has not been formally demanded. Chemical Nat. Bk. v. Bailey, 13 Blatchf. 480. National Banks organized and doing business in the State of Indiana are entitled to contract for and receive upon loans of money ten per cent, per annum. The reservation of more than the legal rate of interest does not render the note voidj The only penalties that can be enforced are those named in the act. A note upon which illegal interest has been paid is valid as to the sureties as well as to the principal. The illegal interest already paid cannot be recouped in a suit upon the note, as the remedy for such illegal acts is exclusive. Wiley «. Starbuck, 44 Ind. 298. A National Bank cannot make a valid loan at a usurious rate of interest. An interpretation of sections 5197-8 bringing them in conflict with the State laws would render them unconstitutional. No National object requires that National banks should exceed the rate of interest fixed by the States and therefore immunity from State usury law is unnecessary. First Nat. Bk. of Whitehall v. Lamb. 50 N. Y. 95 ; a. c, 57 Barb. 429. SECTION 5199. DIVIDENDS. The directors of any association may, semi-annually, declare a dividend of so much of the net profits of the association as they shall judge expedient; but each association shall, before the declaration of a dividend, carry one-tenth part of its net profits of the preceding half-year to its surplus fund until the same shall amount to tveenty per centum of its capital stock. 3d June, 1864, c. 106, § 33, v. 13, p. 109. 1. A National Bank may hold the dividends due the shareholder for any indebtedness from him to it. Or it may attach such dividends in a Buit upon the debt. Before the shareholder commences a suit for dividends due him he must demand the payment of the same from the bank. Hagar «. Union Nat. Bk., 63 Me. 509. LIMIT TO LIAEIIiITIES. 201 SECTION 5200. UMIT TO LIABILITIES WHICH MAY BE INOtJEKED BY ANY ONE PEKSON, ETC. The total liabilities to any association, or any person, or any company, corporation, or firm for money borrowed, including, in the liabilities of a company or firm, the liability of the sev- eral members thereof, shall at no time exceed one-tenth part of the amount of the capital stock of such association actually paid in. But the discount of bills of exchange drawn in good faith against actually existing values, and the discount of commercial or business paper actually owned by the person negotiating the same, shall not be considered as money bor- rowed. 3d June, 1864, c. 106, § 39, v. 13, p. 108. 1. The placing of the funds of one bank in another upon permanent deposit is a loan. Bank ». Lanier, 11 Wall. 369. 2. Where, upon the conversion of a State Bank into a National Bank, among the assets was the note of a single debtor for more than the National Bank could loan to one person; neither that note, nor any note given in renewal thereof comes within the meaning of section 5200 of the act. If the note of a single borrower, which was originally greater than one-tenth part of the capital stock of the bank, has been reduced below the maximum before suit, the fact that it was for the larger sum is no defense. Allen v. First Nat. Bk. of Xenia, 23 Ohio St. 97. 3. A National Bank may sue for and recover money loaned, although the amount exceeds one-tenth of its capital stock. Union, etc. ■». Rocky M. Nat. Bk., 1 Colo. 581. Affirmed. The court holding that a defendant sued by a National Bank for moneys loaned him by it, cannot set up as a bar that such moneys exceeded in amount one-tenth part of the capital stpck actually paid in. Gold Mining Co. v. Nat. Bk., 96 V. S. 640. Where the bank loans in excess of the restriction imposed by section 5200, the loan ik not void, but may be enforced. But the bank may be proceeded against by the Comptroller and its charter forfeited, and the officers themselves are personally liable for such unlawful act. ' In such a case, equity will not interpose at the suit of the debtor to cancel the transaction and to compel a return of the securities, but will leave the parties where it finds them. Stewart v. Nat. Union Bk., 3 Abb. (U. S.) 424 ; Shoemaker v. Nat. Mechanics Bk., Ibid. 416. The fact that a bank, contrary to the provisions of the act, has lent ia excess of one-tenth of its capital stock to a single individual, company or 202 NATIONAL BANKS. firm, will not void the loan if the excess was by mistake or ignorance, or known to the bank only. The fact of the excess is a matter aside from the loan and not entering into its terms. O'Hare ». Second Nat. Bk., 77 Pa. Bt. 96. A debtor is estopped, when sued for money obtained from the. bank, to say that in making the loan the bank exceeded its powers and acted beyond its authority. It does not lie with one who has thus obtained the funds of the bank and impaired the security of its depositors and the public, to consummate a fraud against them by such a plea. Allen v. Nat. Preed- men's, etc., 14 Fla. 418. Public policy does not require, nor did Congress intend, that an excess of loans beyond the proportion specified, should enable the borrower to avoid payment of the money actually received by him. This would be to injure the interests of creditors, stockholders, and all who have an interest in the safety and prosperity of the bank. Gold Mining Co. «. Nat. Bk , 96 U. S. 640. The provisions of this section are designed for the protection of the stockholders and the creditors, and a violation of these provisions does not nullify the obligations of the customer. Until the forfeiture of its rights, privileges and franchises are deter- mined in the mode provided by the act, the bank may do business, and no person, by a conspiracy to evade the regulations of the law, can escape liability for money loaned him by the bank on personal securify in the manner prescribed by the act. Stephens v, Monongahela Nat. Bk., 88 Pa. St. 157; s. c, 19 Alb. L. J. 383. 4. A National Bank will not be enioined from transferring to an inno- cent third party securities taken as collateral to a loan upon the ground that such loan was in excess of one-tenth of its capital stock. Elder e. First Nat. Bk., 12 Kan. 338. SECTION 5301. ASSOCIATIONS NOT TO LOAN OB PUKOHASE THEIR OWN STOGK. No association shall make any loan or discount on the secu- rity of the shares of its own capital stock, nor be the pur- chaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt pre- viously contracted in good faith; and stock so purchased or acquired shall, within six months from the time of its pur- chase, be sold or disposed of at public or private sale; or, in default thereof, a receiver may be appointed to close up the business of the association, according to section fifty-two hun- dred and thirty-four. 8d June, 1864, c. 106, § 35, v. 18, p. 110. ASSOCIATIONS NOT TO LOAN THEIR OWN STOCK. 203 1. After the purchase of its stqck the bank can acquire no lien on its shares except for the purpose of preventing a loss on a debt previously contracted in good faith. Such lien is expressly prohibited by the act. A debt due from the stockholder arising from collections made by him, is a loan within the meaning of the act. Conklin v. Second Nat. Bk, .of Oswego, 45 N. Y. 655. A National Bank, in order to prevent loss upon a debt previously con- tracted, has a lien upon the shares of stock owned by an individual share- holder, and can apply the same as well to the payment of individual as to partnership indebtedness. (In this case the members of a firm individ- ually held the stock. They were individually indebted to the bank, and were also indebted to it upon partnership account.) In re Bigelow, 1 Bey. Reg. 667. 2. A National Bank can make no valid loan or discount on the security of its stock, unless necessary to prevent a loss on a debt previously con- tracted in good faith. Loans by a bank to its stockholders do not give it a lien upon their stock in the bank. Bank v. Lanier, 11 Wall. 369. 3. A transfer of stock to a bona fide parchaser for value is valid, although the seller be at the time indebted to the bank, and a by-law of the bank declared that no transfer by any holder indebted to the bank should be made without the consent of the board of directors. Such by-law, In effect, attempts to create a lien upon stock for debts of the holder, and the result is the same as if a loan were made on the security of the stock — a transaction forbidden by section 5201 of the act. Evansville Nat. Bk. ■». Metropolitan Nat. Bk., 2 Biss. 527 ; Conklin v. Second Nat. Bk. of Oswego, 45 N. T. 655. 4. A stockholder in a National Bank pledged his stock, but no transfer was made on the books of the bank. He afterwards went into bankruptcy and was discharged. The bank, on demand, refused to transfer the stock ; claiming that the pledgor was indebted to it and it had a lien on sucli stock for that debt. Seld, That a National Bank cannot create or hold such a lien. That as the pledgee did not prove its claim in bankruptcy, that proceeding did not affect its lien. Second Nat. Bk. «. Nat. State Bk., 7 Leg. Ns. 70. A National Bank cannot create by a by-law a lien in its favor on the shares of its stockholders, for the security of debts due by them to the bank. A by-law declaring that no transfer of the stock of the bank shall be made without the consent of the board of directors, by any shareholder who shall be liable to the bank as a debtor, if not void, because it provides for a forfeiture of stock, is void because without express authority it attempts to impose a lien upon its stock. The power to declare a lien on stock by means of a by-law, is neither expressly nor impliedly conferred upon National Banks. Yet the lien may exist if provided for in the articles of association. Rosenback v. Salt Springs Nat. Bk., 53 Barb. 495. A bankrupt held certain shares of the defendant's stock. The defend- ant claimed a lien on such stock under its by-laws to secure an indebted- 204 NATIONAL BANKS. uess dae it from the bankrupt. This claim the assignee of the bankrupt asserted was void under the banking law, and demanded that the bank give him, as such assignee, an assignment and certificate of such stock. Upon refusal, he brought an action against the bank for the value of the same. Held, That a judgment for conversion vests the title tp the con- verted property in the wrong-doer; and as the wrong-doer in this case could not take such title, the assignee could not maintain the action. Meyers v. Valley Nat. Bk., 18 Nat. Bey. Reg. 34; s. c, 18 Alb. L. J. 57. A National Bank cannot, even by a by-law, acquire a lien upon its own stock, held by persons who are its debtors. Being against the spirit of the act, such a power cannot be implied from general expressions. It is beyond the power of the bank to make such a by-law. BuUard «. Bank, 18 Wall. 589. SECTION 5202. LIMIT UPON INDEBTEDNESS TO BE INCUEEED. No association shall at any time be indebted, or in any way liable, to an amount exceeding the amount of its capital stock at such time actually paid in and remaining undiminished by losses* or otherwise, except on account of demands of the nature following: First. Notes of circulation. Second. Moneys deposited with or collected by the associ- ation. Third. Bills of exchange or drafts drawn against money actually on deposit to the credit of the association, or due thereto. Fourth. Liabilities to the stockholders of the association for dividends and reserved profits. 3d June, 1864, c. 106, § 36, v. 18, p. 110. 1. In Blair v. First Nat. Bk. of Mansfield, 10 Leg. Ns. 84, it is queried, can a National Bank, under this section, make any indorsement? SECTION 5303. KESTKIOTION UPON USE OF OIROHLATINQ NOTES. No association shall, either directly or indirectly, pledge or hypothecate any of its notes or circulation, for the purpose of procuring money to be paid in on its capital stock, or to be ENFOEOING PAYMENT OF DEFICIENCY. 205 nsed in its banldng operations, or otherwise; nor shall any association use its circulating notes, or any part thereof, in any manner or form, to create or increase its capital stock. 3d June, 1864, c. 106, § 37, v. 13, p. 110. SECTION 5304. PROHIBITION UPON WITHDRAWAL OF CAPITAL. No association, or any member thereof, shall, during the time it shall continue its banking operations, withdraw, or permit to be withdrawn, either in the form of dividends or otherwise, any portion of its capital. If losses have at any time been sustained by any such association, equal to or ex- ceeding its undivided profits then on hand, no dividend shall be made; and no dividend shall ever be made by any associa- tion, while it continues its banking operations, to an amount greater than its net profits then on hand, deducting therefrom its losses and bad debts. All debts due to any associations, on which interest is past due and unpaid for a period of six months, unless the same are well secured, and in process of collection, shall be considered bad debts within the meaning of this section. But nothing in this section shall prevent the reduction of the capital stock of the association under section fifty-one hundred and forty-three. 3a June, 1864, c. 106, § 38, v. 13, p. 110. SECTION 5305. ENFORCING PAYMENT OF DEFICIBNCT IN CAPITAL STOCK. Every association which shall have failed to pay up its cap- ital stock, as required by law, and every association whose capital stock shall have become impaired by losses or other- wise, shall, within three months after receiving notice thereof from the Comptroller of the Currency, pay the deficiency in the capital stock, by assessment upon the shareholders ■pro rata for the amount of capital stock held by each; and the Treasurer of the United States shall withhold the interest upon 206 NATIONAL BANKS. all bonds held by him in trust for any such association, upon notification from the Comptroller of the Currency, until other- wise notified by him. If any such association shall fail to pay np its capital stock, and shall refuse to go into liquidation, as provided by law, for three months after receiving notice from the Comptroller, a receiver may be appointed to close up the business of the association, according to the provisions of sec- tion fifty-two hundred and thirty- four; [and provided, That if any shareholder or shareholders of such bank shall neglect or refuse, after three months' notice, to pay the assessment, as provided in this section, it shall be the duty of the board of directors to cause a sufiicient amount of the capital stock of such shareholder or shareholders to be sold at public auction (after thirty days' notice shall be given by posting such notice of sale in the office of the bank, and by publishing such notice in a newspaper of the city or town in which the bank is located, or in a newspaper published nearest thereto), to make good the deficiency, and the balance, if any, shall be returned to such delinquent shareholder or shareholders.] 3d March, 1873, c. 369, S 1, v. 17, p. 603; 30th June, 1876, c. 156, § 4, v. 19, p. 64. SECTION 5206. EESTEIOTION UPON USE OI" NOTES OP OTHEB BANKS. No association shall at any time pay out on loans or dis- counts, or in purchasing drafts or bills of exchange, or in payment of deposits, or in any other mode pay or put in circu- lation, the notes of any bank or banking association which are not, at any such time, receivable, at par, on deposit, and in payment of debts by the association so paying out or circulat- ing such notes; nor shall any association knowingly pay out or put in circulation any notes issued by any bank or banking association, which at the time of such paying out or putting in circulation is not redeeming its circulating notes in lawful money of the United States. 3d June, 1864, o. 106, § 39, v. 18, p. 111. PENALTY JOB FALSELY CERTIFYING CHECKS. 207 SECTION 5207. UNITED STATES NOTES NOT TO BE HELD AS COLLATERAL, ETC., PENALTY. No association shall hereafter offer or receive United States notes or National Bank notes as security or as collateral secu- rity for any loan of money, or for a consideration agree to withhold the same from use, or offer or receive the custody or promise of custody of such notes as security, or as collateral security, or consideration for any loan of money. Any asso- ciation offending against the provisions of this section shall be deemed guilty of a misdemeanor, and shall be fined not more than one thousand dollars and a further sum equal to one-third of the money so loaned. The officer or oflBcers of any associa- tion who shall make any such loan shall be liable for a further sum equal to one-quarter of the money loaned; and any fine or penalty incurred by a violation of this section shall be recoverable for the benefit of the party bringing such suit. 19th February, 1869, o. 33, v. 15, p. 270. SECTION 5208. PENALTY FOE FALSELY CEETIFTING CHECKS. It shall be unlawful for any officer, clerk, or agent of any National Banking Association to certify any check drawn upon the association unless the person or company drawing the check has on deposit with the association, at the time such check is certified, an amount of money equal to the amount specified in such check. Any check so certified by duly au- thorized officers shall be a good and valid obligation against the association ; but the act of any officer, clerk, or agent of any association, in violation of this section, shall subject such bank 208 NATIONAL BANKS. to the liabilities and proceedings on tlie part of the Comp- troller as provided for in section fiftj-two hundred, and thirty- four. 8d March, 1869, c. 135, v. 15, p. 335. 1. In certifying a clieck in the usual form, the bank simply aflBrms the genuineness of the signature of the drawer, and that he has funds sufficient to meet it, and that such funds will not be withdrawn to the prejudice of the holder of the check; but the bank does not warrant the genuineness of the body of the check. In this case the bank had first certified and then paid a " raised '' check. Meld, That it could recover back the amount as money paid by mistake; and that evidence to show that it was the understanding of the business community that the banks by the word " certified '' intended it to be understood that they would pay the check so marked at all events, was properly rejected. Security Bk. v. Nat. Bk., 67 N. Y. 458. 2. If the cashier has often pledged the credit of the bank by cashier's check, he may bind the bank by certifying a check as " good." Merchants' Bk. «. State Bk., 10 Wall. 604. The bank is responsible to the iona fide holder of a certified check, although the cashier violated his duties by certifying the check without funds. Cooke ■b. State Nat. Bk., 53 N. Y. 96. 8. "While it Is unlawful for a National Bank to certify a check, the drawer having no funds or not suflicient funds, a conditional promise to pay a check whenever a draft left for collection is paid, is binding on the bank. Nat. Bk. «. Nat. Bk., 7 W. Va. 544. SECTION 5309. EMBEZZLEMENT PENALTT. Every president, director, cashier, teller, clert, or agent of any association, who embezzles, abstracts, or willfully misap- plies any of the moneys, funds, or credits of the association; or who, without authority from the directors, issues or puts in circulation any of the notes of the association ; or who, without such authority, issues or puts forth any certificate of deposit, draws any order or bill of exchange, makes any acceptance, assigns any note, bond, draft, bill of exchange, mortgage, judg- ment, or decree; or who makes any false entry in any book. EMBEZZLEMENT PENALTY. 209 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 individual person, or to deceive any ofiScer of the association, or any agent appointed to examine the affairs of any such association ; and every person who with like intent aids or a^ets any officer, clerk, or agent in any violation of this section, shall be deemed guilty of a misdemeanor, and shall be imprisoned not less than five years nor more than ten. ' 3d June, 1864, c. 106, § 55, v. 13, p. 116; 6tli April, 1869, o, 11, v. 16, p. 7; 8th July, 1870, c. 326, v. 16, p. 195. 1. An intent to defraud the bank is shown by the fact of embezzlement. The president is guilty as principal where he directs the clerk to make false entries in the books of the bank, and the clerk obeys the order. The conversion of the money of the bank by the president to his own use, is an embezzlement of such funds. In such a case it is sufficient to show a de faeto bank and a defaato pres- ident. In re VanCampen, 2 Benedict, 419. On a trial for embezzlement, evidence to show that the money of the bank was used by the cashier, witli the consent of the president, and for and on account of the bank, in the purchase and sale of stocks is not ad- missible. United States v. Taintor, 11 Blatchf. 374. 2. State Courts have no jurisdiction of oflfenses created by act of Con- gress; and, therefore, sucli Courts cannot punish officers of National Banks for embezzling the property of the bank, but they can punish such officers for purloining the property of others. Commonwealth ». Tenney, 97 Mass. 50; State «. Tuller, 34 Conn. 280; Commonwealth b. Felton, 101 Mass. 204. The fact that the United States statutes impose a punishment upon an officer of a bank for a breach of his trust in that capacity, does not relieve him from punishment for the larceny of the funds of the bank at common law or under the statutes of the State. The statute of the United States does not purport to punish larceny as such. The obvious inference is that Congress did not intend to interfere with the jurisdiction of State laws and State Courts over offenses of that class against the property of National Banks. "Where money belonging to the bank is intrusted to the care of the teller during the day, but at uight is placed in a safe, which he cannot rightfully open, if he abstracts the money from the safe at night and converts it to his own use, his offense is larceny and not embezzlement. Commonwealth «. Barry, 116 Mass. 1. 3. The charge of misapplying the funds of a National Bank is a charge of an " infamous crime" under the Constitution of the United States, and must be by indictment and not by information. United States ». Hade, 10 Leg. Ns. 22. 14 210 NATIONAL BANKS. The notes of National Banks are United States " currency," and the per- son stealing them may be indicted for the larceny of United States currency. State v. Casting, 23 La. Ann. 609. Congress has no power under the constitution to confer upon the State Oourts jurisdiction of crimes created by Federal statutes, nor can the Stale Legislatures confer such jurisdiction. Where an act of Congress creating a corporation provides for a punish- ment to be inflicted upon any oflBcer of a corporation who embezzles its property, it is not competent for the State Legislature to make the same act an offense against the laws of the State. But where an act of Congress creates a corporation within a State, and authorizes it in general terms to pursue the business of banking, it is competent for a State Legis- lature to protect the bank, and those who deal with it, in that business, by suitable penal enactments. Such an enactment is not predicated on, and has no relation to any law of Congress or offense created thereby. Therefore, where the act of Congress authorizing the establishment of National Banks, provided a punishment to be inflicted upon the officers of a bank who should embezzle its property, but made no provision for such punishment in case of embezzlement or theft of the property of its customers, and a teller of the bank purloined a package of bonds specially deposited in the vault of the bank by one of its customers ; it was lield, that the act was within the purview of the statute of the State punishing officers of banks for embezzling the property of third persons deposited therein, and within the jurisdiction of the State Courts. State n. TuUer, 34 Conn. 380. The prisoner had been arrested under a charge of embezzling the funds of a National Bank. He took out a writ of habeas corpus : Held, That an embezzlement by the cashier of a bank is not a common law offense. That the State statutes concerning such crimes have no application to Na- tional Banks, and that section 5209, which provides specifically for the punishment of cashiers and other officers who shall be guilty of embez- zling the money, funds or credits of such institutions, cannot be enforced by the State Courts. Commonwealth v. Ketner, (Pa. 1880,) 13 Leg. Ns. 433 SECTION 5210. UST OF 8HAEBH0LDEES, ETC., TO BE KEPT. The president and cashier of every National Banking Asso- ciation shall cause to be kept at all times a full and correct list of the names and residences of all the shareholders in the association, and the number of shares held by each, in the office where its business is transacted. Such list shall be subject to the inspection of all the shareholders and creditors of the association, and the officers authorized to assess taxes under BEPOETS TO OOMPTEOLLEB OF THE OUEEENOr. 211 State authority, during business hours of each day in which business may be legally transacted. A copy of such list, on the first Monday of July of each year, verified by the oath of such president or cashier, shall be transmitted to the Comp- troller of the Currency. 3d June, 1864, o. 106, § 40, v. 13, p. 111. 1. The neglect of the oflBcers of the bank to keep a correct list of the stockholders of the bank, as prescribed by the above section, will not free from liability one who is otherwise chargeable as a shareholder. Hale v. Walker, 31 Iowa, 344. SECTION 5211. BEPOETS TO COMPTEOLLEE OF THE OUEEENOY. Every association shall make to the Comptroller of the Cur- rency not less than five reports during each year, according to the form which may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, attested by the signature of at least three of the directors. Each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the asssoeiations [associa- tion] at the close of business on any past day by him specified; and shall be transmitted to the Comptroller within five days after the receipt of a request or requisition therefor from him, and in the same form in which it is made to the Comptroller shall be published in a newspaper published in the place where such association is established, or if there is no newspaper in the place, then in the one published nearest thereto in the same county, at the expense of the association; and such proof of publication shall be furnished as may be required by the Comptroller. The Comptroller shall also have power to call for special reports from any particular association whenever in his judgment the same are necessary in order to a full and complete knowledge of its condition. 3d June, 1864, c. 106, § 34, v. 18, p. 109 ; 3d March, 1869, c. 130, § 1, v. 15, p. 336; 30th June, 1876, c. 156, § 6, v. 19, p. 64; 37th February, 1877, o. 69, V. 19, p. 253. 212 NATIONAL BANSS. SECTION 5213. REPORT AS TO DIVIDENDS. In addition to the reports .required by the preceding section, each association shall report to the Comptroller of the Cnr- rency, within ten days after declaring any dividend, the amount of such dividend, and the amount of net earnings in excess of such dividend. Such reports shall be attested by the oath of the president or cashier of the association. 3d March, 1869, c. 130, § 2, v. 15, p. 327; 30th June, 1876, c. 156, § 3, v. 19, p. 64. SECTION 5313. PENALTY FOE FAILUEB TO MAKE EEPOETS. Every association which fails to make and transmit any report required under either of the two preceding sections shall be subject to a, penalty of one hundred dollars for each day after the periods, respectively, therein mentioned, that it delays to make and transmit its report. Whenever any asso- ciation delays or refuses to pay the penalty herein imposed, after it has been assessed by the Comptroller of the Cur/ency, the amount thereof may be retained by the Treasurer of the United States, upon the order of the Comptroller of the Cur- rency, out of the interest, as it may become due to the associa- tion, on the bonds deposited with him to secure circulation. All sums of money collected for penalties under this section shall be paid into the Treasury of the United States. 3d March, 1869, c. 130, §§ 1, 3, v. 15, p. 336; 30th June, 1876, o. 156, § 8, V. 19, p. 63. (Act of June 30, 1876, c. 156, § 6, v. 19, p. 64. Sec. 6. That all savings banks or savings and trust companies organized under authority of any act of Congress shall be, and are hereby, required to make, to the Comp- troller of the Currency, and publish, all the reports which National Bank- ing Associations are required to make and publish under the provisions of sections flfty-two hundred and eleven, flfty-two hundred and twelve and flfty-two hundred and thirteen, of the Revised Statutes, and shall be subject to the same penalties for failure to make or publish such reports as are therein provided; which penalties maybe collected by suit before any HALF YEARLY EETUBN OF CIKOULATION, ETC. 213 court of the United States in the district in which said savings banks or savings and trust companies may be located. And all savings or other banks now organized, or which shall hereafter be organized, in the District of Columbia, under any act of Congress, which shall have capital stock paid up in whole or in part, shall be subject to all the provisions of the Revised Statutes, and of all acts of Congress applicable to National Bank- ing Associations, so far as the same may be applicable to such savings or other banks: Provided, That such savings banks now established shall not be required to have a paid in capital exceeding one hundred thousand dollars.) SECTION 5214 DtniES PAYABLE TO THE UNITED STATES. In lieu of all existing taxes, every association shall pay to the Treasurer of the United States, in the months of January and July, a duty of one-half of one per centum each half year upon the average amount of its notes in circulation, and a duty of one-quarter of one per centum each half-year upon the average amount of its deposits, and a duty of one-quarter of one per centum each half year on the average amount of its capital stock, beyond the amount invested in United States bonds. 3d June, 1864, c. 106, § 41, v. 13, p. 111. Sec. 23. — That whenever and after any bank has ceased to do business by reason of insolvency or bankruptcy, no tax shall be assessed, or col- lected or paid into the Treasury of the United States, on account of such bank, which shall diminish the assets thereof necessary for the full pay- ment of all its depositors ; and such tax shall be abated from such National banks as are found by the Comptroller of the Currency to be insolvent; and the Commissioner of Internal Revenue, when the facts shall so appear to him, is authorized to remit so much of said tax against insolvent State and savings banks as shall be found to atfect the claims of their depositors. § 23, 0. 135, V. 30, p. 361; approved March 1, 1879. SECTION 5215. HALF YEARLY RETURN OF CIRCULATION, DEPOSITS, AND CAPITAL STOCK. In order to enable the Treasurer to assess the duties imposed by the preceding section, each association shall, within ten 214 NATIONAL BANKS. days from the first days of January and July of each year, make a return, under the oath of its president or cashier, to the Treasurer of the United States, in such form as the Treas- urer may prescribe, of the average amount of its notes in cir- culation, and of the average amount of its deposits, and of the average amount of its capital stock, beyond the amount invested in United States bonds, for the six months next preceding the most recent first day of January or July. Every association which fails so to make such return shall be liable to a penalty of two hundred dollars, to be collected either out of the interest as it may become due such association on the bonds deposited with the Treasurer, or, at his option in the manner in which penalties are to be collected of other corporations under the laws of the United States. 8d June, 1864, c. 106, § 41, v. 13, p. 111." SECTION 5316. PENALTY FOE FAILTJEE TO MAKE EETUEN. Whenever any association fails to make the half yearly re- turn required by the preceding section, the duties to be paid by such association shall be assessed upon the amount of notes delivered to such association by the Comptroller of the Cur- rency, and upon the highest amount of its deposits and capital stock, to be ascertained in such manner as the Treasurer may deem best. 3d June, 1864, c. 106, § 41, v. 14, p. 111. SECTION 5217. PENALTY FOE FAILURE TO PAY DITTIES. Whenever an association fails to pay the duties imposed by the three preceding sections, the sums due may be collected in the manner provided for the collection of United States taxes from other corporations; or the Treasurer may reserve the amount out of the interest, as it may become due, on the bonds deposited with him by such defaulting association. 8d June, 1864, c. 106, § 41, v. 13, p. 111. STATE TAXATION. 215 SECTION 5318. EEFUNDING EXOESSIVB DXTTIEi In all cases where an association has paid or may pay in excess of what may be or has been found due from it, on account of the duty required to be paid to the Treasurer of the United States, the association may state an account there- for, which, on being certified by the Treasurer of the United States, and found correct by the First .Comptroller of the Treasury, shall be refunded in the ordinary manner by warrant on the Treasury. 2d March, 1867, Res. 49, v. 14, p. 573. SECTION 5319. STATE TAXATION. Nothing herein shall prevent all the shares in any associa- tion from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the State within which the association is located; but the Legislature of each State may determine and direct the manner and place of taxing all the shares of National banking associations located within the State, subject only to the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed ■capital in the hands of individual citizens of such State, and that the shares of any Nati onal banking association owned by non-residents of any State shall be taxed in the city or town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property of associations from either State, county, or municipal taxes to the same extent, according to its value, as other real property is taxed. 3d June, 1864, c. 108, § 41, v. 13, p. Ill ; 10th February, 1868, o. 7, v. 15, p. 34. 1. It is within the constitutional power of Congress to establish a Na- tional Bank in any State, and provide that the shares of the capital stock ■shall be exempt from taxation by other States. The United States statute 216 KATIONAL BANKS. of 1864, c. 106, § 41, makes unlawful the imposing by, or by the authority of, a State, of a tax on shares owned by an inhabitant thereof in the capital stock of a National banking association organized under that statute, and located in another State. Flint v. Board of Aldermen of the City of Bos- ton, 99 Mass. 141. The restriction on the power of the States in the matter of taxation of National Banks does not arise from the fact that they are created corpora- tions under the act of Congress. The States may lawfully tax the property merely of a corporation created by act of Congress, in common with other property of the same description throughout the State. But to the extent that such property is invested in the securities of the Federal Government, it is beyond the power of the States to tax it against the corporation, without permission of Congress, for the reason that taxation in that respect would be, indirectly, a tax upon the credit and securities of the Federal Government. The power of the States to tax, in the hands of stockholders, the stock of National Banks which is invested in Federal securities, is derived ex- clusively from the authority conferred by Congress. By the act of 1864, as amended in 1868, power is granted to the States to tax the shares of the stock of National Banks by including them in the valuation of the per- sonal property of the owner. The only restriction on this power of taxation is that it shall not be at any greater rate than is assessed on other moneyed capital in the hands of individual citizens of the State, and that shares owned by non-residents of the State shall be tEixed in the city or town where the bank is located. The mode in which the tax shall be assessed and collected and the place where it shall be laid on resident stockholders are left to the discretion of the Legislatures of the States in which the banks are respectively located. State v. Newark, B9 N. J. 380. (10 Vroom.) But it was held in the Court of Appeals that the resident stockholder had a right, under the laws of New Jersey, to have the shares of National Bank stock standing in his name assessed to him in the township or ward in which he resides. State v. Newark, 40 N. J. 558. (11 Vroom.) Congress, having legally undertaken to provide a currency for the whole country, may secure the benefit of it to the people by appropriate legisla- tion, and to that end may restrain the circulation of any other notes than those issued under its authority, and in order to do so it may tax them out of existence. Veazie Bk. •». Fenno, 8 Wall. 533. Section 5319 in effect, provides that all shares of stock in National Banks, held by any person or body corporate, may be included in the valuation of the personal property of any such person or corporation in the assessment of taxes imposed under State authority, at the place where the bank is located and not elsewhere. This provision of the National Bank Act became a law of property, and every State within which a National Bank was afterwards located acquired jurisdiction, for the purpose of taxation, of all the shareholders of the bank, both resident and non-resident, and of all its shares, and power to legislate accordingly. . ^TATB TAXATION. • 217 Nothing in article 9 of the Constitution of the State of Illinois of 1848 prevented the Legislature of that State from taxing the shares of National Baulss owned by residents of the State, at the place where the bank is located, without regard to their residence. The act of such Legislature so providing, passed June 13, 1867, is valid under said constitution. Tappan v. Merchants' Nat. Bk., 19 Wall. 490. Where a statute provides for the assessment of the shares of a corpora^ tion at "their full and true value," deducting the proportional value of the real estate owned by the corporation, the just assessment will include the surplus or undivided profits of the corporation. People o. Commissioners, 4 L. & E. Rep. 313. (U. S. C. C.) To tax the property of a bank and its capital stock at the same time would be double taxation, which is forbidden by the organic law of the State. Under the United States statute the State is left free to exercise the power of taxation of National Banks, assessing the same on the real estate of the bank or upon the shares of its capital stock, at the election of the State, in accordance with the constitution and laws of the State, and only in conformity with the rules applicable to the citizens or corporations of the State. Under the constitution and laws of Maryland it is not competent to assess for the purposes of taxation both the shares of the capital stock and the property of a National Bank. Commissioners ». Farmers and M. Nat. Bk., 48 Md. 117. United States notes, commonly called legal tender notes, and National Bank notes "are obligations of the National Government, and are exempt from State taxation. Home ®. Green, 53 Miss. 453. 3. The taxing power, so far as it is reserved to the States and used within constitutional limits, cannot be controlled or restrained by United States Courts, the prudence of its exercise not being a judicial question. But a State tax on the loans of the Federal Government is a restriction upon the constitutional power of the United States to borrow money, and if the States had such a right, being in its nature unlimited, it might be so used as to defeat the Federal power altogether. A. tax on the nominal capital of a bank, without regard to the nature or value of the property composing it, is annexed to the franchise as a roy- alty for the grant, and not a burden imposed on the property itself. People V. Commrs. of Taxes, 3 Black. 680. The shares of a National Bank in the hands of the shareholders are subject to taxation, although the whole capital of the bank is invested in National securities. People v. The Commissioners, 4 Wall. 344; Van Allen 0. The Assessors, 3 Wall. 573. A tax on the capital of a bank is not the same thing as a tax upon the shares of which the capital is composed. And when a State imposes on the State banks a tax on their capital^ (the shares in the hands of the share- holders being exempt from taxation,) it cannot lay a tax on the shares of National Banks. Bradley v. The People, 4 Wall. 459. While the caj)ital of National Banks cannot be taxed by State authority. 218 . NATIONAL BANKS.. the shares of shareholders may be, in a rate not exceeding that imposed upon the shares of banks organized in and by authority of such State. But if the laws of the State merely provide for the taxation of the capital of its own banks, and not of the shares held therein, a subsequent or further provision for the taxation of the shares of National Banks, is not in conformity with, and is unauthorized by the act of Congress providing or the organization of National Banks, and la therefore invalid. Hubbard ». Board of Supervisors, 23 Ipwa, 130. The local authorities may tax the shares of National Banks, and may compel the bank to pay the tax for its shareholders. The doctrine which exempts the instrumentalities of the Federal Government from State legis- lation, is not founded on any express provision of the Constitution, but is the implied necessity for the use of such instruments by the Federal Gov- ernment, and hence any act of the State which does not impair such instrumentalities is not within such prohibition. National Bk. v. Com- monwealth, 9 WMl. 353. The act providing that the taxation of shares of stock of National Banks " shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens," requires that no greater per- centage of tax on the valuation of shares shall be levied ; it does not apply to an over-valuation. The fact that the capital of the bank is invested in United States securities does not prevent the taxing of the shares. No deduction need be made for the debts of the owners of such shares. Williams ®. Weaver, 75 N. Y. 30. The act of Congress, approved February 10, 1868, places but one limit- ation on the taxing power of the State, namely: That the shares of stock in National Banks shall not be taxed at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of the State. Stiltz V. Tutewiler, 1 Wilson, (Ind.) 507. The capital stock of a National Bank was assessed at its full value, while all other property was assessed at less than one-half its full value. Seld, That the capital stock was burdened with an undue proportion of the public taxes, and that the bank was entitled to a standing in court for relief. Merchants' Nat. Bk. of Toledo v. Gumming, 5 Reporter, 680. (U. S. C. C, N. D. Ohio.) The rate of taxation upon the shares of National Banks should be the •same or not greater than upon the moneyed capital of the individual citizens, which is liable to taxation. It was not intended by the act to curtail the State power on the subject of taxation. The act simply requires that capital invested in National Banks should not be taxed at a greater rate than like property similarly invested. The plain intent of the statute is to protect such corporations from unfriendly discrimination against them of the power of State tax- ation. That particular persons or particular articles are relieved from taxation, is not a matter to which either class can object. Adams v. Mayor of Nashville, (Tenn.) 10 Leg. Ns. 98 ; s. c, 95 U. S. 19. The proviso in section 5319 means no more than to require of each State STATE TAXATION. 219 as a condition to the exercise of the power to tax ttie shares of National Banks, that it should, so far as it had the capacity to tax, in like manner tax the shares of the banks of its own creation. Hence, where, as to two banks, the State had disabled itself to tax, while as to all others it taxed the same as it did National Banks : Held, That such proviso was complied with. Lionberger «. Bouse, 9 Wall. 468. 3. An assessment upon the capital stock and a tax against a National Bank is void (ch. 761, laws of 1866 of N. Y.), and an action will lie on behalf of the bank against a munieipal corporation to recover the amount collected by it upon such an assessment for municipal taxes. Nat. Bk. of Chemung v. City of Elmira, 53 N. Y. 49. By the provisions of its charter, a State Bank was to pay twenty cents upon every one hundred dollars of stock paid in during the preceding year. In 1865 the bank surrendered its charter and reorganized as a Na- tional Bank. It was subsequently sued by the State for dues maturing after reorganization. Meld, (1) That under the State law the bank had a right to surrender its charter. (3) That the bonus of twenty cents waa a price paid for the right of exercising the powers and privileges of the charter, after the surrender of which, the State had no right to exact. (3) After the reorganization as a National Bank, the bonus could only be exacted as a tax, and that the State had no right to impose. State v. Nat. Bk. of Baltimore, 33 Md. 75. The provisions of the statute of Massachusetts (of 1868, ch. 84,) for taxing National Bank shares owned by non-residents, are not unconstitutional, either as not being proportional or being unreasonable within the meaning of the constitution of the Commonwealth (part 3, c. 1, § 1, art. 4) ; or, as ex- ceeding the limitation of the rate of assessment prescribed in the United States statutes (1864, o. 106, § 41, and 1868, c. 7) ; or, as being retrospective in their operation ; or, as denying to citizens of any State, the privileges and immunities of citizens of the several States. Providence Inst'n for Svgs. 0. City of Boston, 101 Mass. 575; Jewell «. City of Boston, 101 Mass. 575. The State law having been changed, it was held that chapter 158, laws of 1868, providing for the taxation of shares in National Banks, is author- ized and valid under section 5319. Morseman «. Ybunkin 27 Iowa, 350. Nothing in article 9 in the constitution of Illinois of 1848 prevented the Legislature of that State from taxing the shares of National Banks owned by residents of the State, at the place where the bank is located, and with- out regard to their residence. The act of the Legislature so providing, passed June 13, 1867, is valid under the said constitution. Tappan «. Merchants' Nat. Bk., 19 "Wall. 490. The shares of a National Bank should be assessed for taxation at their actual value. The law of New York of March 9, 1865, known as the " enabling act," so far as it provides for the taxation of shares in National Banks, is invalid. Affirming VanAUen v. Assessors, 3 "Wall. 573; People n. Commissioners, 94 TJ. 8. 415. A statute of "Vermont is not void which, for the purpose of taxation, requires, under a penalty for his neglect or refusal, the cashier of each 220 HATIOHAL BANKS. National Bank within the State to transmit, on or before the 15th day of April in each year, to the clerks of the several towns in the State. in which any stockholders of said bank shall reside, a true list of all the names of such shareholders on the books of such bank, together with the amount of money actually paid in on such shares on the first day of that month. Waite V. Dowley, 94 U. S. 527. 4. The actual and not the par value of the shares of the capital stock of National Banks, is the basis of assessment and taxation. From the actual value of the shares the assessor should deduct their pro- portion of the value of the real estate held by the bank ; the balance }s the proper sum to be assessed. People v. Tappan, 11 Bank. Mag. 480. Jnder section 5319 and the act of the Legislature of Pennsylvania, of March 31, 1870, shares in National Banks may be valued for taxation, for county and other purposes at an amount above their par value. Hepburn V. The School Directors, 23 Wall. 480. The actual and not the par value is the standard of taxation in assessing shares of a National Bank. The fact that the capital of the bank is In^ vested in United States bonds does not affect the valuation. The' actual value of the stock, diminished by the proportional value of the real estate owned by the bank, furnishes the proper sum upon which to assess the tax. People V. Commissioners, 8 Hun, 536. 5. The act of Congress requires that States shall assess for taxation shares of stock in National Banks at the place where the bank is located and not elsewhere. The law of the State not assessing for taxation shares of stock in Na. tional Banks at the place where the banks are located, is not in conformity with the act of Congress, and so far as it purports to tax such stock it is void. The State not having taxed shares of stock in National Banks located in the State, such shares are not taxable by the municipal corpora^ tions of the State. Mayor of Nashville v. Thomas, 5 Coldw. 600. The word "place," as used in the proviso in § 41, ch. 106 of the act of Congress of June 3, 1864, refers to the location of the bank, and not to the State authority under which the tax is to be assessed. Note — The plaintiif, residing in Auburn, was the owner of certain shares in a National Bank located at Lewiston. It was held, That such shares were properly taxed at Lewiston. Packard v. City of Lewiston, 55 Me. 456; Abbott v. Inhabitants of Bangor, 56 Me. 310; s. C, 54 Me. 540; Weld V. City of Bangor, 59 Me. 416. The " place" referred to, is the municipal corporation in which the bank is located, and where the valuation of the shares must be taken, the assess- ment made thereon, and the amount assessed collected. Opinion of Jus- tices, 53 Me. 594. An owner of bank shares is rightfully taxed upon them in the town in which he resides, although in a statement, made under statute, 1872, c. 821, § 6 (Mass.), he has by an honest mistake notitied the cashier that his resi- dence was in a different town. Goldsbury v. Inhabitants of Warwick, 113 Mass. 384. STATE TAXATION. 221 Under section 5319 and the Michigan statute (laws 1875, p. 185) a share- holder in a National Bank may be taxed in the township where he resides although the bank be located in a difl'erent township. Howell v. Village of Cassopolis, 35 Mich. 471. Shares of the capital stock of a National Bank are personal property made liable, by the express provisions of the act, to State taxation, at the place where the bank is located, without regard to the residence of the stockholder, provided that they are not taxed at a greater rate than other moneyed capital. Mclver v. Robinson, 53 Ala. 456. Shares of stock in a National liank are proper subjects of State, county and municipal taxation. Such shares owned by non-residents are to be taxed in the city or town where the bank is located and not elsewhere. Kyle V. Mayor, 75 N. C. 445. A State may tax shares held in National Banks organized therein under United States statute of 1864, c. 106, and may authorize the assessment of such tax in the city or town within the same State where the owner resides. Austin V. Board of Alderman of the City of Boston, 14 Allen, 359. The bank shares of the estate of a deceased person must be assessed at the place where all the other property of the deceased is assessed. Under chapter 321 of 1873, the City of Boston had no right to assess any of the shares of such stock (the residence of the deceased having been in Canton) as the residence of the executor, or as the locality of the bank. Revere v. City of Boston, 5 Rep. 46. (Mass.) 6. A corporation, while in a transition state from its original character as a State Bank to that of a National Bank, is subject to State taxation. Commonwealth «. Manufacturers and M. Bk., 3 Pearson, 386. (Pa.) Undfer the laws in force in 1876, a National Bank was not liable to pay State and county taxes for that year assessed on shares of stock in the bank, not owned by it but owned by individual shareholders. Waco Nat. Bk. v. Rogers, 51 Texas, 606. An assessment against a shareholder in a National Bank does not authorize the seizure of property of the bank to satisfy the same. And, when the collector, to satisfy such assessment, seized a package of bank bills, the bank was allowed to recover the same by replevin. First Nat. Bk. of Iowa City v. Hershire, 31 Iowa, 18. To render a National Bank liable for the payment of the taxes due from its stockholders, it must be averred and shown that the bank has or had in its possession dividends or other money or property belonging to the delin- quent shareholder. The bank is not absolutely but is only conditionally liable for such taxes. Hershire i>. First Nat. Bk. of Iowa City, 35 Iowa, 273. 7. The business of a National Bank, under tlie laws of the United States, is not liable to a tax by the municipal authorities of the city where it is located, and if such a tax is attempted to be enforced, the attempt will be restrained by injunction. Mayor v. First Nat. Bk. of Macon, 59 Ga. 648. Where, upon an assessment roll, there appears an assessment against a stockholder in a bank for the amount of his stock, under the usual war- rant attached, directing the collector to collect from the person named, and 222 NATIONAL BANKS. to levy the same on his goods and chattels, the collector is not authorized to levy upon and collect the same of the property of the bank, although the bank holds funds with which the tax should have been paid. A con- tract between the bank and its stockholders cannot thus be enforced. An assessment upon the shares of a National Bank, under the act of 1865 (of New York), is invalid and cannot be enforced. (This case over-rules City of Utica «. Churchill, 33 N. T. 161, under authority of Van Allen v. Assessors, 8 Wall. 573.) First Nat. Bk. of Sandy Hill V. Fancher, 48 N. Y. 524. The banking ofBce and lot owned and occupied as its place of business by a National Bank is not liable to assessment and taxation against the bank. Note. — In this case the shares of the bank had been assessed at their full money value, without deduction of such real estate therefrom, and the tax on the shares had been fully paid. Board of Comrs. of Rice Co. v. Citizens Nat. Bk., 23 Minn. 280. The capital stock of a National Bank cannot be assessed as such by State authority. The only way such stock can be reached is by assessment of the shares of diflferent stockholders. Collins «. City of Chicago, 4 Biss. 472. By this section Congress has limited the States to taxation upon the shares in National Banks, as distinguished from taxation of the bank eo nomine upon their property or capital. A State cannot evade the restriction of the act by requiring the value of the property of the bank to be added to the value of the shares otherwise ascertained, and thus produce an unfavorable discrimination in the taxation of bank shares. St. Louis Nat. Bk. v. Papin, 4 Dill. 29; 8. c, 3 Cent. L. J. 669. In assessing the shares in National Banks under State authority it is not necessary that they shall be included in the list of other personal property,, so that upon aggregating the personal property, shares included, the tax- able portion would be shown by what remained after the deduction for debt was made, as provided by the general revenue law. Under the act of 1867, a system of taxation for bank shares was designed, peculiar to itself and independent of the general revenue system of ike State. The only deduction allowed by the act from the shares of each owner, is a proportionate sum for the real estate in which a portion of the capital might be invested. No deduction for debts owing by the owner can be made from the valuation of the bank shares. McVeagh v. City of Chicago, 49 111. 318. Taxes must be levied upon the individual shareholders, and not upon the capital stock of the bank in the aggregate, and at the place where such bank is located. First Nat. Bk. of Mendota «. Smith, 65 111. 44; People v. Bradley, 39 111. 130. Under sec. 41 of the act of June 3, 1864, authorizing the organization of National Banks, none of the property of such banks is taxable by State, county or municipal authority, except the real estate of the bank, and the- STATE TAXATION. 223 shares of Its stockholders. The duties provided for in said act were designed to be in lieu of all existing taxes. Nat. State Bk. «. Young, 35 Iowa, 311. A National Bank is not^iable upon a tax imposed on it by a city ordinance for the privilege of banking. The collection of such a tax will be enjoined. Nat Bk. of Chattanooga v. Mayor, 8 Heisk. (Tenn.) 814. Taxation by State authority of the capital stock of a National Bank, in- vested in United States securities, will be restrained. First Nat. Bk. of Omaha v. County of Douglas, 3 Dill. 298. Under the legislation of Nebraska, shares in National Banks may be taxed, and the tax enforced by distraint against the property of the bank. First Nat. Bk. ■». Douglas County, 3 Dill. 330. 8. In assessing bank stock, under the provisions of the act authorizing the taxation of stockholders of banks (c. 761, laws of 1866 of N. Y.), it is the duty of the assessors to deduct from the actual value of such share a sum bearing the same proportion thereto as the assessed value of the real estate of the bank bears to the actual value of all the capital stock ; the words " whole amount of the capital stock," as used in said act, has refer- ence to its value, not to the nominal amount of capital. (Reversing People fl. Commrs. of Taxes, 9 Hun, 650;) People v. Commissioners, 69 N. Y. 91; People V. Tappan, 11 Bank. Mag. 480 ; People «. Commrs., 8 Hun, 536 ; Mc- Veagh V. City of Chicago, 49 111. 318. 9. The surplus capital of a National Bank, in excess of the amount they are required to carry to their surplus fund semi-annually, may be taxed by the State, and such taxation is not an encroachment upon the constitu- tional powers vested in the General Government. First Nat. Bk. v. Peter- borough, 56 N. H. 38. 10. Where no remedy exists to recover back illegal State taxes, when paid into the treasury, equity will restrain their collection, the plaintiff being otherwise without adequate remedy at law; and equity, having jurisdiction in such a case, will determine the validity of county as well as State taxes, embraced in the same collection, warrant and levy. The taxation by State authority of the capital stock of a National Bank invested in United States securities will be restrained. First Nat. Bk. of Omaha e. County of Douglas, 3 Dill. 298. 11. United States Treasury notes, being one of the means used for the support and administration of the General Government, cannot be taxed by a State. The power of a State to tax the circulation of National Banks depends upon whether such circulation is for the use of the United States Govern, ment or for private profit. Congress can protect the circulation of those banks by forbidding the State to tax it; until this is done the States have the right to tax it. Buffln v. Board of Commrs. of Orange Co., 69 N. 0. 498. 13. Simmons in 1871 purchased from Aldrich stock in a National Bank upon the faith of the seller's representation that all facts affecting the value of such stock were set forth in a written statement submitted by him. The State tax upon the stock of said bank for 1865 and 1866 had not been paid. 224 NATIONAL BANKS. and this fact was known to the seller, but did not appear in his statement. The amount of said taxes being still uncollected, was paid by the bank in 1873, pursuant to chapter 28, General Laws 1872 of Wisconsin. Held, That Aldrich is liable to Bimmons in damages as for fraudulent representations to the amount of such taxes on the stock sold to Simmons with interest. Simmons u. Aldrich, 41 Wis. 241. 13. A shareholder who has been assessed upon the value of his shares in a bank or banking association, pursuant to the act of 1866 (of New York), is not entitled to a reduction by the assessor of valuation on account of his debts. People v. Dolan, 36 N. Y. 59. Under the Internal Revenue Act of July, 1870, interest paid and divi- dends declared during the last five months of the year 1870, are taxable, as well as those declared during the year 1871, it appearing that income of other sorts was meant to be so taxed, and there appearing to be no good reason why income derived through corporations should not be taxed like income generally. Blake b. Nat. Bks., 23 Wall. 307. Where a National Bank voted to increase its capital stock, and the requisite number of new shares were subscribed and paid for before Jan- uary 1, 1872, and a semi-annual dividend declared on that day was paid on the new shares as well as the old, but such increase of capital was not approved by the Comptroller of the Currency, nor his certificate issued until January 5, 1873: Held, That such new shares were not the subject of taxation under the ordinance imposing a tax on bank shares " in the hands of the taxpayers on 1st January, 1872," for the reason that there can be no increase of the capital of a National Bank until the Comptroller approves thereof and issues his certificate as provided by Section 6143 of the act Charleston v. Peoples' Nat. Bk., 6 Rich. (S. C.) 103. HOTICB OF INTENT TO DISSOLVE. 225 CHAPTEE X. SECTION 5220. VOLTJNTAET DISSOLUTION OF ASSOCIATIONS. Any Association may go into liquidation and be closed by the vote of its shareholders owing two-thirds of its stock. 3a June, 1864, o. 106, § 42, v. 13, p. 112; 30tli, June, 1876, c. 156, § 2, v. 19, p. 63. 1. The Central National Bank of Baltimore suspended active operations as a banking institution, resolved to go into a state of liquidation, depos- ited with the Treasurer of the United States the money with which to redeem its outstanding circulation, and received by reassignment its bonds deposited to secure the payment of its notes. There was no actual or formal surrender of franchises, and no judicial declaration of dissolution. Held, That such facts did not operate a final dissolution of the bank. Ordwayu. Central Nat. Bk. of Baltimore, 47 Md. 217; s. c, 8 Leg. Ns. 291. A National Bank is not liable to be proceeded against in bankruptcy. The bankrupt act does not repeal or supercede the provisions of this act for winding up insolvent banks. Nor can the two acts exist together, as furnishing concurrent or co-ordinate remedies. The remedies prescribed in such case under the bankrupt act are not so ample and complete as those under the National Bank act, and the fact that creditors cannot of their own motion institute proceedings under the latter act does not change the construction of the acts. Nor did Congress intend to inject the pro- visions of the bankrupt act, so that creditors could apply the remedies of the one, and the Comptroller the remedies of the other. Such a construc- tion would inevitably produce confusion. When the legislature creates a corporation, it can also prescribe what remedies shall be had against it, and such remedies then become exclusive. In re Manufacturers' Nat. Bk., 5 Biss. 490. SECTION 5221. NOTIOE OF INTENT TO DISSOLVE. Whenever a vote is taken to go into liquidation it shall be the duty of the board of directors to cause notice of this fact to be certified, under the seal of the association, by its president or cashier, to the Comptroller of the Currency, and publication 15 226 NATIONAL BANKS. thereof to be made for a period of two months in a newspaper published in the city of New York, and also in a newspaper published in the city or town in which the association is located, or if no newspaper is there published, then in the newspaper published . nearest thereto, that the association is closing up its affairs, and notifying the holders of its notes and other creditors to present the notes and other claims against the association for payment. 3d June, 1864, c. 106, § 43, v. 13, p. 112. SECTION 6S33. DEPOSIT OF LAWFUL MONET TO REDEEM OUTSTANDING OIEOULA- TION. Within six months from the date of the vote to go into liquidation, the association shall deposit with the Treasurer of the United States, lawful money of the United States sufficient to redeem all its outstanding circulation. The Treasurer shall execute duplicate receipts for money thus deposited, and de- liver one to the association and the other to the Comptroller of the Currency, stating the amount received by him, and the purpose for which it has been received ; and the money shall be paid into the Treasury of the United States, and placed to the credit of such association upon redemption account. 3d June, 1864, c. 106, §§ 42, 43, v. 13, p. 112; 14th July, 1870, c. 257, v. 16, p. 274; 30th June, 1874, o. 348, v. 18, p. 124. SECTION 5223. EXEMPTION AS TO AN ASSOCIATION CONSOLIDATING WITH ANOTHEE. An association which is in good faith winding up its busi- ness for the purpose of consolidating with another association shall not be required to deposit lawful money for its outstand- ing circulation; but its assets and liabilities shall be reported by the association with which it is in process of consolidation. 14th July, 1870, c. 357, v. 16, p. 374. DBSTBUOTION OF REDEEMED H0TE8. 227 SECTION 5234. BE-ASSIGNMENT OE BONDS AND EEDEHPTION OF NOTES, ETO. Whenever a, snfiBcient deposit of lawful money to redeem the outstanding circulation of an association proposing to close its business has been made, the bonds deposited by the association to secure payment of its notes shall be re-assigned to it, in the manner prescribed by section fifty-one hundred and sixty-two. And thereafter the association and its share- holders shall stand discharged from all liabilities upon the circulating notes, and those notes shall be redeemed at the Treasury of the United States. [And if any such bank shall fail to make the deposit and take up its bonds for thirty days after the expiration of the time specified, the Comptroller of the Currency shall have power to sell the bonds pledged for the circulation of said bank, at public auction in New York City, and, after providing for the redemption and cancellation of said circulation and the necessary expenses of the sale, to pay over any balance remaining to the bank or its legal repre- sentative.] Amendment of February 11, 1875. 3d June 1864, c. 106, § 43, v. 13, p. 112; 18th Feb. 1875, o. 80, v. 18, p. 320. SECTION 5225. DESTEUOTION OF EEDEEMED NOTES. Whenever the Treasurer has redeemed any of the notes of an association which has commenced to close its afiairs under the [six] [five] preceding sections, he shall cause the notes to be mutilated and charged to the redemption account of the association; and all notes so redeemed by the Treasurer shall, every three months, be certified to and burned in the manner prescribed in section fifty-one hundred and eighty-four. 3d June, 1864, c. 106, § 43, v. 13. p. 112; 23d June, 1874, c. 455, t. 18, p. 206; 27th Feb. 1877, c. 69, v. 19, p. 253. 228 NATIONAL BANES. SECTION 5326. MODE OF PE0TE8TING NOTES. Whenever any National Banking Association fails to redeem in the lawful money of the United States any of its circulating notes, upon demand of payment, duly made during the usual hours of business, at the office of such association, or at its designated place of redemption, the holder may cause the same to be protested, in one package, by a notary public, unless the president or cashier of the association whose notes are presented for payment, or the president or cashier of the association at the place at which they are redeemable, offers to waive demand and notice of the protest, and, in pursuance of such offer, makes, signs, and delivers to the party making such demand an admission in writing, stating the time of the de- mand, the amount demanded, and the faei.of the non-payment thereof. The notary public, on making such protest, or upon receiving such admission, shall forthwith forward such admis- sion or notice of protest to the Comptroller of the Currency, retaining a copy thereof. If, however, satisfactory proof is produced to the notary publi& that the payment of the notes demanded is restrained by order of any court of competent jurisdiction, he shall not protest the same. When the holder of any notes causes more than one note or package to be pro- tested on the same day, he shall not receive pay for more than one protest. 3d June, 1864, c. 106, § 46, v. 13, p. 113. SECTION 5237. EXAMINATION BY SPECIAL AGENT. On receiving notice that any National Banking Association has failed to redeem any of its circulating notes, as specified in the preceding section, the Comptroller of the Currency, ■with the concurrence of the Secretary of the Treasury, may appoint a special agent, of whose appointment immediate notice shall be given to such association, who shall immedi- EKDEMPTION AT TEEAStfET. 229 ately proceed to ascertain whether it has refused to pay its circulating notes in the lawful money of the United States, when demanded, and shall report to the Comptroller the fact so ascertained. If, from such protest, and the report so made, the OomptrfiUer is satisfied that such association has refused to pay its circulating notes and is in default, he shall, within thirty days after he has received notice of such failure, declare the bonds deposited by such association forfeited to the United States, and they shall thereupon be so forfeited. 8d June, 1864, c. 106, § 47, v. 13, p. 114. SECTION 5338. OONTINniNG BUSINESS AFTEB DEFAULT. After a default on the part of an association to pay any of its circulating notes has been ascertained by the Comptroller, and notice \of forfeiture of the ionds] thereof has been given by him to the association, it shall not be lawful for the asso- ciation suffering the same to pay out any of its notes, dis- count any notes or bills, or otherwise prosecute the business of banking, except to receive and safely keep money belong- ing to it, and to deliver special deposits. 8d June, 1864, o. 106, § 46, v. 13, p. 113; 18th February, 1875, c. 80, v. 18 p. 830. 1. This provision that it shall be lawful for a National Bank after its failure to "deliver special deposits'' is as eflfectual a recognition of its power to receive them as an expressg declaration to that effect would have been. Nat. Bk. v. Graham, 100 U. S. 690. SECTION 5239. NOTIOE TO HOLDBES EEDEMPTION AT TEBASUET CANCELLATION OF BONDS. Immediately upon declaring the bonds of an association for- feited for non-payment of its notes, the Comptroller shall give notice, in such manner as the Secretary of the Treasury shall, by general rules or otherwise, direct, to the holders of the circu- 280 NATIONAL BANKS. • lating notes of such association, to present them for payment at the Treasury of the United States; and the same shall be paid as presented in lawful money of the United States; where- upon the Comptroller may, in his discretion, cancel an amount of bonds pledged by such association equal at current market rates, not exceeding par, to the notes paid. Sd June, 1864, c. 106, §§ 47, 48, v. 13, p. 114. SECTION 5230. SALE OF BONDS AT AUCTION. Whenever the Comptroller has become satisfied, by the pro- test or the waiver and admission specified in section fifty-two hundred and twenty-six, or by the report provided for in sec- tion fifty-two hundred and twenty-seven, that any association has refused to pay its circulating notes, he may, instead of cancelling its bonds, cause so much of them as may be neces- sary to redeem its outstanding notes to be sold at public auc- tion in the city of New York, after giving thirty days' notice of such sale to the association. For any deficiency in the pro- ceeds of all the bonds of an association, when thus sold, to reimburse to the United States the amount expended in pay- ing the circulating notes of the association, the United States shall have a paramount lien upon all its assets; and such defi- ciency shall be made good out of such assets in preference to any and all other claims whatsoever, except the necessary costs and expenses of administering the same. 3d June, 1864, c. 106, §§ 47, 48, v. 13, p. 114. SECTION 5231. BALE OF BONDS AT PKIVATE SALE. The Comptroller may, if he deems it for the interest of the United States, sell at private sale any of the bonds of an association shown to have made default in paying its notes, and receive therefor either money or tho circulating notes of AFPOINTMENT OF EECEIVEES. 231 the association. But no such bonds shall be sold by private fiale for less than par, nor for less than the market value thereof at the time of sale; and no sales of any such bonds, cither public or private, shall be complete until the transfer of the bonds shall have been made with the formalities prescribed by sections fifty -one hundred and sixty-two, fifty-one hundred and sixty-three, and fifty-one hundred and sixty-four. 8d June, 1864, o. 106, § 49, v. 13, p. 114. SECTION, 5233. DISPOSAL OF PEOTESTED NOTES. The Secretary of the Treasury may, from time to time, make «uch regulations respecting the disposition to be made of cir- culating notes after presentation at the Treasury of the United States for payment, and respecting the perpetuation of the evidence of the payment thereof, as may seem to him proper. 8d June, 1864, c. 106, § 47, v. 13, p. 114. SECTION 5388. OAlNOELLATION OF NATIONAL BANK NOTES, All notes of National Banking Associations presented at the Treasury of the United States for payment shall, on being paid, be canceled. 8d June, 1864, o. 106, § 47, v. 13, p. 114. SECTION 5284. APPOINTMENT OF EEOEIVEHS. On becoming satisfied, as specified in sections fifty-two hun- ■dred and twenty-six and fifty-two hundred and twenty-seven, that any association has refused to pay its circulating notes as therein mentioned, and is in default, the Comptroller of the Ourrency may forthwith appoint a receiver, and require of him fiuch bond and security as he deems proper. Such receiver. 232 NATIONAL BANKS. under tbe direction of the Comptroller, shall take possession of the books, records, and assets of every description of such association, collect all debts, dues, and claims belonging to it, and, upon the order of a court of record of competent jurisdic- tion, may sell or compound all bad or doubtful debts, and, on a like order, may sell all the real and personal property of such association, on such terms as the court shall direct; and may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders. Such receiver, shall pay over all money so made to the Treasurer of the United States, subject to the order of the Comptroller, and also make report to the Comptroller of all his acts and proceedings. 3d June, 1864, c. 106, § 50, v. 13, p. 114; 80th June, 1876, c. 156, §§ 1, 3,. V. 19, p. 68. 1. When a National Bank is insolvent, the order of the Comptroller ot the Currency, declaring to what extent the individual liability of the stock- holders shall be enforced, is conclusive. (Approving Kennedy v. Gibson, 8 Wall. 498.) Casey v. Galli, 94 U. S. 673. The certificate of the Comptroller is sufficient evidence of the validity of the appointment of the receiver In an action brought by him. Piatt V. Beebe, 57 N. Y. 389; Merchants v. Cardoza, 3 Jones & S. 163. The action of the Comptroller of the Currency in appointing a receiver of a National Bank, is conclusive upon the debtors of the bank until set aside in a direct action brought by the bank. Section 5287 makes express '' provision for a contest by the bank of such appointment. Cadle v. Baker^ 20 Wall. 650; Piatt v. Beebe, 57 N. T. 839. The Comptroller is vested with authority to determine when the neces- sity exists for an assessment, and the stockholders are bound thereby. Na appeal lies from his decision. The liability of the stoclsholder is several, and is fixed by his taking- stock In the corporation. When an assessment upon the stockholders i& ordered by the Comptroller, a suit at law is the proper remedy. Bailey s. Sawyer, 9 Leg, Ns. 191. (U. S. C. C. Minn.) 3. The appointment of a r(pceiver does not absolutely dissolve the corpo- ration; and in an action to establish the claim of a creditor, which ha» been rejected either by the Comptroller or receiver, the bank and receiver may both be made parties defendant. Green «. Walkill Nat. Bk., 7 Hun, 68. 3. As soon as a receiver is appointed and qualified, the bank, with its assets and books and papers, passes wholly into his hands, and neither the directors nor officers have any further rights in the premises. Bank of Bethel v. Paquioque Bk., 14 Wall. 383. 4. The clause which prescribes that the receiver shall be " under the APPOINTMKNT OF EEOEIVEES. 233 direction of the Comptroller,'' means only that he shall be subject to hia direction, and not that he shall not act without orders. He may and must collect the assets. That is the object for which he was appointed. Brad- ley, Judge, in Bank v. Kennedy, 17 Wall. 32, 23. 5. The receiver represents the bank, its stockholders, and its creditors only; and he does not in any sense represent the Governmeut. He cannot, therefore, by answering for the Government, subject it to the jurisdiction of the courts. Case v. Terrell, 11 Wall. 199. 6. The receiver cannot be compelled to pay the costs of a suit against his bank, which was put into judgment before his appointment; because he is not a party to the record, is not an ofiBcer of the court, and is bound to pay all the money he receives into the United States Treasury. Ocean Nat. Bk. V. Carll, 7 Hun, 237. The receiver may move to set aside an attachment in an action upon which the property of the bank has been seized. Brown v. First Nat. Bk. of Medina, 34 How. Pr. 408. If, after his appointment, the receiver wishes to take part in a suit begun against the bank prior to its dissolution, he must first be made a party thereto ; otherwise he is a stranger to the proceeding. Tracy v. First Nat. Bk. of Selma, 37 N. Y. 533. As soon as a receiver is appointed, it is his duty to interpose in pending suits and take any steps that may be necessary to remove existing liens. He may claim the property of the bank as against an attachment issued after the bank became insolvent, although prior to his appointment. Nat. Bk. V. Colby, 21 Wall. 609. 7. The receiver is an officer of the United States, and as such he may- bring suits at common law in the District Courts of the United States. Piatt, Rec'r, •». Beach, 3 Ben. 303. And by Rev. Stats. 1874, p. 94, 4th and 15th, the District Court has jurisdiction of suits brought by the receiver in his own district. The receiver may apply to the District Court of the United States in which district his bank is located, for authority to compromise a doubt- ful debt. Such court has jurisdiction in the premises. Matter of Flatt, 1 Ben. 534. 8. Claims may be proved before the receiver. He is the proper party plaintiflf in actions, whether in law or equity, brought against the debtors of the bank. Kennedy v. Gibson, 8 Wall. 498. 9. The decision of a receiver upon a claim is not final ; the creditor may, after a disallowance of the same, sue the bank upon the claim. Paquioque Bk. v. Bethel Bk., 36 Conn. 325. 10. He may bring suit at law or in equity, and he may sue in his own name or in the name of the bank, although the act does not in terms give him authority to sue in his own name. Bk. of Bethel ®. Paquioque Bk., 14 Wall. 383. 11. Suit cannot be brought against the receiver in the United States Courts by a party residing in the same district with him. Van Antwerp e. Hulburd, 8 Blatchf. 283. 234: NATIONAL BANKS. 12. The receiver is a proper party defendant in a suit against the bank to recover the value of special deposits which were lost by the bank before its failure. Turner o. First Nat. Bk. of Keokuk, 36 Iowa, 563. The proceeds of the bonds deposited with the Treasurer of the United States to secure the circulating notes of the bank can never come into the hands of the receiver, and he is, therefore, not a proper party defendant to a suit concerning the same. Van Antwerp v. Hurlburd, 8 Blatchf 382. A receiver was appointed in September, 1873, and entered at once upon the discharge of his duties. In March, 1874, summons was served on the president of the defendant bank, but that ofiBcer neither defended nor informed the receiver of the suit. In April following judgment was ren- ^dered against the bank. In May next the receiver came in and asked that judgment be set aside, etc. Upon these facts the motion was granted. Security Bk. «. Bk. of Commerce, 2 Hun, 287. Where an action is brought to establish a claim rejected by the Comp- troller, or by the receiver, the bank and receiver may both be made parties defendant. Green v. Walkill Nat. Bk., 7 Hun, 63. Where the bank fails and a receiver is appointed before suit brought to recover damages for the misconduct of the officers of the bank prior to its failure, the receiver may be made the only defendant. Case «; Bank, 100 U. S. 446. 13. Where an indebtedness due to the bank cannot be saved except by the purchase of re^l estate, the receiver may, through a trustee, purchase such real property for the purpose of selling the same and thus pay the debt. Zantzingers v. Gunton, 19 Wall. 33. 14. Moneys received on collections by an insolvent bank after its susi pension are a trust fund in the hands of the receiver of such bank for the benefit of the party owning the collection ; and this, although the moneys may have been mingled with the general assets of the bank. German Am . Bk. V. Nat. Bk. of Mo., 11 Leg. Ns. 7. 15. The receiver of an insolvent National Bank holds only the estate and title of the bank in its assets, and he has no greater rights in enforcing their collection than the bank itself would have had. Casey, Eec'r, v. La Societe, 3 Woods, 77. When a National Bank has deposited notes, constituting a part of its assets with a creditor as security for advances, the bank itself being con- cluded by the deposit or pledge, the receiver is not entitled to such notes and cannot maintain an action therefor until the Creditor is made whole for his advances. Casey v. La Societe, etc., 7 Leg. Ns. 313. (U. S. C. C. La.) 16. Where the receiver was appointed more than six years before the order of the Comptroller making the assessment, it was Md, That the statute of limitations began to run upon the appointment of a receiver and the claim was therefore barred. Price, Receiver, «. Yates, 19 Alb. L. J. 295. DIVIDENDS. 235 SECTION 5335. NOTIOB TO FEESENT CLAIMS. The Comptroller shall, upon appointing a receiver, cause notice to be given, by advertisement in such newspapers as he may direct, for three consecutive months, calling on all per- sons who may have claims against such association to present the same, and to make legal proof thereof. 8d June, 1864, o. 106, § 50, v. 13, p. 114, SECTION 5236. DIVIDENDS. From time to time, after full provision has been first made for refunding to the United States any deficiency in redeem- ing the notes of such association, the Comptroller shall make a ratable dividend of the. money 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 juris- diction, and, as the proceeds of the assets of such association, are paid over to him, shall make further dividends on all claims previously proved or adjudicated; and the remainder of the proceeds, if any, shall be paid over to the shareholders of such association, or their legal representatives, in proportion to the stock tiy them respectively held. 3d June, 1864, c. 106, § 50, v. 13, p. 114; 30th June, 1876, c. 156, § 3, v. 19, p. 63. 1. The assets in the hands of the receiver are to be ratably dividea and appropriated to the payment of all legal liabilities of the bank, whether such liabilities are debts, technically so called, or result from the non- feasance or malfeasance of the bank in respect of its binding obligations and duties. Hence, a claim for damages arising from the failure of the bank to deliver to the person entitled a special deposit, stands on the same footing as do other debts. Turner d. First Nat. Bk. of Keokuk, 26 Iowa, 563. There is in the act a clear manifestation of a design on the part of Con- gress : First, to secure the Government for the payment of the notes, not only by requiring in advance of their issue a deposit of bonds of the 236 NATIONAL BANKS. United States, but by giving to the Government a first lien for any defi- ciency that may arise on all the assets subsequently acquired by the insolv- ent bank ; and second, to secure the assets of the bank for ratable distribu- tion among its general creditors. This design would be defeated if a pre- ference in the application of the assets could be obtained by adversary proceedings. When a forfeiture of the rights, privileges and franchises of the corpo- ration is adjudged, the existence of the bank is legally ended; it is then a defunct institution, and judgment can no more be rendered against it in a suit previously commenced than judgment can be rendered against a dead man dying pendente lite. Nat. Bk. v. Colby, 31 Wall. 609. 3. The 50th section of the act ( 5334 ) prescribes how the money paid him by the receiver shall be applied by the Comptroller. Under this sec- tion it is not necessary to put the claim into judgment. And as the judg- ment would bear interest, the claim will bear interest from its approval if the assets are sufficient to pay all claims in full with interest. Nat. Bk. of Commerce o. Mechanics' Nat. Bk., 94 U. S. 437 ; Chemical Nat. Bk. o. Bai- ley, 13 Blatchf. 480. 3. Claims of creditors against the bank may be proved before the receiver, or the Comptroller, or -be established by the judgment of a court of competent jurisdiction. Kennedy v. Gibson, 8 Wall. 498. 4. The rights of an attaching creditor will be postponed to the para, mount lien of the United States, to be repaid the sum expended in redeem- ing the circulating notes of the bank. Schmidt v. First Nat. Bk. of Selma, 33 La. Ann. 814 5. A customer of an insolvent bank must make out a very clear case before the court will allow payment in full. And when his petition assumes the form of a regular suit, costs will be taxed against him if his claim be disallowed. In re Bk. of Madison, 5 Biss. 515. SECTION 5337. INJUNCTION UPON BECBIVEESHIP. Whenever an association against which proceedings have been instituted, on account of any alleged refusal to redeem its circulating notes as aforesaid, denies having failed to do so, it may, at any time within ten days after it has been notified of the appointment of an agent, as provided in section fifty- two hundred and twenty-seven, 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 Comptroller of the Currency to show cause why further proceedings should not be enjoined, and after the FEES AND EXPENSES. " 237 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. 3d June, 1864, o. 106, § 50, v. 13, p. 114. 1. The action of the Comptroller in appointing a receiver is conclusive upon the debtors until set aside by the bank. Section 5237 makes express provision for a contest by the bank of such appointment. Cadle v. Baker. 20 Wall. 650. The action of the Comptroller touching the liability of the stockholders, must precede the institution of a suit against them and must be averred in the bill. The judgment of the Comptroller as to when the liability of the stock- holders should be enforced, is conclusive upon them, and they cannot be heard to dispute it. Kennedy ». Gibson, 8 Wall. 498 ; Casey ». Galli, 94 U. S. 673. A suit against the bank is abated by a decree of the District Court of the United States, forfeiting the rights, privileges and franchises of the corporation and adjudging its dissolution under this section. With such forfeiture the corporation is necessarily dissolved. Its existence as a legal entity is therefore ended ; it is then a defunct institution, and judgment can no more be entered against it in a suit previously commenced than judgment can be rendered against a dead man dying pendente lite. Nat. Bk. e Colby, 21 Wall. 609. SECTION 5288. FEES AND EXPENSES. All fees for protesting the notes issued by any National Banking Association shall be paid by the person procuring the protest to be made, and such association shall be liable there- for; but no part of the bonds deposited by such association shall be applied to the payment of such fees. All expenses of any preliminary or other examinations into the condition of any association shall be paid by such association. All expenses of any receivership shall be paid out of the assets of such association before distribution of the proceeds thereof. 8d June, 1864, c. 106, § 51, v. 13, p. 115. 238 NATIONAL BANKS. SECTION 6239. EBNALTT FOB VIOLATION OF THIS TTTLB. If the directors of any National Banking Association shall knowingly violatb, or knowingly permit any of the officers, agents, or servants of the association to violate any of the pro- visions of this Title, all the rights, privileges, and franchises of the association shall be thereby forfeited. Such violation shall, however, be determined and adjudged by a proper cir- cuit, 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 dis- solved. 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. 3d June, 1864, c. 106, § 53, v. 13, p. 116; 30th Juue. 1876, c. 156, v. 19/ p. 63. 1. The Comptroller is the only person who can bring a suit to have the charter of a Kational Bank forfeited for violation of its organic law. Shoe- maker ii. Nat. Mechanics' Bk., 3 Abb. (U. 8.) 416; Union, etc., v. Rocky, etc., 1 Col. 531. A suit by a National Bank to enforce the collection of a demand, is abated by a decree of the District Court of the United States dissolving the corporation and forfeiting its rights and franchises, rendered upon an information filed against it by the Comptroller. First Nat. Bk. of Selma B. Colby, 7 Leg. Ns. 297. (U.S.) A National Banking Association cannot be dissolved in a collateral pro- ceeding. No one but the Comptroller can bring suit to forfeit the charter of a National Bank. Union, etc., v. Bocky Mountain Nat. Bk., 1 Col. 531. SECTION 5240. APPOINTMENT OF OOOASIONAL EXAMINEES. Tlie Comptroller of the Currency, with the approval of the Secretary of the Treasury, shall, as often as shall be deemed necessary or proper, appoint a suitable person or persons to make an examination of the affairs of every banking associa- APPOINTMENT OF OCCASIONAL EXAMINEES. 239 tion, 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. [Every person appointed to make such examination shall receive for his services at the rate of five dollars for each day hy him employed 'in such examination, and two dollars for every twenty -five miles he shall necessarily travel in the per- formance of his duty, which shall be paid by the association by him examined. But no person shall be appointed to examine the affairs of any banking association of which he is a director or other officer.] [That all persons appointed to be examiners of National Banks not located' in the redemption cities specified in section five thousand one hundred and ninety-two of the Eevised Statutes of the United States, or in any one of the States of Oregon, California, and Nevada, or in the Territories, shall receive compensation for such examination as follows: For examining National Banks having a capital less than one hun- dred thousand dollars, twenty dollars; those having a capital of one hundred thousand dollars and less than three hundred thousand dollars, twenty-five dollars; those having a capital of three hundred thousand dollars and less than four hundred thousand dollars, thirty-five dollars ; those having a capital of four hundred thousand dollars and less than five hundred thousand dollars, forty dollars; those having a capital of five hundred thousand dollars and less than six hundred thousand dollars, fifty dollars; those having a capital of six hundred thousand dollars and over, seventy-five dollars; which amount shall be assessed by the Comptroller of the Currency upon and paid by the respective associations so examined; and shall be in lieu of the compensation and mileage heretofore allowed for making said examinations; and persons appointed to make examination of National Banks in the cities named in section five thousand one hundred and ninety-two of the He vised Statutes of the United States, or in any one of the States of Oregon, California, and Nevada, or in the Territories, shall 240' NATIOHAi BANKS. receive such compensation as may be fixed by the Secretary of the Treasury upon the recommendation of the Comptroller of the Currency; and the same shall be assessed and paid in the manner hereinbefore provided.] 3d June, 1864, c. 106, § 54, v. 13, p. 116; 19th February, 1875, c. 89, v. 18, p. 339. SECTION 5241. UMIT OF VISITOEIAL POWEES. No association shall be subject to any visitorial powers other than such as are authorized by this Title, or are vested in the courts of justice. 8d June, 1864, c. 106, § 54, v. 13, p. 116. SECTION 5343. TEANSFBES WHEN VOID. All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to any National Banking Association, or of deposits to its credit; 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, made with a view to prevent the application of its assets in the manner prescribed by this chapter, 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; and no attachment, in- junction or execution, shall be issued against such association or its property before final judgment in any suit, action, or proceeding, in any State, county, or municipal court. Bd June, 1864, c. 106, § 53, v. 13, p. 115. 1. Under section 5243 a transfer of the property of the bank Is void if insolvency is in contemplation of the bank making the transfer, although the party to whom it is made did not know or contemplate the insolvency of the bank. Case «. Citizens' Bk., 3 Woods, 38. TEANSFEES WHEN VOID. 241 The words " act of insolvency," in section 5343 are to be taken in their usual sense, and not simply such an act as authorizes the Comptroller to appoint a receiver. Irons v. Manufacturers' Nat. Bk., 6 Biss. 301. A return of nulla bona upon an execution against the hank is ample evidence of its insolvency. Wheelock v. Kost, 77 111. 396. T. owed a National Bank $35,000. R. had a deposit in the bank of f 40,000. The bank, being insolvent, stopped payment. The next day R. assigned his deposit to T. Held, That T. could not set off the deposit against the indebtedness due from him to the bank, as it would give a preference of one creditor over the others after the insolvency of the bank. Sections 5234 and 5242 apply to legal as well as voluntary transfers by the hank. The law will not compel a payment or transfer which it prohibits a debtor from making. Venango Nat. Bk. v. Taylor, 56 Pa. St. 14. The preference of one creditor to another by a National Bank, mentioned in this section, is a preference given to the creditor to secure or pay a pre- existing debt. When a National Bank, being embarrassed and in need of assistance, receives a loan of money or other valuable material aid from a person who knows its embarrassed state, on condition that the party making, the loan or giving the aid shall be secured therefor, and the security is accordingly given by pledging a part of the assets of the bank, this is not giving him a preference over other creditors within the meaning of this section. Casey, Rec'r, v. La Societe de Credit, etc., 3 "Woods, 77. 2. The last clause of this section only applies to such National Banks as are described in the preceding pan of the section, that is to say, such as have committed or are contemplating an act of insolvency, and does not prohibit the issuing of an attachment against the property of a solvent National Bank located and doing business in another State. Robinson v. Nat. Bk. of New Berne, 19 Hun, 477 ; B. c, 58 How. Pr. 306 ; (Central Nat Bk. D. Richland Nat. Bk., 53 How. Pr. 136, and Rhoner v. First Nat. Bk., 14 Hun, 126, distinguished and not followed.) The property of a bank cannot be sold on an attachment made after the bank became insolvent, when the same property is claimed by a receiver of the bank, who was appointed after the attachment issued. National Bk. V. Colby, 31 Wall. 609. The receiver may move to set aside an attachment in an action in which the property of the bank has been seized. As such banks are foreign corporations, they are liable to attachment under the State laws. Bowen v. First Nat. Bk. of Medina, 34 How. Pr. 408. Under the amendment of 1873 (c. 369, § 2), providing that " no attach, ment," etc., the State Courts are not prohibited from attaching the property of non-resident banks. The clause relates only to actions against associa- tions located where the suit is brought. Southwick v. First Nat. Bk. of Memphis, 7 Hun, 96, (But see the more general language of section 5342.) Overruled by Rhoner ». First Nat. Bk. of AUentown, 14 Hun, 136, and Palmer v. same, 14 Hun, 126. 16 242 NATIONAL BANKS. An attachment was issued by a State Court against a non-resident Na- tional Bank, and another bank was summoned as garnishee. The court below quashed the attachment. On appeal, held, That under the amend- ment of section 57 by section 2 of the act of 1873, the attachment was void. That Congress has power to create National Banks, and make any provisions which tend to promote their eflSciency, and to protect them not only against State legislation, but also against suits or proceedings in State Courts, by which that efficiency would be impaired. Chesapeake Bk. «. First Nat. Bk., 40 Md. 269. Whether the bank be a resident or non- resident, an attachment cannot issue until final judgment Central Nat. Bk. a. Richland Nat. Bk., 52 How. 136. 3. A National Bank may attach the shares of its stock held by Its debtor in order to secure its claim. Hagar v. Nat. Union Bk., 63 Me. 509. 4. An attachment or judgment lien does not take precedence of a prior unrecorded deed or mortgage, of which the creditor had no notice. First Nat. Bk. «. Hayzlett, 40 Iowa, 659. An attachment or judgment does not take precedence of a prior un- recorded conveyance of real estate, if the attaching or judgment creditor has notice of such unrecorded conveyance at the time of levying his attachment or docketing his judgment. Lamberton a. Merchants' Nat Bk. of Winona, 24 Minn. 281. 5. A creditor of a depositor who attaches money to the credit of his debtor in bank, is in no better position than the depositor. If an agent mingle his principal's money with his own, so that it cannot be followed, the principal cannot recover it specifically; but the agent does not thereby convert himself into a mere debtor; the principal may claim from the admixture the sum which belonged to him. A collector of rents deposited money of his principal in a bank in his own name ; it was attached by a creditor of the depositor, and immedi- ately afterwards, notice of ownership, etc., was given by the principal. Held, That the attaching creditor stood in the position of the depositor, and could recover only what the depositor could. Farmers' and Mechanics' Nat Bk. ■». King, 57 Pa. St. 202. 6. A deposit by a corporation in a bank, is a debt by the bank to the corporation, and is liable to attachment by a judgment creditor of the cor- poration. A corporation making a deposit is on the same footing with the bank as is an individual. Where it is satisfactorily shown that money deposited'in the name of one is the property of another, it cannot be attached as the property of the depositor. Farmers' and Mechanics' Nat Bk. n. Ryan, 64 Pa. St 236. 7. A creditor who is a party to a ti-ust for the benefit of creditors, the trustees under which were not to make a payment until the property was sold and the trust executed, has no legal right to the funds in the hands of the trustee, before the disposition of the whole trust property. A merely equitable right is not' attachable by trustee process. Massachusetts Nat Bk. D. Bullock, 120 Mass. 86. USE OF THE TITLE "NATIONAL." 243 8. In Massachusetts tobacco in process of curing is not exempt from attachment. It can be attached in the place of curing, and secured there, the return being made to the town clerk. The attachment was not lost by the delivery of the key by the attaching officer to an assignee in bankruptcy, that he might examine the tobacco, and through whose negligence the tobacco was seized by another claim- ant. Cheshire Nat. Bk. «. Jewell, 119 Mass. 341. 9. Under the Statutes of Massachusetts, facts stated upon information and belief in the answers of a garnishee, are to be taken as conclusively true, although an adverse claimant has appeared. First Nat. Bk. of Clin- ton V. Bright, 126 Mass. 535. An afadavit for attachment on the ground of the non-residence of the defendant, need not allege that the demand is due. Mastin v. First Nat. Bk. of Kansas City, 65 Mo. 16. SECTION 5343. TJSE OF THE TITLE "NATIONAL." All banks not organized and transacting business under the National currency laws, or under this Title, and all persons or corporations doing the business of bankers, brokers, or savings institutions, except savings banks authorized by Congress to use the word " National " as a part of their corporate name, are prohibited from using the word " National " as a portion of the name or title of such bank, corporation, firm or part- nership; and any violation of this prohibition committed after the third day of September, eighteen hundred and seventy- three, shall subject the party chargeable therewith to a pen- alty of fifty dollars for each day during which it is committed or repeated. 3d March, 1873, c. 369, § 3, v. 17, p. 603. 244 NATIONAL BANKS. OHAPTEK XI. An Act authorizing the appointment of Keceivers of National Banks, and for other purposes. WHEN EEOEIVEE FOE A NATIONAL BANK TO BE APPOINTED BY THE OOMPTEOLLEE OF THE OUEEENOT. Seo. 1. J3e it enacted by the Senate and House of Bepre- sentatives of the United States of America in Congress assembled, That whenever any National Banking Association shall be dissolved, and its rights, privileges, and franchises declared forfeited, as prescribed in section fifty-two hundred and thirty-nine of the Revised Statutes of the United States, or whenever any creditor of any National Banking Associa- tion shall have obtained a judgment against it in any court of record, and made application, accompanied by a certificate from the clerk of the court stating that such judgment has been rendered and has remained unpaid for the space of thirty days, or whenever the Comptroller shall become satisfied of the insolvency of a National Banking Association, he may, after due examination of its affairs, in either case, appoint a receiver, who shall proceed to close up such association, and enforce the personal liability of the shareholders, as provided in section fifty-two hundred and thirty-four of said statutes. INDIVIDUAL LIABILXTT OF SHAEEHOLDERS HOW TO BE ENFOECED. Seo. 2. That when any National Banking Association shall have gone into liquidation under the provisions of section five thousand two hundred and twenty of said statutes, the individual liability of the shareholders provided for by section fifty-one hundred and fifty-one of said statutes may be en- forced by any creditor of such association, by bill in equity, MEETING OJ SHAKEHOLDERS. 245 in the nature of a creditor's bill, brought by such creditor on behalf of himself and of all other creditors of the association, against the shareholders thereof, in any court of the United States having original jurisdiction in equity for the district in which such association may have been located or established. MEETING OF BHAEEHOLDEBS AFTEK PAYMENT OF DEBTS AND EXPENSES OF EECETTEESHIP, ETC. Seo. 3. That whenever any association shall have been or shall be placed in the hands of a receiver, as provided in sec- tion fifty-two hundred and thirty-four and other sections of said statutes, and when, as provided in section fifty-two hun- dred and thirty-six thereof, the Comptroller shall have paid to each and every creditor of such association, not including shareholders who are creditors of such association, whose claim or claims as such creditor shall have been proved or allowed as therein prescribed, the full amount of such claims and all expenses of the receivership, and the redemption of the circulating notes of such association shall have been provided for by depositing lawful money of the United States with the Treasurer of the United States, the Comptroller of the Cur- rency shall call a meeting of the shareholders of such associa- tion by giving notice thereof for thirty days in a newspaper published in the town, city, or county where the business of such association was carried on, or if no newspaper is there published, in the newspaper published nearest thereto, at which meeting the shareholders shall elect an agent, voting by ballot, in person or by proxy, each share of stock entitling the holder to one vote; and when such agent shall have re- ceived votes representing at least a majority of the stock in value and number of shares, and when any of the shareholders of the association shall have executed and filed a bond to the satisfaction of the Comptroller of the Currency, conditioned for the payment and discharge in full of any and every claim that may hereafter be proved and allowed against such asso- ciation by and before a competent court, and for the faithful performance and discharge of all and singular the duties of 246 NATIONAL BANKS. such trust, the Comptroller and the receiver shall thereupon transfer and deliver to such agent all the undivided or uncol- lected or other assets and property of such association then remaining in the hands or subject to the order or control of said Comptroller and said receiver, or either of them; and for this purpose, said Comptroller and said receiver are hereby severally empowered to execute any deed, assignment, transfer, or other instrument in writing that may be necessary and proper; whereupon the said Comptroller and the said receiver shall, by virtue of this act, be discharged and released from any and all liabilities to such association, and to each and all of the creditors and shareholders thereof; and such agent is hereby authorized to sell, compromise, or compound the debts due to such association upon the order of a competent court of record, or of the United States Circuit Court for the district where the business of the association was carried on. Such agent shall hold, control, and dispose of the assets and prop- erty of any association which he may receive as hereinbefore provided for the benefit of the shareholders of such associa- tion as they, or a majority of them in value or number of shares, may direct, distributing such assets and property among such shareholders in proportion to the shares held by each; and he may, in his own name or in the name of such association, sue and be sued, and do all other lawful acts and things necessary to finally settle and distribute the assets and property in his hands. In selecting an agent as hereinbefore provided, administrators or executors of deceased shareholders may act and sign as the decedent might have done if living, and guardians may so act and sign for their ward or wards. SALE or STOCK OF SHAKEHOLDEE REFUSING TO PAT ASSESSMENT. Seo. i. That the last clause of section fifty-two hundred and five of said statutes, is hereby amended by adding to the said section the following proviso: " And provided, That if any shareholder or shareholders of such bank shall neglect or refuse, after three months' notice, to pay the assessment, as provided in this section, it shall be EEPOErra TO COMPTEOLLEE BY SAVINGS BANKS, ETC. 247 the duty of the board of directors to cause a suflBcient amount of the capital stock of such shareholder or shareholders to be sold at public auction (after thirty days' notice shall be given by posting such notice of sale in the oflSee of the bank, and by publishing such notice in a newspaper of the city or town in which the bank is located, or in a newspaper published nearest thereto), to make good the deficiency, and the balance, if any, sliall be returned to such delinquent shareholder or share- holders." PEAUDULENT NOTES TO BE CTAMPED, ETC. Sec. 5. That all United States officers charged with the receipt or disbursement of public moneys, and all officers of National Banks, shall stamp or write in plain letters the word " counterfeit " " altered " or " worthless," upon all fraudulent notes issued in the form of, and intended to circulate as money, which shall be presented at their places of business; and if such officers shall wrongfully stamp any genuine note of the United States, or of the National Banks, they shall, upon presentation, redeem such notes at the face value tliereof. EEPOETS TO COMPTEOLLEE BY SAVINGS BANKS, ETO, Sec. 6. That all savings banks or savings and trust com- panies organized under authority of any act of Congress, shall be, and are hereby, required to make, to the Comptroller of the Currency, and publish, all the reports which National banking associations are required to make and publish under the provisions of sections fifty-two hundred and eleven, fifty- two hundred and twelve and fifty-two hundred and thirteen, of the Revised Statutes, and shall be subject to the same pen- alties for failure to make or publish such reports as are therein provided ; which penalties may be collected by suit before any court of the United States in the district in which said savings banks or savings and trust companies may be located. And all savings or other banks now organized, or which shall here- after be organized, in the District of Columbia, under any act of Congress, which shall have capital stock paid up in 248 HATIONAL BANKS. whole or in part, shall be subject to all the provisions of the Eevised Statutes, and of all acts of Congress applicable to National banking associations, so far . as the same may be applicable to such savings or other banks: Provided, That such savings banks now established shall not be required to have a paid-in capital exceeding one hundred thousand dollars. Approved June 30, 1876. U. 8. Statutes, 1876. CHAPTER 25. AN ACT AUTHORIZING THE OONVEESION OF NATIONAL GOLD BANKS. Be it enacted iy the Senate and House of Representatives of the United States of America in Congress assembled, That any National Gold Bank organized under the provisions of the laws of the United States, may, in the manner and sub- ject to the provisions prescribed by section fifty-one hundred and fifty-four of the Revised Statutes of the United States, for the conversion of banks incorporated under the laws of any State, cease to be a gold bank, and become such an association as is authorized by section fifty-one hundred and thirty-three, for carrying on the business of banking, and shall have the same powers and privileges, and shall be subject to the same duties, responsibilities, and rules in all respects, as are by law prescribed for such associations; Provided, That all certificates of organization which shall be issued under this act shall bear the date of the original organization of each bank respectively as a gold bank. Approved, February 14, 1880. U. S. Statutes, 1879-80, page 66. Eosm, 249 OHAPTEK XII. rOEMS. The following forms will be found useful to receivers and their attorneys. The first and ninth are from the office of the Comptroller of the Currency, while the others have been used by the author in his practice. No. 1. commission of keckrveb. Trbastjrt Dbpabtment, Office op Comptroller of Ctibrenct, • Washington, D. C, February 1, 1875. Notice having been received by me that The Cook County National Bank of Chicago, a National Banking Association formed pursuant to the laws of the United States, and located in the city of Chicago, had failed to redeem its circulating notes when payment thereof was legally demanded at the office of said association, and being satisfied from the protest of one of the circulating notes of the said association produced to me, amounting to five dollars ($5.00), and from the report of J. D. Harvey, a special agent appointed with the concurrence of the Secretary of the Treasury to ascer- tain whether such association has refused to pay its circulating notes in lawful money of the United States when demanded ; that the said association has refused to redeem in lawful money of the United States its circulating notes when payment thereof was legally demanded during the usual hours of business at the office of said association, and is in default. Now, therefore, I, John Jay Knox, Comptroller of the Currency, in pur- suance of the power and authority vested in me by law, do hereby appoint A. H. Burley, Receiver of The Cook County National Bank of Chicago, with all the powers, duties and responsibilities given to or imposed upon a Receiver under the provisions of the Act entitled " An Act to provide a National Currency secured by a pledge of United States bonds, and to pro- vide for the circulation and redemption thereof." Approved, June 3, 1864 In witness whereof, I have hereto subscribed my [seal of name, and have caused my seal of office to be affixed to OOMPTBOLLBB.] these presents at the city of Washington, in the District of Columbia, the day and year first above written. JNO. JAY KNOX, Comptroller of the Ourrenay. 250 MATIONAL BANKS. In the conduct of his office the receiver will many times find it necessary to ask -the direction and authority of some court of competent jurisdiction as to the disposition of bad or doubtful assets. It is suggested that all orders be obtained from the same judge. Commence in his court a general case entitled, " In the matter of the National Bank of . In liquidation^ Intitle all petitions in that case. In practice this will be found to be the easiest and most eco- nomic plan to close up the affairs of an insolvent bank. It saves costs and keeps the files together. No litigated matters should be placed under this head. But all compromises, set- tlements, partitions and other things of like character, which it is proper for a judge in chambers to act upon, will naturally come under this general case. Ko. 2. PETITION TO COMPKOMISB A DOUBTFtTL OliATlI. In TdB District Coubt op the United States, Fob the Northern District of Illinois. To the Honorable M. W. Blodgett, Judge of said Court : Tour petitioner, N. H. Walworth, as Receiver of the City National Bank of Chicago, respectfully represents unto your Honor : That on the 17th day of May, A. D. 1876, said City National Bank of Chicago was put into liquidation, and your petitioner was duly appointed the Receiver thereof by the Comptroller of the Currency of the United States, under and in pursuance of the laws of the United States ; that on or about the date last aforesaid your petitioner accepted said office and entered upon the duties of the same, took possession of the books, records and assets of every description of said bank, and from thence hitherto has been and still is engaged in the collection of all debts, dues and claims belong, ing to said bank, and since then has been and still is discharging the duties of his said office. (*) That among the assets of said bank so coming into the hands of your petitioner as such Receiver, is a certain promissory note for the sum of $2,000, dated February 5, 1876, made by J. W. H., of said city of Chicago, and payable ninety days after date to the order of said bank by the name, style and description of " A. B. Miner, cashier." That on the 16th day of September, 1876, there was paid upon said note the sum of $100, and there now remains due and unpaid upon the same, of principal and interest, the sum of about $3,100. That as your petitioner is informed and believes, said J. W. H. is now FOEMS. 261 and for one year last past has been wholly insolvent and has no property subject to execution. That one M. H., a brother of said J. W. H., offers to pay to your peti- tioner the sum of $200 in cash for an assignment of said promissory note ; which offer has been submitted to the Comptroller of the Currency of the United States, and has been by him referred to your Honor for approval or disapproval. That in the opinion of your petitioner it is for the best interests of the creditors of said bank that such offer be accepted. Your petitioner therefore prays that your Honor will enter an order authorizing and directing him to accept of and receive from said M. H. the sum of $300 in cash, and in consideration thereof to assign and deliver unto said M. H. said promissory note; and that your Honor will grant unto him such other and further power as shall be necessary in the premises. And your petitioner will ever pray, etc. N. H. "WALWORTH, Beeeiver, etc State of iLiiUfois, County op Cook, ss. N. H. Walworth being first duly sworn says, that he has read the above petition by him subscribed as Receiver, and knows the contents thereof, and that the same is true in substance and in fact, as he verily believes. Subscribed and sworn to before me this 15th day of September, 1877. J. B. BREESE, Notari/ Public. OBDEK OF COURT UPON SAID PETITION. TTpon reading and filing the petition of N. H. Walworth, the Receiver of the City National Bank of Chicago, in the matter of the offer by one M. H. of the sum of $300, for a note made by J. W. H., dated February 5, 1876, for $3,000, and payable ninety days after date, to the order of A. B. Miner, cashier, the Court, being fully advised in the premises, doth hereby order, direct, and authorize said Walworth, as such Receiver, to accept of and from said M. H. the said sum of $300 in cash, and to assign, transfer and deliver th* said note to said M. H. in consideration of such payment: and said Walworth, as such Receiver, shall have such other and further power and authority as shall be necessary to carry out the prayer of said petition. No. 3. PETITION TO COMPBOMISB A DOUBTFUL CLAIM WHERE COLLATERALS ASK INVOLVED. {FolUnjo Form 3 to the asterisk, and then proceed as follows:) That when your petitioner accepted said oflice as aforesaid, there came into his possession, among the assets of said bank, the four promissory notes of one S. A., all dated the 11th day of February, 1875, due in one, two, three and four years from su^ date, respectively, and for the sums of one 252 NATIONAL BANKS. thousand dollars, fifteen hundred dollars, eighteen hundred dollars, and twenty-three hundred dollars, respectively. That your petitioner is informed and believes that sometime in the year 1875, A. & Co., of which said S. A. was senior member, became insolvent, and discontinued its business, and your petitioner has since been unable to find said A. ; that prior to the insolvency of said bank said promissory notes were considered of no value, and ever since the appointment of your peti- tioner said notes have been considered worthless and have been so sched- uled ; that as collateral to said indebtedness of S. A. to said bank there was deposited with said bank the promissory note of one A. L., of the city of Chicago, dated December 16, 1864, for the sum of four hundred and sev- enty-three and 10-100 dollars, due in ninety days from the date thereof, to the order of A. & Co., and by said firm indorsed in blank. That among said assets your petitioner also found the promissory note of A. L. & Co., dated November 11, 1874, for the sum of five hundred and eighty-seven and 90-100 dollars, due ninety days after the date thereof, to the order of A. & Co., and by A. & Co. indorsed to said bank, which had been charged to profit and loss by the bank before its suspension, and has been in the hands of an attorney for collection for the past two years, who repoi ts it uncollectable. Your petitioner further states that he has made diligent inquiry as to the financial standing and responsibility of said A. L. and said firm of A. L. & Co., and from such examination he is fully satisfied that neither said L. nor said last named firm have any property in the county of Cook, in said Stale, or elsewhere subject to fexecution. Your petitioner further says, that said A. L. has offered to him the sum of one hundred dollars in cash for a surrender of said two notes last named ; that said offer has been submitted to the Comptroller of the Currency of the United States, and it is by said Comptroller referred to your Honor for approval or disapproval. That in the opinion of your petitioner, though the amount so offered for said notes by said L. is small, yet the creditors of said bank will obtain more benefit from the acceptance of said offer than they will by putting said notes into judgment. ♦ Your petitioner therefore prays for an order authorizing, empowering and directing him to accept of and from A. L. the sum of one hundred dol- lars in cash, and in consideration thereof to surrender to said L. the prom- issory notes last above described, and your petitioner will ever pray, etc. N. H. WALWORTH, Beceiver, etc. • Faklih Q. Ball, Attorney for Petitioner. (Verified by Seceiveras in last Form.) OBDBK OF COURT UPON SUCH PETITION. Upon reading and filing the petition of N. H. Walworth, the Receiver of the City National Bank of Chicago, in the matter of the offer of com- promise made by A. L., of the city of Chicago, and the court being fully FOBMS. 253 advised in the premiaes, dotli autliorlze, and empower and direct said Ee- ceiver to accept of and from said L. tlie sum of one hundred dollars in cash, and in consideration of said sum to surrender to said L. the two certain promissory notes in said petition described, one being dated November 11, 1874, due in ninety days, for five hundred and eighty-seven and 90-100 dol- lars, signed by A. L. & Co., and the othei'dated December 16, 1874, at ninety (90) days, for four hundred and seventy-three and 70 100 dollars, signed by A. L. ; and such other authority and power is hereby given to said Receiver as is necessary to carry out the compromise in said petition set forth. No. 4. PETrnON TO PABTITIOir KEAL KSTATH. (Follow Form 2 to the asterisk and then proceed as follows:) That at the time said banli failed as aforesaid, it held and still holds the title to the undivided one-third part of the west J^ of the northwest ^ of the northwest ^ of the northwest ^ of section eight, township thirty-eight north, range fourteen east of the third principal meridian, and that one William V. Kay, of the city of Chicago, in said district, then held and still holds the title to the undivided two-thirds part of said property; that said real estate has been subdivided into lots and blocks, and is known and described (together with other property) as Kay's addition to Chicago; that your petitioner and said Kay, being desirous of converting their undi- vided interests in said real estate into divided and separate interests, havi heretofore caused said property to be appraised, and have in pursuance of said appraisment agreed upon a division between themselves as to the same ; that under said agreement said William V. Kay is to receive from your petitioner, as such Receiver, a quit claim deed of lots one (1) to twenty-nine (39) inclusive of block five (5), in Kay's addition to Chicago, and your petitioner, as such Receiver, is to receive from said William V. Kay a quit claim deed of lots thirty (30) to forty-nine (49) inclusive of block five (5) in said Kay's addition to Chicago. That your petitioner has fully investigated the fairness and justness of said proposed division, and is of the opinion that the same will give him the full share, extent and value being considered, of said real estate, to which he, as such Receiver, is entitled by reason of the ownership of the undivided one-third part thereof. Your petitioner therefore prays your Honor to order, direct and em- power him to execute and carry out such agreement of division, and accept of and from said William V. Kay the title to the said lots thirty to forty-nine inclusive by conveyance as aforesaid, and to execute, acknowl- edge and deliver to said Kay a conveyance of said lots one to twenty-nine inclusive, and to do and perform whatsoever may be further necessary in the premises. And your petitioner will ever pray, etc. N. H. WALWORTH, Receiver, etc (Verified hy the Bee-eiver as in Form No. 3.) 254: NATIONAL BANKS. ORDER OF COURT ON SUCH PETITION. Upon reading and filing the petition of N. H. Walworth, Receiver of the City National Bank of Chicago, praying for an order granting him author- ity to partition certain real estate between himself and William V. Kay, the court, being fully advised in the premises, doth order and direct and empower said Receiver to accept of and from said William V. Kay a con- veyance of lots thirty to'forty-nine inclusive, in block five of Kay's addi- tion to Chicago, and to execute, acknowledge and deliver to said Kay a conveyance of lots one to twenty-nine inclusive, in said block five of Kay's addition to Chicago, and to do and perform "whatsoever else may be neces- sary and proper to effect such partition. Ho. S. petition for confirmation of sale of bbal b8tatk United States of America, Northern District of Illinois, ss. In the District Court op the United States for said District. In the Matter of the City National Bank. In Liquidation. To tJie Honorable S. W. Blodgett, Judge of said Oourt : Your petitioner, A. H. Burley, as Receiver of the City National Bank of Chicago, respectfully represents unto your Honor, that upon the recom- mendation of Hon. John Jay Knox, Comptroller of the Currency, your petitioner, on the 17th day of June, 1879, advertised for sixty days for bids upon the lot of land and buildings thereon, known as all of lot two (3), block fifty-five (55), in the original town of Chicago, except the east twenty feet thereof, said bids to be closed on the 18th day of August;, 1870, at five o'clock p. M. » That the best bid for said property received by your petitioner under said advertisement was $110,750; that on the 13th day of September, 1879, your petitioner reported the bids received by him for said property to this Honorable Court, and that on full hearing in regard to such matter such proceedings were had that this Honorable Court entered an order herein that " said sale be confirmed, unless a substantially better bid for said premises be obtained by the 27th inst. ; " and your petitioner was hy said order directed to receive further bids for said property up to five o'clock p. M. on the 36th inst., and report the same to this court on the morning of the 37th inst., and that notice of said order be given by publication daily in the Chicago Bvening Journal, and in the Sunday editions of the Chicago Times and Tribune. . Your petitioner further reports to your Honor that under and in pursu- ance of said order he did advertise said premises as therein directed, and reported the bids received by him for said property to this Honorable Court on the morning of said 37th inst., and that such proceedings were then had in open court that the bid of Mathew Laflin of $134,000, subject to the taxes of 1879, was fotmd and was declared to be the highest and best bid FOEMS. 255 for said property, and said Laflin was then given twenty days to examine the abstract of the title to said property and complete the purchase, which ahstract was delivered to said Laflin's attorney on the 1st day of October, 1879. Tour petitioner further reports to your Honor that on the said 27th day of September said Laflin left as an earnest of his said bid with your peti- tioner his certified check payable to the order of your petitioner, for the sum of $10,000 ; that said Laflin has notifled your petitioner that he is now ready to complete his said purchase, accept a deed of said property and and pay the balance due upon his said bid. Your petitioner therefore asks that an order confirming said sale to said Laflin, and ordering and directing your petitioner to make, execute and deliver to him a deed of said premises upon his paying the amount of his said bid, be entered herein. A. H. BURLET, Receiver of the City National Bank of Chicago. {Verified iy the Receiver as in Vorm No. 6.) ORDER OF COURT ON SUCH PETITION. Upon reading the report and petition this day filed herein by A. H. Bur- ley, Receiver of the City National Bank of Chicago, the premises being considered, it is ordered that the sale of lot two (3), except the east twenty feet thereof, of block fifty-five (.55), in the original town of Chicago, Cook County, Illinois, to Mathew Laflin, be confirmed, and that said A. H. Bur- ley, Receiver aforesaid, make, execute and deliver to said Laflin a deed of said premises, upon his paying to said Receiver the sum of one hun- dred and twenty-four thousand dollars ($124,000), including the 1 10,000 heretofore paid. And the said Laflin having paid the sum of $124,000 to the said Receiver, and the said Receiver having delivered to said Laflin a deed of said premises, the said sale and conveyance heretofore ordered is in all things approved and confirmed. No. 6. PETITION TO COMPROMISE STOCK LIABILITY. (Follow Form 2 to the asterisk, and then, proceed as follows:) That at the time of the failure of said bank, one D. F. was the holder and owner of twenty-two shares of the capital stock of said bank of the par value of $100 each ; that on the 5th day of June, A. D. 1876, the Comp- troller of the Currency of the United States made an assessment or requisi- tion upon the shareholders of said bank to the amount of 100 per centum of the par value of such shares, and directed your petitioner to collect the same by suit or otherwise ; that on about the day of October, 1878, said D. F. departed this life, and thereafter one W. A. W. was appointed the administrator of said deceased by the County Court of Will 256 NATIONAL BANKS. County, in this district; that at the time of said failure and suspension, said F. had a money deposit account with said bank, upon which account there was due to him the sum of $2,500. Tour petitioner, after due inquiry, is fully satisfied that the estate of said Ferguson will not pay its liabilities ; that said W., as administrator of such estate, has proposed the following compromise of the matters between said estate and your petitioner, as Receiver of said bank : Said W. will pay to your petitioner the sum of $500 cash; will consent to the indorsement upon such stock liability of the dividend already declared upon said money deposit balance, to-wit, the sum of $403.08, and to the further indorsement upon such stock liability of $1,397.92 from future dividends upon such money deposit balance as the same may be made, in full settle- ment and discharge of the said stock liability of said estate. Your petitioner further says, he is well satisfied that the above ofifer is one which should be accepted ; that it is more advantageous to the cred- itors of said bank to accept the same than to prove and hold a claim for the face value of said stock liability against said estate. Tour petitioner therefore prays that your Honor, the premises being considered, will authorize direct and empower him to accept 'he above mentioned ofl^r of compromise ; and your petitioner will ever pray, etc. A. H. BURLET, Beceiner, etc State of Illinois, Cottntt op Cook, bb. A. H. Burley being first duly sworn says, that he has read the above peti- tion by him signed, and knows the contents thereof, and that the same is true in substance and in fact A. H. BURLEY. OBDEB OF COTTRT ON BAID PETITION. {Same venue and, title.) Upon reading and filing the petition of A. H. Burley, Receiver of the Cook County National Bank of Chicago, in re the offer of W. A. W., administrator of the estate of the late D. F., to settle and compromise the stock liability of said estate to said bank, and the court being fully advised in the premises, said Receiver is hereby authorized, directed and empow- ered to accept of and from W. A. W. administrator, etc., the sum of five hundred dollars cash, the endorsement of a dividend of $402.08 already made upon a certain money deposit account in said bank to the credit of said estate, and the application of the further sum of $1,397.93 of future dividends upon such balance in full discharge and settlement of the stock liability of said estate to said bank; and said Receiver is hereby granted such other and further power as may be necessary to carry out said settle- ment FORMS. 257 No. 7. FORM OF ALLEOATION WHEBB PETITION IS FILED BY A SUBSEqUEHT BECEIVER. (Venue the same as in No. 7.) To the Honorable H. W. Blodgett, Judge of said Court : A. H. Burley, Receiver of the City National Bank of Chicago, respect fully represents unto your Honor, that on the 17th day of May, 1876, said bank was put into liquidation, and N. H. Walworth was duly appointed the Receiver thereof by the Comptroller of the Currency of the United States, under and in pursuance of the laws thereof, and as such Receiver said Walworth then and there took charge of the assets, records, books and papers of said bank, and proceeded to administer upon the same. (Here set forth the facts upon which the prayer of the petition is founded.) Tour petitioner further shows unto your Honor, that on the 17th day of May, 1878, said Walworth resigned his said trust, and your petitioner was thereupon duly appointed the Receiver of said bank by said Comptroller, and has since performed the duties of said office. No. 8. dbclabation in assumpsit on a fbomissobt note. United States of Amebica, Noetiieen Distbict of Ilixnois, ss. In the Ciecuit Coobt of the United States, To the Teem, A. D. 188—. A. H. Burley, who sues as the Receiver of the Cook County National Bank, a corporation organized under and formerly doing business at the city of Chicago, in said district, by virtue of the laws of the United States of America, plaintiff, by Monroe & Ball, his attorneys, complains of the Post and Mail Printing Company, a corporation organized under and doing business by virtue of the laws of the State of Illinois, defendant, which has been summoned of a plea of trespass on the case on promises. For that, whereas, said defendant, on the thirteenth day of January, A. D. 1875, made its certain note in writing, commonly called a promissory note, bearing date the day and year last aforesaid, and then and there delivered the said note to said Cook County National Bank, in and by which said note said defendant, by the name, style and description of " Post and Mail Printing Co., by W. M; Taylor, Business Manager," pronk ised to pay to the order of said bank, by the name, style and description of " Cook County National Bank," sixty days after date thereof, twelve hundred and thirty dollars, at their'offlce in Chicago, for value received. By reason whereof, and by force of the statute in such case made and provided, the said defendant became liable to pay the said bank the said sum of money in the said note specified, according to the tenor and effect 17 258 NATIONAL BANKS. of the said note, and being so liable, said defendant, in consideration thereof, undertook and then and there faithfully promised said bank well and truly to pay unto it said sum of money in said note specified, accord- ing to the tenor and effect of said note ; that on the 1st day of February, A. D. 1875, said bank was put into liquidation, and the plaintiff was duly appointed the Receiver thereof by the Comptroller of the Currency of the United States, under and in pursuance of the laws of the United States. (Here insert the " money counts.") Tet the defendant, though requested, has not paid the said sums of money, or any, or either of them, or any part thereof, either to said bank prior to its being put into liquidation, or to the plaintiff since said bank was put into liquidation, hut refuses so to do, to the damage of the plaintiff, as Receiver as aforesaid of two thousand' and five hundred dollars ; and therefore he brings his suit, etc. And the plaintiff brings into the court here the order putting said bank into liquidation, and appointing the plaintiff such Receiver, etc. By MONROE & BALL, Plaintiff's Attorneys. No. 9. assbssusni ufok shabehoiiders b7 the couptbolleb ov the currency. Treasuby Depabtmbnt, Opficb of the Comptroller of the Cdbbency, Washington, D. C. Is THE Matteb of the Cook County National Bake of Chicago. To all lehom it may concern : This is to certify, that I have taken an accounting of the condition of the estate of The Cook County National Bank, of Chicago, aforesaid, and of its assets and liabilities, and I do find and determine upon data satisfactoiy to me, that in order to provide the money necessary to pay the duly proven debts of said association it is necessary now to enforce, to the extent hereinafter mentioned, the individ- ual liability of the shareholders of said association, provided for by the twelfth section of the Act of Congress, entitled "Aa Act to provide a National Currency," approved June 3, 1864, and by Section 5151 of the Revised Statutes of the United States, approved June 23, 1874; and to that end, and in pursuance of the powers vested in me by the said acts, I have made, and do hereby order and make an assessment or requisition upon the shareholders of said association or bank, and each and every one of them, equally and ratably, to the amount of one hundred dollars, per centum, of the par value of the shares of the capital stock in the said asso- ciation, held or owned by them respectively at the time of its failure or suspension, and I direct A. H. Burley, the Receiver heretofore appointed of the said association, to take the necessary proceedings, by BOit or other- FORMS. 259 wise, to enforce to that extent the said individual liability of the said shareholders. In witness whereof, I have hereto set my hand and caused [l. s.] my seal of office to be affixed to these presents, at the city of Washington, in the District of Columbia, this fifth day of June, one thousand eight hundred and seventy-six. JNO. JAY KNOX, Comptroller of the Ourreney. No. 10. notice to shareholdbks bt the becbiteb. Office of the Receiveb of the Cook Cousty National Bank, of Chicago, No. 120 Lake Street. Chicago, June 9, 1$76. The Comptroller of the Currency lias made an assessment or requisition, a copy of which is hereto attached, upon the shareholders of the Cook County National Bank, of Chicago, of one hundred dollars per share. By the direction of the said Comptroller, I hereby demand that you pay to me, as Receiver of said Bank, within thirty days from the date hereof the sum of , being the amount due from you as a shareholder in said bank. Tours respectfully, A. H. BURLEY, Receiver. Wo. 11. declaration in debt on stock liability. United States of America, Northern District of Illinois. In THE District Court of the United States, for the Northern District of Illinois. Of the October Term, A. D. 1877. Charles D. Sherman, plaintiff herein, who sues as the Receiver of the Fourth National Bank, of Chicago, a corporation organized under and formerly doing business at the city of Chicago, in said district, by virtue of the laws of the United States, by Monroe & Ball, his attorneys, com- plains of James Bradford, defendant herein, who has been summoned, etc., of a plea that he render to the plaintiff the sum of one thousand dollars which he owes to and unjustly detains from him. For that whereas, prior to and on the second day of July, A. D. 1874, the Fourth National Bank of Chicago aforesaid was a corporate body, created and existing for the purpose, and engaged in the business of bank- ing, having its office where its operations of discount and deposit were carried on, at the city of Chicago, in said district. That said corporation was created and organi zed under an act of the Congress of the United States of America, entitled "An Act to provide a 260 NATIONAL BANKS, National currency, secured by a pledge of United States bonds, and to pro- vide for the circulation and redemption thereof," and subsequent acts in addition to or amendatory thereof. That, from its said creation and organization, and thereafter continu- ously, until on the 25th day of September, A. D. 1875, said bank accepted, exercised, and enjoyed the various powers and privileges granted to it by said acts of Congress, and continued to carry on the business of banking at the city of Chicago, aforesaid. That on the date last aforesaid, at said city of Chicago, said bank closed its doors, and then and there suspended and discontinued its business of banking, and has not since resumed the same. That on the 2d day of February, A. D. 1876, the then Comptroller of the Currency of the United States, having become satisfied, as specified in sec- tions 5,336 and 5,227 (Title LXII., " National Banks," ch. 4) of the Revised Statutes of the United States, that said bank had refused to pay its circulat- ing notes as therein mentioned, and was in default, duly appointed the plaintiff the Beceiver of said bank. That afterwards, and on the second day of February, A. D. 1876, the plaintiff, at said district, accepted said ofiBce, and entered upon the duties of the same, took possession of the books, records, and assets of every description, of said bank, and from thence hitherto has been, and still is, engaged in the collection of all debts, dues and claims belonging to said bank, and since then has been and still is discharging the duties devolving upon him by law, by reason of his said ofiSce as such Receiver. That on the day.when said bank closed its doors, ceased to do business, and suspended as aforesaid, said defendant was a shareholder in said bank, and then held and owned fifty shares of the capital stock of said bank, of the par value of one hundred dollars each, amounting to the sum of five thousand dollars. That on the 30th day of December, A. D. 1876, at said city of Washing- ton, said Comptroller, in order to pay and discharge the debts and liabili- ties of said bank, and in pursuance of the powers vested in him by law, did find and determine that it was necessary to enforce the individual liability of the shareholders of such bank, to the extent of seventeen dollars per centum of the par value of the capital stock thereof, and then and there did order and make an assessment and requisition upon the shareholders of said bank, and each and every one of them, equally and ratably, to the amount of seventeen dollars per centum of the par value of the shares of the capital stock of said bank, held and owned by them respectively, at the time of the failure and suspension of said bank; and then and there said Comptroller did direct and empower the plaintiff to take the necessary legal proceedings to enforce said assessment and requisiton. That by virtue of the premises, and under the laws of the United States, said defendant became individually liable to the plaintiff as such Receiver to an amount equal to seventeen dollars per centum of the said amount of said shares of stock of said bank, held and owned by said defendant at the time said bank so closed its doors and failed and suspended as aforesaid. roEMS. 261 to-wit, the sum of one thousand dollars, -which said sum of money was to be paid to the plaintiff as such receiver, by the defendant when he should be thereto requested. And whereas, also, the defendant on the 1st day of March, A. D. 1877, at the district aforesaid,' became and was indebted to the plaintiff as such Keceiver in the sum of one thousand dollars, for money before that time lent by the plaintiff as such Receiver to the defendant at his request; and in the like sum for money before that time received by the defendant for the use of the plaintiff as such Receiver ; and in the like sum for money before that time paid and expended by the plaintiff as such Receiver, for the use of the defendant, at his request; and in the like sum for interest on divers sums of money, before that time forborne by the plaintiff as such Receiver, to the defendant, at his request, for divers spaces of time, before then elapsed ; which said several sums of money, so due to the plaintiff as Receiver as aforesaid, were respectively to be paid to him by the defendant on request. Yet. the defendant, though often requested, etc., has not paid to the plaintiff the several sums of money, in the several counts above specified, or any or either of them, or any part thereof, but refuses so to do, to the damage of the plaintiff of one thousand dollars; and therefore he brings his suit, etc. And the plaintiff shows to the Court now here the order appointing him the Receiver of said Fourth National Bank of Chicago. MONROE & BALL, Attorneys for said Plaintiff. [copy of account bubd upon.] Jaueb Bradford, Esquire, To Chablbs D. Shebman, as Receiver of the Fourth National Bank of Chicago, Dr. To seventeen per centum upon the par value of fifty shares of the capital stock of the Fourth National Bank of Chicago, stand- ing in your name on the books of said bank, on the 25th day ofSeptember,A. D. 1875 $850.00 To interest upon the same from December 30th, 1876, at six per cent, per annum 150.00 The judgment in this case will be: Debt $850, damages $ , being the interest actually due at the time of the entry of judgment. NATIONAL BANKS. TTo. 12. bill in equity to bnrokcb stock liabimtt. United States of Ambkica, Northern District op Illinois, ss. In the Circuit Court of the United States for the Northern District of Illinois. In Chancery. To the Jtidffe of said Court, in Chancery sitting: Charles D. Sherman, the Receiver of the Fourth National Bank of Chi- cago, shows unto your Honor : That on and prior to the 17th day of July, A. D. 1871, the Fourth National Bank of Chicago was a corporate body, created and existing for the purpose, and engaged ih the business of banking, having its office where its operations of discount and deposit were carried on at the city of Chicago, in said district That said corporation was created and organized under an act of the Congress of the United States of America, entitled "An Act to provide a National currency secured by a pledge of United States bonds, and to pro- Vide for the circulation and redemption thereof," and subsequent acts in addition to or amendatory thereof; with a capital stock of two hundred . thousand dollars, divided into shares of the par value of one hundred dol- lars each. That from its creation and organization and thereafter continuously until on or about the 35th day of September, A. D. 1875, said bank accepted, exercised and enjoyed the various powers and privileges granted to it by said acts of Congress, and continued to ca,rry on the business of banking at the city of Chicago aforesaid. That on the 35th day of September, A. D. 1875, at said city of Chicago, said bank closed its doors, and then and there suspended and discontinued its business of banking, and has not resumed the same. That on the 3d day of February, A. D. 1876, the then Comptroller of the Currency of the United States, John Jay Knox, having become satisfied, as specified in sections 5,336 and 5,337 (Title LXII., "National Banks," ch. 4) of the Revised Statutes of the United States, that said bank had refused to pay its circulating notes as therein mentioned, and was in default, duly appointed your orator the Receiver of said bank. That afterwards and on the 3d day of February, A. D. 1876, your orator, at said district, accepted such office and entered upon the duties thereof, took possession of the books, records and assets of every description of said bank, and from thence hitherto has been and still is engaged in the collection of all debts, dues and claims belonging to said bank, and since then has been continuously and still is discharging the duties devolving upon him by law by reason of his said office as such Receiver. That on the 30th day of December, A. D. 1876, at the city of Washing, ton, in the District of Columbia, said Comptroller of the Currency of the United States, in order to pay and discharge the debts and liabilities of said bank ; and in pursuance of the powers in him vested by law did find FOBMB. 263 and determine that it was necessary to enforce the individual liability of the shareholders of said bank, to the extent of seventeen dollars per centum of the par value of the capital stock thereof, and then and there did order and make an assessment and requisition upon the shareholders of said bank, and each and every of them equally and ratably to the amount of seventeen dollars per centum of the par value of the shares of the capital stock of said bank held and owned by them respectively at the time of the failure and suspension of said bank; and then and there said Comptroller did direct and empower your orator to take the necessary legal proceed, ings to enforce said assessment and requisition. That on said day when said bank so closed its doors and ceased to do business and suspended as aforesaid, the shares of the capital stock of said bank were held or owned by the following named persons, the number of shares and the par value thereof so held or owned by each being set oppo- site his name, to-wit: NAUB. BEBIDBNCB. NO. OF SHARES. PAE VAITOB. N. a B Chicago, 111. 170 • Etc. 17,000 Etc. Etc. Etc. 3,000 200,000 That of the above named shareholders, the following persons, and no others, have complied with the terms and conditions of said assessment and requisition of said Comptroller, and have paid to your orator the sum of seventeen dollars per centum upon each share of said stock so respect- ively held or owned by tliem, to-wit: N. S., etc. That of said shareholders the following only are residents and citizens of said Northern Bistrict of Illinois, to-wit : J. D. J., etc. And they are accordingly made defendants to this bill of complaint That as your orator is informed and believes, the following of said share- holders are citizens cf the States following their respective names, and they are not citizens, nor is either or any of them a citizen of said North- ern District of Illinois, nor is either or any of them within the jurisdiction of this court, to-wit: G. E., of Whitewater, Wisconsin, etc. And your orator says that said last named shareholders, being out of the jurisdiction of this court, they cannot be made parties defendant to this bill of complaint; and he therefore prays that this cause may proceed without making them or any of them parties defendant to this bill. In consideration whereof, and forasmuch as your orator is entirely remediless in the premises, according to the strict rules of the common law, and can only have relief in a court of equity, where matters of this nature are properly cognizable and relievable. To the end therefore that the said J. D. J., etc., (naming resident defend- ants only,) defendants as aforesaid, and each of them may full, true, direct and perfect answer make to all and singular the matters hereinbefore 264 NATIONAL BANKS. Stated and charged as fully and particularly as if the same were here again repeated and they and each of them thereunto distinctly interrogated; (but not under oath, answer under oath being hereby expressly waived;) that it may be found determined and decreed by this court how many shares of the capital stock of said bank were held or owned by said defendants, and by each of them, at the time when said bank closed its doors, ceased to do business and suspended as aforesaid. That said defendants and each of them may, by the order and decree of this Honorable Court, be directed and ordered to pay to your orator, as such Receiver, the amount of seventeen dollars per centum of the par value of the shares of the capital stock of said bank so found to have been held or owned by them or him at the time when said bank so suspended as aforesaid. And that your orator may have such other or further relief, or both, in the premises, as the nature of this case shall require and to your Honor shall seem meet. May it please your Honor to grant unto your orator a writ of subpoena, duly issued out of and under the seal of this court, directed to the said J. D. J., etc., (naming resident defendants only,) thereby commanding them and each of them, at a certain day and under a certain penalty therein to be specified, to be and appear before your Honor in this court, and then and there to answer all and singular the premises, and to stand to, perform and abide such order and ^ccree herein as shall be agreeable to equity and good conscience. And your orator will ever pray, etc. OHARLES D. SHERMAN, Beeeiver Fourth National Bank of Ghieago. MOHBOB & BAI/Ii, Solicitors for Complainant. (Verified by the Receiver) DATI027AL BANES. 265 CHAPTEE XIII. The following cases liave appeared in the periodicals and latest reports since the manuscript of this book went to the printer. In order to have the list of authorities as complete as possible they are given here in the form of an appendix. The cases are placed under the sections to which thej refer. SECTION 3,413. Section 3,413 of the Eevised Statutes, which enacts that " every National Banking Association, State bank or banker, or association, shall pay a tax of ten per centum on the amount of notes of any town, city or municipal corporation paid out by them," is not unconstitutional. The tax thus laid is not^n the notes, but on their use as a circulating medium. (Veazie Bk. ■». Penno, 8 Wall. 533, cited and approved.) Nat. Bk. 0. United States, 101 tJ. S. 1. SECTION 5,136. The cashier is the executive officer of a bank, and author- ized as such to receive money on deposit; after receiving it, no trick or fraud on his part, by means of which the money passes to a firm in which the bank officers are largely interested,' can absolve the bank from its liability. Ziegler v. First Nat. Bk. of AUentown, 10 Rep. 411. (Pa.) The drawee of a bank check is not a party to the check, and cannot be sued upon it until he accepts it, even though he has funds in his handa belonging to the drawer sufficient to pay it. The amount of a check stated in figures, usually at the bottom or top of the left hand margin, does not control the amount of the check, especially when contradicted by words in the body of the check. Placing a check on the cancelling fork by the mistake of the cashier^ 266 NATIONAL BANKS. and afterwards correcting tlie error, does not amount to an acceptance of of the check, or in any manner afiEect its validity. Nat. Bk. of Kockville v. Second Nat. Bk. of LaFayette, (Ind.) 10 Rep. 364. An y act clearly indicating an intention to comply with the request of the drawer of a bill of exchange, as paying part in cash, and issuing a certifi- cate of deposit for the balance, will constitute an acceptance. After a bill of exchange has been received and the proceeds credited to the payee, who presents it, the drawee cannot thereafter, by any arrange- ment with the payee, revoke such acceptance and hold the drawer. Repayment of a draft in this case by the drawer, having been made in ignorance of facts showing an acceptance by the drawee, it cannot be regarded as voluntary ; and the amount thereof may be recovered from such drawee. Andressen v. First Nat. Bk.'of Northfleld, 3 Fed. Rep. 128. A bill of exchange drawn upon a general or particular fund operates as an assignment to the payee of a debt due from the drawee to the drawer, when the bill has been accepted by the drawee. A bill of exchange drawn upon a general fund, but not accepted by the drawee, does not operate as an assignment of the fund, but is mere evi- dence of an assignment, and, with other circumstances, showing that such was the intention, will vest in the holder an exclusive claim to the fund, and bind it in the hands of the drawee after notice. An order upon the whole of a particular fund, though not accepted, will operate as an equitable assignment of the fund? and bind it in the hands of the drawee after notice ; but such order does not possess the property of negotiability. First Nat. Bk. of Canton d. Dubuque, etc., 1 Am. L. Rev. (N. 8.) 166 ■(Iowa.) In a suit by a drawee of a bill of exchange against the indorser, where such bill was drawn by the Treasurer of the United States, and the name of the payee was forged, the statute of limitations does not begin to run until judgment has been obtained by the United States against the drawee. Merchants' Nat. Bk. of Baltimore v. First Nat. of Baltimore, (U. S. S. C.) Fed. Rep., Aug. 3, 1880. Two bills of exchange, belonging to the plaintiff at Chicago, were indorsed for collection to a bank at Atchison, and by said bank to one at Kansas City, and by the latter to the defendant, a bank at Hutchison, Kan- sas. Held, That they remain the property of plaintiff, all the indorsements being restrictive. An indorsement on a bill of exchange directing the drawee to pay to another " on account of" the indorser, or " for collection," is a restrictive indorsement, the effect of which is to restrict the further negotiability of the bill, and to give notice that the indorser does not thereby give title to the bill or to its proceeds when collected. Although there may be no privity between the own?r of the bill and the last indorsee, yet, if the latter collects the bill, he is bound to pay the proceeds to the owner, and the latter may recover in assumpsit, on the ground that the NATIONAL BANKS. 267 defendant has property in his possession which belongs to the plaintifiF, and refuses to pay it over. First Nat. Bk. of Chicago v. Reno Co. Bk., Fed. Rep! Aug. 11, 1880. (U. S. C. C, Kas.) On March 23, 1866, the National of Crawford County, Penn., at Mead- viUe, gave a sight draft to the plaintiflf on Culver, Penn & Co., in New York. The plaintiff mailed it to the defendant for collection, who received it in the morning of March 36, presented it to the drawees, and obtained their check. The check was sent through the clearing house, and pre- sented at the Culver, Penn & Co.'s bank the next day, the 37th, when it wag refused payment, as Culver, Penn & Co. failed on that day. The defendant took back the check to Culver, Penn & Co., received the draft, protested it for nonpayment, and on March 28th the plaintiff and the drawer were served by mail with notice. EabIi, J., lield, on authority oi, Turner v. Bank of Fox Lake, 4 Abb. Ct. of App. (Dec), 434, and Burkhalter v. Second National Bank, 43 N. Y. 538, that sufficient was done to charge the drawer, but that, while the diligence was sufficient in the case of a holder to charge the drawer, it wag not suffi- cient on the part of a collecting agent towards his principal; that the check gave the defendant the means of obtaining the money; and as it was this latter which they were employed to obtain, it was their duty to get the money on the check, or have it certified — the evidence showing that this would have been done had the check been presented on the 36th. The referee allowed as damages the face of the draft. This was held to be prima facie the measure of damages ; but as it appeared that the drawer was charged, and the presumption in the absence of proof was that the drawer was solvent, the plaintiff had suffered only nominal damages. Although not shown on the trial, it was stated in argument, that by the law of Pennsylvania the drawer was not charged. First Nat. Bk. of Meadville v. Fourth Nat. Bk. of N. T., 1. Am. L. Rev. (U. S.) 91. A bank is responsible for the safekeeping of the money of a depositor, and it cannot set up the fraud of its own officers as an answer to a demand for repayment. Under what circumstances lack of ordinary care is no answer to fraud, commented upon. Steckel*®. First Nat. Bk. (Pa.) Week. Notes of Cas. (Sept. 3) 17. Action for the recovery of a balance of moneys deposited by the plain, tiff's intestate. The moneys were in fact moneys collected by R. Bros., as agents for shipmasters, and were deposited in the name of plaintiff's intes- tate, who was their book-keeper, to prevent seizure by creditors. The bank charged against the amount deposited a note of R. Bros., and the judgment was for the balance. The plaintiffs appealed. Held, That the indebtedness was really due to the firm of R. Bros., and a balance of theirs could be properly set off; and the judgment for the balance should be affirmed. Falkland's Adm'x ■». St. Nicholas Nat. Bk., (Sup. Ct. N. Y.) 10 Rep. 341. Although it is a well settled rule that money deposited in a bank to the 268 NATIONAL BANKS. credit of A. may be shown to be the property of B., yet this question can arise only upon the claim of the real owner or his creditors ; it cannot be set up by the bank in which the deposit is made. A. kept an account in a bank in his own name. The bank notified him not to draw any further, as it proposed to hold the balance for security of an indebtedness against B., who they alleged was the real owner of the money deposited. Hdd, That the bank by accepting the deposit in the name of A. was estopped by its own act from disputing the apparent own- ership of the fund. First Nat. Bk. of Look Haven «. Mason, (Pa.) 13 Leg. Ns. 36. A bill of lading, though made assignable by statute, has not the full character of negotiable paper ; and in the hands of a purchaser for value in good faith, without notice, taken from one who has stolen it, it is with- out value. The purchaser of a negotiable bill of lading, when he has grounds for belief that the holder has no title, will be held to have knowledge of the defect of title. Shaw B. Merchants* Nat. Bk. of St. Louis, 10 Rep. 139. (U. S. S. C.) A promissory note containing the words, "' I promise to pay to the order of myself,"' signed by two persons, and placed by one in the hands of the other, to be by him put in circulation for his own benefit, may be trans- ferred to a hona fide holder before maturity, so as to give him complete title by such holder's indorsing his name, although the name of the other maker is not so indorsed. First Nat. Bk. v. Fowler, 1 Am. Law Rev. (n. b.) 92. (Ohio.) Where the treasurer of a town borrowed money on a vote of the town authorizing him " to borrow on the credit of the town in anticipation of taxes," but there was no vote making the proposed loans payable from the taxes of that or the preceding year, nor were the votes passed by two-thirds of the legal voters present at the meeting, it was ?ield that notes given by the treasurer in return for money loaned were given without lawful author- ity, and the town was not liable in any form for the money borrowed, even though it could be shown that the identical money thus borrowed was all used by the town treasurer in the payment of debts legally due from the defendant town. Agawam Nat. Bk. e. Inhabitants of So. Hadley, 1 Am. L. Bev.'(]!r. s.) 535, When the maker of a note occupies a dwelling house, but has no place of business, and the note specifies no place of payment, a presentment at the maker's former place of business in the same town, without inquiry as to his present place of residence, is not a good presentment, and does not show such diligent search for the maker and failure to find him as to excuse a want of presentment of the note and demand of payment. Where a note has been paid by the indorsers under a mistake as to their liability, interest is recoverable by them only as damages for the wrongful detention of the money. And where they have made no demand for the money before bringing suit, interest should be computed only from the date of the writ NATIONAIi BANKS. 269 Talbot V. ITat. Bk. of Commonwealth, (Mass.) 10 Rep. 336. The defenses of the maker of a promissory note can be cut otf only by the payees indorsement of it before maturity. A guaranty written on it by the payee is not such an indorsement. Trust Company v. Nat. Bk., 101 U. S. 68. A. made his promissory note to his own order, duly indorsed it to the order of B., and delivered it to a National Bank. The latter negotiated it to B., and applied the proceeds thereof to the cancellation of a prior debt of A. With the knowledge and consent of the president and cashier, who were also directors, but without any notice to or authority from the board, C, one of the directors and vice-president of the bank, guaranteed, at the time of the transaction, the payment of the note at maturity by an indorse- ment thereon to that eflEeot in the name and on behalf of the bank. The note was duly protested for non-payment, and the bank notified thereof. B. brought this action against the bank. Held, 1. That the bank was not prohibited by law from guaranteeing the payment of the note. 3. That it is to be presumed that C. had rightfully the power he assumed to exercise, and the bank is estopped to deny it. 3. That the bank by its retention and enjoyment of the proceeds of the note, rendered the act of 0. as binding as if it had been expressly authorized. Peoples' Bk. v. Nat. Bk., 101 U. 8. 181. A breach of the condition does not relieve a corporation from liability upon a conditional indorsement, where performance of such condition has been duly waived. The earnings of a railroad are attachable In the hands of a trustee, although they came into his possession as the receiver of a connecting rail- road. First Nat. Bk. of St. Johnsbury v. Portland & O. B. B. Co., 2 Fed. Rep. 831. An indorsee of a negotiable promissory note made for the accommoda^ tion of the indorser,"taking the note in good faith as collateral security for an antecedent debt, and without other consideration, is entitled to the posi- tion of holder of such paper for value, and therefore not affected by the defense of the want of consideration to the maker. It is no defense that the note sued on was known to the plaintiff to be an accommodation note between the maker and the payees, provided the plaintiff took the note for value, in good faith, before it was due. Maitland v. Citizens' Nat. Bk. of Baltimore, 40 Md. 540. The filing of a judgment creditor's bill, or at least the service of pro- cess, gives the complainant a lien upon the property of the debtor, by placing it under the control of the court, which will not suffer it to be withdrawn so as to defeat the object of the bill. It seems that this lien survives the death of the debtor, and follows his property into whosever hands it may come. This lien is defeated as to property subject to execution, by an actual seizure of the property on execution in favor of another creditor before the appointment of a receiver. 270 KATIOXAL BAHKS. The lien applies only to property the debtor had at the time of the com- mencement of the suit; if after acquired property is sought to be reached, it must be by supplemental bill. First Nat. Bk. of Sioux City o. Gage, 93 111. 173. A National Bank has power to make a by-law creating a lien on the stock of every stockholder for his liabilities to the bank ; and such a lien is created by a by-law which provides that no transfer of the stock of the bank shall be made without the consent of the board of directors by any stockholder who shall be liable to the bank, either as principal debtor or otherwise. An assignee in bankruptcy has the same title to the bankrupt's estate which the bankrupt himself had before the adjudication of bankruptcy. But an exception to this rule obtains where the bankrupt has transferred his property to defraud his creditors. Under the by-laws of a bank creating a lien on the stock of every stock- holder for his liabilities to the bank, a stockholder owning one hundred and thirty shares in the bank, and being indebted to the bank in $20,000, was adjudged a bankrupt. Meld, That, under these circumstances, the bank was not bound to transfer the stock to his assignee. Meld, also. That the lien of the bank on the stock was not defeated by the adjudication of bankruptcy; that the stock should be sold and the pro- ceeds applied to the payment of the debt due the bank so far as the same would go ; and that, for the residue of its debt, the bank might prove its. claim with a view to a dividend of the assets of the bankrupt estate. A by-law of a bank is a contract between the stockholders ; and the ordi- nary rules of construing contracts apply in its construction. And if pos- sible, it should be so construed ut res magis vaZeat quam pereat. In re Bunkerson, 4 Biss. 327. National Banks are not authorized to institute suits in the Federal Courts out of the districts where they are established, when the amount in controversy does not exceed $500. The St. Louis Nat. Bk. e. Brinkman, 1 Fed. Rep. 45. Stockholders of a corporation which is a defendant in a suit in equity cannot acquire a standing in court to protect the interests of the corpora- tion by an informal petition which lacks the essential elements of a cross bill. Fifth Nat. Bk. ». Pittsburgh & C. S. Ey. Co., 13 Leg. Ns. 51. (U. S. D. C. W. D. Pa.) The Federal Courts have jurisdiction over all suits by and against' National Banks, irrespective of the subject matter Joining merely nom- inal or personal parties has no effect either to confer or exclude the juris- diction ; but trustees, executors and the like are not formal parties within the meaning of the rule, when in fact they are interested in the litigation. Foss «. First Nat. Bk., Fed. Rep. Aug*, 17, 1880; s. c, 1 Am. L. Rev. 741. (U. S. C. C, Colo.) A State by becoming a shareholder in a banking corporation, does not identify itself with the corporation. The fact that a State is a shareholder NATIONAL BANKS. 271 does not prevent the corporation from being sued in the courts of the United States. The suit is against the corporation, and the judgment is to be satisfied by the property of the corporation and not by that of the indivic^ual corporators. Bk. of the U. S. v. Planters' Bk. of Georgia, 9 Wheat. 904. In an action by a bank on a promissory note the defendant offered to prove that he went to the bank to receive payment of a certificate of deposit; that when the money was paid he signed a paper represented by the bank officers to be a receipt therefor, but which afterward turned out to be the note on which action was brought. Held, That such facts con- stituted a defense, and that it was error to exclude the offer. Resh V. First Nat. Bk. of Allentown, 10 Rep. 411. (Pa.) When it appears by the complainant's bill that the remedy is barred by lapse of time, or that by reason of his laches, he is not entitled to relief, the defendant may by demurrer avail himself of the objection. Nat. Bk. «. Carpenter, 101 U. S. 567. Whenever a creditor has a trust in his favor, or a lien upon property for the debt due him, he may go into equity without exhausting his rem- edy at law. Case, Recr. ■». Beauregard, 101 U. S. 688. A lease for twenty-one years, in addition to the usual covenants, con- tained a covenant on the part of the lessor that if the lessee should pay the rent and keep -the covenants on his part, the lessor, at the expiration of the term, would grant a new lease for twenty-one years. 'There was no cove- nant by the lessee to accept the new term. Then followed a covenant by the lessor for another renewal, and then a covenant by both parties that the lessee, at the expiration of the third term, should purchase the premises at an appraised value. Held, That the lessee was not bound to renew the term. An additional or correlative agreement on the part of the lessee cannot be implied from the words of express covenants on the part of the lessor, unless the language used shows clearly that such covenant was intended. Bruce v. The Fulton Nat. Bk. of N. T., (N. T. Ct. of Apps.,) 1 Am. Law Rev. (N. s.) 331. The validity of a deed of assignment of property, although executed in another State, so far as it attempts to convey real estate, must be deter- mined by the laws of the State in which the land is situate. The placing of property in the hands of an assignee for any other pur- pose than to distribute it or its proceeds among creditors is fraudulent and void as to them, If to procure time or for the benefit of the assignor, it is fraudulent; and when the assignor has, or thinks he has more property than is necessary to pay his debts, the assignment can only be presumed to be intended for his own benefit, for in that event he only is to be profited. A clause in an assignment for the benefit of creditors, authorizing the assignee to carry on the business of the assignor for such time as the assignees may deem necessary to prevent shrinkage and loss, and closing out and liquidating the same to the best advantage, when the deed recites 272 NATIONAL BANKS. that the assignor has property sufficient to pay three times what he owes, together with a clause that the assignee may make, assign, indorse and guarantee any and all bills of exchange and promissory notes or other paper for any new indebtedness or liability that may be contracted in car- rying on the business, and to lease or mortgage the real estate, etc., unless compelled sooner to close upon the request of a majority of the creditors, clearly vests power in the assignee to hinder and delay creditors, and ren- ders the assignment fraudulent. To make such a deed valid, the debtor's property must be immediately and without restriction transferred to the assignee, with a general authority to him to receive, hold and dispose of it for the equal benefit of all the creditors in the order of preference, if any. It has been held by this court that a clause in an assignment authorizing the sale of assigned property on a credit, renders the same void, as delay- ing creditors. The same principle applies with equal force to a clause authorizing the assignee to hold the property and continue the business until new debts are contracted, and then to mortgage the assigned property to secure their payment or to sell the same and devote the proceeds to their payment. Gardner v. Commercial Nat Bk. of Providence, 95 111. 298. The assignment of a warehouse receipt transfers the legal title and con- structive possession of the property to the assignee, and he may maintain an action for its conversion. First Nat. Bk. of Cincinnati «. Bates, 1 Fed. Rep. 703. A warehouse receipt, though not in the commercial sense of the term negotiable, is an assignable instrument. The assignment and delivery of such an instrument vests the legal title of the property in the assignee, without notice to the warehouseman. The statement in such an instrument, that the property is to be delivered upon order, the return of the receipt is a representation upon which the assignee has a right to rely, and if after the assignment and delivery of such an instrument, the warehouseman, without the consent of the assignee, delivered the property to the person to whom he has given the receipt, he will be liable to the assignee for the value thereof, although he had no notice of such assignment. First Nat. Bk. of Cincinnati d. Bates, 19 Am. Law Reg. 566. (U. S. D. C, S. D. of Ohio.) Although a factor has no right to pledge the goods of his principal, yet if he does so pledge to an innocent pledgee, the latter may in an action of trover brought by the principal, claim a reduction of damages to the extent of the advances made by the factor to the principal and for which the factor had a lien. In this respect there is no substantial difference between the effect of a pledge made by a factor and a pledge made by a pledgee. Although by the laws of Kentucky, warehouse receipts are made negc tiable, the holder of such receipt takes no better title than if the goods themselves had been delivered to him. NATIONAL BANKS. 273 In trover against the holder of a warehouse receipt for the goods, the date of the conversion is the date of his acceptance of the' receipt, and the value of property at that time is the measure of damages. B. shipped goods to his factor for sale, and received advances from the factor thereon. The factor stored the goods, pledged the warehouse receipts for his own debt to C, and afterward became insolvent. In trover by B. against C, Held, That B. was entitled to recover the value of the goods at the time of the transfer of the receipt to C. leas the amount of the advances made by the factor. First Nat. Bk. of Louisville o. Bryce, (Ky.) 19 Am. L. Eeg. 503. Where a question arises involving the right of National Banks to make loans of a particular character upon mortgage, the assignee should be permitted to litigate such question in the Federal Courts, and should not be sent into the State Courts to try it on the distribution of surplus moneys in a foreclosure suit, or in a suit brought by the party holding the alleged invalid mortgage. In re Duryea, 17 Nat. Bk. Reg. 495. The provisions of the Indiana statute (1 Davis, 1876, p. 927) making warehouse receipts negotiable, and an indorsement of such receipts a trans- fer of the property, held, not applicable to a transaction where a private warehouseman took out a permit for his warehouse, ia class B, and then issued receipts for his own property stored therein. As against creditors, possession, actual or constructive, is essential to the validity of a pledge. Where a private warehouseman issued receipts for his own property, in his own warehouse, and delivered them as security for his indebtedness, held, that the person to whom they were so delivered acquired no title to the property described therein as against other creditors, and in bankruptcy proceedings, was not entitled to any preference. An assignee in bankruptcy represents all the creditors, and as such may contest transfers binding upon the bankrupt. The fact that the bankrupt received money or property upon an unlaw- ■ ful contract, under which a creditor seeks a preference, which property went to increase the estate, will not render such contract valid. Adams v Merchants' Nat. Bk. of Indianapolis, 2 Fed. Eep. 174. A change of possession is not necessary to give validity to a judicial sale, and a purchaser thereat may leave the goods with the judgment debtor without rendering them liable for his debts. An arrangement to leave goods with a debtor made after a judicial sale may be valid and good, though such an agreement made prior might have been fraudulent as to creditors. Bisling v. Third Nat. Bk., lO- Rep. 410. One partner has no authority, without the assent of his-, co-partners, to sign the name of the partnership to a note for his individual debt; and all persons who take such a note from him with knowledge, either by its appearance or otherwise, that it was made for the separate accommodation of one partner, cannot recover against the others ^without proving their authority or assent. 18 274 NATIONAL BANKS. Nat Bk. of the Commonwealth v. Law, 1 Am. L. Rev. (n. b.) 168. (Mass.) March 1, 1876, A., by way of collateral security for his notes of even date, payable four months thereafter, made an instrument in writing assigning to B., the payee of them, a judgment against C, and authorizing him to sell it, in case they should not be paid at maturity, and apply the proceeds to the payment of them. C.,. at said ^ate, had suflBcient personal property to satisfy the judgment. Execution was issued June 19th, but that property had been previously exhausted by the levy of other execu- tions. In a suit by B. against A. on the notes — 3eld, 1. That B. was not bound by the terms of the assignment to take steps for the collection of the judgment before the maturity of the notes. 2. That, in the absence of acci- dent, mistake or fraud, evidence was not admissible to show his parol agreement, made contemporaneously with the assignment and as part of the transaction, to issue execution and collect the judgment whenever the money could be made thereon. Bast B. Bank, 101 U. S. 93. Where a valid evidence of indebtedness, issued by a county, is surren- dered by the holder to the county, and a new evidence of debt issued therefor, which is invalid, the legal rights of the creditor are not affected thereby. Merchants' Nat. Bk. v. Pulaski Co., (U. S. C. C, E. D. of Ark.) Eed. Kep., June 15, 1880. A principal is, in law, affected with notice of all facts, of which notice can be charged upon his attorney. Parties who deal with an executor, exercising his power of disposition of the personal assets of the estate in his hands to raise money, not for the estate or the settlement of its affairs, but for the business of a commer- cial firm, are bound to look into his authority, and are held to a knowl- edge of all the limitations which the will, as well as the law, puts thereon. His pledge of assets made for other purposes than the discharge of his duties as executor, will not be sustained where the purchaser or pledgee takes them with knowledge or notice of the perversion of them, or the intended perversion of their proceeds. Such assets are held by him in trust to pay the debts of the testator and then to discharge legacies. Where, therefore, they are acquired from him by third parties, witl\ knowledge of his trust and of the disregard of its obligations, they can be followed and recovered. Smith V. Ayer, 101 U. S. 320; Smith v. Nat. Bank, Ibid. SECTION 5,137. The Act does not imply a negation of the corporate power on the part of National Banks which might be organized under it to make a loan of money on real estate, does not annul any loan made by any such bank, or release or discharge NATIONAL BANKS. 276 any deed of trust or mortgage on real estate taken by the bank to secure the payment of such loan. If the Act plainly pro- hibited a bank organized under it to take a deed of trust or mortgage to secure a loan in any case, or made it penal to do so, such a provision could only have been intended for the benefit of the Grovernment, which might or might not, at its pleasure, enforce the forfeiture ; and it could not be avoided by the borrower or his creditors. Wrotens, Ass'g, v. Armat, 31 Qratt. 328. SECTION 5,139. In an action at law brought by a Eeceiver of a National Bank against the real owner of stock in such bank, standing by his procurement in the name of another, and never having been in his own name on the books, such real owner can be charged as a shareholder with the statutory liability of a share- holder. , Davis, Reo'r, v. Stevens, (U. 8. C. C, S. D. of New York) Leg. Intel., Nov. S8, 1879. SECTION 5,198. The defense of usury can be maintained in a State Court in an action therein brought by a National Bank upon a note given to it for money borrowed. The defense of usury is not defeated by showing that the note sued on was given for another note, usurious in its inception, and that the amount of usury was afterward credited to the principal sum by indorsement on the renewal note. Nat. Bk. of Winterset v. Eyre, 9 Rep. 83. (Iowa.) The provision in Section 5,198, that "suits, actions and proceedings against any association under this title may be had in any Circuit, District or Territorial Court of the United States held within the district in which such association may lie established, or in any State, county or municipal court in the county or city in which said association is located, having jurisdiction in similar cases,'' Jteld to apply to transitory actions only, and not to such actions as are by law local in their character. Section 5,136 subjects the banks to suits at law or in equity as fully as natural persons, and there is nowhere in the Banking Act any evidence of an intention on 276 NATIONAL BANKS. the part of Congress to exempt banks from the ordinary rules of law affect- ing the locality of actions founded on local things. Casey v. Adams, 31 Alb. L. J. 376. (U. S. S. C.) Under the Revised Statutes of Missouri, a judgment obtained by an assignee in bankruptcy for a penalty incurred by the violation of a State statute against usury, cannot be set off against a claim of the judgment debtor against the bankrupt estate. Wilson V. Nat. Bk. of Rolla, 1 Am. Law Rev. ^N. s.) 801. (U. 8. C. C, W. D. ofMo.) SECTION 5,209. The defendant was indicted in a State Court as receiving teller of the First JSTational Bank of Mahoning City with fraud- ulently making false entries in the books, reports and state- ments of the bank, with intent to injure and defraud the bank. His counsel assigned for error the want of jurisdiction in the court. But it was held that as the offense was one which was a crime at common law, the State Court had jurisdiction. Lubery v. The Commonwealth, 37 Leg. Intel. 339; 8. 0., 7 "Week. Jur. 458. SECTION 5,219. The officers of Ifational Banks cannot be compelled by State laws to present for inspection to the tax officers of the State, their books, showing the amounts of deposits, so as to enable such officers to reach such sums for taxation to the depositors. Nat. Bks. D. Auditor of Mahoning Co., (U. S. C. C, W. D. of Ohio,) Week. Cinn. L. B., July 26, 1880. « A State can only impose such a tax upon National Banks as is author- ized in the Act of Congress creating them; which Act only authorizes a tax on the shares of such bank, and not upon its capital stock. The right of a National Bank, therefore, to conduct its business as a banking institu- tion, is in no way dependent upon a license to be obtained either from the State or any of its municipalities. Carthage v. First Nat. Bk. of Carthage, 10 Rep. 469. (Mo.) Although the statutes of a State provide for the valuation of all moneyed capital for the purposes of taxation at its true cash value, including shares of the National Banks, the systematic and intentional valuation of all other moneyed capital by the taxing officers far below its true value, while National Bank shares are assessed at their full value, is a violation of the Act of Congress which prescribes the rule by which those shares shall be taxed by State authority. In such case, on the payment or tender of the sum which the bank shares ought to pay under the rule established by the NATIONAL BANKS. 277 Act of Congress, a court of equity will enjoin the State authorities from collecting the remainder. Pelton B. Commercial Nat. Bk. of Cleveland, 101 U. S. 143. The Constitution of Ohio declares that all property shall be assessed " according to its true value in money." In a county wherein a National Bank was located real estate was assessed at one-third of« its value, while the bank shares were assessed at their full value. The bank brought a bill to restrain the collection of the tax. Held, That such tax was in violation of the Constitution, and that the appropriate mode of relief in such cases is, upon payment of the amount of the tax which is equal to that assessed on other property, to enjoin the collection of the illegal excess. Cummings «. Nat. Bk., 101 XJ. S. 153. SECTION 5,334. The stockholders of a defendant corporation cannot obtain the removal of a Receiver by petition, where it appears from the pleadings that such corporation has a regularly elected board of directors, and that such board is in active sympathy the petitioners. A District Court of the United States has jurisdiction of a bill in equity praying for the appointment of a Eeeeiver of an insolvent corporation, filed by a JTational Bank established within the district within which the court is held. Fifth Nat. Bk. of Pittsburg v. Pittsburg, etc., 1 Fed. Rep. 190. SECTION 5,343. In an action in a New York court against a bank located in North Carolina, an attachment was levied upon the property of the bank. It was objected that under Sections 5,198 and 5,242 the Court had no jurisdiction. Held, That in the absence of a statute conferring exclusive jurisdiction upon the Federal Courts, the State Courts have the same power and jurisdiction in suits to which a National Bank is a party, as if it was an individual. That under subdivision four of Sec- tion 5,136 such a bank may " sue and be sued in any court of law and equity as fully as any natural person." That Section 5,242 has reference to banks in an insolvent condition only, and its object is to prevent one creditor of a corporation, whose assets are insufficient to meet its liabilities, from ob- taining a preference. Robinson «. Nat. Bk. of Newberne, 22 Alb. L. J. 115. (N. Y. Sup. Ct.) INDEX. A. ACCOMMODATION PAPER, cashier cannot bind, bank by indorsing, 100. contra, wtien note has passed into hands of bonaflde purchaser, 100. cashier cannot bind bank by indorsing his own paper, 100, 101. bank bound by what appears on face of paper, 101. president cannot certify his own paper, 101. indorser of cannot compel bank to resort to securities, 101. in such case indorser must first pay note, 101. accommodation acceptor of bound to bona fide purchaser, 101, 102. indorser bound to bona fide purchaser, 101, 103. national bank no right to lend its credit on personal security, 102. when original is not paid by new, 103. parol agreement to contradict paper not admissible, 103. AGENT AND AGENCY, power to draw on funds is not power to draw on credit, 120. principal should repudiate unauthorized act when informed of it, 120. power to make notes does not include power to make accommo- dation paper, 120. money handed to one to pay to another may be recalled before accepted, 130. general words do not enlarge the specific power of agent, 120. payment to cashier is payment to bank, 130. equity follows the fund so long as it can be identified, 131. real owner may give notice of that fact to bank, 131. depositor can recover moneys improperly drawn by clerk, 131. deposit of fund by trustee in his own name is a conversion, 132. and the bank may apply it as his private fund, 132. power to make promissory notes must be specially given, 123. ASSIGNMENT, DEED OF, ETC., is determined as to real estate by laws of state where that is situ- ated, 271. showing more assets in value than debts is void, 273. if authorizes assignee to hold property until, etc., is void, 373. what acts amount to, 142. (379) 280 INDEX. ASSIGNMENT, DEED OF, KTC— Oontimed. assignee takes attached property subject to attachment, 144. case when no warranty of quality was made, 144. ATTACHMENT. See Tkanspers. ATTORNEYS, receiver may employ private counsel and stockholders cannot object, 122. held to reasonable skill in performance of their duties, 122. but not liable to third parties; there is no privity, 122. B. BANKS AND BANKERS, not to use the word " national " in title of firm, 26, 343. national banks ; organization and powers, 8-13, 45-170. obtaining and issuing circulating notes, 13-16, 171-188. regulation of business, 17-21, 189-324. dissolution and receivership, 23-26, 225-243. organization of state as national banks, 13, 167. liabilities of shareholders In such case, 11, 162. BANKRUPTCY AND INSOLVENCY, bankrupt act does not supersede the banking act, 133. nor do the provisions of the former apply to national banks, 133. power creating corporation can prescribe the remedies against it, 123. return of nulla bona is evidence of insolvency, 123. " act of insolvency " in § 5342 is to be taken in its usual sense, 123. bank may pay checks so long as it continues business, 123. garnishment will not lie against bank having bankruptcy funds, 123. bank may hold its collaterals although the debtor has become bankrupt, 133. assignee in bankruptcy is within the term "legal representatives," 124. knowledge of debtor's insolvency, what, 134. checks not presented until after assignment do not bind fund, 134. insolvency under § 5343, what, 124. fraudulent preference, what, 134. judgment may be taken against a corporation in bankruptcy, 134. plea of bankruptcy does not of itself stay proceedings, 135. bankrupt after petition filed may deposit and draw money, 125. title to money in bank vests in assignee, when, 135 bank entitled to preference, when, 125. non-joining of a partner leaves creditors to their full remedies, 136. assignee takes the rights of bankrupt, 270. represents all the creditors, 273. a judgment against several will be stayed as to those in bank- ruptcy, 135. INDEX. 281 BILL OF LADING, instructions in regard to must be obeyed, 90. may be surrendered upon acceptance of time draft, 90, 91. holder takes title of shipper, 91. carrier shohild deliver property only on, 91. liable to owner if delivery be made to wrong party, 91. has not full character of negotiable paper, 91. stolen, is without value in hands of any one, 268. BILL OF EXCHANGE. See Draft. BY-LAWS, is a contract between the shareholders, 270. bank cannot acquire a lien on its stock by, 158. that no stock shall be transferred while shareholder is indebted is valid, 141. 0. CAPITAL, requisite amount of, 153. does not include moneys temporarily borrowed, 43, 153. of bank at dissolution, assumed to be its capital, 42. CASHIER, appointed by board of directors, 9, 49. oath required to payment of installments of capital stock, ( 9, 159. statement of facts to comptroller showing that the bank is entitled to commence business, 8. as to report of dividends, 20, 212. penalty for embezzlement by, 20, 208. representations of away from bank bind it, when, 47. acts done away from banking house bind it, when, 47. office and duties of, 60. is the executive officer of bank, 60. receives its moneys, gives certificates of deposit, etc., 61. appoints subordinate officers, 61. is managing agent of bank, 61. presumed to have all necessary power to do the business of bank, 61. cannot bind bank by endorsement of his own paper, 61, 64. may sign transfer on certificate of stock, 62. is not an insurer of the honesty of his employees, 62. authority to certify checks confined to ordinary course of business, 62. representations as to notes bind bank, 62. may take United States bonds for transfer, 63. replies of, as to solvency of parties do not bind bank, 63. fraud of, in usual course of business bind bank, 63. 282 INDEX. CASHIER— Oontinued. bank liable for gross negligence of, concerning speciiil deposits, 63. has no authority to receive such, 63. after money is deposited no fraud of, can free bank from, liability, 265. cannot compromise claim, 63. bank not liable for his statements in matters ultra t)jre«,63. cannot pledge assets for antecedent debt, 64. lona fide holder not affected by fraud of, 64. ^ cannot discharge surety, 64. authority of cannot be questioned in suit by bank on overdraft, 64 note payable to " M. cashier," is payable to bank, 64 cannot endorse accommodation paper, 64. extent of his powers is matter of law, 64. customers of bank are presumed to know powers of, 65. may be removed by directors, 65. is agent of directors and not of shareholders, 65. admissions of, do not bind owner of note, 65. public have a right to presume that oflScers have usual powers, 65. notice to, is notice to bank, 65. has management of all matters not committed to directors, 65. declarations of as to goodness of makers of note does not bind bank, 66. payment to, is payment to bank, 66. certification of, does not bind bank as to filling of check, 66. refusal of, to transfer of stock is refusal of bank, 66, CERTIFICATE OP DEPOSIT, is not dishonored until presented, 87. is evidence of high character, 87. banks have no power to issue time certificates, 87. before suit on, there must be demand, 87. payable " in current funds" is not negotiable, 87. omitting "for value received" is not negotiable, 87. when drawn with interest will bear interest after maturity, 88. bank should examine with reasonable care, 88. bound by its identification of payee, 88. when bank liable, for signed by the individual name of president, 88. CHATTEL MORTGAGE, national bank may take, when, 110. may lend on pledge of stock of another corporation, 110. buy such stock at sale to prevent loss, 110. sell its interest in coin pledged to it, 110. mortgage to endorser may be discharged, when, 110. of retail stock bad, 110, 111. mortgagee not to suffer from confusion of goods by mortgagor, 111. what is a suflScient description of goods in, 111, INDEX. 283 CHATTEL MOWrGAQE — Oontmued. chattel mortgage on fixtures superior to mortgage on realty, when, 111. CHECKS, penalty for certifying beyond amount of deposit, 20, 207. figures on margin do not control, 265. giving check transfers amount named to payee, who may sue, etc., 66. bank no right to pay money on other checks after presenta- tion, 66. contra, 67. by deposit of check on itself, bank becomes debtor of depositor, 67. presentment of check is demand, 67. facts constituting acceptance, 266. bank not liable unless it agrees to pay, 67, 265. cancelling check by mistake is not acceptance, 265. if drawer has no funds, drawing check is a fraud, 67. no privity between bank and payee until check is accepted, 68. bank no right to pay check until endorsed by payee, 68. presumed to know the signature of drawer, 68, 69, 73. if it take the signature of another it guarantees his authority to sign the payees name, 69. If it pay on forged indorsements, it must pay again, 69, 70. only reasonable diligence is required in giving notice of forg- ery, 69. liability of bank is only to one not negligent, 69. bank may buy checks on other banks, 70. drawee not a party to check until he accepts, 265. paying check without funds, no ground to recover money, 70. liable for carelessness in paying money to employees, 70. liable for negligence in collecting check or draft, 71. taking bank check is not payment, 71. a check of itself is not evidence of a debt or loan, 71. checks on other banks received from depositor, are taken for col- lection, 71. when drawer has no funds, promise to pay at future day is not binding, 72. payment of raised check through mistake may be recovered back, 72. stating that check is " good," binds bank only as to signature and that depositor has that much to his account, 72, 73, 208 no interest in check can be obtained through a forgery, 73 bank liable on certification, although cashier violated his duty, 73, 208. bank may recover money paid on raised check, 73. certifying check is warranty of signature and that there are funds to pay, 208. 284 INDEX. CHECKS — Oontinued. certified check, if .indorsed, binds bank in bands of bona fide party, , altbough stolen, 74. certification binds bank although the check be forged, 74, 75. dishonor of check makes drawer liable, 74. holder should demand payment of, on day after he receives it, 74. certification does not release the indorser or maker, 75. if teller adopts a forged certification, the bank is bound, 75. certification does not warrant the genuineness of check as to payee or amount, 75, 208. when officers are asked as to certified check they must tell what they know, 75, 76. bank bound by promise to pay check, when, 308. after demand, check need not be sent through clearing-house, 76. rules of clearing house and effect of passing check through, 76. CIRCULATING NOTES. See National Banks. CIRCUITS COURTS OP UNITED STATES, jurisdiction over suits by or against national banks, 38. may grant injunction in case of national banks in hands of receivers, 34, 336. national banks may sue in, whether or not located in the district, and irrespective of amount, 38. jurisdiction bill filed by receiver against stockholders, 38. ^ of bill filed by stockholder against ofllcers, 38. COLLATERAL SECURITY, case where held to be continuing, 144. COLLECTIONS, relation between bank and customer not one of trust, 88. note passed to deposit becomes property of bank, 88. " for collection and credit " property of note remains in deposi- tor, 88. receiving bank liable for neglect of collecting bank, 89. agent bank is not liable to owner, 89. bank liable for loss of, through taking a check, 89, 90. must use care and diligence in collecting, 89, 90. liable for loss, when check is upon itself, unless it noti- fies, 90. no right to take anything but money in payment, 90. liable, if loss occurs through taking a certified check, 90. COMMON CARRIER, by stipulation cannot divest himself of liability attached to occu- pation, 145. subsequent carrier become agent of, 145. COMPTROLLER OP CURRENCY, to be chief officer of currency bureau, 37, 33. appointment, salary, etc., 38, 38. oath and bond of, 38. iNiJEx. 285 COMPTROLLER OP CVRRENCY — Coniimed. employment of clerks by, 39, 33. not to be interested in national banks, 39, 33. seal of office of, 39. examination of banks of District of Columbia by, 31, annual report by, to Congress, 30. how. to be printed, 45. jurisdiction of circuit court of suits to enjoin, etc., 38. in wliat district, 40. certificates, etc., and copies of papers in office, evidence of, 33, 40. National Banks under his supervision — organization and powers of, 8-13, 45-170, § § 5133-5156. obtaining and issuing circulating notes, 13-16, 171-188, § § 5157- 5189. . regulation of business, 17-31, 189-334, § § 5190-5319. dissolution and receivership, 33-36, 335-343, § § 5330-5343. articles of association to be sent to, 8, 33, 48, 49. certificate of association to be sent to, 8, 33. title of banks subject to approval of, 8, 33, 47. banks not to begin business until authorized by, 8, 33, 50. payment of installments to be certified to, 9, 33, 159. increase and decrease of stock to be approved by, 10, 33, 36, 160, 161. oaths of directors of bank to be sent to, 11, 33, 162. to determine as to capital, etc., of banks etc., 176. compel bank to close, 11, 33, 163, 164. to receipt for bonds deposited by banks, 13, 33, 173. to keep a register of bonds transferred by treasurer, 13, 33, 173. to notify banks of transfers etc., 14, 33, 174. to have access to books of treasurer, 14, 33, 174. bonds of banks shall be annually compared with books of, 14, 33, 174. duties as to interest on bonds, requiring additional, permitting exchange, returning bonds on surrender of circulation, etc., 14, 33, 175. to see to correctness of organization, etc., 33, 176. permission to banks to commence business, 33, 176. to issue circulation to bank, 14, 33, 178. to cause notes to be engraved, etc., 14, 33, 179. to cause annual examination of plates, 15, 33, 180. to have custody of the plates,- etc., 15, 33, 180. to make requisition for return of circulation to equalize appor. tionment, 33, 183. to prescribe rules for the removal of banks from one state to another, 15, 34, 184. to replace worn-out notes, 15, 34, 185. when to issue gold-notes to banks, 15, 34, 185. 286 INDEX. COMPTROLLER OF CimKElUGY ~ Continued. to notify banks to keep up reserve, 34, 190. when may appoint receivers of banks, 17, 18, 24, 34, 189, 193, 202, 205, 231. to approve selection of redemption agencies, 18, 34, 192. to require bank to make good impaired capital, 19, 34, 205. list of shareholders to be sent to, 20, 34, 210. reports to, special reports, 20, 34, 211. dividend reports shall be sent to, 20, 34, 212. may fine for failure to make reports, 21, 34, 212. vote of bank to go into liquidation to be certified to, 22, 34, 225. duties of, in relation to banks redeeming circulation, 22, 34, 22S. on failure to redeem notes, 22, 24, 34, 228. notice of appointment of receivers, 24, 34, 235. dividends to creditors of banks, 24, 34, 235. enjoined in proceedings against banks, 24, 34, 236. forfeiture of franchises of bank at suit of, 25,' 34, 238. may appoint occasional examiners, 25, 34, 238. savings banks, etc., established under acts of Congress must report to, 35, 247. decides on sufficiency of evidence of compliance with the act as to organization, 35, 49, 177, 178. his certificate is proof of incorporation of bank, 177, 178. and is conclusive upon the stockholders and debtors, 177. must decide as to when and for how much the stockholders must be sued, 35, 36. his order as to extent of liability of stockholders is conclusive, 35. action in appointing receiver cannot be questioned by debtors or stockholders, 36. his certificate is sufficient evidence of the appointment of the receiver, 36. is the only person who can bring suit to forfeit the charter of a bank, 36. cannot make the Government a party to litigation, 36. suits against banks abated by their dissolution, 36. suit by bank to enjoin must be had in district court, 40. his certificate as to the organization of bank is final, 49. COMPTROLLER OF TREASURY, duties as to refund of taxes paid by national banks in excess of what was due, 21, 215. COPIES, evidence of books, record and papers in the office of Comptroller of Currency, 7, 40. organization certificate of bank, 40. CURRENCY, BUREAU OF NATIONAL, Comptroller of Currency to be chief of, 28. See National Banks. INDEX. 287 CURRENCY, BUREAU OF NATIONAL— CoreW^ed. expenses of to be paid out of taxes on national bank circulation, 180. D. DEFACING NOTES, ETC. of national banks, penalty, 16, 188. DEFINITIONS, of " bank " and " banker " in laws relating to taxation, 43. investing capital only in bonds secured by real estate does not constitute a bank, 43. when banks liable only for bankers license feies, 43. "capital" does not include moneys temporarily borrowed, 43. of "United States bonds," 171. "place" in § 41, act of 1864, refers to location of bank, 330. "act of insolvency" to be taken in usual sense, 341. United States notes are " currency," 310. DEMAND NOTES, issue of, 3. DEPARTMENTS, TREASURY, Comptroller of Currency, 37-36. DEPOSITS, national banks may receive, 8, 50. proportion of reserve to be kept on, 17, 189. may have in excess of capital, 19, 304. not to certify checks in excess of, 30, 307. to pay duty or tax on, 31, 313. to make returns of to treasurer, 31, 313. duty or tax on how assessed and collected in default of return and payment, 31, 314. refunding of excessive duties, 315. relation between bank and depositor that of debtor and creditor, 83. money deposited is money lent, 83. title to special deposit remains in depositor, 83. general deposit passes to bank, 83. on general deposit bank is not liable for interest, 83. demand must be made before suit, 83. bound to keep deposit safely, 367. note of depositor is not paid by deposit unless bank agrees, 83. bank is bound to pay so long as deposit exceeds debts, 84. may apply balance on debt of depositor, 84. may do so as against real owner, 367. has no lien on deposit, 84. need pay no checks after account is overdrawn, 84. otherwise where bank has agreed with payee, 84. giving check is an appropriation of so much of deposit, 85. how bonds deposited as collateral should be sold on default, 85. 288 INDEX. DEPOSITS — Continued. when bank is bound by "charging oflF," 85. bank bound by agreement not to charge note to deposit, 86. checks credited to deposit become property of bank, 86. borrower should count money at bank, 86. custom not to correct mistakes after party leaves room is void, 86. depositor must point out mistake in deposit within reasonable time, 86. bank estopped to say money is not property of depositor, 367. DEPOSITARIES OF PUBLIC MONEYS, national banks may be designated as depositaries, security, duties, 13, 166. such designation does not make it agent of Government, 167. nor render the United States liable for losses, 167. DEPUTY COMPTROLLER OF CURRENCY, appointment, salary, duties, oath and bond, 38, 33. not to be interested in national banks, 39. DESIGNATED DEPOSITARIES. See Dbpositariks. national banks when are such, 13, 166. DIRECTORS, of national bank, board of, 9, 49. when may sell shares of delinquent holders, 10, 159. votes in selection of, 10, 161. qualifications of, 10, 163. shall hold office for one year, 161. oath of, 11, 163. which shall be sent to comptroller, 11, 163. filling vacancies in board of, 11, 163. proceedings when election is not had on proper day, 11, 168. shall elect president, 11, 163. oath of, required as to facts in relation to organization, 48. penalty for embezzlement by, 30, 308. reports to be signed by, 30, 311. shall give notice of vote to go into liquidation, 33, 335. penalty for violation of laws by, personal liability of, 35, 338. of state bank, how may convert organization into national bank, 13, 167. one elected to the office of, is presumed to accept, 55. majority may act, 55. ' knowledge of director as to defect in note is knowledge of bank, when, 55. not bound to examine books of teller for gratuitous bailee, 55. should remove officer engaged in stock gambling, 55. bound to examine accounts of officers in order to hold sureties, 55. INDEX. 289 DIEE0T0R8 — Oontirmed. at common law not bound to make good loss to depositor, 56. must not declare an Improvident dividend, 56. whether they have by silence ratified what appears on hooks of bank is one of fact, 56. cannot use the property of bank in their private business, 57. may instruct the cashier to hire clerks, 57. may plead usury on loan from the bank, 57. ratification of act of officer is equal to original authority, 57. powers other than needful to oflScers reside in, 57. bond running to is for benefit of bank, 57. either purchaser or seller of stock may compel transfer, 58. right of to office cannot be tried in state court, 58. are trustees, and cannot use assets for private ends, 58. may borrow of bank, 58. may remove any of the officers, 58. cannot hire officers for any specified time, 58. power ceases the moment a receiver is appointed, 58. after rights are fixed statements of officers are not evidence, 58. DISCOUNT AND EXCHANGE, national banks may do business in, 9, 50. See National Banks. DISTRICT ATTORNEYS, to coniluct suits respecting national banks in which the United are interested, 37. statute in this regard is directory only, 37. DISTRICT COURTS OF UNITED STATES, jurisdiction of — suits by or against national banks, 37. to enjoin receivers, etc., of national banks, 34. to adjudge forfeiture of franchises, etc., of national banks, 25. may authorize receiver to compromise doubtful claim, 37. receiver may enforce stock liability by bill, 37. Bee Suits. DIVIDENDS OF NATIONAL BANKS, See National Banks. while reserve is below the minimum none can be made, 17, 190. may be declared, when, 18, 200. not counted as a debt of the bank, when, 19, 204. shall not exceed net profits, 19, 205. reported to comptroller, when and how, 20, 212. failure to report penalty for, 21, 212. in hands of receiver, 34, 235. bank may hold dividend for debt of shareholder, 200. in hands of receiver must be ratably divided on all claims, 235. after government is paid, 235. 19 290 IMDEX. DIVIDENDS OF NATIONAL BANKS — Continued. not necessary to put claim into judgment, 335. after surrender of franchise, no judgment against bank, 236. claims may be proved or put into judgment, 336. right of attaching creditor subject to claim of government, 336. right to payment in full must be clearly made out, 236. DRAFTS, bank is holder for value of discounted draft against which the drawer has been allowed to check, 78. if sight draft deposited be not paid, bank may withdraw credit, 78. on acceptance of time draft, bank may deliver bill of lading, 78. debtor will not be allowed to set up want of power to recover moneys loaned on drafts, 78. when bank must have shipping bill with draft, 79. delivery of bill of lading to bank gives it title to property, 79. bank liable for negligent loss of, 79. must use diligence in demanding payment of, 80. collecting bank is agent of receiving bank, 80. when bank may hold collections for overdraft, 80. acceptance operates as an assignment of fund, 366. acceptance by cashier binds bank, 80. by parol is good, 81. facts showing an acceptance, 266. drawee is bound to know signature of drawer, 81. contra, in Pennsylvania, 81. rule of clearing house applies only to state of account, 81. bank loses if it pay a forged acceptance, 81. statute of limitations begins to run, when, 266. payment of acceptance discharges payee, 82. acceptance once made bank cannot withdraw, 366. presentment cannot be made by deputy of notary, 83. what will discharge accommodation indorser, 83. when presence of draft in bank is not presentment, 83. what is suflScient demand, 83. restrictive endorsement does not change title to, 366. funds sent for that purpose must be applied on draft, 83. a special agreement to pay draft must be exactly carried out to be binding, 83. a draft must be presented within a reasonable time, 83, 367. E. EMBEZZLEMENT OF FUNDS OF NATIONAL BANK, by president, cashier, agent, 20, 208. intent to defraud is shown by embezzlement, 309. sufficient to show a defaato bank, 209. INDEX. 291 EMBEZZLEMENT OP FUNDS OF NATIONAL BX'HiK — Continued. consent of president to taking of money by cashier is no excuse, 209. state courts have no jurisdiction under act, 309, 310. but may punish for taking property of others, 309, 310. when offense is larceny and not embezzlement, 309. charge must be by indictment, 209. United States notes are " currency," 310. EQUITY, creditor having trust in his favor, may go into, 371. or he may follow it in law, 143. when bill shows that remedy is barred defendant may demur, 371. will restrain unlawful tax, 276, 277. federal district court can entertain bill to appoint receiver, 377. will charge land with purchase price when money was that of another, 144. ESTOPPEL, prevents one from denying the incorporation when he has dealt with bank as such, 115, 116. shareholder is estopped to deny legal validity of bank, 115. so is one who has made his note payable at the bank, 116. arising from judgment is conclusive on parties and privies, 116. debtor cannot say that bank has exceeded its powers, 116. one selling note to bank is estopped, 116. city estopped to say its bonds are invalid, 116. bank estopped where it ratifies act of its officer, 116. real owners is estopped if he has misled purchase, 117. bank bound to pay reward offered by part of directors where it does not at first repudiate, 117. if bank repudiates unauthorized contract it must hand back the fruits of contract, 117. bank cannot repudiate a completed contract, 117. director borrowing money of bank is not estopped to set up usury, 118. teller estopped to set up falsity of his certificate which he has pro- nounced genuine, 118. when bank holds collateral for third parties it is estopped to say it had no power to do so, 118. bank estopped to deny genuineness of certificate of stock which cashier has assigned, 118. bank estopped by its monthly accounts, when, 118. creditor estopped by silence, when, 119. pledgee must restore property when he asks judgment, 119. bank is, to deny that deposit belongs to depositor, 267, 268. debtor estopped to say loan is ultra vires, 202, 275. one seeking to rescind contract must first put his adversary back where he stood before contract was made, 146. 292' INDEX. EVIDENCE, of organization certificate of national bank, 40. is conclusive against shareholders and creditors, 40. of copies of books, etc., from office of Comptroller, 40. Comptroller's certificate and transaction of business makes prima facie proof of corporation, 40. certified copy of certificate is competence evidence in state court, 40. such certificate is evidence as to name of bank, 40. EXAMINERS OP NATIONAL BANK, on failure of bank to redeem its circulating notes, 33, 228. to examine aflFairs of bank, 35, 238. duties of, 338. compensation of, 339. EXECUTORS, holding bank stock not liable, 11, 165. that he is such must appear on books of bank, 165. party dealing with him must look to his authority, 374. See GuABDiAus. F. FINANCIAL AND FISCAL AGENTS, national bank may be employed as, 12, 166. does not make it agent of government, 167. or render government liable for losses, 167. FORMS, commission of receiver, 249. petition to compromise doubtful claim, 250. affidavit to petition, 251. order of court on same, 251. petition to compromise doubtful claim when collaterals are in- volved, 251. order of court on same, 352. petition to partition real estate, 258. order of court on same, 254. petition for confirmation of sale of real estate, 354. order of court on same, 255. petition to compromise stock liability, 355. order of court on same, 256. form of allegation where petition is filed by subsequent receiver, 257. declaration on promissory note, 257. assessment upon shareholders by Comptroller, 258. notice to shareholders by the receiver, 259. declaration in debt on stock liability, 259. bill in equity to enforce stock liability, 363. INDEX. 298 G. GALLATIN, ALBERT, views on a national paper currency, 1. GOLD BANKS, organized to issue notes payable in, 15, 185. reserve of, redemption by, 15, 186. of San Francisco, not required to redeem notes in New York, 18, 193. not required to take notes of currency banks at par, 18, 193. limit of circulation of removed, 186. may be converted into currency banks, 248. GREENBACKS. See United States Notbs. GUARANTY, national banks no power to, 114. is bound by its guaranty, 269. by president without authority of directors is his individual obli- gation, 114. such a contract is within the statute of frauds, 114. partner may bind his firm by, when, 114. by a bank is not an indorsement, 115. and assignee takes only the rights of assignor, 115. is within the statute of frauds when, 115. Instance when check was held not to be within contract of, 115. GUARDIANS, holding national bank stock not liable, 11, 165. such fact must appear by books of bank, 165. See BxBouTOBS. HOMESTEAD exemption may be waived, 144. INDEBTEDNESS, limit of, not to exceed amount of capital stock, 204. except for notes of circulation, 204. moneys deposited or collected, 204. drafts drawn against funds, 304. .dividends and reserved profits, 204. can a national bank make any indorsement, 304. INJUNCTION, bank may enjoin appointment of receiver, when, 336. if suit is decided against bank it is dissolved, 237. this is the only way to question action of receiver, 337. INTEREST, See Usury. 294: INDEX. INTEREST — Continued. on loans by national banks, rate, etc., 18, 193. bills of exchange included, 193. consequences of taking usurious interest, 194. bank may take the rate allowed to state banks of issue, 194. the provisions supersede the state laws, 194, 196. contra, 300. taking usury from a corporation forfeits interest in New York, 194. Congress has power to fix the rate of interest, 194. bank liable for usurious act of president, when, 195. usury forfeits the whole interest, 195, 196, 197. and forfeiture may be enforced by way of set off, 195, 196. accommodation indorser may enforce it, 195. affects the whole loan although renewed, 195. state courts have jurisdiction, 195, 375. principal only can be recovered, 195, 196. two years' limitation commences to run from time of payment, 196, 197, 199. in suit on contract defendant may set off usury in other transac- tions, 197. where usury has been paid, twice the interest may be recovered in penal action, 197. cannot be set off in action on note, 200. the action must be debt and in name of payor or his legal representatives, 197, 198. and be brought within two years, 199. assignee in bankruptcy may bring suit, 197, 199. usury must be alleged and proved, 197, 198. it must appear that bank took usury knowingly, 198. state courts has jurisdiction for penalty, 198. contra, 198. laws of state where note is payable govern as to usury, 198, 199. taking interest in advance is not usury, 198. usury is no defense against a bona Me purchaser, 199. surety cannot avail himself of, when, 199. approved claim bears interest from date of approval, 199. and if assets allow it must be paid, 200. action for should be assumpsit against bank, 300. ' J. JURISDICTION, See Titles of the Several Codhts; Suits. of circuit courts over national banks, 38. of district courts over national banks, 37. INDEX. 295 LAWFUL MONEY, meaning of term in case of gold banlcs, 186. reserve of, by national banks, 189, 193. LAWFUL MONEY RESERVE, prescribed, 189. what may be counted toward, 190. certificates of deposit with United States treasurer, 191. limitation on the power to issue such certificates, 191. LEASE, lessee not bound to renew unless language is clear, 371. but if he holds over he is bound, 141. after renewal, trade fixtures put up during first term can- not be removed, 142. LIEN, of banker does not extend to money on deposit, 108. bank may hold dividends for debt of shareholder, 108. cannot hold deposit for note not due, 108. get lien on stock of shareholder by loan to him, 108. contra, 370. except for debt prior to purchase of stock, 109. not defeated by bankruptcy of shareholders, 370. United States has first lien on all assets, 109. receiver of bank takes no greater right than bank had, 109. as against third persons possession of pledge is necessary, 109. firm debtor has no specified lien on firm assets, 109, bank may recall credit it gives to failing borrower, 109. creditor's bill a lien, when, 269. applies only to property had when bill was filed, 369. lost by seizure on execution before appointment of receiver, 269. bank may acquire lien on stock by its articles of association, 158. 203. cannot by a by-law, 50, 141, 203. LOANS AND DISCOUNTS, not to be made when reserve is reduced except, 17, 189. rate of interest on, 18, 193. to individuals, etc., limit of, 18, 201. banks not to make loan on, or purchase their own stock, 19, 202. loans by banks on personal security, 9, 50, after purchase, bank can acquire no lien on, except for a prior debt, 208. may have a lien for prior debt, 203. bank cannot prevent transfer of stock because holder Is indebted to it, 203. by-law to prevent transfer while holder is indebted, invalid, 203, 204. 296 INDEX. LOANS AND DISCOUNTS — Continued. it can by its articles of association, 158. trover will not lie against bank for refusal to transfer stock, 303. LOANS, LIMIT OF, to one person limited to one-tenth of capital stock, 18, 301. permanent deposit in another bank is a loan, 301. fact that loan originally exceeded limit is no defense, 301. bank may recover although loan esceeds limit, 301. equity will leave parties where it finds them, 301. debtor estopped to say that loan exceeds limit, 303. provision made to protect shareholders and creditors, 303. injunction not granted against bank because of, 303. LUNATIC, note of, bona fide discounted by bank, may be recovered upon, 143. liable for torts, and may bind themselves for necessaries, 143. estate of, may be sold on execution, 143. M. MARRIED WOMAN, giving note to relieve husband's goods, effect of, 143. right of husband to draw dividends belonging to, must be deter- mined by law of place of bank, 143. may confess judgment, 148. at common law husband must join her in suit on note, etc., 143. by overdrawing her account, charges her separate estate, 143. MUTILATED NOTES, of national banks replaced, etc., 15, 185. K NATIONAL BANKS, FACTS CONCERNING, congress has the power to create them, 5, 46. they were to be confined to legitimate banking, 5. and limited to act, 46. total number of banks organized, 5. gone into voluntary liquidation, 5. placed in the hands of receivers, 5. capital of insolvent national banks, 6. loss upon, 6. comparison with loss in other banks, 6. national gold btoks, when authorized, 6. their powers and restrictions, 6. Comptroller of Currency, power of, 6. United States courts, jurisdiction of, 6. papers of Comptroller, evidence, 7. title of the act creating and governing national banks, 8. INDEX. 297 NATIONAL BANKS, FACTS CONCERNINa— Co»W»««(l principle underlying them, 1. advantages of, 2. title of act creating, 46. their business strict banking, 5. organization and powers, 8-13, 45-170. obtaining and issuing circulating notes, 13-16, 171-188. regulation of banking business, 17-31, 189-324. dissolution and receivership, 33-36, 385-343. Comptroller Of Currency, 27-36. what associations, etc., are subject to laws relating to, 13, 171. title " national,'' not to be used by other banks, 38, 343. district attorneys to conduct suits respecting, when United States interested, 37. jurisdiction of district courts in suits by and against, 87. of circuit courts, 38. proceedings by, to enjoin Comptroller, in what district to be had, 40. copy of organization certificate of, when and of what evi- dence, 40. report of Comptroller upon, when and how printed, etc., 45. , application of provision to evidences of indebtedness, 43. revised act applies to banks in being on its passage, 170. organization and powers, 8-18, 45-170. articles of association, 8, 45. how many persons are required to form a bank, 8, 46. contents of organization certificate, 8, 47. how acknowledged and filed, 48. Comptroller to decide upon preliminary steps, 8, 49. may give or withhold certificate authorizing commencement of business, 8, 50, 176. certificate to commence business to be published, 8, 178. powers of, as bodies corporate, 8, 49. to hold real estate, 9, 147. minimum capital, 9, 153. 1 paying in of capital stock, 9, 159. failure to pay installments on stock, 10, 159. , increase of capital, 10, 160. reduction of capital, 10, 160. rights of shareholders to vote, 10, 161. no officer, clerk, etc. of, can act as proxy, 10, 161. shareholder in default cannot vote, 10, 161. shareholders elect the directors, 10, 161. individual liability of shareholders, 11, 164. executors, etc., holding stock not personally liable, 11, 165. 298 INDEX. NATIONAL BANKS, FACTS CONCERNING — CorKiraMed designated as public depositaries, etc., duties, etc., 13, 166. of banks of issue of gold notes, 15, 186. state banks may become national banks, 13, 167. rights of, organized under former act, 12, 170. shareholders — organization certificate to state the names of original, 8, 47. shares of, to be one hundred dollars each, 9, 153. are personal property, 9, 153. how transferable, 9, 153. failing to pay installments, stock may be sold, 10, 159, 246. may reduce capital, 10, 160. directors to be elected by, 10, 161. right of, to vote, 10, 161. in default, cannot vote, 10, 161. may fix day for election of directors, 11, 163. individual liability of, 11, 153, 154, 164. executors, etc., holding stock not individually liable, 11, 165. assessed to make good capital, etc., 19, 305. list of, open to inspection and copy to be sent to Comp- troller, 30, 310. two-thirds may vote the bank into liquidation, 33, 825. discharge from liability for notes, 22, 227. surplus after paying debts to be paid to, 34, 335. creditors bill may be filed against, when, 244. may take assets out of hands of receiver, 345. directors — number, etc., of, 10, 161. power of to appoint and remove ofl5cers, 9, 49. to make by-laws and carry on business of bank, 9,49. who may vote in the election of, 10, 161. qualifications of, 10, 162. oath of, 11, 162. filling vacancies in board of, 11, 168. failure to elect on proper day, 11, 168. president elected from and by, 11, 163. oath of as to facts in relation to organization, 8, 48. penalty for embezzlement by, 20, 208. reports to be signed by, 20, 211. shall give notice of vote to go into liquidation, 22, 335. penalty for violations of law by, 35, 238. deposit of bonds — ^ before commencing business, 13, 171. INDEX. 299 NATIONAL BANKS, FACTS CON CERNll!iG — Continued. what kind of may be deposited, 13, 171. increase or decrease of according to capital, 13, 173. registered to be issued for couijon bonds, 13, 173. transfer of by whom made and how, 13, 173. register of transferred bonds and notice of transfer, 18, 14, 173, 174. examination of books of treasurer relating to transfers, 14, 174. annual examination of deposited bonds, 14, 174. custody of, collection of, interest on, etc., 14, 175. claim of title to, by third persons will not be recognized, 173. provisions concerning, §§ 5157, 5189. circulating notes — provisions for obtaining and issuing, 14, 178. delivery of on deposit of bonds, 14, 178. amount of, 178. printing denominations of, etc., 14. 179. Compti'oller to have control of plates of, 15, 180. examination of plates of, 15, 180. limit of amount of small notes, 15, 181. circulation of any one bank not to exceed $500,000, 15, 181. aggregate and apportionment of circulation of (f&pealed), 181. limit of aggregate circulation removed by act of 1875, 181. equalizing the apportionment of circulating notes, 183. how withdrawn, 188. how signed, etc. ; for what receivable, 15, 184. restriction upon use of, 304. not at par not to be paid out by banks, 19, 306. to be received by all banks, 18, 184, 193. place of redemption of to be designated,' 193. none other than those authorized by law to be issued, 15, 184. certifying check is not prohibited, 185. destroying, etc. ; worn out, 15, 185. redemption of in case of dissolution of bank, 33, 336. mode of protesting for non-payment, 33, 838. proceedings on failure to redeem by bank, 38, 330. for redemption of, at treasury of United States, 33, 339. penalty for issuing notes to unauthorized associations, 16, 187. for printing business cards in imitation of, 16,187. for mutilating circulating notes, drafts, etc., of, 16, 183. 300 INDEX. NATIONAL BANKS, FACTS CONCERNINQ—Gontmued. gold notes may be issued by the banks organized for that purpose, how, 15, 185. fraudulent to be stamped, 347. regulation of business — place of business located, 17, 189. reserve prescribed, 17, 189. what may be included in, 17, 190 may count certificates of deposit, 17, 191. issue of certificates of deposits to, not to contract or expand the currency, 17, 191. redemption agencies; may deposit half of reserve with, if in New Tork, 18, 193. shall receive notes of each other at par, 18, 193. rate of interest by, 18, 193. penalty for taking unlawful interest, 18, 194. dividends of, 18, 300. limit of loans to one person, etc., 18, 301. not to loan on or purchase their own stock, 19, 3031 limit as to indebtedness of, 19, 304. not to pledge their own notes, etc., 19, S07. not to withdraw capital ; when not to declare dividend, 19, 305. failure to pay up or impairment of capital stock of, 19, 305. not to pay out notes of other banks which are not at par, 19, 306. not to receive United States notes, etc., as collateral, 19, 807. officers, etc., not to certify checks unless, etc., 30, 307, penalty for embezzlement, 30, 308. to keep, etc., a list of shareholders, 80, 810. to make, etc., report of assets, etc., 30, 311. to make report of dividends, etc., 30, 812. penalty for failure to make reports, 21, 318. to make return of amount of deposits, etc., to treasurer of the United States for taxation thereon, 81, 213. duty or tax how assessed on failure to make return, 21, 313, 314. how collected on failure to pay, 81, 213, 214. refunding excess of duty to, 21, 815. ^shares and real property of to be liable to state, etc., tax- ation, 21, 215. examiners of — appointment, duties and compensation, 25, 238. in case of failure to redeem notes, 23, 228. dissolution and receivership — how may go into liquidation, 22, 335. INDEX. 801 NATIONAL BANKS, FACTS CON OEKNl'N Or— Gontinued. to give notice of intended dissolution, 32, 325. deposit to redeem circulation, 23, 326. not required where the intent is consolidation, 226. re-assignment of bonds, redemption of notes, 22, 327. destruction of redeemed notes, 22, 227. protesting notes of, manner of, 22, 228. examination by special agent, 338. failure to pay note of, proceedings on notice, 38, 229. business of, after failure to pay notes not lawful, 23, 329. can deliver special deposits, 229. notice to holders of notes of, redemption of notes, sale of bonds, 33, 229. sale of bonds at auction ; at private sale, 230. disposal of redeemed notes of, 33, 231. notes paid at treasury to be cancelled, 23, 231. appointment of receiver of, on failure to pay circulating notes, and duties, 18, 24, 231. notice to creditors to present claims, 24, 235. dividends to creditors, 34, 235. receiver may be enjoined, when, 24, 236. ^ fees and expenses of receivers, etc., of, 25, 387. appointment of receiver when bank fails to make capital equal to minimum, 10, 160. transfers after act of insolvency void, 25, 240. not dissolved unless by judgment of court, 225. or by formal surrender of franchise, 235. cannot be put into bankruptcy, 325. taxes — state banks converted into national, 43, 44, 45. of ten per cent, on notes of persons or state banks used or paid out by them, 43, 45. on notes of town, city or municipal corporation paid out by them, 44, 45. monthly returns to be made of amount of such notes paid out, 45. semi-annual on circulation and deposits, 31, 218. returns for, 21, 218. failing to make returns or pay duty, 21, 214. refunding of excessive duties, 21, 815. how subject to state taxation, 21 315. exemption from tax on circulation when outstanding amount is reduced to five per cent, of capital, 45. upon depositing in treasury lawful money to the amount of outstanding notes after ceasing to issue notes for circulation, 44. 302 INDEX. NATIONAL BANKS, FACTS CONCERNING — Coratorauec?. viaitorial powers over — banks subject to none except such as are authorized by the act, 35, 240. See Examiners. may sue in United States courts, 38. within or without the district in which located, 38. NATIONAL BANK ACT, first presented in 1862, 2. when it became a law, 3. passage of substituted act, 3. title of, 8. NATIONAL BANK NOTES, power of Congress to authorize their issue, 5. NOTARIES PUBLIC, duty of on protest of national bank notes, 22, 238. NOTICE, to attorney is notice to client, 274. by national banks of liquidation, 22, 225. after receiver is appointed, 24, 235. NOTES, See National Banks. §§ 5157, 5189. of state banks paid out, tax on, 42, 43. of town, city or municipal corporation, tax on those paid out, 44. not at par not to be paid out, 19, 206. fraudulent to be stamped, 247. PAPER MONEY, continental money, 1. treasury notes first issued when, 1. legal tender for what, 1. second issue when, 1. principle underlying national banks, 1. efiect of war of Rebellion upon finances, 3. demand notes Issued when, 2. suspension of specie payment, 2. eflfect of upon finances, 2. passage of national bank act, 3. reduction of legal tenders, 3. limitation to national bank notes removed, 3. resumption of specie payment, 3. PENALTIES, for falsely certifying checks, 207. failure to make report of assets, 213. to pay duties, 214. INDEX, 303 PENALTIES — Continued. for violation of banking law, 238. comptroller is only person, who can bring suit to forfeit franchises of bank, 338. for use of " national " except by banks organized under act, 248. if oflense is a common law one, state court has jurisdiction, 376. PLACE OF BUSINESS, See Citizenship. bank must keep its office in the place specified in organization certificate, 189. when acts and words of cashier away from bank bind it, 47. a national bank is a citizen of the state where located, 48. its general business must be done at its principal office, 48, 189. cannot keep an office of discount or deposit in another state, 48, 189. is liable to attachment laws of other states, 48. must give security for costs in other states, 48. cannot be sued in federal courts outside of its district, 48. not legally organized until act is complied with, 48. cashier may certify check on his bank outside of office, 189. bind his bank by statements away from bank, 189. bank can have no other office than that specified in certificate, 189. PLEADING AND EVIDENCE, parties — bank may contradict officers return of service by plea in abatement, 127. after appointment receiver should be served, 137. who should be parties in action for waste of bank assets, 137. suit against directors, bank must be plaintiff or defend- ant, 134. receiver is plaintiff in suits against debtors or stock- holders, 137. creditors cannot be parties to such a suit, 127. receiver may be party in suit for special deposits, 137. and bank in suit on rejected claim, 138. bank is defendant in suit by creditor for interest on claim, 138.' all interested in fund sued for, should he made parties, 138. right to recover usury is in person paying same, 131. appearance confers jurisdiction, 138. remedy — to recover usury is by a personal action, 128. in bill against stockholders, those non-resident need not be joined, 138. creditors are not proper parties to such bill, 128. when whole amount is claimed from stockholders the action is at law, 138. 304 INDEX. PLEADING AND BYID^NCE — Continued. wheu less it may be In equity, 128. in either case may it not to be at law, 128. pleadings — charter of bank must be pleaded, 128. averments as to appointment of receiver, 129. as to incorporation of bank, etc., 129. pleading several elements of damage not demurrable, when, 129. bank must allege right to sue, 139. when bank bound to prove its corporate existence, 129. evidence — certificate of comptroller proves corporate existence, 129, 130. and name of bank, 131. order of comptroller assessing stockholders is conclusive, 130. must precede suit against stockholders, 180. claim bears Interest from date of order, 130. certified copy of is evidence, 130. stockholders cannot deny existence or validity of bank, 130, 133. receiver not bound to show insolvency of bank, 130. may employ private counsel, 130. order of Comptroller appointing receiver is evidence of that fact, 131. notes must be described, when, 131. usury must be alleged and proved, 131. as a defense must be specially pleaded, 131. facts constituting fraud must be set out, 131. not good plea to say that bank has assets enough to pay its debts, 131. right of set-off is governed by law of place, 131. afladavit of defense should set out facts, 131. general denial puts existence of bank in issue, 133. evidence that bank is bailee, what, 132. contents of unstamped receipt shown aliunde, 182. burden on plaintiff to show negligence of bank concern- ing special deposit, 132. to show that bank accepted check, 133. contra in Illinois, 132. to show demand and refusal of payment of cer- tificate of deposit, 132. on bank to show what became of package put into its possession, 132. refusal to return package evidence of conversion, 132. INDEX. 305 PLEADING AND EYIDBNCIi — Continued. proof of parol acceptance of draft is binding, 133. stock book is proof that defendant stockholder, 133. force of certificate of deposit as evidence, 133. presumption is that holder of note is bona fide, 133. upon proof of fraud burden changes, 133. execution of note being denied burden is on plaintiff, 133. if bank receives money it is liable on principle of quan- tum valebat. 134. is to be held for taxes due from shareholder, it must be shown to have some of his property in its possession, 134. action for conversion by ofl5cer of bank is assignable, 134. bank maysue on note without regard to its right to pur- chase, 134. maker and indorser cannot be sued in same action, 134. several judgments for same cause of action; effect of replevy of one, 134. on contract, judgment must be had against all or none, 135. if one be in bankruptcy it will be stayed as to him, 135. 28th and 39th of February in law are one day, 135. special verdict must find facts or give conclusion, 135. PLEDGE, if factor pledge goods owner must allow advances made to him by the agent, 373. against third persons possession is necessary, 373. rule is otherwise as to judicial sales, 373, bank must return or show cause why, 144. POWERS OP BANK, may take railway stocks for bad debts, 53, 54. cannot lend its credit, 54. cannot give notes for borrowed money, 54. not liable for Answers of cashier as to solvency of parties, 54. how far bound by the acts or statements of its oflScers, 54. liable for debts of prior corporation only when it has received assets, 55. is bound by its guaranty of note of third party, 369. is a body corporate, when, 8, 49. to adopt and use a seal, 8, 49. to exist for twenty years, 8, 49. to make contracts, 8, 49. to sue and be sued, 9, 49. to elect or appoint directors and officers, 9, 49. to make by-laws, 9, 49. to carry on the business of banking, 9, 50. shall do none of these things until authorized by Comptroller, 8, 50. 20 306 INDEX. POWERS OF BATHK — Continued- are not limitations on each other, 50. are to be measured by the act, 50. incidental powers, 9, 49. expressed mode of exercising forbids any other, 51. states cannot control banks except under act, 51. congress has power to create national banks, 51. in what name bank may bring suit, 51. no power to take special deposit for accommodation, 51. may buy checks on other banks, 53. or commereial paper, 53. cannot act as broker in purchase of bonds or stocks, 53, 53. may take them for exchange, 52. may hold collateral for third parties, 53. may take United States bonds as collateral to loans, 53. or stock in another corporation, 53. PRESIDENT OF THE BANK, binds his bank by obtaining money for it on fraudulent stock, 58. and by loaning its money at a usurious rate, 59. cannot release claims of bank, 59, 60. his bank liable for government securities taken by him to ex- change, 59. oral agreement of, not to enforce draft, invalid, 59. liable to bank for moneys improperly taken, 59. cannot certify his own check, 59. • bank not bound by statements of, outside of his authority, 59. no authority over that of other directors except to have charge of litigation, 60. although signed by, purchaser is bound by what is shown on face of paper, 60. may satisfy judgment in favor of bank, 60. PROMISSORY NOTES, commissions for discount not usury, 98. , bank may sell note to avoid litigation, 99. case where note and bond were held to be one transaction, 99. same person may be jointmaker and payee, 99. non-indorsement of past due interest is not notice, 99. railroad bonds are negotiable paper, 99. joint, indorsed by one only, can be enforced against him, 268. made by town when void, 368. partner no right to make firm-note for his individual debt, 373. case where payee held not negligent as to collaterals, 374. rights of creditor not affected by surrender of valid evidence of indebtedness for invalid, 374. execution of denied under oath, burden is on plaintiff, 95. verbal authority to renew is suflacient, 95. payable to bearer, passes by delivery, 95. INDEX. 307 PROMISSORY NOTES — Oontinued. stipulation in, to pay attorney's fees 19 valid, 95. such a note is not negotiable, 95. surviving partner cannot bind co-survivors by making, 95. third party is joint-maker, when, 96. maker not personally liable, when, 96. measure of damages on purchase of forged note, 96. maker can recover money paid on forged note when, 96. negligence of plaintiff is no defense where money was paid under mutual mistake of fact, 96. payable to "A. B. cash." is payable to bank, 96. ' that note was improperly used, is no defense against bona fide holder, 97. payable to " A. B. trustee " is not commercial paper, 97. school district order is not negotiable paper, 97. made by married woman, when valid, 97. payable at a certain place does not affect its negotiability, 97. bank bound by receipt of its own forged paper, 97. mere credit on books of bank does not make a holder for value, 97. agreement to carry does not suspend right of action, 97, 98. although payee does not indorse, indorsers bound when, 98. is paid when charged to deposit account, 91. held by bank, not paid by deposit unless so applied, 93. bank no right to pay note and charge to account when told not to do so, 93. payable at bank is duly presented if there on maturity, 92. diligence in presenting, 368. in suit on, defendant cannot set up want of power in bank, 93. on joint and several note, either maker can be sued, 93. is paid by renewal note when, 93. possession of is evidence of ownership, 93. title not changed by assignment for collection only, 93, 866. given for accommodation is no defense in hands of holder for value, 93, 269. fraud in obtaining, no defense against bona fide holder, 93. is a defense when note is in bands of payee, 371. maker of must not have been negligent, 93. whether note has been altered is a question of fact, 93. when bank is holder for value, 98, 97. made on Sunday, is valid when, 93. knowledge of non-acting director, not knowledge of bank, 98. no recovery can be had on forged note, 94. extension of time of payment makes a holder for value, 94. taking as security for prior debt makes holder for value, 369. given to induce railway company to build its road not void, 94. for whisky, not void, 94. 308 INDEX. PROMISSORY NOTES — Gontinued. if maker shows fraud in inception of, liolder must show that he is an innocent holder, 94. guaranty on back is not an indorsement, 369. PROTESTS, of national bank notes, 33, 338. R. REAL ESTATE, when national banks may purchase, 9, 147. necessary for its accommodation, 148. mortgaged to it for previous debt, 147, 148, 149. conveyed to it in satisfaction of previous debt, 147, 148, 149, 150. purchased to secure debts to it, 148, 150. , none obtained under three last clauses to be held more than Ave years, 148. bank cannot take mortgage of, for contemporaneous loan, 148. may take mortgage on renewal of loan, 149. banks are limited to personal security for present loans, 148. mortgage of, to secure future indebtedness void, 148. bank may loan on note of third party secured by real estate, 149. make new maturity and secure by mortgage of, 149. conveyance to trustees to sell not forbidden by act, 149, 150. mortgage to secure pre-existing debt and future advances, is void as to the latter, 148, 151. if premises are sold proceeds must go to pay debt, 149. must be so applied in favor of indorser, 149. indorsement by married women not a mortgage, 149. when bank sells it may take back mortgage, 150. may loan to one of a firm upon note secured by real estate, 150. bankruptcy of principal does not aflfect the mortgage, 150. bank may pay prior incumbrance and secure payment by mort- gage, 150. a conveyance is a mortgage, when, 151. validity of mortgage is res acljudicala, when, 151. trust deed for present debt and future advances is good after advances are made, 151. loans on, is valid between the parties, 151. Comptroller the only party to inflict penalty, 151. act does not render loan made on, void, 374. the government only can enforce forfeiture, 375. debtor and his creditors estopped, 875. REBELLION, war of, effect upon the currency, 2. INDEX. 309 RECaSIVERS OP NATIONAL BANKS, may he appointed on failure to make capital equal to legal mini- mum, 11, 160. when reserve is not made good, 17, 189. on failure to redeem notes, 18, 34, 193, 331. when bank continues to own its own stock, 19, 202. on refusal to make good impaired capital, etc., 19, 205. duties of, 34, 232, 335. fees and expenses of, 35, 237. suits to enjoin, 35, 88, 386. must give bond, 331. take possession of books and assets, 333. collect or sell assets, 332. enforce liability of stockholders, 232. pay moneys over to Comptroller, 232. report to Comptroller, 332. appointment of, Comptroller's certificate is evidence, 333. action of Comptroller in appointing is conclusive, 333. Comptroller determines when assessment is necessary, 233. and his order to that effect is conclusive, 333. suit at law to collect same is proper, 233. appointment of, is not a dissolution of bank, 233. possession of, ousts officers, 333. is under direction of Comptroller 333. but must collect assets, 233. does not represent the Government, 383. does the bank, stockholders and creditors, 333. not to pay costs of suit commenced before appointment, 233. not a party to suits begun before his appointment, 333. may move to set aside attachment against bank, 233. his duty to interpose in suits concerning property of bank, 233. may bring suits in United States district courts, 333. apply to same court for order to compromise, 333. claims may be proven before, 338. his decision upon, not final, 338. suit on such should be brought against bank and receiver, 384. may bring suits at law or in equity, 233. either in his own name or that of the bank, 233. cannot be brought against him in the United States courts in his own district, 283. should be a defendant where suit is brought for special deposit, 234. not a defendant in suit for proceeds of bonds deposited with treasurer, 234. may be only defendant in suit brought after appointment, 334. may purchase real estate through trustee, 284. 310 INDEX. RECEIVERS OP NATIONAL BANKS — Continued. moneys received after suspension are trust funds, 234 has no greater rights than had the bank, 334. must pay debt before he can demand pledge, 234. statute of limitations begins to run from appointment, 284. appointed upon judgment, 244. REDEMPTION, of notes of national banks, proceedings on failure to provide for, 18, 192. when at the treasury of the United States, 33, 337. protest on failure of, 33, 328. proceedings on notice of failure of, 23, 328. business not to be done by banks after failure to redeem any of their notes, 23,239. of banks in liquidation, account to be kept, 33, 336. when notes shall be charged to, 23, 226. agencies of national banks to be selected for, 18, 193. REMOVAL of bank to another state, 184. REPORTS, ON NATIONAL BANKS, printing of, 45. to comptroller, by savings banks, 247. to comptroller of currency, 211. as to dividends, 213. penalty for failure to make, 213. RESERVED FUNDS, of national banks, amount, etc., of, 17, 189. what it may consist of, 17, 190. when half of, may be kept in New York, 18, 193. Issuing gold notes, 15, 16, 186. S. SAVINGS BANKS. not to use " national " in title except, 36, 348. SEAL, of Comptroller of Currency, 39. SEARCH, for taxable articles, 41. clerk of supervisor not entitled to examine checks, 41. once stamping check sufficient, 41. SECRETARY OF TREASURY, Comptroller of Currency, 37-36. National Banks, §§ 5183-5343. organization and powers, 8-13, 45-170. obtaining and issuing circulating notes, 13-16, 171-188. regulation of banking business, 17-21, 189-234. dissolution and receivership, 33-26, 235-343. INDEX. 311 SET OFF, inoney deposited becomes a debt of bank and may be set oflf, 136. may be pleaded in action by receiver, 136. usury may be, in action on the contract, 136. but the penalty cannot, 136. depositor may, his deposit in suit by bank, 126. shareholder cannot, 136. after insolvency debtor cannot, purchased claims, 136. penalty cannot, against claim by bank, 136. firm debt to bank cannot be paid by claim of individual of firm, 137. SHAREHOLDERS, NATIONAL BANKS, organization certificate to state names of original, 8, 47. rights and liabilities of succession, 9, 153, 154. failure to pay installments on capital, 10, 159, 346. may reduce capital, 10, 160. directors to be elected l.y, etc., 10, 161. may fix day for election of directors, 11, 161. individual liability of, 11, 153, 154, 164, 165. limit of is par value of, stock, 165. assessed to make good capital, etc., 19, 205. list of to be open tfi inspection and copy sent to comptroller, 20, 310. neglect to keep list does not relieve shareholder, 211. two-thirds of, may vote bank into liquidation, 23, 235. discharge from liability fos notes, 22, 227. surplus after paying debts to be paid to, 24, 235. on death of, shares pass to legal representatives, 153. bank is trustee for, 153. liability of, ceases upon bona fide transfer of stock, 158. party in whose name stock stands is liable, 153-155. real dwner is liable even at law, 275. transfer to avoid liability of no effect, 153, 154, 155, 165. cannot set off sum due him from bank against liability, 155. stock of, subject to levy, 156. cannot deny validity of bank when sued by receiver, 156. or any other fact preceding assessment, 156. rights of, under forged assignment, 157. bank may by articles of association create lien on its stock, 158. cannot by a by-law, 158. may by by-law forbid transfer of stock while holder is indebted to bank, 158. officer of bank no right to refuse to transfer, 158. executor, etc., may transfer, 158. stock shall be paid for, how, 159. payment to be certified to Comptroller, 159. may be sold out for failure to pay for stock, 159. 312 INDEX. SHAREHOLDERS, NATIONAL BKIUKS, — Gontimied. has one vote for each share of stock, 161. which may be by proxy, 161. liability of fixed by taking stock, 164. name of, on stock book evidence that he is shareholder, 165. order of Comptroller to pay assessment conclusive upon, 165. ■when liability of may be enforced by creditor's bill, 344, after debts and expenses are paid may elect agent in place ot receiver, 245. to whom remaining assets shall be turned over, 246. can defend in bill against corporation, by filing cross-bill, 370, although state is shareholder bank may be sued in federal courts, 270. SHARES OF STOCK, how divided and how transferrable, 153. are personal property, 153. liability of shareholders Is several, 153, 154. on death of owner goes in usual course of administration, 163. are mere demands for dividends, 153, 156. bank is trustee for shareholders, 153. ■where by-laws so provide, there must be actual transfer on books of bank, 153. liability of transferror ceases when transfer is made, 153. transferree liable although not equitable owner of, 153, 154 so is a pledgee if the stock be in his name, 154. bank may be a shareholder in another bank, 153. transfer to avoid liability of no effect, 153, 154, 155. until shares are transferred on books, the party whose name thereon appears is liable, 154. pledgee may sell stock and relieve himself of liability, 155. name on book is prima facie the owner, 155. stock must be paid for in money, 155. Stockholder cannot set off claim debt from bank against his liabil- ity, 155. case where bank held liable for by wrongful act of cashier, 155. Stock may be levied upon under execution against party in whose name it stands on books, 156. signing transfer is a warranty of genuineness of stock, 156. change from state to national bank does not pay stock, 156. stockholder sued by receiver cannot deny validity of bank. 156. or decision of Comptroller as to necessity of assessment, 156. bank reducing stock cannot keep money as surplus, 156, 161. nor keep back declared dividend for surplus, 157. if bank refuse to transfer stock it is liable for value, 157. contra, 157. case where bill filed to compel transfer was dismissed, 157. INDEX. 313 SHARES OF STOCK — Oontinued. rights of parties under forged assignment, 157. bank cannot by by-law create a lien on its stock, 168. may by articles of association, 158. by-law that holder shall not transfer stock while indebted to bank is valid, 158. officers no right to refuse to transfer, 158. executor may transfer, 158 payment for, how made, 159. each to be certifled to Comptroller, 159. if shareholder fails to pay for he may be sold out, 159. how such stock shall be disposed of, 159. stock may be increased, how, 160. must be approved by Comptroller, 160. may be reduced, how, 160. to what extent, 161. shareholder entitled to one vote on each share of stock, 16L in person or by written proxy, 161. but no officer, etc., shall act as proxy, 161. shareholders elect directors, 161. SPECIAL DEPOSITS, cashier no power to bind bank by taking. 111. bank liable for gross negligence only in keeping of, 111, 113, 114. BO held where teller took deposit, 111. same rule where cashier took deposit, 113. bank not bound by statements of officers after the act, 113. liable for collaterals stolen, 113. may agree to exchange one kind of bond for another, 113. liable for special deposit for consideration, 113. burden of proof to show what became of, is on bank, 113. if bank is in habit of receiving, it is bound by act of cashier in taking, 113. written authority to withdraw, of others, must be specially fol- lowed, 114. banks may receive special deposits, 114. and deliver them after failure, 28, 339. " special deposits " includes United States securities. 114 SPECIAL AGENTS, to examine national bank, 33, 338. expenses of, liow paid, 35, 337. SPECIE PAYMENT, suspension of, 3. resumption of, 3. STATE BANKS, not to use " national " in the name of, 36, 343. internal revenue tax on circulation, 43. to apply to evidences of indebtedness, 48. 314 INDEX. STATE BATSKS — Oontinued. how may become national banks, 12, 167. capital in, on conversion to national banks, what amount to be, 43. liabilities of shareholders on becoming such, 11, 168. no authority necessary from the state to make change, 168. by change, neither assets nor liabilities are afifected, 168. nor is the stock affected in any way, 168. contracts binding on state bank, bind after change, "168. not affected by change so far as sec. 5200 is coacerned, 169. case where it may sue in its old name, 169. new bank is liable for debts of old, 169. . property passes from old to new by very act of change, 169, may keep in operation any branches it had before change, 169. STOCKS OF NATIONAL BANKS. See shares. SUITS, when the district court of the United States has jurisdiction, 37, circuit court of the United States has jurisdiction, 38, 135. removal of, 89. national bank as such has no right of, 89. • nor has a receiver of such a bank, 89. national banks do not come within section 640, R. S., 39. suits to enjoin Comptroller shall be in district court, 40, 135. bank cannot sue out of its district in U. S. courts unless amount exceeds $500, 270. federal courts have jurisdiction irrespective of subject matter, 135, 270. questions affecting banks should be litigated in federal courts, 273. rule as to forum is influenced by nature of action whether local, etc., 275. federal courts may entertain bill to prevent waste of assets, 135. outside of district in which bank is located, have juris- diction, suits brought by it, 135. right of bank to sue in, comes from bank act, 136. appearance of bank in foreign court waives its right to be sued at home, 136. receiver cannot be sued in federal court in his own district by resident thereof, 136. federal courts not bound by state decisions on commercial law, 136, 140. district court may empower receiver to compromise, 136. has jurisdiction of suits by or against bank, 136. state courts have similar jurisdiction, 136, 137. this is the exercise of their ordinary jurisdiction, 136, if court had no jurisdiction over bank, it cannot give judgment agamst receiver, 136. state court cannot enforce penalty for usury, 137. may entertain suit to recover usury paid, 137. INDEX. 315 SUITS— Continued. Congress has power to say in what courts bank shall be sued, 137. suit against bank dissolved by dissolution of bank, 137. judgment set aside when obtained by service on president only after appointment of receiver, 137. change from state to national does not bar suit by bank, 137. before Comptroller acts, court may appoint receiver, 138. court cannot order receiver to compromise with shareholder, 138. to take part in, receiver must be made party to existing suits, 138. bank may be sued after receiver is appointed, 138. after receiver is appointed judgment against bank gives no pref- erence, 138. receiver may sue at law or in equity, 138. in his own nam", 138. or that of the bank, 138. not liable for cost incurred before his appointment, 139. court of law has no power to try right of stockholder to share of remaining assets, 138. mortgagee not liable for damages, when, 138. state court cannot try right to office of director, 139. payee of check may sue bank, when, 139. depositor alone can sue, when, 139. right of removal to federal court, when, 139. bank as such cannot remove, 139. nor can receiver, 139. costs follow decision, even on petition, 140. bank liable when it has received the fund although the act was ultra vires, 140. SURETY AND INDORSER, bound on usurious note the same as principal, 103. may set off all usury paid by principal, 102. contra, 106. can only recover principal of usurious note from maker, 108. judgment against, no bar to suit against principal, 102. sureties released by negligence of directors, 102. contra, 103. bond undated except as to year, presumed to be made on last day thereof, 103. bank not bound to investigate books of bank for benefit of sureties, 103. bond forfeited as to principal, is forfeited as to, 103. need not be accepted in writing, 103. indorser should be tendered collaterals on demand of debt, 103. on secured notes has right to have security applied, 103. paying note of shareholder, has lien on his shares, 103. bound by notice of dishonor, when, 103. may waive neglect to give notice, 104, 105. 316 INDEX. SURETY AND mDORS^R — Oontinued. law as to notice by drop letter, 104 evidence of notice, 104 notice must be personal, when, 104 notice, what sufficient, 104 bound to pay attorney's fees when stipulated in note, 105. partner may bind his firm as, when, 105. consent of, to alteration of paper need not be in writing, 105. , evidence of extension of note, what, 106. statements of officers do not bind bank, when, 106. change of note after indorsed, releases, 106. fraud upon payer by payee, no defense to note in hands of Ixmafide holder, 107. indorsing for identity only, does not bind, 107. bound by demand after banking hours, when, 107. evidence of payment by mail, 107. intention of maker to pay, does not discharge, 108. cotemporaneous agreement in writing, good, when, 108. SURPLUS FUND, of national banks, what part of profits to be carried to, 18, 200. TAXES AND TAXATION, special, on notes of persons and state banks paid out, 43, 44 penalty remitted in certain cases, 43 not to apply in certain cases to national banks, 45. on notes of towns, etc., paid out, 44. is constitutional, 265. circulation and deposit of banks, 21, 213. returns for, 21, 213. how assessed on default of return, 21, 214 how collected on default in paymentj 21, 214 how refunding excess of payment, 21, 215. states authorized to, 21, 215. cannot tax capital, 222. may tax corporate property, 216. but no higher than similar property, 216. cannot tax both capital and shares, 217. if done, bank may recover amount overpaid, 219. cannot tax greenbacks or national currency, 217, 223. may tax shares, although capital be in United States securities, 217, 218. not tax shares unless it also taxes shares of its banks. 218. resident owner assessed in town where he lives, 216, 221. non-resident taxed where b&nk is located, 216, 217, 219, 281. all holders may be taxed where bank is located, 221. INDEX. 317 'TAXES AND TAXATIO'S — Oontinued. no deduction for debts of owner, 218, 333, 334. congress has power to exempt banks from taxation, 333. to say how far and where shares shall be taxed, 315, 317. 333. bank may be compelled to pay shareholder's tax, 318. contra, 231. restriction does not apply to over-valuation, 318 unless similar property be undervalued, 318, 376. when equity will restrain, 876, 277. what tender should be made in bill, 377. object of, is to prevent discrimination, 318. Btate may tax shares of non-residents, 219. compel cashier to furnish list of shareholders, 319. contra, 376. shares should be taxed at their actual value, 319, 330. although it is above par, 230. act requires shares to be taxed where bank is located, 330. state law taxing them elsewhere is void, 330. word " place " in act refers to location of bank, 330. no other tax can be laid than that prescribed, 323. tax on shares of deceased person laid where the estate is adminig. tered, 221. bank liable to, while in transition state, 221. property of, cannot be taken for tax on shares, 331. unless it has property of delinquent, 331. business of bank cannot be taxed by state, 331 state or city cannot lay a license tax on bank, 323, 276. if real estate is taxed, its value must be taken from value of shares, 333, 333. surplus of bank may be taxed, 333. equity will restrain collection of illegal tax, 223. purchaser may recover taxes due at time of transfer from seller 333. increase of capital, taxable, when, 334. TELEGRAPH COMPANY, only liable for direct damages from failure to deliver message, 145. on breach, nominal damages at least can be recovered, 145. TRANSFERS BT BANK, when void, 340. are void when bank is insolvent although other party did not know, 340. " act of insolvency " to be taken in usual sense, 341 "nulla bona" is evidence of insolvency, 841 claim bought after insolvency cannot be set off, 341. securing loan by bank is not a preference, 341. attachment against solvent bank is good, 241. 318 INDEX. TRANSFERS BY BA.'NK — Conlinued. against bank after insolveney, void, 341. state court has jurisdiction, 377. receiver may move to set aside, 341. banks liable to, as foreign corporations, 341. cannot issue until final judgment, 343. Congress may protect banks against state legislation, 343. attachment does not take precedence of judgment, when, 343. principal may claim money deposited by agent, when, 343. deposit is a debt which may be attached, 343. but if shown to be the property of another, it cannot, 843. an equitable right cannot be attached, 343, personal property may be attached, 343. when lien not lost, 343. afladavit for, need not allege debt due, 343. TREASURER OF UNITED STATES, bonds transferred to, by national banks, 13, 14, 173. may retain out of interest on bonds, penalty for refusal, etc., to make reports, 81, 313. semi-annual tax on bank to be paid to, 31, 313. report to, as basis of semi-annual tax, 31, 313. may assess tax without report, 31, 314. may reserve tax out of interest on bonds, 31, 314. to certify claim of bank for return of semi-annual duty, 31, 315. national banks in liquidation to deposit money with, for redemp- tion of notes, 33, 333. when to redeem national bank notes, 33, 336. destroy national bank notes, 33, 337. receivers of national banks to pay over money collected to, 34, 331. TREASURY DEPARTMENT, NATIONAL BANKS, organization and powers, 8-13, 45-170. obtaining and issuing circulating notes, 13-16, 171-188. regulation of banking business, 17-31, 189-334. dissolution and receivership, 33-36, 335-343. TREASURY NOTES, when first issued, 1. legal tender for what, 1. additional issue authorized, 3, limit as to amount, 3. TRUSTEES, holding national bank stock not to be personally liable, 13, 165, 166. the fact that he is, must appear on books of bank, 165. by taking stock, shareholder becomes trustee for creditors of bank, 166. corporation holding stock is trustee, when, 166. no one but the trustee can transfer stock of the deceased, 166. INDEX. SI 9 U. ULTRA VIRES, bank liable where it has received the fund, although act was ultra vires, 140, 141. has no powers other than those given by the act, 140. lo order receiver to compromise with shareholder, 140. president no power to release claims of bank, 140. board of directors can so do, 140. bank cannot keep oflSce of discount or deposit in another state, 140. mortgage for future loan, is, 140. does not apply to wrongs done by bank, 140. pai'ties to contract estopped to say their acts were, 140. that is a matter between the government and the bank, 140. bank may hold collateral on contract between third persons, 140. no power to deal in railroad bonds for third persons, 141. parties must take notice of what appears on face of papers, 141. bank cannot take real estate mortgage for contemporaneous loan, 148. UNITED STATES NOTES, certificate of deposit for, 17, 191. notes received for, not to be issued, etc., 17, 191. not to be received by national banks as collateral, 19, 207. note payable in "greenback currency" is payable in, 145. V. VACANCIES, in departments, how filled, 27. subordinate, while doing the duties may take title of superior, 27. is presumed to be acting lawfully, 27. necessity for, is presumed by discharge of duties, 87. VISITORIAL POWER OVER BANKS, limited to provisions of act, 240. . and courts of justice, 240. w. WAREHOUSE RECEIPT, is assignable, 272. which vests legal title of property in assignee, 272. but he gets no better title than if he had pos- session of goods, 378. warehouseman should deliver property only on return of, 272. in trover, date of acceptance of receipt is date of conversion, 373. from private warehouse, is not negotiable, 373. INDEX. WAREHOUSE liECEIFT— Continued. delivery of, for part of larger bulk, gives no title until separation, 143. is not technically negotiable, 143. hence where receipt was given by mistake, it may be shown as against assignee, 143. WIFE. See Masbibd Woman.