FREDEHIGK BROTH EKb LAW BOOKS, 3 Pine St.. Albany N. Y. QJnrtipU IGatu i>rl:ynnl Slibraty Cornell University Library KFN5250.A338M84 1916 Banklna law of New York :Chapter 2 of Co 3 1924 022 794 857 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/cu31924022794857 BANKING LAW OP NEW YORK Chapter 2 of Consolidated Laws Chapter 369, Laws of 1914 WITH NOTES, ANNOTATIONS AND REFERENCES GEORGE WILSON MORGAN OF THE NEW YORK BAR AMASA J. PARKER, Jr. OF THE ALBANY BAR THE BANKS LAW PUBLISHING CO. 23 PARK PLACE NEW YORK 1916 53D'^^'^ » t COPYWGHT, 1914 BY THE BANKS LAW PUBLISHING CO. COPTEIGHT, 1916 BY THE BANICS LAW PUBLISHING CO. TO GEOEGE C. VAN TUTL, Je. AND A. BAETON HEPBUEN, TO WHOM THE STATE OF NEW TOBK IS INDEBTED FOE THEIE FOKBSIGHT AND ENERGY IN CONCEIVING AND EXECUTING THE PRESENT REVISION OF THE BANKING LAWS. [iii] PREFACE. The present Banking Law (chapter 369 of the Laws of 1914) was submitted to the Legislature by the Van Tuyl-Hepbum Bank- ing Commission on February 25, J.914, introduced as a legislative bill by Senator Henry W. Pollock and Assemblyman Simon L. Adler on February 26th, unanimously passed, with slight modi- fications, by a Democratic Senate and a Eepublican Assembly on March 25th, and signed by Governor Martin H. Glynn on April 16th. This law represents the results of the work of the Commission to Revise the Banking Law, appointed by Superintendent of Banks George 0. Van Tuyl, Jr., pursuant to chapter 705 of the Laws of 1913, as amended by chapter 3 of the Laws of 1914. The Commission was composed largely of men of wide banking ex- perience, who wisely selected as Chairman, Mr. A. Barton Hep- burn. Under Mr. Hepburn's leadership, criticisms of the old law and suggestions for the revision were invited from all who were subject to the provisions of the then existing banking stat- utes, and from many students of financial problems. Valuable assistance was rendered to the Commission by the various State banking associations, by the State Savings and Loan Association, and by public spirited citizens who had made a special study of the problems relating to small loans. Many of the changes both of form and substance were suggested by Mr. George I. Skinner, First Deputy Superintendent of Banks, who was associated with the writer as counsel to the Commission. Mr. Skinner's ex- haustive knowledge of the practical workings of our banking laws gained through an experience in the Banking Department extend- ing over a period of seventeen years was invaluable to the Com- mission, and contributed largely to the united support given to the bill by the banking community of the State. rvi vi Bankiistg Law. The substantive changes in the present revision are noted under the text V7here such changes occur. Many changes largely formal have been made for the purpose of unifying the arrangement of the various articles. The powers and duties of the Superintendent of Banks have been gathered together in article II. By unifying the manner of organizing corporations under the Banking Law, of supervising them and the individuals within its provisions, and of reporting to the Superintendent, departmental administration has been greatly simplified. Each article, so far as it relates to beginning business and continuing as a going concern, is com- plete in itself. The advantage of this arrangement to the banker or person engaged in the business and subject to the provisions of the Banking Law, is obvious. The manner of voluntarily dis- continuing business and the merger of this class of corporations is contained in article XII. For the first time, certain classes of private bankers have been brought under the supervision of the Superintendent of Banks (article IV), and a beginning has been made toward protecting small savings accounts received by individuals (see note to §' 150). The making of small loans by individuals at interest in excess of six per centum per annum has also been brought under super- vision by provisions contained in article IX. Sections 375 to 438 of article X provide for the incorporation by savings and loan associations of a land bank, patterned after the German landschafien. It is hoped that the securities to be issued by this corporation will help to solve the problem of mobilizing rural credits. The scholarly work of Mr. Edward A. Craighill, Jr., and Mr. Hiram Thomas of Breed, Abbott & Morgan, has contributed materially both to the revision of the Banking Law and to whatever virtues this book may possess. GEORGE WILSON MOEGAN. 32 Liberty Street, 'New York City. May 12, 1914. BANKING LAW CHAPTER 369 OF 1914. With Amendments 1916 AN ACT in rdaticm to banking corporations, and individuals, partnerships, unincorporated associations and corporations under the supervision of the banking department, constituting chapter two of the consolidated laws. Appeoved by the Governor April 16, 1914. Passed, three-fifths being present. The People of the State of New YorTc, represented in Senate and Assemhly, do enact as follows: Chapter 2 of the Consolidated Laws. BANKING LAW. Article I. Short title; definitions (§§ 1-3). 11. Banking department; powers and duties of superintendent and other officers (§§ 10-83). ni. Banks (§§ IO0-U8). rV. Private bankers (§§ 150^172). V. Trust companies (§§ 180r-223). VI. Savings banks (§§ 230-281). Vn. Investment companies (§§ 290-309). Vin. Safe deposit companies (§§ 315-331). IX. Personal loan companies and personal loan brokers (§§ 340-371). X. Savings and loan associations; land bank of the state of New York (§§ 375-438). XI. Credit unions (§§ 450-479). XII. Forfeiture of corporate existence by non-user; voluntary dissolution and merger of corporations (§§ 485-496). XIII. Laws repealed; construction; when to take effect (§§ 500-502). ARTICLE I. Short title and definitions. Section 1. Short title. 2. Definitions of persons. 3. Definitions of terms used. § 1. Short title. This chapter shall be known as the " banking law," and shall be applicable to all corporations and individuals defined in the 3 Banking Law. § 3. next section and to such other corporations and individuals as shall subject themselves to special provisions thereof, or who shall, by violating any of its provisions, become subject to the penalties provided therein. Source. — Former § 1. Jurisdiction, specifically broadened by amendment so as to include others than those enumerated in § 2; i. c, those who shall "subject themselves to special provisions thereof " and those " subject to the penalties provided therein." § 2. Definitions of persons to whom chapter is applicable. Bank. The term, " bank," when used in this chapter, unlesa a different meaning appears from the context, means any domestic moneyed corporation, other than a trust company, authorized to discount and negotiate promissory notes, drafts, bills of exchange and other evidences of debt; to receive deposits of money and commercial paper; to lend money on real or personal security; and to buy and sell gold and silver bullion, foreign coins or bills of exchange. Individiud banker. The term, " individual banker," when used in this chapter, means any individual, partnership or unincor- porated association, heretofore authorized by the superintendent of banks co engage in the business of banking pursuant to th& banking law. Private hanker: The term, " private banker," when used in this chapter, means an individual, other than an individual banker, who, by himself, or as a member of a partnership or un- incorporated association other than an unincorporated express, company having a contract with a railroad company or railroad companies for the operation of an express service upon the lines thereof, is engaged in the business of receiving deposits subject, to check or for repayment upon the presentation of a pass book,, certificate of deposit or other evidence of debt, or upon the re- quest of the depositor, or in the discretion of such individual, partnership or unincorporated association ; of receiving money for transmission; of discounting or negotiating promissory notes, drafts, bills of exchange or other evidences of debt ; of buying or selling exchange, coin or bullion ; or is engaged in the business of transacting any part of such business. The term, " private banker," when so used, shall include the executor or administrator § 2. Short Title; Definitions. 3 of a deceased private banker and a partnership or unincorporated association of private tankers. Trust company. The teorm, " trust company," when used in this chapter, means any domestic corporation formed for the pur- pose of taking, accepting and executing such trusts as may be lawfully committed to it, acting as trustee in the cases prescribed by law, receiving deposits of money and other personal property, and issuing its obligations therefor, and lending money on real or personal securities. Savings hank. The term, " savings bank," when used in this chapter, means a corporation authorized by the laws of this state only to receive money on deposit in such sums, to invest the same in such securities, obligations and property, and to declare, credit and pay from its earnings such dividends, as may be prescribed by law. Investment company. The term, " investment company," when used in this chapter, means any corporation other than an insur- ance corporation formed under the laws of this state or of any other state, and doing business in this state for the purpose of selling, offering for sale, or negotiating to individuals other than bankers bonds or notes secured by deed of trust or mortgages on real property or choses in action, owned, issued, negotiated or guaranteed by it, or for the purpose of receiving any money or property, either from its own members or from other persons, and entering into any contract, engagement or undertaking with them for the withdrawal of such money or property at any time with any increase thereof, or for the payment to them or to any per- son of any sum of money at any time, either fixed or uncertain. Safe deposit company. The term, " safe deposit company," when used in this chapter, means every domestic corporation formed for the purpose of taking and receiving as bailee for safe- keeping and storage, jewelry, plate, money, specie, bullion, stocks, bonds, securities and valuable papers of any kind and other valu- able personal property, on deposit and guaranteeing their safety upon such terms and for such compensation as may be agreed upon by the company and the respective bailors thereof, and to rent vaults and safes and other receptacles for the purpose of such safe-keeping and storage. Personal loan company. The term, " personal loan company," when used in this chapter, means any corporation organized under 4 Banking Law, § 2. chapter three hundred twenty-six of the laws of eighteen hundred ninety-five, as amended by chapter seven hundred six of the laws of eighteen hundred ninety-five, chapter two hundred six of the laws of eighteen hundred ninety-six, chapter seventy-eight of the laws of nineteen hundred two, and chapter three hundred thirty- three of the laws of nineteen hundred five, article ten of chapter six hundred eighty-nine of the laws of nineteen hundred nine, or article nine of this chapter, and authorized by the superintendent of banks to engage in the business of making small loans to needy borrowers not exceeding two hundred dollars to any individual at any one time at interest exceeding the rate of six per centum per annum, pursuant to the provisions of this chapter. Personal loan, broker. The term, " personal loan broker," when used in this chapter, means any individual, who, by himself, or as a member of a partnership or unincorporated association, is authorized by the superintendent of banks to engage in the busi- ness of making small loans to needy borrowers not exceeding two hundred dollars to any individual at any one time at interest ex- ceeding the rate of six per centum per annum, pursuant to the pro- visions of this chapter. The term, " personal loan broker," when so used, includes any partnership or unincorporated association of personal loan brokers. Savings and loan association. The term, " savings and loan association," when used in this chapter, means a domestic moneyed but non-atock corporation formed for' the purpose of encouraging industry, frugality, home-building, the saving of money by its members, the 'accumulation of savings, the lending of such accumu- lations to its members, and the repayment to each member of his savings when they have accumulated to a certain sum, or at any time when he shall desire the same, or the association shall desire to repay the same. The term, " savings and loan association," shall include every corporation, company or association doing busi- ness in this state and having for a part of its title or name the words "building association," "building and loan association," " building and mutual loan association," " savings and loan asso- ciation," "savings association," " co-operative loan, association," or " co-operative bank," and every corporation, company or associa- tion whose shares are wholly or in part payable by a cumulative fund in regular or periodical instalments, or which is doing busi- § 2. Short Title; Definitions. 5 ness in the form and of a character similar to that authorized by this chapteor organized or incorporated in this state. Land hank of the state of New York. The term " land bank of the state of New York," when used ia this chapter, means a domestic moneyed but non-stock co-operative corporation for sav- ings, the membership of which is composed of " savings and loan associations," doing business in pursuance of the provisions of ar- ticle ten of this chapter, for the purpose of issuing and redeeming debenture bonds secured by first mortgages pledged by its members, and for otherwise promoting their interests. Credit union. The term, " credit union," when used in this chapter, means a domestic moneyed but non-stock corporation or- ganized under article eleven of chapter six hundred eighty-nine of the laws of nineteen hundred nine, as amended by chapter five hundred eighty-two of the laws of nineteen hundred thirteen, or article eleven of this chapter, for the purpose of promoting thrift among its members and of making loans to its members at reason- able rates with or mthout security. Source. — Former § 2 with alterations and additions. BANK. — Much of the altered language of this definition was taken from subdivision 1 of former § 66 relating to the powers of banks. The words " real or " are new. The power to issue circulation has been omitted owing to the federal tax on state bank circulation, and to the currency features of the federal reserve act — of which member state banks may take advantage. INDIVIDUAL BANKER. — The present law makes no provision for indi- vidual bankers not already engaged in business; but the rights of those en- gaged in business at the time the act took effect are preserved by § 143. At that time only one individual banker was engaged in business in the state. Under the former law the term meant a person who had complied with the requirements of law and was authorized by the banking department to en- gage in the business of banking, and was subject to the banking law and the supervision of the superintendent of banks. People v. Doty, 80 N. Y. 225; Perkins v. Smith, 116 N. Y. 441; People v. Young, 207 N. Y. 522, 528; HaU v. Baker, 66 App. Div. 131. This is the meaning of the term as used in § 14 of the Tax Law (post). Atty.-Gen. Eep. (1910) 670. PRIVATE BANKER.— This definition is new. UntU the passage of the present law no private bankers were subject to the supervision of the super- intendent of banks. See note to § 150. Previous to that time the term had a well-recognized meaning, viz., a per- son or firm engaged in the banking business without authority from the 6 Banking Law. § 2. banking department and not subject to the banking law or the supervision of the superintendent of banks. People v. Doty, 80 N. Y. 225. Perkins v. Smith, 116 N. Y. 441; People v. Young, 207 N. Y. 522, 528; Hall v. Baker, 66 App. Div. 131. TRUST COOVLP ANY.— This definition is identical with that contained in former § 2. SAVINGS BANIC. — Former definition revised so as to negative more clearlj' implied powers. " Dividends " has been substituted for " interest " in refer- ring to earnings credited to depositors. INVESTMENT COMPANY.— This definition differs from that of "Mort- gage, Loan, or Investment Corporation" contained in former § 2 in that the words " to individuals other than bankers " have been inserted. The purpose of the insertion was to exclude from the operation of the act corporations which do not sell to the public. The clause defining foreign associations and individuals as foreign corporations has been omitted because the purpose of its inclusion was in confiict with the federal constitution. Opinion that a corporation which receives money, accumulates and agrees to pay back is under the supervision of the banking department. Atty.-Gen. Rep. (1886) 208. As to the right of corporations organized under the Business Corporations Law to exercise investment company powers, see post, notes to §§ 293, 309. SAFE DEPOSIT COMPANY.— Identical with the definition in former § 2. PERSONAL LOAN COMPANY. — This differs slightly in language from the definition of " Personal Loan Association " in former § 2. The amendment expresses the special power possessed by such corporations to charge interest in excess of six per centum per annum. PERSONAL LOAN BROKER.— New. Such brokers were not regulated under the former Banking Law. See note under § 359. SAVINGS AND LOAN ASSOCIATION.— The first sentence of this defi- nition varies but slightly from that contained in former § 2, the principal change being the insertion of the words " domestic moneyed but non-stock." The second sentence is identical in substance with former § 238, except no provision is made for foreign corporations or associations not already engaged in business in the state when the present law took effect. LAND BANK OF THE STATE OF NEW YORK.— New. See note to § 450. CREDIT UNION. — Practically the same as the definition in former § 2. Words " domestic moneyed but non-stock " inserted. § 3. Shoet Title; Definitions. 7 § 3. Definitions of terms used in chapter. Ouaranty fund. The term " guaranty fund," when used in this chapter, means a fund created by a mutual non-stock corpo- ration to which this chapter is applicable and pursuant to its pro- visions, from its earnings or from contributions, which is not avail- able for the payment of expenses, so long as such corporation has any undivided profits, or for the payment of dividends, and against which losses upon its investments, whether resulting from deprecia- tion in the value of its securities or otherwise, may be charged, without encroaching upon its undivided profits or net earnings, until such, guaranty fund is exhausted. Surplus. The term, " surplus," when used in this chapter, means the excess of assets over liabilities including liability to stockholders. Surplus fund. The term, " surplus fund," when used in this chapter, means a fund created pursuant to the provisions of article three or five of this chapter by a bank or trust company from its net earnings or undivided profits, which to the amount specified in such articles is not available for the payment of dividends and cannot be used for the payment of expenses or losses so long as any such corporation has undivided profits. Total profits. The term, " total profits," when used in this chapter, means the total amount of undistributed net earnings of any corporation to which this chapter is applicable from the date of its organization, including such portions of its surplus fund or guaranty fund as have been derived from net earnings or from undivided profits. Undivided profits. The term, " undivided profits," when used in this chapter, means the credit balance of the profit and loss ac- count of any corporation to which this chapter is applicable. Net earnings. The term, " net earnings," when used in this chapter, means the excess of the gross earnings of any corporation to which this chapter is applicable over expenses and losses charge- able against such earnings during any dividend period. Dividend period. The term, " dividend period," when used in this chapter, means the period from the date as of which the last dividend of any corporation to which this chapter is applicable was declared to the date selected for the declaration of the next 8 BANKiiirG Law. § 3. dividend; or the period from the date when its corporate existence began to the date as of which the first dividend is declared. Time deposits. The term, " time deposits," when used in this chapter, means all deposits the payment of which cannot legally be required within thirty days. Demand deposits. The term, " demand depositsi," when used in this chapter, means deposits payment of which can legally be re- quired within thirty days. Aggregate demand deposits. The term " aggregate demand de^ posits," when used in this chapter, means the deposits against which reserves must be maintained, by banks, trust companies and pri- vate and individual bankers and includes total deposits, all amounts due to banks, bankers, trust companies and savings banks, the amounts due on certified and cashiers' checks, and for unpaid divi- dends, less the following items: Total time deposits: Deposits secured by the deposit of outstanding unmatured stocks, bonds or other obligations of the state or city of 'Sew York; Deposits to an amount not exceeding either the market or par value of outstanding unmatured stocks, bonds or other obligations of the state or city of New York owned and held by such. corpora- tion or banker; The amounts due it on demand from banks, bankers and trust companies other than its reserve depositaries, including foreign ex- change balances credited to it and subject to draft; The excess due it from reserve depositaries over the amount re- quired to maintain its total reserves. Reserves on hand. The term, " reserves on hand," when used in this chapter, means the reserves against deposits kept in the vault of any individual or corporation pursuant to the provisions of this chapter. Reserves on deposit. The term, " reserves on deposit," when used in this chapter, means the reserves against deposits maintained by any individual or corporation pursuant to this chapter in re- serve depositaries, or in a federal reserve bank of which such corporation is a member, and not in excess of the amount author- ized by this chapter. Toted reserves. The term, " total reserves," when used in this chapter, means the aggregate of reserves on hand and reserves on deposit maintained pursuant to the provisions of this chapter. § 3. Shoet Title; Definitions. 9 Reserve depositary. The term, "reserve depositary," when used in thia chapter, means a bank, trust company or banking corpora- tion designated by the superintendent of banks as a depositary for reserves on deposit. Stockholder. The term, " stockholder," when used in this chap- ter, unless otherwise qualified, means a person who appears by the books of a stock corporation to be the owner and holder of one or more shares of the stock of such corporation. Shareholder. The term, " shareholder," when used in this chap- ter, means a member of a savings and loan association^ land bank or credit union. Population. The term, " population," when used in this chap- ter, means population as determined by the last state or federal enumeration; or when used in connection with the words "unin- corporated village," as determined by the superintendent of banks from the best available sources of information. Source. — ■ New. None of tlieae terms was defined in the former law except " stockholder." AGGEEGATE DEMAND DEPOSITS.— The amount of deposits against which reserves were required to be carried under the former law (Banks, § 67; Trust Companies, § 198) excluded "an amount equal to the market value, but not exceeding the par value " of obligations of the State oil City of New York owned by such institution, but held by public officers in trust for such institution. This provision has been eliminated in the new law by the definition of aggregate demand deposits, and only the value of such items may be excluded as are owned and held by such institution. Bank credits receivable on demand in excess of the amount of its total reserves maintained as reserves on deposit may also be excluded. STOCICHOLDER.— The definition in former § 2 included not only holders of record but all other legal and equitable owners, with the exception of certain pledgees. Such definition has formed originally part of a, section fixing the liability of stockholders to creditors of the corporation and should have been left there. As to who are liable under the present law as stockholders of banks, see § 120; of trust companies, see § 206; of safe deposit companies, see § 322. The term "stockholder" as used in former § 38 (new § 496) meant the actual owner of the stock. Matter of Rogers, 102 App. Div. 466. Under the present definition, the proceeding provided for by that section can only be taken by the holder of record. SHAREHOLDER. — Members of these corporations are not "stockholders" in the ordinary sense. Their status is more nearly analogous to that of de- positors in savings banks. Atty.-Gen. Rep. (1910), 841. 10 Banking Law. ARTICLE II. Banking department; powers and duties of superintendent. Section 10. Banking department; superintendent. 11. Official seal of superintendent. 12. Offices and furniture. 13. Deputies, clerks, examiners, special agents and other employees. 14. Bond of deputy acting as superintendent. 15. Restrictions on examiners. 16. Retirement of deputies, clerks and examiners. 17. How expenses of department defrayed. 18. Fees for copies and certifications. 19. Reimbursement of state treasury. 20. Notice of intention to organize. 21. Superintendent shall refuse to file defective certificate. 22. Filing certificate for examination. 23. Investigation of applicant. 24. Authorization certificate. 25. Investigation of private banker's affidavit. 26. Revocation of acceptance of private banker's affidavit. 27. Licenses to foreign corporations. 28. Superintendent as attorney to accept service of process. 29. Revocation of authorization certificate or license in certain cases. 30. Assessments for encroachments on reserves. 31. Proceedings for violations of chapter. 32. Assessments, penalties and forfeitures entitled to priority. 33. Securities deposited with superintendent. 34. Application of interest or proceeds to assessments or penalties. 35. Exchange of securities. 36. Examination and comparison of securities. 37. Return of securities. 38. Designation of reserve depositaries. 39. Examinations and special investigations. 40. Result of examination of savings bank to be certified on records. 41. .Examiners' and special agents' reports. 42. Reports from corporations, bankers and brokers. 43. Publication of summary of reports. 44. Superintendent's powers as trustee for creditors and depositors'. 45. Unclaimed deposits, dividends and interest. 46. Publication of unclaimed sums. 47. Index of persons entitled to unclaimed sums. 48. Discretion of superintendent. 49. Extension of time by superintendent. 50. Change of location. 51. Branch offices. § 10. PowBES AND Duties of Supeeintendent. 11 Section 52. List of legal investments for savings banks. 53. Estimated market value of bonds. 54. Valuation of securities in arrears of interest. 55. Requiring sale of securities by savings bank. 56. Orders of superintendent. 57. When superintendent may take possession. 58. When possession may terminate. 59. May report delinquencies to attorney-general. 60. Relief against superintendent's action. 61. Resumption of business. 62. Special duties, assistants, counsel and other employees. 63. Payment of expenses. 64. Procedure where attorneys' liens asserted. 65. Notice to persons holding assets. 66. Inventory of assets. 67. Property held by delinquent as bailee. 68. Efifect of notice on bailment contract. 69. Liquidation and conservation of assets. 70. Deposit of moneys collected. 71. Superintendent's powers to act for delinquent. 72. Notice to creditors. 73. Listing claims. 74. Objections to claims. 75. Acceptance or rejection of claims. 76. Effect of acceptance. 77. Judgments against delinquent not liens. 78. Dividends to creditors. 79. Stockholders' meeting. 80. Enforcement of stockholders' liability. 81. Actions against directors, trustees or officers. 82. Public information as to department. 83. Annual report of superintendent. § 10. Banking department; superintendent; appointment; term of office; qualifications; compensation; oath; bond. There shall continue to be a banking department charged with the execution of the laws relating to the individuals, partnerships, unincorporated associations and corporations to which this chapter is applicable. The chief officer of such department shall continue to be known as the superintendent of banks. He shall have supervision of every such individual, partnership, unincorpo- rated association and corporation, and shall exercise such pow- ers and perform such duties as are conferred and imposed upon him by this chapter or by any law of this state. 12 Banking Law. § 11» The superintendent of banks shall be appointed by the governor, by and with the advice and consent of the senate, and after the termination of the term of ofBce of the incumbent at the time this act takes effect shall hold his office for the term of three years, beginning on the first day of July succeeding his appointment and ending on the first day of July in the third calendar year there- after, provided that the term of office of the superintendent ap- pointed to succeed the superintendent who was in office on the first day of January, nineteen hundred and fourteen, shall con- tinue until the first day of July, nineteen hundred and seventeen, and that a vacancy in such office shall be filled only for the balance of the unexpired term. The superintendent shall not, either directly or indirectly, be interested in any corporation to which this chapter is applicable, or engage in business as a private banker or personal loan broker. After the termination of the term of office of the incumbent at the time this act takes effect, the superintendent of banks shall receive an annual salary of ten thousand dollars, to be paid monthly. The superintendent shall, within fifteen days from the time of notice of his appoint- ment, take and subscribe the constitutional oath of office and file the same in the office of the secretary of state, and execute to the people of the state a bond in the sum of fifty thousand dollars, with two or more sureties to be approved by the comptroller and treasurer of the state, conditioned for the faithful discharge of the duties of his office. Source. — Former § 3.. Oath of office, see Constitution, Art. 13, § 1. Official bonds, see Pub. Off. Law, §§11, 12. Disqualification of superintendent to serve on jury, see Judiciary Law, § 503. APPOINTMENT TO FILL VACANCY.— One appointed to fill the vacancy created by the resignation of the Superintendent of Banks hold office for the balance of the unexpired term. Atty.-Gren. Rep. (1896) 86. AN ASSIGNMENT FOE THE BENEFIT OF CEEDITOES by a corporation organized under the banking law does not limit or interfere with the superin- tendent's powers over such corporation. Atty.-Gen. Eep. (1901) 265. § 11. Official seal of superintendent; sealed instruments to be received in evidence and recorded. The secretary of state shall provide the superintendent of banks with an official seal. Every paper executed by him as such super- §§ 12, 13. Powers akd Duties of Supeeinteitdei^t. IS intendent in pursuance of any authority conferred on him by law, and sealed with his seal of office, shall be received in evidence, and may be recorded in the proper recording offices in the same manner and with the same effect as a deed regularly acknowledged. Source. — Former § 4. Form of seal, see State Law, §§ 70-74; Pub. Oflf. Law, § 40. Sealed documents as evidence, see Code Civ. Proc, § 933. § 12. Offices and furniture. The trustees or other officers having by law the custody of the public buildings at the state capital, shall assign to the superintend- ent suitable rooms therein for conducting the business of the bank- ing department. The superintendent shall, from time to time, fur- nish the necessary furniture, stationery, fuel, lights and other oroper conveniences for the transaction of such business. Source. — Former § 6. § 13. Deputies, clerks, examiners, special agents and other employees; appointment ; compensation ; oath of office. The superintendent may appoint a first, a second, a third, and a fourth deputy, and shall employ from time to time such clerks, examiners, special agents and other employees as he may need to discharge in a proper manner the duties imposed upon him by law. They shall perform such duties as the superintendent shall ajssign to them and their compensation shall be fixed by him and paid monthly. Every deputy shall, within fifteen days after notice of his appointment, take and subscribe the constitutional oath of office, and file the same in the office of the secretary of state. Every examiner shall, before entering upon his duties as such examiner, take and subscribe the constitutional oath of office and file the same in the office of the clerk of the county where he resides. Source. — Former § 5. Amended by L. 1915, chap. 588. In effect May 10, 1915. The provision as to the examiner's oath of office is taken from former § 11. The provisions for the appointment of a fourth deputy and of special agents are new. 14 Banking Law. §§ 14:, 15. Appointment of special deputies to assist in liquidation, see § 62. Bonds of deputies, see Pub. Off. Law, §§11, 12. Misconduct by officers of Banking Department, see Penal Law, § 300 post, COMPENSATION OE SPECIAL EXAMINEE.— Where a special examiner did not apply to the superintendent for' a certificate until nearly ten years after the completion of the services, it was held that the Superintendent properly refused on the ground that the claim was barred by lapse of time; also that mandamus did not lie to compel the granting of such certificate, the remedy, if any, being by certiorari. People v. FVeston, 62 Hun 185, afl'd 131 N. Y. 644. § 14. Bond of deputy acting as superintendent, when required. In case of a vacancy in the office of superintendent, or in case of his absence or inability to act, for thirty successive days, none of his deputies shall thereafter act as superintendent, until the first deputy, or if there be a vacancy in the office of first deputy, or he be absent or unable to act, the second deputy or, if there be a va- cancy in the office of second deputy, or he be absent or unable to act, the third deputy, or if there be a vacancy in the office of third deputy, or he be absent or unable to act, the fourth deputy, shall have executed to the people of the state a bond in the penalty of fifty thousand dollars, with two sureties to be approved by the comptroller and treasurer of the state, conditioned for the faithful discharge of the duties of the office of superintendent while such deputy acts as such auperintendenit. Sources — 'Former §, 5. § 15. Bestrictions on examiners; penalty. "No examiner shall be appointed receiver of any corporation or private or individual banker or personal loan broker whose books, papers and affairs he shall have examined pursuant to a commission from the superintendent, but he may be appointed by the superintendent a special deputy to assist in the liquidation of any such corporation, banker or broker under section sixty4wo of this article. No examiner shall obtain a loan from any individual, partnership, unincorporated association or corporaition to which this chapter is applicable, or receive, either directly or indirectly, from any such individual, partnership, unincorporated association or corporaition, or from any ofBcer or employee thereof, any sum of §§ 16, 17. Powers and Duties of Supekintendent. 15 money or other valuable thing by way of gift, credit or otherwise. A violajtion of the provisions of this section by any examiner shall constitute .sufficient grounds for his removal by the superintendent. Source. — The first clause is taken from former § 11. The rest of the sec- tion is new. Appointment of special deputies, see § 62. Compensation of examiners acting as special deputies, see § 63. § 16. Retirement of deputies, clerks and examiners. The superinitendent may, in his discretion, reitire any deputy, clerk or examiner who shall have served in the department for a period of twenty years and who shall have become physically or mentally incapacitated for the further performance of the duties of his position. A person retired from service pursuant to this section shall be paid out of the funds appropriated to the bank- ing department an annual sum, in equal monthly instalments, equal to one-half of the average amount of his annual or per diem salary for tie period of two fiscal years preceding the time of such retirement. Source. — Former § 5a. § 17. How expenses of department defrayed; assessments. All the expenses incurred in and about the conduct of the busi- ness of the banking department, including the compensation of the superintendent, his deputies, clerks, examiners, special agents and other employees, shall be paid in the first instance out of the state treasury on the certificate of the superintendent and the ".varrant of the comptroller. All general expenses incurred in connection with thd supervision of the corporations and private and individual bankers and per- sonal loan brokers required by section forty-two of this chapter to report to the superintendent shall be charged to and paid by such corporations, bankers and brokers in such proportions as the superintendent shall deem just and reasonable. The expenses incurred and services performed on account of any such corporation, banker or broker, or on account of any foreign corporation or its agency to which this chapter is applica- ble, shall be charged to and paid by the corporation, banker or broker for whom they were incurred or performed. 16 Baitking Law. §§ 18, 19. If any such corporation, banker or broker shall not, after due notice, pay any such charges, the superintendent may apply thereto the proceeds of the sale of or the interest on any stocks or bonds in his hands, as provided in section thirty-four of this arti- cle, or an action may be brought to recover such charges, as pro- vided in section thirty-one of this article. Source.— Part former § 7. The provision for payment in the first instance out of the state treasury is taken from former § 5. Proceedings to enforce assessments, see § 31 Assessments entitled to priority, see § 32. Application of interest on or proceeds of securities in payment of assess- ments, see § 34. Assessment as liability of bank, see § 135; of trust company, see § 220; of savings bank, see § 277; of investment company, see § 299; of safe deposit company, see § 330; of personal loan company, § 366. AFTER A COEPOEATION HAS GONE INTO THE HANDS OF RE- CEIVERS the superintendent cannot make any assessment against it for services thereafter rendered. Atty.-Gen. Rep. (1903) 361. THE CLAIM OF THE STATE FOR REIMBURSEMENT of expenses in- curred, as provided in this section (formerly § 7) does not constitute a preferred claim. Atty.-Gen. Rep. April 4, 1911. §18. Fees for copies and certifications. Tor every copy of any paper filed in the banking department and for the certification thereof, except where such copy or certi- fication is made for the benefit of a corporation or private or in- dividual banker or personal loan broker to which this chapter is applicable, the superintendent may charge ten cents per folio, and for affixing his official seal on such copy and certifying the same, one doUar. Source. — New. § 19. All moneys received to be paid into state treasury to reimburse state. To reimburse the state for advances made by it for the expenses of the banking department the superintendent shall pay into the state treasury monthly all moneys received by him from corpora- tions, private or individual bankers or personal loan brokers, in payment of his charges or assessments against them or of any § 20. PowEEs AND Duties of Supeeintendeitt. 17 penalties or forfeitures incurred by them; all moneys applied by him to the payment of such charges, assessments, penalties or for- feitures from the proceeds of the sale of or the interest on any stocks or bonds in his hands deposited by such corporation, banker or broker which has failed, after due notice, to pay such charges, assessments, penalties or forfeitures; all moneys recovered in actions brought by the attorney-general under section thirty-one of this article; and all fees, perquisites and money received by the banking department, or any salaried officer or employee thereof, from any source whatever, on account of services rendered by the department, or by any such officer or employee in an official ca- pacity. The superintendent shall annually, on or before the close of the fiscal year and before levying an assessment upon such cor- porations, bankers and brokers to reimburse the state for such advances, pay into the state treasury such interest as shall have accrued upon the balances held by him as trustee for the owners of unclaimed deposits, dividends or interest. Source. — i Part former § 7. Revision eliminates all exceptions and re- quires all monies to be paid into treasury of state. § 20. Notice of intention to organize bank, trust company or savings bank; designation of newspaper. Upon receipt by the superintendent of a notice of intention to organize a bank, trust company or savings bank, executed in the manner prescribed by this chapter, he shall forthwith designate for the publication of such notice a newspaper published in the village, borough or city, if in a city not divided into boroughs, specified in such notice as the place where the business of the proposed corporation is to be transacted; or if no newspaper is published therein, a newspaper published in the county in which such place is located ; or if none is published in such county, then a newspaper published in an adjoining county. Source.— Part former §§ 61, 131, 181. As to the notice of intention required to be given in the case of a bank, see § 101; of a trust company, see § 181; of a savings bank, see § 231. 2 18 Banking Law. §§ 21, 22. § 21. Superintendent shall refuse to file defective certificate. IJpon receipt by the superintendent of any organization certifi- cate of a corporation proposed to be organized under this chapter, or any private banker's certificate submitted pursuant to section one hundred fifty-one of this chapter, or any personal loan broker's certificate submitted pursuant to section three hundred fifty-nine of this chapter, if such certificate fails to comply in form or sub- stance with the requirements of this chapter or is not accom- panied by such by-laws, affidavits or other documents as are re- quired by this chapter to be attached thereto or filed therewith, or if such by-laws, affidavits or other documents are not in con- formity with the requirements of this chapter, the superintendent shall forthwith return such certificate, together with such by-laws, affidavits or other documents, to the proposed incorporators or the private banker or personal loan broker from whom it was received, calling attention to the defect or defects therein, and shall refuse to file such certificate for examination until such defect or defects shall have been remedied and such certificate, by-laws, affidavits or other documents shall have been made to comply in all respects with the requirements of this chapter. Source.— From former §§ 62, 132, 182. CROSS-REF'ERENCES. — For organization certificate of bank, see § 100; of trust company, see § 180; of savings bank, see § 230; of investment company, see § 290; of safe deposit company, see § 315; of personal loan company, see § 340; of savings and loan association, see § 375; of land bank, see § 421; of credit union, see § 450. NAMES OF mOORPORATOES.— If the organization certificate contain names of proposed incorporators which were not in the notice of intention, the Superintendent should refuse to file it. Atty.-Gen. Eep. (1909) 716. § 22. When superintendent shall endovae certificate " filed for ex- amination." If such organization certificate or private banker's certificate, and such by-laws, affidavits or other documents as are required to be attached thereto or filed therewith, comply, or shall have been so amended as to comply in all respects with the requirements of this chapter, the superintendent shall forthwith endorse upon each § 23. Powers and Duties of Superintendent. 19 of the duplicates of such certificate over his official signature the words " filed for examination " with the date of such endorse- ment. Source.— Part former §§ 62, 132, 182. § 23. Investigation by superintendent of proposed corporation, pri- vate banker or personal loan broker; refusal or approval; filing certificate. When any such certificate shall have been filed for examination, the superintendent shall thereupon ascertain from the best sources of information at his command, and by such investigation as he may deem necessary, whether the character, responsibility and gen- eral fitness of the person or persons named in such certificate are such as to command confidence and warrant belief that the business of the proposed corporation, private banker or personal loan broker will be honestly and efficiently conducted in accordance with the intent and purpose of this chapter, and whether the public con- venience and advantage will be promoted by allowing such pro- posed corporation, private banker or personal loan broker to engage or continue in business. In the case of a private banker who has not submitted with his certificate the affidavit specified in section one hundred and sixty of this chapter or whose affidavit has been refused by the superin- tendent as provided in section twenty-five of this article, the super- intendent shall also ascertain in like manner whether the facts stated in such certificate are true. In the case of a proposed savings bank the superintendent shall also ascertain in like manner whether greater convenience of access to a savings bank will be afforded to any considerable number of depositors by opening a savings bank ia the place designated in the certificate, whether the density of the population in the neighbor- hood of such place and in the surrounding country affords a reason- able promise of adequate support for the proposed savings bank, and whether the contributions to the initial guaranty fund and ex- pense fund have been paid in cash. After the superintendent shall have satisfied himself by such investigation whether it is expedient and desirable to permit such 20 BANKiTiTG Law. § 24. proposed corporation, private banker or personal loan broker to engage or continue in business, lie shall within sixty days after the date of the filing of such certificate for examination, endorse upon each of the duplicates thereof over his official signature the word " approved " or the word " refused," with the date of such endorse- ment. In case of refusal he shall forthwith return one of the dupli- cates, so endorsed, to the proposed incorporators, private banker or personal loan broker froni whom such certificate was received. In case of approval he shall forthwith give notice thereof to the pro- posed incorporators, private banker or personal loan broker and file one of the duplicate certificates in his own office and the other in the office of the clerk of the county in which is located the place of business of such proposed corporation, private banker or per- sonal loan broker. Source.— Part former §§ 63, 133, 134, 182, 212, 281, 300, 310, 331. The paragraph relating to private bankers is new. § 24. Authorization certificate; when and to whom issued; contents; filing and recording. Before authorizing any corporation, private banker or personal loan broker to begin or continue business the superintendent shall be satisfied that such corporation, banker or broker has in good faith complied with all the requirements of law and fulfilled all the conditions precedent to commencing business imposed by this chapter. In the case of every stock corporation, he shall examine or cause an examination to be made in order to ascertain whether all of its capital stock has been fully paid in cash. In the case of every personal loan broker and of every private banker subject to all the provisions of article four of this chapter, he shall ex- amine or cause an examination to be made in order to ascertain whether there has been invested in such business, or deposited in cash to be invested therein, the amount of permanent capital stated in the certificate of such banker or broker. If satisfied that such corporation, banker or broker has in good faith complied with all the requirements of law and fulfilled all the conditions precedent to commencing business imposed by this § 25. Powers and Duties of Supeeintendent. 21 chapter, the superintendent shall, -within six months after the date on which such organization certificate or private banker's or per- sonal loan broker's certificate was filed by him for examination, but in no case after the expiration of that period, issue under his hand and ofiicial seal, in triplicate, an authorization certificate to the person or persons named in such organization certificate or pri- vate banker's or personal loan broker's certificate. Such authoriza- tion certificate shall state that the corporation, private banker or personal loan broker named therein has complied with the pro- visions of this chapter and with all the requirements of law, that it is authorized to transact within this state the business specified ■ therein, and that such business can safely be intrusted to it. One of the triplicate authorization certificates shall be transmitted by the superintendent to the corporation, private banker or personal loan broker, thereby authorized to commence or continue business, another shall be filed in the ofiice of the superintendent, and the third shall be filed by the superintendent in the county clerk's ofiice wherein the organization certificate of such corporation or the private banker's or personal loan broker's certificate has been filed by him. The superintendent and said county clerk shall respec- tively attach such authorization certificate to such organization certificate or private banker's or personal loan broker's certificate previously filed in his office and shall record both such certificates in the book of records of incorporation therein. Source.— Part former §§ 12, 32. CERTIFICATE. — The Superintendent of Banks has discretion to refuse a certificate of authorization for a state bank of discount. Atty.-Gen. Rep. (1904) 403. § 25. Affidavit of private banker; investigation; refusal or accept- ance. Upon receipt by the superintendent of an affidavit submitted by a private banker pursuant to section one hundred and sixty of this chapter, if such affidavit fails to comply in form or substance with the requirements of such section, he shall refuse to file it for examination until the defect or defects therein shall have been 22 Banking Law. § 26. remedied. If such affidavit complies, or shall have been so amended as to comply in all respects with the requirements of such section, he shall forthwith endorse upon each of the dupli- cates thereof over his official signature the words "filed for ex- amination" with the date of such endorsement. Thereupon he shall, by such investigation as he may deem necessary, satisfy himself whether the facts stated in such affidavit are true. If from such investigation it shall appear to him that any of such statements are untrue, he shall, within thirty days after the date on which such affidavit was endorsed " filed for examination," endorse on each duplicate thereof over his official signature the word " refused " with the date of such endorsement and return one of such duplicates, so endorsed, to the private banker from whom it was received. If the superintendent shall be satisfied that the facts stated in such affidavit are true, he shall, within the time above specified, endorse on each duplicate thereof over his official signature the word " accepted " with the date of such en- dorsement, and shall forthwith give notice thereof to such private banker and file one of such duplicates in his own office and the other in the office of the elerk of the county in which the certificate of such private banker has been filed. Source. — i New. § 26. When acceptance of private banker's affidavit may be revoked; notice of revocation. If at any time the superintendent shall have reason to believe that any private banker whose affidavit the superintendent has accepted as provided in the last preceding section is not keeping permanently invested in this state in his banking business the amount of capital specified in such affidavit, or, if such banker is engaged in such business in a city of the first class, that such banker is paying or crediting or advertising to pay or credit any interest, or is paying, crediting or giving any bonus or gratuity whatever or anything of value, on deposits of less than the amount stated in such affidavit, or that any material statement in such affidavit was in fact untrue, the superintendent shall forthwith in- § 27. Powers and Duties of Superintendent. 23 stitute such investigation as he shall deem necessary to ascertain the truth of such facts and may examine or cause an examination to be made into the books, papers and affairs of such private banker so far as may be necessary for such purposes. If from such in- vestigation or otherwise the superintendent shall be satisfied that such banker is not keeping such capital so invested, or, if such banker is engaged in such business in a city of the first class, that such banker is paying or crediting or advertising to pay or credit any interest, or is paying, crediting or giving any bonus or gratuity whatever or anything of value, on deposits of less than the amount stated in such affidavit, or that any material statement in such affidavit was in fact untrue, the superintendent may, over his official signature, notify such private banker that the acceptance of such affidavit is revoked. Such notice shall be executed in tripli- cate and the superintendent shall transmit one copy to such private banker, attach another to the duplicate of such affidavit on file in his own office and file the third copy thereof in the county clerk's office in which the other duplicate of such affidavit has been filed. Source. — i New. § 27. licenses to foreign corporations; renewal. Upon receipt by the superintendent from any foreign corpora- tion of an application in proper form for leave to do business in this state under the provisions of this chapter, he shall, by such investigation as he may deem necessary, satisfy himself whether the applicant may safely be permitted to do business in this state. If from such investigation he shall be satisfied that it is safe and expedient to grant such application and it shall have been shown to his satisfaction that such applicant may be authorized to en- gage in business in this state pursuant to the provisions of this chapter and has complied with all the requirements of this chap- ter, he shall issue a license under his hand and official seal author- izing such applicant to carry on such business at the place desig- nated in the license and, if such license is for a limited time, specifying the date upon which it shall expire. Such license shall be executed in triplicate and the superintendent shall 24 Banking Law. §§ 28, 29. transmit one copy to the applicant, file another in his own office and file the third in the office of the clerk of the county in which is located the place designated in such license. Whenever any such license is issued for one year or less, the superintendent may, at the expiration thereof, renew such license for one year. Source.— Former §§ 33b, 283, 284, 285. CROSS-REFERENCES.— As to licensing of foreign banks, see §§ 144-147; of foreign investment companies, see §§ 303-308. Extent to which foreign trust company may transact business in state, see § 223. § 28. Superintendent as attorney to accept service of process. Whenever pursuant to any provision of this chapter, the super- intendent shall have been duly appointed attorney to receive serv- ice of process for any foreign corporation, he shall forthwith forward by mail, postage prepaid, a copy of every process served upon him directed to the president or secretary of such corpora- tion, at its last known post office address. For each copy of process the superintendent shall collect the sum of two dollars, which shall be paid by the plaintiff or moving party at the time of such service, to be recovered by him as part of his taxable dis- bursements if he succeeds in his suit or proceeding. The term process, when used in this section, includes any writ, summons, petition or order whereby any suit, action or proceeding shall be commenced. Source.— Part former §§ 34, 288. CROSS-REFERENCES. — Appointment of superintendent as attorney to accept service of process on foreign bank, see § 145; on foreign trust com- pany acting as executor or trustee in this state, see § 223; on foreign invest- ment company, see § 304. § 29. Bevocation of authorization certificate or license in certain cases. If at any time the superintendent shall be satisfied that any private banker, personal loan company, personal loan broker or foreign corporation to which he has issued an authorization cer- § 30. PowEKS AND Duties of Superintendent. 25 tificate or license, is violating any of the provisions of this chap- ter, or is conducting its business in an unauthorized or unsafe manner, or is in an unsound or unsafe condition to transact its business, or cannot with safety and expediency continue business, the superintendent may, over his official signature and seal of office, notify the holder of such authorization certificate or license that the same is revoked. Such notice shall be executed in tripli- cate and the superintendent shall forthwith transmit one copy to the holder of such authorization certificate or license^ file another in his own office and file the third in the office of the clerk of the county in which such authorization certificate or license has been filed. The superintendent may, in his discretion, publish a copy of such notice, with such other facts as he may deem proper, for six successive days, in the state paper published at Albany. Source.— Former §§ 33b, 287. CROSS-REFERENCES. — Effect of revocation of license to foreign bank, see § 146; of authorization certificate to private banker, see § 158; of license to foreign investment company, see § 308; of authorization certificate to per- sonal loan company, see § 351. § 30. Assessments for encroachments on reserves against deposits. If any bank, trust company or private or individual banker to which this chapter is applicable shall not maintain the total reserves required by this chapter, the superintendent shall levy an assessment upon it during such period as any encroachment upon its total reserves amounting to one per centum or more of its aggregate demand deposits shall continue, at the following rates : 1. At the rate of six per centum per annum upon any such encroachment not exceeding two per centum of such deposits. 2. At the rate of eight per centum per annum upon any ad- ditional encroachment in excess of two and not exceeding three per centum of such deposits. 3. At the rate of ten per centum per annum upon any additional encroachment in excess of three and not exceeding four per centum of such deposits. 26 Banking Law. § 31. 4. At the rate of twelve per centum per annum upon any ad- ditional encroachment thereon. Source. — New. CROSS-REFERENCES. — As to designation of reserve depositaries, see § 38. As to orders by superintendent to make good encroachment on reserves, see § 56. As to reserves required to be carried by banks and individual bankers, see §§ 112, 143; by private bankers, see § 166; by trust companies, see § 197. As to proceedings to enforce assessments, see § 31. Assessments entitled to priority of payment, see § 32. Application of interest on or proceeds of securities in payment of assess- ments, see § 34. Assessment as liability of bank, see § 135; of trust company, see § 220. § 31. Proceedings in name of superintendent for violations of this chapter. If any corporation or private or individual banker or personal loan broker to which this chapter is applicable shall refuse or fail, after due notice, to pay any assessment lawfully imposed upon it by the superintendent under section seventeen or section thirty of this article; or if any such corporation, banker or broker or any officer, director, trustee, agent or employee of any such corpo- ration, shall refuse or fail, after due notice, to pay any penalty or forfeiture incurred under any provision of this chapter by such corporation, banker, broker, officer, director, trustee, agent or em- ployee, or if any other person or corporation shall violate any of the prohibitions contained in this chapter ; the superintendent may, in his discretion, report the facts to the attorney-general, who shall thereupon, in the name of the superintendent, institute such action or proceeding as the facts may warrant against such per- son, corporation, banker, broker, officer, director, trustee, agent or employee. Source.— Part former §§7, 76, 333. CROSS-REFERENCES.— Priority of assessments, penalties and forfeitures, see § 32. Application of interest on, or proceeds of securities in payment of assess- ments, penalties and forfeitures, see § 34. §§ 32, 33. PowEEs AND Duties of SuPEEiNTENnENT. 27 § 32. Assessments, penalties and forfeitures entitled to priority. In case of the insolvency or voluntary or involuntary liquidation of any corporation, private or individual banker or personal loan broker to which this chapter is applicable, all unpaid charges law- fully assessed against it by the superintendent and all unpaid pen- alties and forfeitures incurred by it under any section of this chapter shall be entitled to priority of payment from the assets of such corporation, banker or broker on an equality with any other priority given by this chapter. Source. — New. CROSS-REFERENCES.— As to priorities generally, see § 78, and annota- tions thereto. § 33. Securities deposited with superintendent; how held; interest thereon; lien on deposit of foreign corporation. All stocks and bonds deposited by any corporation or private or individual banker with the superintendent pursuant to any re- quirement of this chapter shall be registered in the name of office of the superintendent in trust under and pursuant to this chapter. So long as such corporation or banker shall continue solvent and comply with the laws of the state, the superintendent shall pay over to it, or permit it to collect the interest paid on such stocks or bonds. In case of the insolvency or voluntary or involuntary dissolution of any foreign corporation which shall have been licensed by the superintendent to do business in this state, the superintendent shall have a lien, on any securities deposited with him by such corporation in favor of its creditors and stockholders residing in this state. Source. — Former §§ 14, 35, 76. This and the four next succeeding sections contain all the powers and duties of the superintendent with regard to se- curities deposited with him. The last sentence of this section is a substitute for former § 35. CROSS-REFERENCES. — Application of interest or proceeds in payment of assessments or penalties, see § 34. Exchange of securities and withdrawal of excess, see § 35. Examination and comparison of securities, see § 36. 28 Banking Law. §§ 34, 35. Eeturn of securities, see § 37. Deposit of securities with superintendent ty bank, see § 105 ; by individual banker, see § 143; by private banker, see § 161; by trust company, see § 184; by domestic investment company, see § 292; by foreign investment company, see § 306. PREFERENCE OF DOMESTIC CREDITORS NOT UNCONSTITUTIONAL. — The giving of a preference to domestic creditors and stockholders in the securities deposited with the superintendent by a foreign corporation is not a violation of the provision of the Federal Constitution guaranteeing to the citizens of each state the privileges and immunities of citizens in other states. See People v. Granite State Assoc., 161 N. Y. 492, aff'g 41 App. Div. 257. § 34, When interest or proceeds may be applied in payment of assess- ments or penalties. If any such corporation o!r banker sliall not, after due notice, pay to the superintendent any charge assessed against it pursuant to section seventeen or section thirty of this article or any penalty or forfeiture incurred by it under any section of this chapter, the superintendent may apply in payment thereof, with interest at the legal rate, so much as may be necessary of the interest accruing on any stocks or bonds deposited with him by such corporation or banker pursuant to any requirement of this chapter, or in the case of securities deposited pursuant to sections one hundred five and two hundred ninety-two of this chapter may sell so much of such stocks or bonds as may be necessary for that purpose and apply the proceeds in payment of such assessment, penalty or for- feiture with interest at the legal rate. Source.— Part former §§7, 76. See annotations to § 33. § 35. Exchange of securities; withdrawal of excess. Any coisporation or private or individual banker which shall have deposited with the superintendent in trust any stocks or bonds in pursuance of any requirement of this chapter, may be permitted by the superintendent, so long as it diall continue solv- § 36. PowEES AND Duties of Supeeintbndent. 29 ent and comply with tlie laws of the state, from time to time to withdraw any of such stocks or bonds upon depositing with the superintendent other stocks or bonds of the kind it is required by this chapter to keep on deposit with him, the market value of which shall be not less than the miarket value of those withdrawn, except that, if the market value of the stocks or bonds so held by the superintendent exceeds the amount which such corporation or banker is required by this chapter to keep so deposited, the stocks or bonds in excess of such amount may be withdrawn without de- positing others in exchange therefor, or the securities so substi- tuted may be of less market value than those vrathdrawn, provided there shall at all times be on deposit with the superintendent the amount required by this chapter. Source.— Part former §§ 14, 15. CROSS-REFERENCES.— See annotations to § 33. § 36. Examination and comparison of securities; receipt to super- intendent. Any corporation or private or individual banker which shall have deposited with the superintendent in trust any stocks or bonds in pursuance of any requirement of this chapter, may once or oftener during each fiscal year, and at such time during ordinary business hours as it may select, examine and compare such securi- ties so deposited by it with the books of the banking department, and, if found correct, execute to the superintendent a receipt stat- ing the different kinds of such securities and the amoimts thereof, and that they are in the custody and possession of the superin- tendent at the date of the receipt. In the case of a corporation such examination may be made by the president, cashier, secretary or treasurer thereof or by an agent duly authorized thereto in writing under the seal of the corporation. In the case of a private or individual banker such examination may be made by such banker personally, or if a partnership or unincorporated associa- tion by a member of such partnership or one of the principal officers of such association, or it may be made by an agent of such banker 30 Banking Law. § 37. duly authorized in writing. If made hj an agent of such corpora- tion or banker, so authorized, the receipt of such agent shall have the same force and effect as if executed by the corporation or banker. If any such corporation or banker shall neglect to make any such examination during any fiscal year, the comptroller and su- perintendent shall appoint some suitable and discreet person as agent for such corporation or banker, who shall make such exami- nation, and if the securities so held by. the superintendent shall be found to agree with the books of the department, such agent shaU execute the receipt above mentioned and transmit a copy thereof to the corporation or banker in whose behalf it is made, and such receipt shall be of like force and effect as if executed by such corporation or banker. The superintendent shall pay to the person so appointed and making such examination, as a general expense of the department, such compensation for his services and expenses in making such examination as the superintendent shall deem just and reasonable. Source. — Former § 9. CROSS-REFERENCES.— See annotations to § 33. § 37. Return of securities. Whenever any banker or corporation which shall have on deposit with the superintendent in trust any stocks or bonds pursuant to any requirement of this chapter, shall have paid in full all assess- ments imposed on and penalties incurred by it under any of the provisions of this chapter and shall have shown to the satisfaction of the superintendent that it has ceased transacting business and has complied with ^all the provisions of this chapter, the superin- tendent shall, upon its being shown to his satisfaction that such corporation or banker is solvent and that the interests of its creditors are fully protected, return such securities to such cor- poration or banker. Source. — New. CROSS-KEFERENCES.— See annotations to § 33. § 38. Powers and Duties op Superintendent. 31 § 38. Designation of reserve depositaries. The superintendent shall, in his discretion, upon the nomina- tion of any bank, trust company or private or individual banker, designate a depositary or depositaries for the res&'ves on deposit of such corporation or banker provided for by this chapter. Ex- cept as otherwise provided in this section, such depositary shall be a bank, trust company or national banking association located in this state. But no bank, trust company or national banking association sball hereafter be designated as a depositary of any euch reserves unless it shall have a combined capital and surplus of at least 1. One million dollars, if located in a borough of a city which borough has a population of two million two hundred thousand or over; 2. Seven hundred and fifty thousand dollars, if located in a borough of a city which borough has a population of one million or over and less than twc million two hundred thou- sand or in a city which has a population of four hundred thou- sand or over; 3. Five hundred thousand dollars, if located elsewhere in the state. No such corporation, if located in a borough having a population of two million two hundred thousand or over, shall be designated as a reserve depositary for any bank, trust company or private or individual banker having a combined capital and surplus greater than its own, unless the combined capital and surplus of such de- positary exceeds two million dollars. Such depositary may also be a banking corporation with a capital and surplus of two million dollars or more, located in the cities of Chicago, Illinois, Boston, Massachusetts, or Philadelphia, Pennsyl- vania, provided any such banking corporation shall make such re- ports as the superintendent may prescribe, and submit to such examinations as he may deem necessary. Source. — Part former §§ 67, 198. The provisions of former § 67 and § 198 permitted reserve deposits to be made in institutions approved generally by the superintendent as reserve depositaries. Under the present law the depositing institution nominates its depositaries to the superintendent, who thereupon designates from such nominees the depositaries for such institu- 32 Banking Law. § 39. tion. The capital and surplus requirements of reserve depositaries have been raised considerably, and unless the capital and surplus of the depositary- exceeds two million dollars, the superintendent cannot designate as a reserve depositary an institution with a smaller capital and surplus than the depos- iting institution. The provision permitting the selection of reserve deposi- taries in certain cities outside the state is also new. CROSS-EEFERENCES.— Assessments for encroachments on reserves, see § 30. As to reserves required to be carried by banks and individual bankers, see §§ 112, 143; by private bankers, see § 166; by trust companies, see § 197. A TRUST COMPANY INCORPORATED BY SPECIAL ACT may be desig- nated by the superintendent as a depositary of lawful money reserve. Atty.- Gen. Rep. (1900) 165. § 39. Examinations of corporations, bankers, brokers and agencies. The superinltendent shall, either personally or hj his deputies or examiners, at least twice in each year visit and examine every bank, trust company and individual banker, and every private banker subject to the provisions of article four of this chapter, except such as shall have duly obtained certain exemptions pur- suant to section one hundred sixty of this chapter; and he shall also in like manner visit and examine at least once in each year every other corporation to which this chapter is applicable, and every personal loan broker. He shall have power in like manner to examine every corporation to which this chapter is applica;ble, at any time prior to its dissolution, and every such private and individual banker and personal loan broker, whenever, in his judgment, such examination is necessary or ex- pedient. He shall have power in like manner to examine every agency located in this state of any foreign banking corporation for the purpose of ascertaining whether it has violated any law of the state and for such other purposes and as to such other matters as the superintendent may prescribe. On every such examination inquiry shall be made as to the con- dition and resources of such corporation, banker or broker, the mode of conducting and managing its affairs, the actions of its directors or trustees if a corporation, the investment of its funds, the safety and prudence of its managemenrt;, the security afforded to those by whom its engagements are held, and whether the requirements of its charter and of law have been complied with in § 40, Powers and Duties of Superintendent. 33 the administration of its affairs ; and as to such other matters aa the superintendent may prescribe. The superintendent may also make such special invesitigations as he shall deem necessary to determine whether any individual or corporation has violated any of the provisions of this chapter. The superintendent and every such examiner shall have power to administer an oath to any person whose testimony may be re- quired on the examination or investigation of any such individual, corporation, banker, broker or agency, and to compel the appear- ance and attendance of any such person for the purpose of any such examination. Such examination may be made and such inquiry instituted or continued in the discretion of the superintendent after he has takea possession of the property and business of any such coi-poration, banker or broker under the provisions of section fifty-seven of this article until it shall resume business or its affairs shall be finally liquidated in accordance with "the provisions of this article. If the examination shall be made by the superintendent, or by one or more deputies or examiners who are compensated by salary only, no charge shall be made except for necessary traveling and other actual expenses. Source. — Part former § 8. Compelling attendance and testimony of witnesses, see Code Civ. Proc, §§ 854-859. POWER TO E.MPLOY APPRAISERS OF REAL ESTATE.— Where it is necessary to ascertain the value of real estate held by a corporation under examination, the superintendent has power to instruct the examiner to em- ploy expert appraisers and pay them out of the fund appropriated for the payment of examiners. Atty.-Gen. Rep. (1903) 234. POWER TO CONDUCT INVESTIGATION AFTER CLOSING BANK.— Prior to the amendment of 1912 authorizing examinations by the superin- tendent of banks closed by him under former § 19, it was held that the superintendent had no power to conduct a quasi-judicial investigation of a closed bank for the purpose of determining how the bank had been brought to disaster. Matter of Union Bank, 204 N. Y. 313, reversing 147 App. Div. 593, which affirmed 73 Misc. 404. § 40. Besnlt of examination of savings bank to be certified on records. The result of every examination of a savings bank made pur- suant to the provisions of the last preceding section shall be certi- 3 34 Banking Law. §§ 41, 42. fied by the examiners, or one of them, upon the records of the corporation examined. Source. — Part former § 8. § 41. Examiners' and special agents' reports of confidential nature; publication by superintendent. Every examiner, duly appointed and sworn, shall, when commis- sioned by the superintendent, forthwith examine fully the books and papers and investigate the business and affairs of any corpora- tion, private or individual banker or personal loan broker desig- nated in his commission, and make written report on oath to the superintendent of the result of such examination. All reports of examiners and special agents shall' be confidential communications and shall not be made public unless, in the judgment of the superintendent, the ends of justice or the public advantage will be subserved by the publication thereof, in which event he may publish a copy of any such report or any part thereof in at least one daily newspaper published in the city of 'New York and in one newspaper published in the county where the principal place of business of such corporation or banker is located, or in such other manner as he may deem proper. Source. — Former §§ 11, 16. The provision regarding the confidential char- acter of the reports is new. EXAMINER. — The compensation of an examiner is paid by the bank which is examined upon the certificate of the superintendent of banks. The refusal of the superintendent to act should be reviewed by certiorari and not by mandamus; the examiner's right to demand compensation begins when he has completed his work. People ex rel. Best v. Preston, 62 Hun 185; aiT'd 131 N. Y. 644. Section 41 alone confers upon the Superintendent of Banks the power ta permit the State Board of Tax Commissioners to have access to the reports of banks, trust companies and savings and loan associations for the purpose of using them in connection with the work of fixing the ratio between the assessed valuation and the real value of taxable property. Attorney-General. Rep., May 19, 1915. § 42. Reports from corporations, bankers and brokers. It shall be the duty of the superintendent to require all corpora- tions to which this chapter is applicable, all individual bankers^ and personal loan brokers and all private bankers to whom article four of this chapter is applicable to make to him the regular periodical reports of their condition prescribed by this chapter and he shall prescribe the form and contents of all such reports. In addition to such regular reports he may require any such corpora- tion, banker or broker to make special reports to him at such times- § 43. Powers and Duties of Superintendent. 35 and in such form as he may prescribe, and may direct that such special reports be verified and prescribe the form of the verifi- cation. He shall ait least once in every three months, designate some day therein in respect to which every such bank, trust company and individual banker, and every such private banker except such as shall have duly obtained certain exemptions pursuant to section one hundred sixty of this chapter, shall report to him, and he shall serve a notice designating such day. Such notice may be sei-ved by delivering the same to such private or individual banker or, in the case of a corporation, by delivering the same at its place of business to some officer therein, or it may be served in any case by deposit- ing it in the post-office enclosed in a postpaid wrapper directed to such corporation or banker at its principal place of business. Source. — Former § 21. The provision authorizing the superintendent to require special reports is new. CROSS-REFERENCES.— Reports by banks and individual bankers, see §§ 133, 143; by private bankers, see § 170; by trust companies, see § 218; by savings banks, see § 273 ; by investment companies, see § 298 ; by safe deposit companies, see § 329 ; by personal loan companies and personal loan brokers, see § 365; by savings and loan associations, see § 413; of credit unions, see § 477. CANNOT REQUIRE REPORT FROM BANK IN LIQUIDATION.— The superintendent's power to require reports extends only to " going " concerns. He cannot require a report from a bank in process of voluntary liquidation. Atty.-Gen. Rep. (1906) 499. FALSE REPORT — SUPERINTENDENT'S POWERS.— If a false report is made to the banking department it must be investigated through the judicial branch of the government which has jurisdiction over such matters. The superintendent is not invested with judicial powers and cannot decide whether a person is or is not guilty of a crime. Matter of Union Bank, 204 N. Y. 313, 322. § 43. Summary of reports of banks, trust companies and private and individual bankers to be published. Within thirty days after the receipt of any quarterly report of any bank, trust company or private or individual banker, the superintendent shall publish a summary thereof in a newspaper at Albany in which notices by state officers are required by law to be published, arranging the reports of individual bankers and pri- vate bankers in separate classes, and specifying ihe names and 36 Banking Law. §§ 44, 45. places of business of eaoli, and if partnerships or unincorporated associations, the names and residences of the members thereof. Source. — Former § 24. § 44. Superintendent's powers as trustee for creditors and depositors. The superintendent shall have power to act in his name of office as trustee for the creditors and depositors of any corpora- tion, private or individual banker or personal loan broker to which this chapter is applicable. As such trustee he may take and hold stocks, bonds or other securities deposited with him for the benefit and protection of such creditors and depositors, may enter into agreements with any such corporation, banker or broker, or with the officers, directors or trustees of such corpora- tion, for the benefit of its creditors and depositors, and may in his name of office maintain any action or proceeding necessary to enforce such agreements. Source. — New. § 45. Unclaimed deposits, dividends and interest; deposit by super- intendent in trust; preference. The superintendent may take and hold as trustee for the owners thereof any sums which remain due to and unclaimed by any creditor, depositor, stockholder or shareholder of any corporation or private or individual banker, to which this chapter is ap- plicable, after the completion of the voluntary or involuntary liquidation of the business and affairs of such corporation or banker. Whenever such sums are received by the superintendent and he is not in possession of the business and affairs of such cor- poration or banker, he shall give his receipt for such moneys and shall forthwith deposit them in one or more solvent state banks, trust companies or savings banks, to the credit of the superin- tendent of banks in trust for the persons entitled thereto. At the completion of a liquidation by the superintendent, he shall in like manner deposit such moneys at the expiration of six months after the order for final distribution. All such deposits by the superintendent shall be entitled to priority of payment in case of the insolvency or voluaitary or in- § 46. Powers and Duties of SupEEiiirTENDENT. 37 voluntary liquidation of the depositary on an equality with, any other priority given by this chapter. Source. — New, except the sentence relating to liquidations by the superin- tendent which is taken from former § 19. This and the two succeeding sec- tions gather together all the powers and duties of the superintendent with regard to unclaimed deposits, dividends and interest. CROSS-REFERENCES.— Publication by superintendent of unclaimed sums, see § 46. Index to be kept by superintendent, and payment to persons entitled, see § 47. Disposition of unclaimed dividends on liquidation by superintendent, see § 78. Annual report by superintendent as to unclaimed sums, see § 83. Annual report of unclaimed sums by banks and individual bankers, see 8§ 134, 143; by private bankers, see § 157; by trust companies, see § 219; by savings banks, see § 274. § 46. Superintendent must publish list of unclaimed deposits, divi- dends and interest every five years. On the second Wednesday in January, nineteen hundred and sixteen, and on the second Wednesday in January in each fifth year thereafter the superintendent shall cause to be published in a paper in Albany in which notices by state officers are required by law to be published, and in at least one daily newspaper pub- lished in each city of the first or second class within the state, a list containing the names of the banks, trust companies, private and individual bankers and savings banks which, according to their last reports to him, held unclaimed deposits, dividends or interest, and the names of the liquidated corporations and private and individual bankers for the benefit of whose unlocated de- positors, creditors, stockholde!rs or shareholders, the superintend- ent holds deposits, dividends or interest as trustee, together with the full names of the persons entitled to receive such unclaimed deposits, dividends or interest from each of said corporations and bankers or from the superintendent. Source. — New. CROSS-KEFBRENCJES.— See annotations to % 45. Section 46 of the Banking Law must be read in connection with § 3h of the State Finance Law. Attorney-General Rep., Jan. 6, 1916. 38 Banking Law. §§ 47,48. § 47. Index of persons entitled to nnclaimed sums; payment to persons entitled. The superintendent shall keep in his office an index of the names of all persons for whom he holds in trust any unclaimed deposits, dividends or interest and of the names of all persons reported to him by any corporation or private or individual banker as entitled to any such unclaimed deposits, dividends or interest held by such corporation or banker. Whenever any per- son shall show by evidence satisfactory to the superintendent that he is lawfully entitled to receive any such money, the superin- tendent shall indicate to him the corporation or banker by which it is held, or, if the superintendent holds such money in trust, he may pay it over to such person. In cases of doubt or conflicting claims, he may require of the claimant an order of the supreme court authorizing and directing the payment thereof, but for any payment made by him in good faith, by check or order payable to the creditor, depositor, stockholder or shareholder appearing from the records in his office to be entitled thereto, he shall be held harmless and shall not be liable to any subsequent claimant. Source. — The first sentence is taken from former § 30. The provision as to payment over to the persons entitled, so far as it relates to unclaimed dividends on liquidations by the superintendent, is taken from former § 19. The provision protecting the superintendent against subsequent claimants is new. See annotations to § 45. § 48. Approval of superintendent ; filing. In any case in which this chapter makes the approval of the superintendent a condition precedent to the doing of any act, it shall lie within his sound discretion to grant or refuse his ap- proval. Such approval, if granted, shall be in writing and a copy thereof shall be filed in the office of the superintendent. Source. — New. APPROVAL NtJNC PRO TtTNC— It seems that the superintendent's ap- proval may be given nunc pro tunc where an act has been done in good faith and in ignorance of the statutory requirement. Atty.-Gren. Rep. (1896) 193. APPROVAL OF CHANGE OF CORPORATE NAME.— Under Gen. Corp. Lavr, § 60, an application by a corporation organized under the Banking Law for leave to change its name must be first approved by the superintendent. Atty.-Gen. Rep. (1900) 255; Atty.-Gen. Rep. (1902) 186. § 49. Powers and Duties of Superintendent. 39 REDUCTION OF CAPITAL.— A reduction of the capital of a corporation organized under the Banking Law may not be effected without the written consent of the superintendent. Atty.-Gen. Rep. (1909) 738. § 49. Extensions of time by superintendent. For satisfactory cause to hi'm shown, the superintendent may grant extensions of time to corporations or private or individual bankers or personal loan brokers to which this chapter is ap- plicable, as follows: 1. He may extend for not more than one year the time within which any sucli corporation may commence business. Such exten- sion shall only be made by an order under his hand and official seal which shall be executed in triplicate and one copy thereof shall be filed in the superintendent's office, one in the office of the clerk of the county in which the organization certificate of such corporation has been filed, and the third shall be transmitted to such corporation. 2. He may extend for not exceeding ten days in the case of a bank, trust company, private banker or individual banker, and for not exceeding twenty days in the case of any other corporation to which this chapter is applicable or of a personal loan broker, the time within which any such corporation, banker or broker is required to make and file any report to the superintendent. 3. He may extend for such period as he may deem proper the time within which any corporation or private or individual banker is required by this chapter to dispose of real estate held by it. Source. — Subdivision 1 is adapted from former § 136, relating to savings banks. Subdivision 2 was suggested by former § 21. Subdivision 3 is new. CROSS-REFERENCES.— Forfeiture of corporate rights by failure to begin business, see § 485. Time within which reports must be made by banks and individual bankers, see §§ 133, 134, 143; by foreign banks, see § 147; by private bankers, see §§ 157, 170; by trust companies, see §§ 218, 219: by savings banks, see §§ 273, 274; by investment companies, see § 298; by safe deposit com- panies, see § 329; by personal loan companies and brokers, see § 365; by savings and loan associations, see § 413; by credit unions, see § 477. Time within which real estate must be disposed of by banks, see § 107; by private bankers, see § 163; by trust companies, see § 189; by savings banks, see § 240. 40 Banking Law. § 50. ADMINISTRATIVE DISCRETION OF SUPERINTENDENT.— Under for- mer § 211 (now § 410) requiring a copy of amendments to the by-laws of a savings and loan association to be filed in the office of the superintendent within thirty days after the adoption thereof, the Attorney-General was of the opinion that it was within the administrative discretion of the superin- tendent to receive such amendments for filing after the statutory period had elapsed. Atty.-Gen. Rep. (1912) 183. § 50. Change of location; approval or refu&al; certificate. Upon receipt by the superintendent of a written application from any corporation or private or individual banker or personal loan broker to which this chapter is applicable for leave to change its place of business to another place in the same county and within the limits of the village, borough or city, if in a city not divided into boroughs, in which its principal place of business is then located, the superintendent shall, if he shall be satisfied that there is no reasonable objection to such change of location, give his written approval of the proposed change. If the proposed pla^je of business is without such limits, the superintendent shall designate for the publication of the notice of intention to make such application a newspaper published in the county in which such place of business is located. Upon receipt by the superin- tendent of evidence satisfactory to him of due publication of such notice^ he shall, if satisfied that there is no reasonable objection to such change of location, make a certificate in triplicate under his hand and ofiicial seal authorizing such change and specifying the date on or after which, and the place to which such change may be made, and shall file one thereof in his own ofiice, one in the office of the clerk of such county, and shall transmit the other to such applicant. If the superintendent shall be satisfied in any case that such change is undesirable or inexpedient, he shall refuse such application and notify such corporation or banker of his de- termination. Source.— Former §§ 31, 147. CROSS-REFERENCES.— Change of location by banks, see § 119; by pri- vate bankers, see § 159; by trust companies, see § 205; by savings banks, see § 259; by investment companies, see § 296; by safe deposit companies, see § 321; by personal loan companies, see § 352; by savings and loan asso- ciations, see § 403; by credit unions, see § 460. As to branches, see § 5] and annotations. §§ 51, 52. Powers and Duties of Supeeintendent. 41 § 51. Branch offices; approval or refusal; certificate. Upon receipt by the superintendent of a written application for leave to open a branch office from a corporation authorized by this chapter to open branch offices, he shall make such investiga- tion as he may deem necessary to ascertain whether the public con- venience and advantage will be promoted by the opening of such branch office and whether such corporation has the amount of act- ually paid in capital required by this chapter. If satisfied that the granting of such application is expedient and desirable, he shall make a certificate in triplicate under his hand and official seal authorizing the opening and occupation of such branch office and specifying the date on or after which and the conditions under which it may be. opened and the place where it shall he located, and shall file one triplicate in his own office, one in the office of the clerk of the county wherein the principal place of business of such corporation is located, and shall transmit the other to such appli- cant. If the superintendent shall be satisfied that the opening of such branch office is undesirable or inexpedient or that such cor- poration has not the requisite amount of capital actually paid in, he shall refuse such application and notify such corporation of his determination. Source.— Former §§ 109, 186, subd. 11. CROSS-REFERENCES.— Branch offices of banks, see § 110; of trust com- panies, see § 195; of savings banks, see § 245; of investment companies, see § 293, subd. 5; of safe deposit companies, see § 318; of personal loan com- panies, see § 349. § 52. Superintendent must furnish savings banks list of legal in- vestments. On or before the first day of January, nineteen hundred and fifteen, and on or before the first day of January in each and every year thereafter, the superintendent of banks shall mail to each savings bank in the state a list containing the names of states and municipalities, the bonds of vyhich, in his judgment, if legally issued and properly executed, conform to the requirements of sec- tion two hundred and thirty-nine of this chapter, and also as com- plete a list as is practicable of railroad bonds which, in his judg- ment, if legally issued and properly executed, conform to the pro- visions of said section. 42 Banking Law. §§ 53, 54. In the preparation of ench list lie may employ such expert as- sistants as he deems proper and apportion the expense thereof among the savings banks of the state, or he may rely upon infor- mation contained in publications which he may deem authoritative in reference to such matters. He shall be in no way liable for the omission from such list of the name of any state or munici- pality the bonds of which conform to the provisions of said sec- tion, or of any railroad bond which conforms to the provisions of said section, nor for the inclusion in such list of the name of any state or municipality the bonds of which do not conform to the provisions of said section, or of any railroad bond which does not conform to the provisions of said section. Source. — New. CROSS-REFERENCES.— Investments of savings banks, see § 239. § 53. Superintendent must furnish savings banks estimated market value of bonds. On or before the first day of June and the first day of December in each year the superintendent shall furnish to each savings bank a list giving with such detail as he may deem necessary the esti- mated market values, either specifically or by classes, at which the bonds held by it, which are legal investments for savings banks, shall be reported at the date of its next semi-annual report. In making such valuations the superintendent shall be governed so far as is practicable by actual sales of such bonds las ascertained by him, or as reported by the various stock exchanges and financial papers during the preceding five months, and by general business conditions. Source. — New. Semi-annual reports of savings banks, see § 273. § 54. Must determine valuation of securities in arrears of interest. The superintendent, upon application by any savings bank or savings and loan association, shall determine and report to it the valuation of such stocks or bonds, or bonds and mortgages as are in arrears of interest for six months or more, and of all other in- vestments not enumerated in section two hundred fifty-seven of this chapter, from the best information he can obtain ; and he may §§ 55, 56. Powers and Duties of Superintendent. 43 change the valuation thereof from time to time as he may obtain other and further information. Source. — ■ Former § 154. CEOSS-RBFERENCES.— How per centum of par value surplus determined, see § 257. § 55. When superintendent may require savings bank to sell securi- ties. Wherever any securities purchased by any savings bank pursu- ant to the provisions of section two hundred thirty-nine of this chapter shall have, edther before or since the time such purchase was made, ceased to be an authorized investment for the moneys of savings banks, the superintendent may, in his discretion, require such savings bank to sell such securities. Source. — Former | 146, subd. 5, broadened. POWiER UNDER FORMER LAW.— The Attorney-General was of the opinion that the superintendent had power, under former §§ 8 and 17, to require a savings bank to dispose of an investment which, though legal when made^ had become illegal by reason of the changed condition and character of the security. But the power should be so exercised as to prevent loss and embarrassment in the business of the bank. Atty.-Gen. Rep. (1908) 371. § 56. Orders of superintendent. 1. To discontinue unlawful or unsafe practices. Whenever it shall appear to the superintendent that any corporation to which this chapter is applicable, or any individual banker, or any private banker to which article four of this chapter is applicable, or any personal loan broker or any foreign corporation licensed by the superintendent to do business under this chapter, has violated its charter or any law, or is conducting its business in an unauthorized or unsafe manner, he may issue an order directing the discontinu- ance of suc-h unauthorized or unsafe practices and requiring the delinquent to appear before him, at a time and place fixed in said order, to present any explanation in defense of the practices directed in said order to be discontinued. 2. To make good impairment of capital. Whenever it shall ap- pear to the superintendent that the capital stock of any such cor- poration has been reduced in value below the requirements of law or of its certificate of incorporation or of its articles of association, 44 Banking Law. § 56. or that the capital of any such private or individual banker or per- sonal loan 'broker has been reduced in amount below the require- ments of law, he may issue an order directing that such corpora- tion, banker or broker make good such deficiency forthwith or within a time specified in such order, 3. To make good encroachments on reserves. Whenever it shall appear to the superintendent that either the total reserves or re- serves on hand of any such corporation or private or individual banker required by this chapter to maintain such reserves are be- low the amount required by law to be maintained, or that such cor- poration or banker is not keeping its reserves on hand as required by this chapter, he may issue an order directing that such corpora- tion or banker make good such reserves forthwith or within a time specified in such order, or that it keep its reserves on hand as re- quired by this chapter. 4. To keep books and accounts as prescribed. Whenever it shall appear to the superintendent that any corporation to which this chapter is applicable or any individual banker or personal loan broker or any private banker subject to the provisions of article four of this chapter except such as shall have duly obtained' certain exemptions pursuant to section one hundred sixty of this chapter, does not keep its books and accounts in such manner as to enable him readily to ascertain its true condition, he may issue an order requiring such corporation, banker or broker, or the officers thereof or any of them, to open and keep such books or accounts as he may, in his discretion, determine and prescribe for the purpose of beep- ing accurate and convenient records of the transactions and ac- counts of such corporation, banker or broker. 5. To reduce charges of personal loan company or 'broker. Whenever it shall appear to the superintendent that the net earn- ings of any personal loan company during its preceding fiscal year, as determined hj section three hundred and fifty of this chapter, or the profits of any personal loan broker during the preceding cal- endar year, as determined by section three hundred and sixty-four of this chapter, shall have exceeded twelve per centum, of the capi- tal stock or permanent capital of such company or broker, he may issue an order requiring such company or broker to reduce interest rates and charges, so that its annual net earnings or profits, as so § i57. Powers and Duties of Sttpeeiittendent. 45 determined, sliall not exceed twelve per centum of its capital stock or permanent capital. Source. — Subdivisions 1 and 2 are adapted from former § 17 ; subdivision 3 from former §§ 67, 198; subdivision 4 from former § 8; subdivision 5 from former § 313. Former section 17 empowered the superintendent to require an impairment of capital to be made good within sixty days; the revision makes provision for ordering such deficiency to be made good " forthwitli " or within a stated time. Former §§67 and 198 allowed thirty days within which to make tlie reserve good. CROSS-REFERENCES. — Disobedience of order as ground for taking pos- session, see § 57. Assessment of stockholders to make good impairment of capital of bank, see § 121; of trust company, see § 207; of safe deposit company, see § 323. Assessments by superintendent for encroachments on reserves, see § 30. Reserves required to be carried by banks and individual bankers, see §§ 112, 143; by private bankers, see § 166; by trust companies, see § 197. Requirements as to methods of keeping books of banks, see § 109; of private bankers, see § 165; of trust companies, see § 194; of savings banks, see § 246; of investment companies, see § 295; of safe deposit companies, see § 320; of personal loan companies and brokers, see § 367; of savings and loan associations, see § 391. Limitation upon profits of personal loan company, see § 350; of personal loan broker, see § 364. § 57. When superintendent may take possession of delinquent cor- poration, banker or personal loan broker. The superintendent may forthwith take possession of the busi- ness and property of any corporation to which this chapter is ap- plicable, or any individual banker or personal loan broker, or any private banker to which article four of this chapter is applicable whenever it shall appear that such corporation or banker : 1. Has violated its charter or any law; 2. Is conducting its business in an unauthorized or unsaf3 manner ; 3. Is in an unsound or unsafe condition to transact its business ; 4. Cannot with safety and expediency continue business; 6. Has an impairment of its capital; 6. Has suspended payment of its obligations; 7. Has neglected or refused to comply with the terms of a duly issued order of the superintendent; 46 Backing Law. § 57. 8. Has refused, upon proper demand, to submit its records and affairs for inspection to an examiner of the banking department; 9. Has refused to be examined upon oath regarding its affairs. The superintendent may also forthwith take possession of the business and property of any savings and loan association which for two years after due demand or notice of withdrawal has been filed with it by any shareholder, has failed to pay matured shares or withdrawals or any part thereof as provided in section three hundred ninety-eight of this chapter. Source. — Former § 19. Last paragraph taken from former § 229. Sections 57-81 are substituted for tlie matter contained in former § 19. CROSS-REFERENCES.— As to voluntary dissolution, see § 486. As to proceedings to dissolve corporations generally and for voluntary dissolution, see Gen. Corp. Law, §§ 100-221. REASONS FOR ENACTMENT OF FORMER § 19.— The reason for the enactment of former § 19 giving the superintendent the right to take charge of a, bank in unsound condition, was because during the financial depression of 1907 there were a series of receiverships in which the demand for com- missions and counsel fees were so extravagant as to arouse an instant popu- lar demand for reform. Matter of Union Bank, 204 N. Y. 313, 316. A SPECIALLY CHARTERED TRUST COMPANY is subject to this section by reason of § 187 (former § 197). Atty.-Gen. Rep. (1910) 832. SUPERINTENDENT ACTS BY VIRTUE OF STATXTTE.- In taking pos- session of a bank under this section the superintendent acts as such by virtue of statutory authority and not as a result of any proceeding in court, though his administration is, in certain respects, subject to the action of the State Supreme Court. In re Bologh, 185 Fed. 825. EFFECT OF ASSIGNMENT FOR CREDITORS.— The powers of the superintendent over a corporation organized under the Banking Law are not limited or interfered with by an assignment for the benefit of creditors. Atty.-Gen. Rep. (1901) 265. NECESSITY FOR EXAMINATION.— " The plain theory of the statute is that the superintendent shall not take possession of a bank for purposes of liquidation until after he has made an examination from which it appears that the conditions warrant the exercise of the power." Matter of Union Bank, 204 N. Y. 313, 317. EFFECT OF TAKINO POSSESSION.— The legal existence of an incor- porated bank does not cease when the superintendent takes it over. Matter of Union Bank, 147 App. Div. 593. The superintendent on taking possession merely becomes a custodian and liquidator. The corporation is not extinguished and still retains title to its assets. Lafayette Trust Co. v. Higginbotham, 136 App. Div. 747, §§ 58, 59. PowEES AND Duties op Supeeintendent. 47 Section 229 of the former Banking Law of 1909, as amended, empowering the Superintendent of Banks to take possession of the co-operative building bank wherje demands for withdrawals remain unpaid for two years, does not amount to a command to such institution to pay within two years, but relates solely to the supervisory powers of the State Superintendent. Moly- neaux v. Co-operative Building Bank, 169 App. Div. 731. Rights of creditors are fixed as of the time the superintendent takes possession of the bank. People v. Bank of Staten Island, 70 Misc. 634. After the superintendent has taken possession, the directors have no power to begin proceedings for voluntary dissolution. Matter of Murray Hill Bank, 153 N. Y. 199. § 58. Circumstances under which possession of superintendent may terminate. When the superintendent shall have duly taken possession of such corporation, private or individual banker or personal loan broker, he may hold such possession until its affairs are finally liquidated by him, unless : 1. He shall have permitted such corporation or banker to re^ sume business pursuant to the provisions of section sixty-one of this article; 2. The superintendent shall have been directed by order of the supreme court to surrender such possession, pursuant to the pro- visions of section sixty of this article ; 3. The stockholders of such corporation, at a meeting called by the superintendent pursuant to the provisions of section seventy- nine of this article, shall have duly determined to appoint, and shall have appointed, an agent or agents to continue the liquida- tion of such corporation, and such agent or agents shall have qualified to take possession of its remaining assets as provided in section seventy-nine of this article; 4. The depositors and other creditors of such banker or broker and the expenses of such liquidation shall have been paid in full. Source. — Former § 19. The language of the section is all new, but all the material is collected from former § 19. § 59. Superintendent may report delinquencies to attorney-general to procure judgment of dissolution ; reports presumptive evidence. Whenever the superintendent is entitled to take possession of any such corporation for any reason set forth in section fifty- seven of this article, he may report to the attorney-general and specify in such report the delinquencies of such corporation; and the attorney-general may institute an action to procure a judg- 48 Banking Law. § 60. ment dissolving such corporation. Every sueli report and every report of a duly instituted examination of such corporation, when duly verified, shall be presumptive evidence of the facts' therein stated in any action or proceeding against such corporation in- stituted by the attorney-general. Source.— Former §§18 and 26. As to actions by Attorney-General to dissolve corporations, see Gen. Corp. Law, § 101, et seq. NO RELATOR NECESSARY.— Upon receiving the report of the superin- tendent, the Attorney-General may bring an action in the name of the peo- ple of the state to dissolve the corporation, without waiting for a relator to set him in motion. People v. Mercantile Co-op. Bank, 53 App. Div. 295. SUFFICIENCY OF COMPLAINT.— In People v. Manhattan Real Estate, etc., Co., 175 N. Y. 133, it was held that in an action brought by the Attorney- General to dissolve a corporation organized under the Banking Law, the com- plaint was demurrable unless it contained a traversable allegation that the corporation was insolvent or unable to pay its debts, or that it had violated some specified law. But under the section as it now stands it would seem sufficient to allege the existence of any of the grounds enumerated in § 57. For complaint held suflBelent in action by Attorney-General to procure dis- solution of corporation, see People v. Republic Sav. & L. Assoc, 53 App. Div. 384. AN ACTION TO DISSOLVE A SAVINGS AND LOAN ASSOCIATION could be maintained by the Attorney-General under former § 18. People v. Republic Savings & Loan Assoc, 53 App. Div. 384. REPORT PRESUMPTIVE EVIDENCE.— An. examiner's report showing that a corporation was insolvent on a certain date, is prima facie evidence thereof. People v. Empire Loan & Ins. Co., 15 App. Div. 69. § 60. iManner and time within which action of superintendent in taking possession may be tested. At any time within ten days after the superintendent has taken possession of the property and business of any such corporation, banker or broker, such corporation, banker or broker may apply to the supreme court, in the judicial district in which the princi- pal office of such corporation, banker or broker is located, for an order requiring the superintendent to show cause why he shotdd not be enjoined from continuing such possession. The court may, upon good cause shown, direct the superintendent to refrain from further proceedings and to surrender such pos- session. Source. — Former § 19. §§ 61, 62. PowEKS AND Duties of Supeeintendent. 49 § 61. Superintendent may permit resumption of business. The superintendent may, upon such conditions as may be ap- proved by him, surrender possession for the purpose of permitting such corporation, banker or broker to resume business; but the superintendent shall not authorize any reduction of capital stock or capital as one of the terms of such resumption. Source. — Former § 19. The prohibition against reduction of capital is new and is intended to prevent any diminution of the stockholders' liability. SCALING DOWN DEPOSITS OF SAVINGS BANK.— In People v. Ulster County Sav. Bank, 64 Hun 434, aff'd 133 N. Y. 689, it was held that, under Laws of 1882, c. 400, § 273 (repealed by the former Banking Law), the court had power to permit an insolvent savings bank to resume business upon scaling down its deposits sufficiently to render the bank solvent; and it seems that such power resides in the court independently of statute. By § 280 of the present law express provision is made for reduction of liability to depositors of an insolvent savings bank. However, the constitution- ality of this provision has been questioned. See dissenting opinion of Putnam, J., in In re Eagle Sav. & L. Assoc, 164 App. Div. 867. § 62. Special deputies; assistants; counsel and other employees. The superintendent may, by certificate, under his hand and official seal, appoint one or more special deputy superintendents as agent or agents to assist him in liquidating the business and affairs of any corporation or private or individual banker or per- sonal loan broker in his possession. The superintendent shall file such certificate in his office and shall cause a certified copy thereof to be filed in the office of the clerk of the county in which the principal office of such corporation, banker or broker is located. He may, from time to time, delegate such special deputy superintendents to perform such duties connected with such liqui- dation as he may deem proper. He may employ such expert assistants and counsel and may retain such of the officers or employees of such corporation, banker or broker as he may deem necessary in the liquidation and distribution of the assets of such corporation, banker or broker. He shall require such security as he may deem proper from his agents and assistants appointed pursuant to the provisions of this section. Source. — Former § 19, in part, without material change. CROSS-REFEEENCES. — Eligibility of examiner to appointment as spe- cial deputy, see § 15. Compensation of special deputies, assistants, counsel and other employees, see § 63. 4 50 Banking Law. §§ 63, 64. § 63. Payment by superintendent of expenses of liquidation. The superintendent shall pay out of the funds in his hands, of such corporation or private or individual banker or personal loan broker, all expenses of liquidation, subject to the approval of the supreme court in the judicial district in which the principal office of such corporation, banker or broker is located, and upon notice of the application for such approval to such corporation, banker or broker. He shall, in like manner, fix and pay the com- pensation of special deputy superintendents, assistants, counsel and other employees appointed to assist him in such liquidation pursuant to the provisions of this article. But a special deputy who, as examiner acting uiider commission from the superin- tendent, has previously examined the books, papers and affairs of such corporation, banker or broker, shall not receive compen- sation as such special deputy which exceeds by more than five dollars a day the per diem compensation received by him as ex- aminer at the time of making such examination. Source. — Former § 19. The last sentence is new. CROSS-HEFERBNCES.— Eligibility of examiner to appoint as special deputy, see § 15. Appointment of special deputies and employment of counsel and assistants, see § 62. COMPENSATION OF COUNSEL.— In view of the fact that the compensa- tion of counsel was by law payable out of the funds of the insolvent institu- tion, the court granted an additional allowance of $1,000 in a difficult and extraordinary ease in which the insolvent was successful, although such allow- ance (Would not otherwise have been made. First Nat. Bank v. Lafayette Trust Co., 86 Misc. 558. § 64. Procedure of superintendent to obtain possession of pleadings, et cetera, in actions against which attorneys' liens are asserted. When the superintendent is in possession of the business and property of any such corporation or private or individual banker or personal loan broker, and attorneys' liens are asserted by attor- neys of such corporation, banker or broker against any causes of action to which such corporation, banker or broker is a party, or against pleadings or other papers in the possession of such attor- neys relating to such causes of action, or if such liens are asserted against any evidences of title to any assets or against any of the assets of such corporation, banker or broker then in the possession of such attorneys, the superintendent may institute special pro- §§ 65, 66. Powers and Duties op Supebintendent. 51 ceedings and petition the court to fix and determine the amount of said liens. Such proceedings shall be instituted in the county in which the principal office of such corporation, banker or broker is located. Upon application of the superintendent and upon notice to such attorneys to be prescribed by the court, the court may by order prior to final order in such proceeding direct such attorneys to deliver to the superintendent all property of such corporation, banker or broker, against which such liens are asserted, together with such consents to substitution of attorneys as the court may direct, upon the superintendent furnishing security to such attorneys in the manner and to an amount to be fixed by the court. Source. — New. The purpose of the section is to prevent delays in liquida- tion by controversies over counsel fees. Enforcement of attorney's lien, see Judiciary Law, § 475. The procedure to enforce an attorney's lien. Matter of King, 168 N. Y. 53. § 65. On taking: possession, superintendent shall notify those holding assets; effect of notification. When the superintendent shall have taken possession of the property and business of any such corporation or private or in- dividual banker, or personal loan broker, he shall forthwith give notice of such fact to any and all banks, trust companies, associa- tions and individuals holding any assets of such corporation, banker or broker, l^o corporation, association or individual hav- ing notice or knowledge that the superintendent has taken posses- sion of such corporation, banker or broker, shall have a lien or *broker, for any payment, advance or clearance thereafter made, charge against any of the assets of such corporation, banker or or liability thereafter incurred. Source. — Former § 19, in part, without material change. § 66. Inventory of assets and where filed. After the superintendent shall have taken possession of the property and business of such corporation or private or individual * The present banking law passed the legislature under an emergency mes- sage. Senate print 1530 was amended and passed in both houses on the 27th day of March, 19'14. In the reprint of the bill as amended, after its passage, two lines were transposed by the printer. The last clause in this section as passed by both houses read as follows: "Shall have a lien or charge against any of the assets of such corporation, banker or broker, for any payment, advance or clearance thereafter made, or liability thereafter incurred." 62 BANKiiirG Law. § 67. banker, or personal loan broker, he shall make in duplicate an inventory of the assets of such corporation, banker or broker. He shall file one copy of snch inventory in his office and shall cause one copy to be filed in the office of the clerk of the county in which the principal office of such corporation, banker or broker is located. Source. — Former § 19, in part, -without material change. § 67. Disposition by superintendent of property held by delinquent as bailee, or depositary for hire. The superintendent may, after he has taken possession of any such corporation or private or individual banker or personal loan brtJier, cause to be mailed to all persons claiming to be, or appear- ing upon the books of such corporation, banker or broker to be, the owner or owners of any personal property theretofore left in the possession of such corporation, banker or broker as bailee or de- positary for hir^. or the lessee of any safe, vault or box, a notice in writing in a securely closed, post-paid, roistered letter directed to each of such persons at his post-office address as recorded upon its books, or, if his name is not recorded in said books, at his last known post-office address, notifying such person to remove all such personal property within a period stated in said notice, and not less than sixty days from the date thereof. If such property shall not have been removed within the time fixed by such notice, the superintendent may apply to the supreme court in the judicial district in which such property is located for an order directing him as to the disposition of such property ; and he may cause any safe, vault or box held by, or on the premises of, such corporation, banker or broker to be thereafter opened in his presence or in the presence of one of the special deputy superintendents, and of a notary public, not an officer or in the employ of the corporation, banker or broker or of the superintendent, and the contents, if any, to be sealed and distinctly marked by such notary public, with the name and address of the person in whose name such safe, vault or box stands upon the books of the corporation, banker or broker, and a list and description of the property therein to be attached thereto. Such package so sealed and addressed together with the list and description of the property therein, may be kept by the superintendent in one of the general safes or boxes of the corpora- §§ 68, 69. Powers and Duties of Superintendent. 53 tion, banker or broker until delivered to the person whose name appears thereon or until otherwise disposed of as directed by the court. Source. — Former § 19, in part. A SPECIAL DEPOSIT OF MONEY with a trust company to the credit of a pending action and subject to the order of the court creates a baihnent. Such money does not become the property of the trust company and does not pass to the Superintendent upon his taking possession. Van Wagoner v. Buckley, 148 App. Div. 808. DEPOSITS RECEIVED WHILE INSOLVENT.— One depositing drafts with a bank which is then insolvent to the knowledge of its officers is entitled to reclaim them from the receiver. The fraud of the bank in holding itself out as solvent entitles the depositor to rescind the contract implied from such deposit. Cragie v. Hadley, 99 N. Y. 131. SUPERINTENDENT'S RIGHT TO RELEASE OR RECEIPT.— The Super- intendent cannot exact, as a condition of delivering property held by the delinquent as bailee, the execution by the owner of a release of liability on the part of the delinquent, or of himself, or of his deputy, for wrongful detention. But he may exact an ordinary receipt so that he may have an official record of the acknowledgment of the delivery of the property to the owner. Matter of Carnegie Trust Co., 162 App. Div. 76. APPLICATION BY CLAIMANT TO COMPEL SURRENDER OP PROP- ERTY. — The section does not expressly authorize the court, on the applica- tion of the claimant, to summarily direct the surrender of property by the Superintendent, and it is doubtful whether such an order could be made without the Superintendent's consent. But where, upon such an application, the Superintendent consents to the jurisdiction, an order may be made direct- ing the surrender of the property. Matter of Carnegie Trust Co., 162 App. Div. 76. § 68. Effect of superintendent's notice to remove upon contract of bailment or of deposit for hire. After the superintendent shall have duly mailed a notice in writing, as provided in section sixty-seven of this article, the con- tract of bailment or of deposit for hire, or lease of safe, vault or box, if any, between the person duly notified and the corporation or private or individual banker or personal loan broker shall cease and determine upon the date for removal fixed in such no- tice, and the amount of the unearned rent or charges, if any, paid by such person shall become a debt of the corporation, banker or broker to said person. Source. — Former § 19 in part. § 69. Liquidation and conservation of assets; compounding debts and compromising certain claims. The superintendent is authorized, upon taking possession of the property and business of such corporation or private or individual banker or personal loan broker, to liquidate the affairs thereof and 54 Banking Law. §§ 70, 71. to do all acts and to make such expenditures as in his judgment are necessary to conserve its assets and business. He shall pro> ceed to collect the debts due. He may upon an order of the su- preme court, sell or compound all bad or doubtful debts held by, and compromise claims against such corporation, banker or broker, other than deposit efeims, and, upon such terms as the court shall direct, may sell or otherwise dispose of all or any of the real and personal property of such corporation, banker or broker. In case any of the real property so sold is located in a county other than the county in which the application to the court for leave to sell the same is made, the superintendent shall cause a certified copy of said order to be filed in the oiBce of the clerk of the county in which such real property is located. Source. — Part former § 19. Power to compromise claims added. Power to sue, defend, execute instruments, etc., see § 71. POWER TO EXPEND BANK'S MJNDS.— When the Superintendent deems it necessary and proper to expend some of the funds of the bank in order to conserve its assets, he may do so without an application to the Supreme Court, and is not liable for any loss occasioned thereby, unless he has failed to exercise honestly his best judgment and discretion. Atty.-Gen. Rep. (1912), vol. 2, p. 55. SALE OF REAL PROPERTY. — Where, on petition by the Superintendent, the Supreme Court made an order approving and confirming a private sale of land belonging to an insolvent trust company, it was held that under the circumstances of the case the court thereafter had no power to revoke its first order and make a new one directing that the sale must be at public auction and at a greater price. Matter of Superintendent of Banks, 207 N. Y. 11. On an application by the Superintendent to the Supreme Court for permis- sion to sell real estate belonging to a bank in his possession, it is not neces- sary that notice be given to the Attorney-General under Gen. Corp. Law, § 312. Atty.-Gen. Rep., Sept. 29, 1913. § 70. Deposit of moneys collected; preference. The moneys collected by the superintendent shall be from time to time deposited in one or more state banlis, savings banks or trust companies and, in case of the insolvency or voluntary or in- voluntary liquidation of the depositary, such deposits shall be en- titled to priority of payment on an equality with any other priority given by this chapter. Source. — Former § 19, in part, without material change. As to priorities in general, see § 78, and annotations thereto. § 71. Superintendent's power to sue, execute instruments, et cetera, for delinquent; actions and proceedings preferred; exemp- tion from filing fees. For the purpose of executing any of the powers and performing any of the duties hereby conferred upon him, the superintendent § 71. PowEES AND Duties of Supeeintendent. 55 may, in the name of the delinquent corporation or private or indi- vidual banker or personal loan broker, prosecute and defend any and all actions and legal proceedings. Any such action or proceed- ing, upon application of the superintendent, shall be entitled to the same preference to which an action or proceeding by or against a receiver appointed by the court is entitled in any court of the state. He may, in the name of the delinquent corporation, banker or broker, execute, acknowledge and deliver any and all deeds, assign- ments, bills of sale, releases extensions satisfactions and other instruments necessary and proper to effectuate any sale, lease or transfer of real or personal property or to carry into effect any power conferred or duty imposed upon him by this article or by order of the supreme court. Any instrument executed pursuant to the authority hereby given shall be as valid and effectual for all purposes as though the same had been executed by the officers of the delinquent corporation by authority of its board of directors, or by the private or individual banker or personal loan broker per- sonally. The superintendent shall not be required to pay any fee to any public officer for filing or recording any paper or instrument executed in pursuance of any power conferred on him by this section. Source. — Part former § 19. The last sentence is new, as is also the pro- vision for preferring causes upon application of the superintendent. ACTION PROPERLY BROUGHT IN NAME OF CORPORATION.— An action on a note held by a delinquent corporation is properly brought in its name. Lafayette Trust Co. v. Higginbotham, 139 App. Div. 747. Any action with respect to the property or business of the bank should be brought by or against the corporation, which still retains its corporate exist- ence, as if still managed by its board of directors. Richardson v. Cheney, 146 App. Div. es&, 690, affirmed 208 N. Y. 541 ; Van Tuyl v. Schwab, 85 Misc. 172. MAY SUE AND BE SUED AS RECEIVER.— The superintendent when in possession for purposes of liquidation may sue and be sued in effect as a re- ceiver. In re Carnegie Trust Co., 161 App. Div. 280. ENFORCEMENT OF MORTGAGE BY SUPERINTENDENT.— The superin- tendent may maintain an action to enforce a bond and mortgage held by the bank, but the action must be brought in the name of the corporation. If brought in the name of the superintendent the summons and complaint may be amended, but not nunc pro tunc. There is no power to amend the lis pendens so as to make it operate against intervening rights, but a new notice of lis pendens may be filed. It is not necessary to plead the provisions of the Banking Iiaw in the complaint. Van Tuyl v. N. Y. Real Estate Sec. ■Co., 153 App. Div. 409, affirmed 207 N. Y. 691. SET-OFF AND COUNTERCLAIM.— In an action by the superintendent against an endorser of a note held by the bank the endorser cannot offset his deposit in the bank against the amount due on the note, if the maker is sol- 56 Banking Law. § 72. vent. Borough Bank v. Mulqueen 70 Misc. 137. But see Curtis v. Davidson, 150 N. Y. Supp. 305. An endorser of a note made for his accommodation may set-off his deposit against his liability on such note when sued thereon by the superintendent. Building & Engineering Co. v. Northern Bank, 206 N. Y. 400, affirming 151 App. Div. 942. An endorser when sued on the note may set-off his deposit without showing that the maker is insolvent. The burden is on the plaintiff to show that the maker is solvent. Carnegie Trust Co. v. Kistler, 152 N. Y. Supp. 240. Where in an action against the maker of a note held by the bank, the de- fendant counterclaims his deposit in the bank, this constitutes a sufficient de- mand to start interest running on the deposit from that time. Sickles v. Harold, 149 N. Y. 332. In an action by the superintendent to enforce the payment of rent due to an insolvent private banker, the tenant may set-off his deposit with such private banker against the claim for rent. Mandel v. Koroner, 149 N. Y. Supp. 455. Where the holder of a demand note made by a bank demanded payment less than an hour before the closing of the bank, it was held that in an action by the receiver against the holder of the note on a debt due from him to the bank, the defendant was entitled to set-off the note. Fisher v. Hanover Nat. B?.nk, 64 Fed. 832. POWER TO VERIFY REPLY TO COUNTERCLAIM.— The superintendent or one of his special deputies has power to verify and interpose a reply to a counterclaim in an action brought by him in pursuance of his duties in liqui- dating the affairs of a bank. Union Bank v. Kanturk Realty Corp., 72 Misc. 96. § 72. Notice to creditors to make proof of claims. Wiien the superintendent shall have taken possession of such cor- poration or private or individual banker or personal loan broker, and shall have determined to liquidate its affairs he shall notify all persons who may have claims against such corporations, banker or broker, to present the same to him and make proper proof thereof within four months from the date of said notice and at a place specified therein, and shall specify in said notice the last date for presenting said proofs. He shall cause said notice to be mailed to all persons whose names appear as creditors upon the books of the corporation, banker or broker. He shall also cause said notice to be inserted weekly in such newspapers as he may direct for three consecutive months, the first insertion thereof to be published more than ninety days before the last day fixed in said notice for presenting proof of claims. After the date specified in such notice as the last date for presenting proofs of claims the superintendent shall have no power to accept any claim. Source.— Part former § 19. The time for presenting and making proof of claims cannot be later than four months from the date of notice to creditors; and after this period has expired, the superintendent cannot receive any further claims. These provisions are new. §§ 73, 74, 75. Powers and Duties, of Supeeintendent. 57 § 73. Superintendent to list claims duly presented; when and where filed. The superintendent shall make in duplicate a complete list of all claims duly presented, and shall specify therein the name of the claimant, the nature of the claim, and the amount thereof. Within ten days after the last date fixed in said notice to creditors to present and make proof of claims, the superintendent shall file one copy of said list in his office, and cause one copy to be filed in the office of the clerk of the county in which the principal office of such corporation or private or individual banker or personal loan broker is located. Source.— Part former § 19. The provision as to the time within which list must be filed by superintendent is new. § 74. Objections to claims presented may be filed with superintendent within certain time; procedure upon claim under objection. Within thirty days after the last date fixed in said notice to creditors to present and make proof of claims, objections to any claim duly presented may be made by any party interested, by filing with the superintendent such objections in writing, signed by the objector and duly verified. Unless the superintendent rejects any claim to which objections have been duly filed with him, he shall, within thirty days after the time to file such objections has ex- pired, apply to the supreme court, upon notice to the objector, for an order directing the superintendent as to the disposition of said claim. The court may thereupon dispose of said objections or may order a reference for that purpose. Source. — Part former § 19. The procedure in liquidation has been modi- fied by this section. Objections to the allowance of claims must be made within thirty days from the last day for making proofs. This gives objectors not less than twenty days to examine the list of claims filed by the Super- intendent under the provisions of section 74. This provision, and the require- ment that the superintendent must act upon objections promptly, were inserted for the purpose of expediting liquidations. § 75. Superintendent may accept or reject claims; list of claims accepted to be filed. The superintendent shall, not later than thirty days after the time has expired to file objections to claims duly presented, accept 58 Banking Law. § '76. or reject every duly filed claim except claims as to which objections are still pending undetermined by the court. Every claim accepted by him, he shall endorse " accepted " and file so endorsed in his of- , fice. If he doubts the justice or validity of any claim, he shall reject such claim and shall endorse the same " rejected " and file said claim so endorsed in his office. He shall cause notice of such re- jection to be served upon the claimant either personally or by mail. The superintendent shall not determine priorities, in accepting or rejecting claims; but accepted claims shall be presented to the supreme court pursuant ta section seventy-eight of this article for determination as to their priority of payment. Within thirty days after the superintendent has accepted or rejected all claims duly filed, he shall list all claims accepted and all rejected by him and file one copy of said list in his office and one copy in the office of the clerk of the county in which the principal office of such cor- poration or private or individual banker or personal loan broker is located. Source. — Part former § 19. The limitation on the time within which claims must be acted upon and the requirement as to listing claims are new, as is also the provision prohibiting the superintendent from determining priorities. Determination of priorities, see § 78. COURT CANNOT ORDER PAYMENT OF DEPOSIT.— The Supreme Court has no power or jurisdiction to order the superintendent, on an application by a depositor of a bank in tlie superintendent's possession, to pay over to such depositor the amount of his deposit. Matter of Peters, 78 Misc. 453. COSTS IN ACTION ON REJECTED CLAIM.— Where a claim is rejected and an action is brought thereon, the plaintiff, is successful, is entitled to his costs in full out of the assets of the insolvent with interest thereon from the date of judgment to the time of payment. In re Carnegie Trust Co., 161 App. Div. 280. INTEREST ON DIVIDEND WHERE CLAIM ESTABLISHED BY ACTION. — 'Where a rejected claim is established by action, the creditor is entitled to interest on his dividend from the time such dividend was paid to other creditors. In re Carnegie Trust Co., 161 App. Div. 280. § 76. Effect of acceptingr claims; statute of limitations for actions upon claims not accepted; necessary allegations. When the superintendent has accepted a duly filed claim and has filed the same endorsed " accepted " in his office, the claimant, § 77. PowEES AND Duties of Superintendent. 59 unless such olaim is entitled by law to priority of payment, shall be entitled to share ratably with other general creditors in the dis- tribution of the assets of such corporation or private or individual banker or personal loan broker as such assets are distributed pur- suant to section seventy-eight of this article. When the time within which the superintendent is required to accept or reject claims has expired and at any time within six months thereafter, a claimant whose claim has been duly filed and has not been accepted by the superintendent may institute and maintain an action thereon against such corporation, banker or broker. No action shall be maintained against such corporation, banker or broker while the superintendent is in possession of its affairs and business unless brought within the period of limitation specified in this section. In all actions or proceedings instituted against such corporation, banker or broker while the superintendent is in possession of its property and business, the plaintiff shall be re- quired to allege and prove that the claim upon which the action is instituted was duly filed and that sixty days have elapsed since the expiration of time for filing said claim and that said claim has not been accepted. Source. — Practically new. The six months statute of limitations was con- tained in former § 19. FAILURE TO FILE CLAIM. — Depositors who do not prove their claims forfeit their right to share in the distribution. People v. German Bank, 136 N. Y. Supp. 311. ACTION DOES NOT LIE AGAINST SUPERINTENDENT.— An action to enforce a claim against a corporation in the hands of the superintendent must be brought against the corporation and not against the superintendent. Richardson v. Cheney, 146 App. Div. 686, affirmed 208 N. Y. 541. " It seems to be well settled in this state than an action cannot be main- tained against the Superintendent of Banks upon a demand existing against a bank which he is liquidating. The Superintendent of hanks is merely a custodian, liquidator and conservator of the bank and for the purposes of an action against the bank, the latter is the real party in interest.'' Van Tuyl V. Schwab, 85 Misc. 172. § 77. Judgments recovered after superintendent takes possession shall not be liens. A lien shall not attach to any of the property or assets of such corporation or private or individual banker or personal loan broker 60 Banking Law. § TS- by reason of the entry of any judgment recovered against such cor- poration, banks ror broker after the superintendent has taken pos- session of its property and business and so long as such possession continues. Source. — New. The section embodies the rule laid down in Northern Bank V. Drury, 152 App. Div. 64. This rule has since been upheld by the Court of Appeals in Lafayette Trust Co. v. Beggs, 213 N. Y. 280, aflarming 163 App. Div. 959. JUDGMENT NOT ENTITLED TO PREFERENCE.— A judgment obtained by a general creditor of a savings bank against its receiver in an action that was pending when the receiver was appointed, was held not entitled to a preference over depositors. People v. Mechanics' and Traders' Sav. Inst., 92 N. Y. 7, reversing 28 Hun 375. § 78. Dividends to creditors; priorities; disposition of unclaimed dividends. At any time after the date fixed by the superintendent for the presentation of claims, the supreme court may by order .authorize the superintendent upon his application to declare out of the funds remaining in his hands after the payment of expenses, one or more dividends. Such order shall specify what claims, if any, are en- titled to priority of payment, and shall direct the superintendent regarding the manner of payment of such prior claims. At any time after the expiration of eight months from said date fixed for the presentation of such claims, he may by like order declare a final dividend. Such dividends shall be paid to such persons, in such amounts, and upon such notice, as the supreme court in the judicial district in which the principal office of such corporation or private or individual banker or personal loan broker is located, may by order direct. Dividends remaining unclaimed or unpaid in the hands of the superintendent for six months after the order for final distribution, shall be deposited by him as provided in sec- tion forty-five of this article. Source. — Part former § 19. The provision for determination of priorities is new. Under the limitations of time within which claims must be presented, actions upon claims instituted, and liquidating officials perform their duties, it is possible to complete the liquidation of an institution within twelve months. CROSS-REFERENCES.— Priority of assessment and penalties, see § 32. Priority of unclaimed sums deposited by superintendent, see § 45. Priority of funds deposited by superintendent acting as liquidators, see § 70. Prohibition against determination of priorities by superintendent, see § 75. Preference of depositors in case of insolvency or suspoision of piivate banker, see § 156. § Y8. PowEEs AND Duties of Supeeintendent. 61 Priority of debts due from trust company in fiduciary capacity, see § 188, subd. 8. Priority of deposits made by savings bank, see § 278; by savings and loan associations, see § 414; by the land bank, see § 437; by credit unions, see I 456. Priority of debts due the United States, see U. S. Rev. Stat., § 3466 ; 2 Fed. Stat. Ann., p. 45. STATE FtlNDS are entitled to preference by virture of Const. 1894, art. 1, § 16. Matter of Carnegie Trust Co., 206 N. Y. 390; United States Fidelity and Guaranty Co. v. Carnegie Trust Co., 161 App. Div. 429, affirmed 213 N. Y. 629.; United States Fidelity & Guaranty Co. v. Borough Bank, 161 App. Div. 479, affirmed 213 N. Y. 628. MUMCIPAI, FU2SrDS are not entitled to preference. Matter of Northern Bank, 85 Misc. 594, affirmed 163 App. Div. 974 and 212 N. Y. 608. SUBROGATION OF SURETY TO PREFERENCE.— A surety on a bond given by a trust company to secure a deposit which is entitled to priority of payment upon paying the amount to the depositor becomes subrogated to the right to preferential payment. United States Fidelity & Guaranty Co. v. Carnegie Trust Co., 161 App. Div. 429, affirmed 213 N. Y. 629; Same v. Same, 161 App. Div. 435, affirmed 213 N. Y. 629 ; United States Fidelty &, Guaranty Co. V. Borough Bank, 161 App. Div. 479, affirmed 213 N. Y. 628. FAILURE TO DEMAND A PREFERENCE at the time of filing a claim against the insolvent does not constitute a waiver of the right to such prefer- ence in the absence of elements creating an estoppel. United States Fidelity & Guaranty Co. v. Carnegie Trust Co., 161 App. Div. 429, affirmed 213 N. Y. 629. AGREEMENT NOT TO DRAW OUT DEPOSIT.— A bank discounted notes aggregating $6,000 for a depositor upon the latter's agreement not to draw out $2,000 of the amount credited to him until the notes were paid. Accord- ingly he delivered to the bank his cheek for $2,000 payable to its order. The bank accepted the cheek payable at another bank, and subsequently collected the same and credited the amount back to the depositor's account but with- out his knowledge. Thereafter the superintendent took possession of the bank and the depositor sued him to recover the $2,000. It was held that the depositor was not entitled to priority, but must file his claim and share with the other creditors. Richardson v. Cheney, 146 App. Div. 686, affirmed 208 N. Y. 541. CREDITOR OBTAINING IMPROPER PREFERENCE.— Where a depositor has checks outstanding at the time the bank is closed and the same are paid through the clearing house subsequent to such closing, the depositor is not entitled to any dividend until all other creditors have been paid a pro- portion of their claims equal to the proportion of such depositor's claim that has been paid by the payment of the checks. People v. Bank of Staten Island, 70 Misc. 634. INTEREST. — Interest during the period of administration may be allowed against the corporation if the assets are sufficient for that purpose, but no interest can be allowed upon a preferred claim to the detriment of unpre- ferred creditors. People v. American Loan & Trust Co., 172 N. Y. 371, affirm- 62 Banking Law. § 79. ing 70 App. Div. 579; United States Fidelity & Guaranty Co. v. Carnegie Trust Co., 161 App. Div. 429, affirmed 213 N. Y. 629; Same v. Same, 161 App. Div. 435, affirmed 213 N. Y. 629; United States Fidelity & Guaranty Co. V. Borough Bank, 161 App. Div. 579, affirmed 213 N. Y. 628. APPEAL BY SUPERINTENDENT. — An application by the superintendent to the Supreme Court for a determination of conflicting claims to the bank's assets is a special proceeding and the superintendent, as the representative of the creditors generally, is entitled to appeal from the court's decision giving a preference to a particular creditor. Matter of Carnegie Trust Co., 206 N. Y. 390. DISTRIBUTION AS OF DATE OF CLOSING.— Distribution of the assets of an insolvent bank or trust company should be made as of the date when they pass into the custody of the law by the appointment of a receiver or otherwise. People v. American Loan & Trust Co., 172 N. Y. 371, aflf'g 70 App. Div. 579. DEPOSITORS AND CREDITORS OP SAVINGS BANKS SHARE RATA- BLY. — Upon the insolvency of a savings bank the assets of the corporation become a trust fund for its creditors. Depositors stand upon the same basis as other creditors, and share ratably with them and with each other in re- ceiving payment from the insolvent estate. People v. Mechanics' & Traders' Sav. Inst., 92 N. Y. 7, reversing 28 Hun, 375; People v. Ulster County Sav. Bank, 64 Hun, 434, affd 133 N. Y. 689. § 79. Superintendent shall call stockholders' meeting after creditors are paid in full; proceedings at such meeting. Whenever the superintendent shall have paid to each creditor of any stock corporation whose claim has been duly proved the full amount of such claim,, and shall have made proper provision for claims in litigation and not finally determined, and shall have paid all the expenses of liquidation, and shall have returned to stock- holders who have paid to him the amounts demanded pursuant to section eighty of this article, their pro rata share of any such amounts not finally necessary to pay creditors in full, he shall call a meeting of the stockholders of such corporation hy causing notice of the- time and place of such meeting to be published at least once a week for three successive weeks in one or more newspapers selected by him and published in the county where the principal office of such corporation is located. At such meeting, the stock- holders shall determine whether the superintendent shall continue as liquidator to wind up the aif airs of such corporation, or whether the stockholders themselves shall elect an agent or agents for that purpose. In determining these matters, the stockholders shall vote by ballot in person or by proxy. Each share of stock shall be enti- tled to one vote and the vote of a majority of the issued stock shall be necessary to a determination. In case it is determined to con- § 79. Powers and Duties of Supeeintendent. 63 tinue the liquidation under the superintendent, he shall continue the liquidation of the affairs of such corporation and after paying the expenses thereof, shall distribute the proceeds among the stock- holders in proportion to the several holdings of stock and in such manner and upon such notice as may be directed by order of the su- preme court. Upon a petition by the superintendent showing that all the assets of such corporation have been duly distributed and that unclaimed sums have been duly deposited by him as provided in section forty-five of this article and that more than one year has elapsed since the last required publication of notice to creditors to present their claims, and upon such notice as the court may pre- scribe, the supreme court may, on such terms as justice requires, make an order affirming such disposition of such unclaimed sums and declaring such corporation dissolved and the corporate existence thereof terminated. Upon the filing of a certified copy of such order in the office of the superintendent, the existence of such cor- poration shall cease and determine. In case the stockholders shall determine to appoint an agent or agents to continue such liquidation, they shall thereupon select by ballot such agent or agents^ A majority of the stock present and voting in person or by proxy shall be necessary to determine such question. If such agent or agents shall be duly elected by the stockholders, the superintendent may require such agent or agents to execute and deliver to him a bond to the people of the state, in such amount, with such sureties, and in such form as shall be approved by him, conditioned upon the performance of all the duties of his or their trust; and thereupon the superintendent shall transfer and deliver to such agent or agents all the assets of such corporation then remaining in his hands. Upon such transfer and delivery, the superintendent shall be discharged from any and all further liability to such corporation and its creditors. Upon the transfer and delivery of said assets by the superintendent, he shall file a certified copy of the proceediags of said meeting in his office and cause a certified copy to be filed in the office of the clerk of the county in which the principal office of such corporation was located. No banking powers shall be exercised by such corporation after the superintendent has filed such certified copy in his office. Source. — Part former § 19. The new section expressly applies to stock corporations only, and consequently there can be no question whether it is 64 "Banking Law. § 80v applicable in the liquidation of a savings and loan association, as was tte case under the former law. See Atty.-Gen. Rep. (1910) 841. § 80, Superintendent may enforce payment of statutory liability of stockholders; notice thereof, and effect of failure to pay at time fixed. Whenever a liability of stockholders for the amount of their respective shares of any such corporation exists, and the superin- tendent has duly taken possession of the property and business of such corporation, and has duly notified creditors to present and make proof of their respective claims and the last day to present such claims has expired, and he has determined from his examina- tion of its affairs that the reasonable value of the assets of such corporation is not sufficient to pay its creditors in full, he may enforce the individual liability of such stockholders in whole or in part. In case he determines to enforce such liability, he shall make demand in writing upon such stockholders by causing such demand to be enclosed in sealed envelopes addressed and mailed, postage prepaid, to said respective stockholders at their last known places of address as the same appear upon the stock ledger of such corporation or at their last known address if no address appears in said ledger. Such demand shall state the total amount assessed by the superintendent against the stockholders and the equal and pro rata share assessed against each stockholder for each share of stock, and the total amount of such assessment for all the shares of stock of such stockholder. Such demand shall also fix a date, not earlier than thirty days from the date of such notice, upon which such stockholders shall be required to pay such assessment to the superintendent. In case any such stockholder shall fail or neglect to pay such assessment within the time fixed in said notice, the superintendent shall have a cause of action, in his own name as superintendent of banks, against such stockholder either sever- ally or jointly with other stockholders of such corporation, for the amount of such unpaid assessment or assessments, together with interest thereon from the date when such assessment was, by the terms of said notice, due and payable. In any such action, the written statement of the superintendent, under his hand and seal of office, reciting his determination to enforce the individual lia- l)ility, or any part thereof, of such stockholders, and setting forth § 80. PowEEs AND Duties of Superintendent. 65 the value of the assets of such corporation and the liabilities thereof, as determined by him after examination and iuTestigation, shall be presumptive evidence of such facts as therein stated. Source. — Part former § 19, which merely provided that the superintendent might, " if necessary to pay the debts of such corporation, enforce the indi- vidual liability of the stockholders." OROSS-KEFEENCES.— As to liability of stockholders of banks, see § 120 ; of trust companies, see § 206; of safe-deposit companies, see § 322. SUPERINTENDENT'S POWEE TO ENFORCE.— Under the former law it was held that the superintendent had authority, if necessary, to institute an action in his official capacity to enforce the statutory liability of stockholders, unhampered by any of the limitations contained in the Stock Corporation Law, and notwithstanding that the charter of the company has not been dissolved by judgment. Van Tuyl v. Scharniann, 208 N. Y. 53; Hosier Safe Co. V. Guardian Trust Co., 208 N. Y. 524; Van Tuyl v. Robin, 80 Misc. 360, aff'd 160 App. Div. 41 and 211 N. Y. 540; Cheney v. Scharmann, 145 App. Div. 456. The present law expressly excludes the limitations contained in the Stock Corporation Law. See §§ 120, 206, 322. NO ABSOLUTE DUTY TO SUE.— Since this section does not impose an absolute duty on the sperintendent to proceed against stockholders, it would seem clear that he could not be held liable for the amount which he might have recovered, had he proceeded against a solvent stockholder within the time limited by statute. See People v. Staten Island Bank, 146 App. Div. 378. CORPORATION NOT NECESSARY PARTY.— In an action by the super- intendent to enforce the stockholders' liability, the corporation, while a proper, is a not a necessary party. Van Tuyl v. Scharmann, 208 N. Y. 53. STATUTE OF LIMITATIONS.— Under the former Banking Law such ac- tions could be brought within ten years after the accrual of the cause of ac- tion. . See Richards v. Gill, 138 App. Div. 75. The present law expressly pro- vides that the action must be brought within six years. See §§ 120, 206, 322. PROOF OF INSOLVENCY. — The inventory of assets and lists of claims filed by the Superintendent are admissible to show insolvency. Richards v. Robin. (Law Journal, March 27, 1915.) EXHAUSTION OF ASSETS NOT PREREQUISITE.— It is not necessary to exhaust all the assets of the corporation before bringing the action. Van Tuyl V. Robin, 80 Misc. 360, aff'd 160 App. Div. 41 and 211 N. Y. 540; Persons V. Gardner, 26 Misc. 663, 62 App. Div. 490; Barnes v. Arnold, 23 Misc. 201; Richards v. Robin. (Law Journal, March 27, 1915.) FORM OF ACTION. — In Cheney v. Scharmann, 145 App. Div. 456, it was held that, under former § 19, the superintendent could only enforce the liability in an action in equity against all the stockholders. The present section allows him to sue the stockholders either severally or jointly, thus enabling him to bring separate actions at law where the full amount of the liability is required, as is done under the national bank act. See Casey v. Galli, 94 U. S. 673. SUFFICIENCY OF COMPLAINT. — In -Cheney v. Scha;rmann, 145 App. Div. 456, it was held that a mere allegation that the superintendent deemed 66 Banking Law. §§ 81, 82. it necessary to enforce the stockholders' liability, was not sufBcient, and that no presumption of the existence of such necessity arose from the fact that the superintendent had taken possession. For complaints held suiEcient under the former Banking Law, see Van Tuyl V. Scharmann, 208 N. Y. 53; Van Tuyl v. Robin, 80 Misc. 360, affd 160 App. Div. 41 and 211 N. Y. 540. PARTIES DEFENDANT. — In an equity action by the superintendent against all the stockholders it is sound equitable practice to bring in as parties defendant all persons who will be affected by the judgment so that the controversy may be adjusted as between all parties. Richards v. Robin, 86 Misc. 528. COUNTERCLAIM. — In maintaining an action against stockholders, the superintendent represents the creditors, and consequently no claim against the corporation can be asserted as a counterclaim against the plaintiff in such action. To permit such a counterclaim would give such defendant a preference over other creditors. Van Tuyl v. Schwab, 165 App. Div. 412; Van Tuyl v. Schwab, 85 Misc. 172; Matter of Empire City Bank, 18 N. Y. 199. A stockholder who is also a creditor cannot offset the pro rata amount that will eventually be paid on his claim, as such amount cannot be determined until final distribution. Van Tuyl v. Schwab, 165 App. Div. 412. INTEREST ON LIABILITY.— In Mahoney v. Bernhard, 45 App. Div. 499, affirmed 169 N. Y. 589, it was held under the former law that the stock- holders' liability could not be extended by allowing interest thereon from the commencement of the action. The present section makes express provision for interest, the purpose of which is to discourage dilatory tactics on the part of stockholders. CREDITORS' RIGHT TO SUE STOCKHOLDERS.— In Mosler Safe Co. v. Guardian Trust Co., 208 N. Y. 524, it was held that, if the superintendent refused to bring the action, a creditor might do so. The present law ex- pressly so provides. See §§ 120, 206, 322. § 81. Superintendent may maintain action against directors, trustees, managers or officers for violation of their official duties. At any time while the superintendent is in possession of the property and business of any such corporation, he may within six years after the cause of action has accrued institute and maintain in his name as superintendent of banks against its directors, trus- tees, managers or officers, or any of them, any action or proceed- ing which is vested in such corporation or in the stockholders or creditors thereof. Source.— New. See Gen. Corp. Law, §§ 90^92, post. § 82. Official acts of superintendent and details of department busi- ness to be made public. The superintendent shall keep in his office, in a place accessible to the general public, a bulletin board upon which he shall cause to be posted at noon on Friday, of each week a detailed statement, signed by him or, in case of his absence from Albany or inability § 82. Powers and Duties oe Supeeintestdent. 67 to act, by tlie deputy superintendent in charge, giving the follow- ing items of general information with regard to the work of the de- partment since the preceding statement : 1. The name of every corporation and private and individual banker and personal loan broker whose certificate has been filed for examination in the office of the superintendent, its location and the date of filing of such certificate. 2. The name and location of every corporation and private and individual banker and personal loan broker authorized by the superintendent to commence or continue business, its capital, surplus and the date of authorization. 3. The name of every proposed corporation and private and individual banker and personal loan broker which a certificate of authorization has been refused by the superintendent, and the date of notice of refusal. 4. The name and location of every private banker whose affi- davit executed pursuant to section one hundred sixty of this chap- ter has been filed for examination in the office of the superin- tendent, and the date of such filing. 5. The name and location of every private banker whose affi- davit executed pursuant to section one hundred sixty of this chap- ter has been accepted or refused by the superintendent, and the date of such acceptance or refusal. 6. The name and location of every private banker, the accept- ance of whose affidavit executed pursuant to section one hundred sixty of this chapter has been revoked by the superintendent, and the date of such revocation. 7. The name and location of every private banker, personal loan broker, personal loan company and foreign corporation, whose authorization certificate or license has been revoked by the super- intendent, and the date of such revocation. 8. The name of every corporation and private and individual banker and personal loan broker that has been authorized by the superintendent to change its place of business, and the date when and the places from and to which the change is authorized to be made. 9. The name of every corporation that has applied to the super- intendent for permission to open a branch office, the date of such application and the location of the proposed branch. 68 BANKiiiTGt Law. § 82. 10. The name of every corporation that has been authorized by the superintendent to open a branch office, the date of ap- proval and the location of such branch office. 11. The name and location of every corporation and private banker and personal loan broker authorized by the superintendent to increase or reduce its capital stock or permanent capital, the date of such authorization and the amount of the increase or re- duction. 12. The names and locations of all corporations that have merged pursuant to the provisions of this chapter and the dates of such mergers. 13. The name and residence of every person appointed l>y the superintendent as a deputy, examiner or employee in the banking department, the title of the office to which appointed, the com- pensation paid and the date of appointment. 14. The date on which a call for a quarterly report by banks, trust companies or private or individual bankers was issued by the superintendent and the day designated as the day with reference to which such report should be made. 15. The name and location of every corporation and private and individual banker and personal loan broker of whose property and business the superintendent shall have taken possession and the date of taking possession, and the name and residence of every person appointed by the superintendent as a special deputy super- intendent of banks. 16. The name and location of every corporation and private and individual banker and personal loan broker which shall have been authorized by the superintendent to resume business, and the date of resumption. 17. The name and location of every corporation whose creditors or depositors have been paid in full by the superintendent and a meeting of whose stockholders shall have been called, together with date of notice of meeting and date of meeting. 18. The name and location of every corporation subject to the banking law whose affairs and business shall have been finally liquidated and the corporation dissolved. 19. The name and location of every private and individual banker and personal loan broker whose affairs have been liquidated and business discontinued. § 8'3. Powers and Duties of Supeeintendent, 69 20. The name and location of every corporation whicli has ap- plied for approval of a change of name, and the name proposed. Every such statement, after having been so posted for one week, shall be placed on file and kept in the oiEce of the superintendent. All such statements shall be public documents and at all reason- able times shall be open to public inspection. Source. — Former § 43 with additions. § 83. Annual report of superintendent. The superintendent shall report annually to the legislature as follows : 1. A summary of the state and condition of every corporation and private and individual banker and personal loan broker re- quired to report to him and from which reports have been received during the preceding year, at the several dates to which such re- ports refer, with an abstract of the whole amount of capital re- ported by them, the whole amount of their debts and liabilities and the total amoimt of their resources, specifying in the case of banks, trust companies and private or individual bankers the amount of lawful money held by them at the times of their sev- eral reports, and such, other information m relation to such corpo- rations and bankers as, in his judgment, may be useful. Such corporations shall be divided into classes so as to correspond with the designations thereof in section two of this chapter. 2. A statement of all corporations and private and individual bankers and personal loan brokers authorized by him to do busi- ness during the previous year, with their names and locations and the dates on which their certificates were endorsed " approved " by him and on which their respective authorization certificates were issued, particularly designating such as have commenced business during the year. 3. A statement of the corporations and private and individual bankers and personal loan brokers whose business has been closed either voluntarily or involuntarily, during the year, with the amount of their resources and of their deposits and other liabili- ties as last reported by them and the amount of unclaimed and unpaid deposits, dividends and interest held by him on account of each. 70 Banking Law. § 83. 4. A statement of the amount of interest earned upon all un- claimed deposits, dividends and interest held by him pursuant to the requirements of this chapter. 5. Any amendments to this chapter, which, in his judgment, may be desirable. 6. The names and compensation of the deputies, clerks, ex- aminers, special agents and other employees employed by him, and the whole amount of the expenses of the department during the preceding fiscal year, the amounts appropriated by the legis- lature for the expenses of the department during such year, and the amount, if any, for which the treasury of the state shall not have been reimbursed at the date of such report. The first part of such report shall be made on or before the last day of the year, and shall contain all matters herein specified other than the reports of corporations and individuals subject to the provisions of articles five to eleven of this chapter; and the usual number of copies for the use of the legislature shall be printed and in readiness for distribution by the printer employed to print legislative documents, and one thousand copies shall be printed for the use of the department, the expense of which shall be charged to the general expenses of the department. The other parts of such report may be made on or before the fifteenth day of March in each year. Source. — Former § 25 with additions. CROSS-REFERENCES.— As to printing the reports, see State Printing Law, §§ 10, 11. Banks. 71 ARTICLE in. Banks. Section 100. Incorporation; organization certificate. 101. Notice of intention to organize. 102. Submitting (organization certiiieate. 103. When corporate existence begins; conditions precedent to com- mencing business. 104. National banlc may become state bank. 105. Deposit of securities witli superintendent. 106. General powers. 107. Restrictions on taking and holding real estate. 108. Restrictions on loans, purchases of securities and total lia- bilities. 109. Restrictions as to entries in books; amortization of securities. 110. Restriction on branch offices. 111. Restrictions on deposit of bank's funds. 112. Reserves against deposits. 113. Interpleader in certain actions; costs. 114. Rate of interest. 115. Interest on collateral demand loans of not less than five thou- sand dollars. 116. Calculation of earnings for dividend period. 117. Surplus fund. 118. Dividends. 119. Change of location. 120. Rights and liabilities of stockholders. 121. Assessment of stockholders when capital impaired. 122. Annual meeting of stockholders. 123. Qualifications of directors. 124. Oath of directors. 125. Tenure of office of directors. 126. Vacancies in board of directors. 127. Change of number of directors. 128. Annual meeting of directors. 129. Monthly meetings of directors. 130. Examinations by directors. 131. Report of directors' examinations. 132. Communications from banking department. 133. Reports to superintendent. 134. Annual report of unclaimed deposits, dividends and interest. 135. Bank to pay expenses incurred in its behalf by superintendent. 136. Preservation of records. 137. Change from state to national bank. 138. Change from state bank to trust company. 72 Banking Law. § 100. Section 139. Restrictions on officers, directors and employees. 140. Prohibition against encroachments upon certain powers of banks. 141. Prohibition against use of sign or words indicating bank. 142. Bills payable otherwise than in money prohibited. 143. Rights of existing individual bankers preserved. 144. Conditions to be complied with by foreign banks applying for license. 145. When foreign bank may transact business in state. 146. Rights and privileges under license, 147. Reports of foreign banks. 148. Deposits of minors and trust deposits and deposits in the names of more than one person. § 100. Incorporation; organization certificate; amount of capital stock. When authorized by the superintendent of banks as provided by section twenty-three of this chapter, five or more persons may form a corporation to be kno^Ti as a bank. Such persons shall subscribe and acknowledge an organization certificate in duplicate, which shall specifically state: 1. The name by which the bank is to be known. 2. The place where its business is to be transacted. 3. The amount of its capital stock, and the number of shares into which such capital stock shall be divided, which capital stock shall amount to not less than : (a) Twenty-five thousand dollars, if the place where its busi- ness is to be transacted is an incorporated or unincorporated village the population of which does not exceed two thousand; (b) Fifty thousand dollars, if the place where its business is to be transacted is an incorporated or unincorporated village or a city the population of which exceeds two thousand but does not exceed thirty thousand; (c) One hundred thousand dollars, if the place where its busi- ness is to be transacted is a city the population of which exceeds thirty thousand. 4. The names and places of residences of the incorporators and the number of shares subscribed for by each. 5. The term of its existence which may be perpetuaL 6. The number of directors of the bank, which shall not be less than five nor more than thirty, and the names of the incorporators who shall be its directors until the first annual meeting of stock- § 100. Banks. 73 holders. The incorporators named as directors must possess the qualifications of directors as to citizenship and residence specified in section one hundred and twenty-three of this article; and the certificate shall recite that such qualifications are possessed by such incorporators. Such certificate may provide for the manner in which the stock of the corporation may be transferred and for the number of directors necessary to constitute a quorum. Source. — Former § 60. CONSTITUTIONAL PROVISIONS AFFECTING BANKS.— Article 8, § 4. Special charters prohibited; § 5. Suspension of specie payment prohibited; § 6. Registration of circulating notes — security for redemption in specie; § 7. LiabiEty of stockholders; § 8. Billholders preferred in case O'f insolvency. OTHER STATUTEiS AFFECTING BANKS. — Banks are subject to all pro- visions of the General Corporation Law and the Stock Corporation Law, except such as are made inapplicable either expressly or by necessary impli- cation. See Gen. Coup. Law, § 321. Executive Law, § 82. Publication of notices, etc., in Albany paper; § 101. Appointment of notaries for banks; § 105-a. Notaries who are ofKcers, stock- holders, etc. Tax Law, § 13. Taxation of bank stock, post; § 14. Place of taxation of individual bank capital, post; § 23. Banks to make report, post; § 24. Bank shares, how asessed, post; § 25. Individual banker, how assessed, post; § 26. Notice of assessment, post; § 27. Reports of corporations, postj § 7. Collec- tion of taxes assessed against stocks in banks, post; § 182. Franchise tax, post; § 183. Exemption from tax on capital stock, post; § 191. Tax on foreign bankers, post; § 192. Reports to Comptroller; § 197. Time for payment of tax; § 205. Exemption from other State taxes; § 227. Prohibition against transfer of decedent's assets; § 241. Deposit of taxes by Comptroller. Penal Law, §| 290-305, 660-668, post. CROSS-REFERENCES.— Definition of "bank," see § 2; of "population," see § 3. Directors, see §'§ 122-131. Similar provisions in case of trust company, see § 180; of savings bank, see § 230 of investment company, see § 290; of safe deposit company, see § 315; of personal loan company, see § 340; of savings and loan associaton, see § 375; of land bank, see § 421; of credit union, see § 450. As to qualifications of incorporators, see Gen. Corp. Law, § 4, post. As to corporate names, see Gen. Corp. Law, § 6, post. As to amended and supplemental certificates, see Gen. Corp. Law, § 7, post. As to extension of corporate existence, see Gen. Corp. Law, § 37, post. 74 Banking Law. § 101. Transfer of stock, see Stock Corp. Law, § 50 et seq, post. STATUTE MUST BE COMPLIED WITH.— To effect a valid organization all the substantial requirements of the act must be complied with. Valk v. Crandall, 1 Sandf. Ch. 179. THE NAMES OF THE PROPOSED INCORPORATORS must be the same as those stated in the notice of intention required by § 101. Atty.^en. Rep. (1909) 716. CERTIFICATE CANNOT PROVIDE FOR PREFERRED STOCK.— Opinion that certificate of incorporation of State bank cannot provide for the creation of preferred stock. Atty.-Gen. Rep. (1902) 251. EFFECT OF EXPIRATION OF CORPORATE EXISTENCE.— There is no provision of law permitting the revival of the corporate existence of a bank whose corporate existence has expired. In such case the bank must reincor- porate or seek legislative relief. Atty.-Gen. Rep. (1911) vol. 2, p. 3. PROOF OF CORPORATE EXISTENCE. — In an action by a banking cor- poration its corporate existence is sufficiently established by proof of due filing of the certificate in the county clerk's office and of its user of corporate powers under color of incorporation. Leonardsville Bank v. Willard, 25 N. Y. 574. TRANSFER WHERE STOCKHOLDER INDEBTED TO BANK.— This question is controlled by section 51 of the Stock Corporation Law, post. Cases dealing with bank stock in this connection are Gibbs v. Long Island Bank, 83 Hun 92, aff'd 151 N. Y. 657; Leggett v. Bank of Sing Sing, 24 N. Y. 283; Bank of Attica v. Manufacturers', etc., Bank, 20 N. Y. 501; Reynolds v. Bank of Mt. Vernon, 6 App. Div. 62, aff'd 158 N. Y. 740. CHANGE OF NAME. — Under Gen. Corp. Law, § 60, post., an application by a banking corporation for leave to change its name must be approved by the superintendent. Atty.-Gen. Rep. (1900) 225; Atty.-Gen. Rep. (1902) 136. § 101. Notice of intention to organize; filing, publication and serv- ice upon existing banks and trust companies. At the time of executing sucli organization certificate, the pro- posed incorporators shall sign a notice of intention to organize such bank which shall specify their names, the name of the pro- posed corporation, the amount of its capital stock and its location as set forth in the organization certificate. The original of such notice shall be filed in the office of the superintendent of banks within sixty days after the date of its execution and a copy thereof shall be published at least once a week for four successive weeks in a newspaper designated by the superintendent as provided in section twenty of this chapter, such publication to be commenced within thirty days after such designation. A copy of such notice § 102. Banks. 15 shall, at least fifteen days before the organization certificate is filed with the superintendent for examination, be served upon each state bank and trust company organized and doing business in the village, borough or city, if in a city not divided into boroughs, specified as the location of the proposed bank, by mail- ing such copy, postage prepaid, to said banks and trust companies. Source. — Former § 61. Filing original notice within sixty daya after its execution, and serving copy of notice upon trust companies, are new. CROSS-REFERENCES.— Duties of superintendent upon receipt of notice of intention, see § 20. Similar provision as to trust companies, see § 181; as to savings banks, see § 231. NAMES OF PROPOSED INCORPORATORS.— A notice of intention was published containing five names as proposed incorporators. The organization certificate filed thereafter with the superintendent contained the same five names and five additional names. The Attorney-General was of the opinion that this was not a compliance with the statutory requirements; that the names in the certificate must be identical with those in the notice of intention. Atty.-Gen. Rep. (1909) 716. § 102. Submitting organization certificate to superintendent; proof of publication and service of notice of intention. After the lapse of at least twenty-eight days from the date of the first due publication of the notice of intention to organ- ize and within ten days after the date of the last publication thereof, the organization certificate, executed in duplicate, shall be submitted to the superintendent of banks at his office to- gether with affidavits or other evidence satisfactory to him showing due publication and service of the notice of intention to organize pres.cribed in section one hundred and one of this article. Source. — Former §§ 60, 62. The language is new. CROSS-REFERENCES.— Superintendent prohibited from filing defective certificate, see § 21. Filing certificate " for examination," see § 22. Investigation of proposed bank and refusal or approval by superintendent, see § 23. Issuance of authorization certificate, see § 24. Similar provisions as to trust companies, see § 182; as to savings banks, see § 232; as to investment companies, see § 290; as to safe deposit com- panies, see § 315; as to person?il loan companies, see § 340; as to savings and loan associations, see § 375; as to land bank, see § 421; as to credit imions, see § 450. 76 Banking Law. §§ 103, 104. § 103. When corporate existence begins; conditions precedent to commencing business. When the superintendent shall have endorsed his approval on the organization certificate as provided hj section twenty-three of this chapter, the corporate existence of the bank shall begin, and it shall then have power to elect officers and transact such other business as relates to its organization. But the bank shall transact no other business until : 1. All of its capital stock shall have been fully paid in cash and an affidavit stating that it has been so paid, subscribed and sworn to by its two principal officers, shall have been filed in the clerk's office of the county in which its principal office is located, and a certified copy thereof in the office of the superintendent; 2. It shall have made the deposit with the superintendent re- quired by section one hundred five of this article; 3. The superintendent shall have duly issued to it the author- ization certificate specified in section twenty-four of this chapter. Source. — The provision as to when corporate existence shall begin is new. The requirement that the capital stock shall have been fully paid in cash is taken from former J 68. Tlie requirement of an affidavit that it has been so paid comes from former § 13. The requirement as to the deposit with the superintendent is derived from former § 76. The requirement as to the au- thorization certificate comes from former § 32. CROSS-REFERENCES. — Similar provision as to trust companies, see § 183; as to savings banks, see § 233; as to investment companies, see § 291; as to safe deposit companies, see § 316; as to personal loan companies, see § 341; as to savings and loan associations, see § '377; as to land bank, see § 423; as to credit unions, see § 452. Conditions precedent to transacting business as private banker, see § 152; as personal loan broker, see § 361. Forfeiture of corporate rights by not commencing business, see § 485. PROOF OF CORPORATE EXISTENCE.— A deposit of securities with the bailking department need not be proved to show corporate existence in an action by the bank. Leonardsville Bank v. Willard, 25 N. Y. 574. § 104. National bank may become state bank; procedure and effect thereof. Any banking corporation organized under the laws of the United States and doing business in this state may become an in- corporated bank of this state with all the powers and subject to all § 104. Banks. 11 tbe obligations and duties of banks organized under tbe provisions of this article, provided such banking corporation bas authority by virtue of any law of tbe United States, to dissolve its organiza- tion as a national banking corporation. A national banking cor- poration desiring to become such an incorporated tank of this state shall proceed in the following manner : 1. It shall take such action, in the manner prescribed or au- thorized by tbe laws of the United States, as shall make its dissolu- tion as a national banking corporation effective at a future date certain. 2. A majority of its directors shall thereafter and before the ■ time when its dissolution becomes effective, subscribe and acknowl- edge in duplicate upon the authority in writing of the owners of at least two-tking Law. §§ 204,205. § 204. How net earnings credited for dividend purposes; credits to surplus fund and to undivided profits; dividends to stock- holders. When tibe net earnings of a trust company have been determined at the close of a dividend period as provided in section two hun- dred two of this article, if its surplus fund does not equal twenty per centum of the trust company's capital, one-tenth of such net earnings shall be credited to the surplus fund or so much thereof, less than one-tenth, as will malie such fund equal twenty per cen- tum of such capital. The balance of such net earnings, or the entire amount thereof if such fund equals such twenty per cen- tum, may be credited to the trust company's profit and loss ac- count ; or, if its expenses and losses for such .dividend period ex- ceed its gross earnings, such excess shall be charged to its profit and loss account. The credit balance of such account shall consti- tute the undivided profits at the close of such dividend period, and shall be available for dividends. The directors of any trust company may aimually, .semi-anually or quarterly, but not more frequently, declare such dividends aa they shall judge expedient from such undivided profits. No trust company shall declare, credit or pay any dividends to its stock- holders until it shall have made good any existing impairment of its capital and any existing encroachment on its reserves required to be maintained against deposits. Source. — Former § 27, sabd. 10. The section is identical with § 118 relating to bants. See the annotations to the latter section. § 205. Change of location. Any trust company may make a written application to tho superintendent of banks for leave to change its place of business to another place in the same county. The application shall state the reasons for such proposed change, and shall be signed and acknowledged by a majority of its board of directors and accom- panied by the written assent thereto of stockholders owning at least two-thirds in amount of its stock. If the proposed place of business is within the limits of the village, borough or city, if in a city not divided into boroughs, in which the principal place of business of the trust company is located, such change may be made § 206. Trust Companies. 189 upon the written approval of the superintendent; if beyond such limits, notice of intention to make such application, signed by the president and another principal officer of the trust company shall be published once a week for two successive weeks immediately preceding such application in a newspaper published in the city of Albany in which notices by state officers are required by law to be published, and in a newspaper to be designated by the superin- tendent, published in the county in which the place of business of such trust company is located. If the superintendent shall grant his certificate authorizing the change of location, as provided in section fifty of this chapter, the trust company shall cause such certificate to be published once in each week for two successive weeks in the newspaper in which the notice of application was published. When the requirements of this section shall have been fully complied with, the trust company may, upon or after the day specified in the certificate, remove its property and effects to the location designated therein, and thereafter its principal place of business shall be the location so specified ; and it shall have all the rights and powers in such new location which it possessed at its former location. Source. — Former § 31. The section is identical with § 119 relating to banks. See the annotations to the latter section. § 206. Rights and liabilities of stockholders; who liable as stock- holders; who may enforce liability; within what time action must be commenced. The rights, powers and duties of stockholders of trust com- panies shall be as prescribed in the general corporation law and the stock corporation law; but the individual liability of such stock- holders for the contracts, debts, and engagements of the trust com- pany and the time within which an action may be instituted to enforce such liability shall be governed exclusively by the pro- visions of this section and section eighty of this chapter. The stockholders of every trust company shall be individually responsible, equally and ratably and not one for another, for all contracts, debts and engagements of the trust company, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. An action to enforce such liability must be brought within six years 190 Banking Law. § 206. after the cause of action has accrued. The term " stockholder " as used in this section shall apply to: 1. Such persons as appear by the books of the trust company to be stockholders; 2. Every owner of stock legal or equitable although the same may be on such books in the name of another person, provided, however, that such term shall not apply to a person holding stock as collateral security for the payment of a debt and not appearing by the books of the trust company to be the owner and holder thereof in his own right, or to a person holding stock in a bona fide fiduciary capacity and not appearing by the books of the trust company to be the owner and holder thereof in his own right unless such fiduciary shall have invested the funds in his care in violation of law or of the terms under which said funds are held by him, in which case he shall be personally liable as a stockholder. N"© person who has in good faith, and without any intent to evade his liability as a stockholder, caused his stock to be trans- ferred on the books of the trust company when such trust company is solvent to any resident of this state of full age previous to any default in the payment of any debt or liability of the trust com- pany, shall be subject to any personal liability for any contracts,, debts or engagements of the trust company. In case the superintendent of banks shall have taken possession of the property and business of the trust company pursuant to section fifty-seven of this chapter or a permanent receiver of such trust company shall have, been appointed, all actions or proceedings to enforce the liability of stockholders under this section shall be taken and prosecuted only in the name of the superintendent or the receiver, as the case may be, unless the superintendent or re- ceiver shall refuse to take such action or proceeding upon proper request in writing made by any creditor, or shall have failed or neglected to commence such action or proceeding within sixty days after the receipt of such request, and in that event such action or proceeding may be taken by any creditor of the trust company. But no such action shall be brought by a creditor until a judgment shall have been recovered by him against the trust company and an execution thereon shall have been returned unsatisfied in whole or in part. Source. — This section is identical with § 120 relating to stockholders of banks. See the annotations to that section. § 207. Trust Companies. 191 § 207. Assessment of stockholder to make good impairment of capital; sale of stock. Whenever the superintendent of banks shall have made re- quisition upon any trust company pursuant to section fifty-six of this chapter to make good the amount of an impairment of its capital, the directors of the trust company shall immediately give notice o£ such requisition to each stockholder and of the amount of the assessment which he must pay for the purpose of making good such deficiency, by a written or printed notice mailed to such stockholder at his place of residence, or served personally upon him. If any stockholder shall refuse or neglect to pay the assessment specified in such notice within sixty days from the date thereof, the directors of such trust company shall have the right to sell to the highest bidder at public auction the stock of such stockholder, after giving previous notice of such sale for two weeks in a newspaper of general circulation published in the county where the principal office of such trust company is located ; or such stock may be sold at private sale, and without such pub- lished notice, provided, however, that before making a private sale thereof an offer in writing to purchase such stock shall first be obtained, and a copy thereof served upon the owner of record of the stock sought to be sold either personally or by mailing a copy of ^uch offer to such owner at his place of residence or the address furnished by him to the trust company; and if, after • service of such offer, such owner shall still refuse or neglect to pay such assessment within two weeks from the time of service of such offer, the said directors may accept such offer and sell such stock to the person or persons making such offer, or to any oliier person or persons making a larger offer than the amount named in the offer submitted to such stockholder ; but said stock shall in no event be sold for a smaller sum than the valuation put on it by the superintendent in his determination and certificate, which valuation shall not be less than the amount of the assessment called for and the necessary costs of sale. Out of the avails of the stock sold the directors shall pay the necessary costs of sale and the amount of the assessment called for thereon. The balance, if any, shall be paid to the person or persons whose stock has been thus sold. A sale of stock as herein provided shall effect an absolute cancellation of the outstanding certificate or certificates evidencing 192 Banking Law. § 208. the stock so sold, and shall render the same null and void and a new certificate or certificates shall be issued to the purchaser or purchasers of said stock. Source. — Former § 17. The section is identical with § 121 relating to banks. See the annotations to the latter section. § 208. Number of directors; classification; tenure of ofice of "original directors. The affairs of every such trust company shall be managed and its corporate powers exercised by a board of directors of such number, not less than seven nor more than thirty, as shall from time to time be prescribed in its by-laws. The persons named in the organization certificate, or such of them respectively, as shall become holders of at least ten shares of such stock, shall constitute the first board of directors, and may add to their number not exceeding the limit of thirty, and shall severally continue in office until others are elected to fill their re- spective places. Within six months from the time when such trust company shall commence business, the first board of directors shall classify themselves by lot into three classes as nearly equal as may be. The term of office of the first class shall expire on the third Wednesday of January next following such classification. The term of olfice of the second class shall expire one year thereafter; and the term of office of the third class shall expire two years thereafter; provided that all directors whose term of office shall expire as heretofore provided shall none the less continue in office until their successors are elected as hereinafter provided. Source. — Former § 195. Under the old law the number of directors was " not less than thirteen.'' As to reason for reduction of minimum number to seven, see note to § ISO. CEOSS-REFERENCES.— Directors of banks, see §| 122-131; of safe deposit companies, see §§ 324^327; of personal loan companies, see §§ 353-357; of sav- ings and loan associations, see §§ 405-409; of land bank, see §§ 430-433; of credit unions, see §§ 464-469. General provisions as to corporate directors, see Gen. Corp. Law, §§ 23-35, 43, 90-92, 109-111, 114; as to directors of stock corporations, see Stock Corp. Law, 1§ 25-35. Offenses by directors, see Penal Law, §§ 290-, 297, 664, 665, 668, post. CHANGE IN NUMBER OF DIRECTORS of trust company governoed by both this section and Stock Corp. Law, § 26, post. Atty.-Gen. Kep. (1907) 470. §§ 209,210. Teust Companies. 198 NEGLIGENCE OF DIRECTORS.— Duties of direetors and their liability to stockholders for losses caused by their negligence, discussed at length. Kavan- augh V. Gould, 147 App. Div. 281 ; Kavanaugh v. Commonwealth Trust Co., 64 Misc. 303. § 209. Animal meeting of stockholders; notice. At or before tlie expiration of the term of the first class, and annually thereafter, a number of directors shall be elected by the stockholders equal to the number of directors whose term tvill then expire "who shall hold their ofiices for three years or until their successors are elected, and at such election, the stockholders may fill for the balance of the unexpired term any vacancy which has occurred in the office of any other director and which vacancy has not been filled by the directors of the company. Such election shall be held at the principal place of business of the company. Notice of the time and place of holding the stockholders' meeting for the election of directors and for action upon such other matters as may be brought before such meeting, shall be given by publication thereof at least once in each week for two successive weeks im- mediately preceding such election, in a newspaper published in the county, approved by the superintendent of banks, where such election is to be held, and in such other manner as may be pre- scribed in the by-laws. Source. — Former § 195. CROSS-REFERENCES.— Similar provision as to banks, see § 122 and anno- tations thereto. § 210. Qualifications and disqualifications of directors. Every director of a trust company shall be a stockholder of the trust company owning in his own right at least ten shares of its capital stock ; and every person elected to be a director who, after such election, shall hypothecate, pledge or cease to be the owner in his own right of the amount of stock aforesaid, shall cease to be a director of the trust company and hia office shall be vacant, and he shall not be eligible for re-election as a director for a period of one year from the date of the next succeeding annual meeting. Source. — Former § 195. The last clause is new. CROSS-REFERENCES. — For similar provisions as to other corporations sub- ject to the Banking Law, see § 123 and cross-references there given. 13 194 Bankia-o Law. §§ 211, 212, 213. ALIEN IilAY BE DIRECTOR' of trust company, provided that at least one director is a citizen of the State. Atty.-Gen. Rep. (1912) vol. 2, p. 20. See also Atty.-Gen. Rep. (1867) 318. § 211. Oath of directors. 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 the trust company, and will not knowingly violate, or willingly permit to be violated, any of the provisions of law applicable to such trust company, and that he is the owner in good faith and in his own right, of the number of shares of stock required by this article, subscribed by him or standing in his name on the books of the trust company and that the same is not hypothecated, or in any way pledged as security for any loan or debt, and, in case of re-election or reappointment, that such stock was not hypothecated, or in any way pledged as security for any loan or debt during his previous term. Such oath shall be subscribed by the director making it, and certified by an officer authorized by law to administer oaths, and im- mediately transmitted to the superintendent of banks. Source. — Former § 195. CROSS-REFERENCES.— Identical provision as to barfcs, see § 124 and anno- tations thereto. § 212. Failure to elect; when vacancies filled by board. In case of failure to elect any director on the day named, the directors whose terms of office do not that year expire may proceed to elect a number of directors equal to the number in the class whose term that year expires or such number as may have failed of re-election. The persons so elected, together with the directors whose terms of office shall not that year expire shall constitute the board until another election shall be held according to law. Vacan- cies occurring in the intervals of election shall be filled by the board of directors for the balance of the unexpired term. Source. — ' Former § 195. The words at the end of the section " for the bal- ance of the unexpired term " are new. § 213. Annual meeting of directors; election of officers. Within fifteen days after the date on which the annual meet- ing of stockholders is held its directors shall, after their due qualifi- § 214. Tetjst Companies. 195 cation, hold a meeting at which they shall elect a president from their own number, a vice-president, and such other officers as are required by the by-laws to be elected annually. Source. — New. CROSS-REFERENCES.— Similar provision as to banks, see § 128. § 214. Monthly meetings of directors; quorum; statement to di- rectors. The directors of every trust company shall hold a regular meet- ing at least once in each month. If the number of directors neces- sary to constitute a quorum is not prescribed in the certificate of incorporation or organization certificate, or in the by-laws, and no provision is made therein for determining the same, the directors may fix such number, which shall not be less than on&-third of all the directors and in no case less than five, with the same effect as if such numJber were prescribed in the certificate of incorporation or organization certificate. The board of directors shall by reso- lution duly recorded in the minutes, designate an officer or officers whose duty it shall be to prepare and submit to each director at each regular meeting of the board, or to an executive committee of not less than five members of such board, a written statement of all the purchases and sales of securities, and of every discount, loan or other advance, including over-drafts and renewals made since the last regular meeting of the board, describing the collateral to such indebtedness as of the date of meeting at which such state- ment is submitted ; but such officer or officers may omit from such statement discounts, loans or advances including overdrafts and renewals of less than one thousand dollars except as hereinafter provided. Such statement shall also contain a list giving the ag- gregate of loans, discounts, and advances including overdrafts to each individual partnership, unincorporated association, corpora- tion- or person whose liability to the trust company has been in- creased one thousand dollars or more since the last regular meeting of the board, together with a descripton of the collateral to such indebtedness held by the trust company at the date of the meeting at which such statement is submitted. A copy of such statement, together with a list of the directors present at such meeting, veri- fied by the affidavit of the officer or officers charged with the duty of preparing and submitting such statement shall be filed with the 196 Baitking Law. §§ 215, 216 records of the trust company -within one day after such meeting, and be presumptive evidence of the matters therein stated. Source. — Former § 42, except the second sentence which is from former § 195. Renewals are included for the first time. The minimum number of directors necessary to constitute a quorum has been changed from seven to five. CEOSS-REFERENCES.— Identical provision as to banks, see § 129 and annotations thereto. § 215. Examinations by directors into affairs of trust company; may employ assistants. It shall be the duty of the board of directors of every trust company during the months of March or April and during the months of September or October in each year to examine, or to cause a committee of at least three of its members to examine, fully the books, papers and affairs of the trust company, and the loans and discounts thereof, and particularly the loans or dis- counts made directly or indirectly to its ofSeers or directors, or for the benefit of such officers or directors or for the benefit of other corporations of which such officers or directors are also officers or directors, or in which they have a beneficial interest as stockholders, creditors, or otherwise, with the special view of ascertaining their safety and present value, and the value of the collateral security, if any, held in connection therewith, and into such other matters as the superintendent of banks may require. Such directors shall have the power to employ such assistance in making such examination as they may deem necessary. Source. — Former § 23. The section is identical with § 130 relating to banks. See the annotations to the latter section. § 216. Reports of directors' examinations; penalty for failure to make or file. On or before the fifteenth day of the month of May or Novem- ber succeeding any examination made pursuant to the require- ments of the last section, a report in virriting thereof, sworn to by the directors making the same, shall be made to the board of directors of such trust company, and placed on file in said trust company, and a duplicate thereof filed in the office of the super- intendent of banks. . Such report shall particularly contain a statement of the assets and liabilities of the trust company exam- § 217. Teust Companies. 197 ined, as shown by the books, together with such deductions from the assets, and the addition of such liabilities, direct, indirect, contingent or otherwise as such directors or committee, after such examination, may find necessary in order to determine the true condition of the trust company. It shall also contain a statement showing in detail every known liability to such trust company, direct, indirect, contingent, or otherwise, of every officer or director thereof and of every corporation in which any such officer or director owns stock to the amount of twenty-five per centum of the total outstanding stock, or of which any such officer or director is also an officer or director. It shaU also contain a statement, in detail, of loans, if any, which in their opinion are doubtful or worthless, together with their reasons for so regard- ing them; also a statement of loans made on collateral security which in their opinion are insufficiently secured, giving in each case the amount of the loan, the name and market value of the collateral, if it has any market value, and, if not, a statement of that fact, and its actual value as nearly as possible. Such report shall also contain a statement of overdrafts, of the names and amounts of such as they consider worthless or doubtful, and a full statement of such other matters as affect the solvency and sound- ness of the institution. If the directors of any trust company shall fail to make, or to cause to be made, or to file such report of examination in the manner, and within the time specified, such trust company shall forfeit to the people of the state one hundred dollars for every day such report shall be delayed. Source. — Former § 23. The section is identical with § 131 relating to banks. See the annotations to the latter section. § 217. Communications from lianking department must be submitted to directors and noted in minutes. Each official communication directed by the superintendent of banks or one of his deputies to a trust company or to any officer thereof, relating to an examination or investigation conducted by the banking department or containing suggestions or recommenda- tions as to the conduct of the business of the trust company, shall be submitted, by the officer receiving it, to the board of directors at the next meeting of such board, and duly noted in the book con- taining the minutes of the meetings of such board. Source. — Former § 41. The section is identical with § 132 relating to banks. See the annotations to the latter section. 198 Banking Law, § 218. § 218. Reports to superintendent; penalty for failure to make. Within ten days after service upon it of the notice provided for by section forty-two of this chapter, every trust company shall make a written report to the superintendent, which report shall be in the form and shall contain the matters prescribed by the super- intendent and shall specifically state the items of capital, deposits, specie and cash items, public securities and private securities, real estate and real estate securities, and such other items as may be necessary to inform the public as to the financial condition and solvency of the trust company, or which the superintendent may deem proper to include therein, and shall also state the amount of deposits the payment of which, in case of insolvency, is preferred by law or otherwise over other deposits. Every such report shall be verified by the oaths of the president or vice-president and another principal ofiicer of the trust company and such verification shall state that the report is true and correct in all respects to the best of the knowledge and belief of the persons verifying it, and that the usual business of the trust company has been transacted at the location required by this article and not elsewhere. Every such report exclusive of the verification shall, within thirty days after it shall have been filed with the superintendent, be published by the trust company in one newspaper of the place where its princi- pal place of business is located, if there be one; if not, then in the newspaper published nearest where such trust company is located. Every such trust company shall also make such other special re- ports to the superintendent as he may from time to time require, in such form and at such date as may be prescribed by him, and such report shall, if required by him, be verified in such manner as he may prescribe. Every such trust company, which does not have an unimpaired surplus fund equal to at least twenty per centupi of its capital shall, within ten days after declaring a dividend, make a written report to the superintendent stating the amount of such dividend, the amount of its net earnings in excess thereof and the amount carried to the surplus fund. Such report shall be verified by the oath of the president or vice-president and another principal offi- cer of the trust company. § 219. Trust Companies. 199 quired by the superintendent, su-cli trust company shall forfeit to the people of the state the sum of one hundred dollars for every day that such report shall be delayed or withheld, and for every day that it shall fail to report any such omitted matter, .unless the time therefor shall have been extended by the superintendent as provided by section forty-nine of this chapter. The moneys forfeited by this section, when recovered, shall be paid into the state treasury to reimburse the state for the sums advanced by it for the expenses of the department. Source. — This section is identical with § 133 relating to banks. See state- ment as to source in the annotations to that section. Amended by L. 1916, Chap. 96. In effect March 30, 1916. § 219. Annual report of unclaimed deposits, dividends and interest; publication; penalty for non-compliance. In the month of September in each year, and on or before tha tenth day thereof, every trust company shall make a written re- port to the superintendent of banks, verified by the oaths of the president or vice-president and one other principal oflEicer of the trust company, which report shall contain a true and accurate statement of all deposits made with the trust company and all dividends declared and interest accrued upon any of its stock cr other evidences of indebtedness, which on the first day of August preceding such report amounted to fifty dollars or over and had remained unclaimed by any person or persons authorized to re- ceive the same for five years then next preceding. Such state- ment shall set forth the date of each such deposit, its amount and the name and last known place of residence or post-office address of the person making it, the name of each person in whose favor and the time when any such dividend may have been declared or any such interest may have accrued, its amount, and upon what number of shares or upon what amount of stock or other evidences of indebtedness of such trust company it was declared or accrued. In case any such trust company shall at said date have held no such unclaimed deposits, dividends or interest, it shall at the time above specified make a written report to the superintendent so stating, which report shall be verified as hereinabove provided. ^0 deposits, dividends or interest shall be deemed unclaimed 200 Bankistg Law. § 220. within the meaning of this section if it appears from the hooks of the trust company or from other written evidence on file with the trust company that the person or persons authorized to receive them have knowledge thereof. Every such trust company which reports any unclaimed de- posits, dividends or interest under the provisions of this section shall cause to he puhlished once in each week for two successive weeks in a newspaper designated by the superintendent published in the county and in the village or city in which such trust com- pany is located, if there be a newspaper published therein, and at least once in a newspaper published at Albany in which noticjes by state officers are required to be published, a true copy of such report, and shall file with the superintendent of banks on or before the first day of October in each year proof by affidavit of such publication. The expense of such publication shall be paid by the trust company, but if, on or before the first day of August in that year, the trust company shall have mailed, postage pre- paid, to each person authorized to receive any such unclaimed deposit, dividend or interest, at his last known place of residence or post-office address, a statement showing the amount to which such person is entitled and requesting written acknowledgment thereof, the trust company may reimburse itself for such expense by deducting the amount thereof from the sums due any such person or pei;sons who shall not have made written acknowledg- ment before the filing of such report with the superintendent, in the proportion that each such sum bears to the aggregate thereof. Any such trust company failing to make any report or to file any affidavit of publication required by this section shall forfeit to the people of the state the sum of one hundred dollars for each day such report or the filing of such affidavit of publication shall be so delayed or withheld, unless the time therefor shall have been extended by the superintendent as provided by section forty-nine of this chapter. Source.— Former § 30. The seqtion is identical with § 134 relating to banks. See the annotations to the latter section. § 220. Liability of trust company for assessments by superintendent. When the superintendent, pursuant to the powers conferred on him by article two of this chapter, shall have levied any assess- §§ 221, 222. Teust Companies. 201 ment upon any trust company and shall have duly notified such trust company of the amount thereof, the amount so assessed shall become a liability of and shall be paid by such trust company to the superintendent. Source.— New. The section is identical with § 135 relating to banks. See the annotations to the latter section. § 221. Preservation of books and records of trust company. Every trust company shall preserve all its records of final entry including cards used under the card system, and deposit tickets, for a period of at least six years from the date of making the same or from the date of the last entry thereon. Sources. — New. The section is identical with § 136 relating to banks. See the annotations to the latter section. § 222. Bestrictious on officers, directors and employees. No officer, director, clerk or other employee of any trust com- pany, and no person in any -way interested or concerned in the management of its affairs, shall as individuals discount, or directly or indirectly, make any loan upon any note or other evidence of debt, which he shall know to have been offered for discount to such trust company and to have been refused. Every person violating the provisions of this subdivision shall, for each offense, forfeit to the people of the state twice the amount of the loan which he shall have made. !N"o officer, director, clerk or other employee of any trust com- pany shall borrow, directly or indirectly, from the trust company with which he is connected any sum of money without the written approval of a majority of the board of directors thereof filed in the oflBce of the trust company or embodied in a resolution adopted by a majority of such board exclusive of the director to whom the loan is made; and in no event shall any officer of a trust com- pany located in a city of the first class borrow any sum of money from such trust company. If an officer, director, clerk or other employee of any trust company shall own or control a majority of the stock of any other corporation a loan to that cor- poration shall be considered for the purpose of this subdivision as a loan to such officer, director, clerk or other employee. Every 202 Bajn-kiisg Law. § 223. person knowingly violating this provision shall, for each offense, forfeit to the people of the state twice the amount which he shall have borrowed. Source. — Former § 27, subd. 6 and 7. The section is identical with § 139 relating to banks. See the annotations to the latter section. § 223. Prohibition against encroachments upon powers of trust com- panies. Wo corporation other than a trust company organized under the laws of .this state shall have or exercise in this state the power to receive deposits of money, securities or other personal property from any person or corporation in trust, or have or exercise in this state any of the powers specified in subdivisions one, four, five, six, seven and eight of section one hundred eighty-five of this article, nor have or maintain an ofiice in this state for the transaction of, or transact, directly or indirectly, any such or similar business, except that a federal reserve bank may exercise the powers conferred by subdivision one of such section if author- ized so to do by the laws of the United States and any domestic corporation legally exercising any of the powers conferred by such subdivision at the time this act takes effect may continue to exercise such powers, and a trust company incorporated in another state may be appointed and may accept appointment and may act as executor of, or trustee under, the last will and testa- ment of any deceased person in this state, provided trust com- panies of this state are permitted to act as such executor or trustee in the state where such foreign corporation has his domi- cile, and such foreign corporation shall have executed and filed in the office of the superintendent of banks a written instru- ment appointing such superintendent in his name of office, its true and lawful attorney upon whom all process in any action or proceeding against such executor or trustee, affecting or relating to the estate represented or held by such executor or trustee or the acts or defaults of such corporation in reference to such estate, with the same effect as if it existed in this state and had been law- fully served with process therein, and shall also have filed in the ofiice of the superintendent a f opy of its charter by its secretary under its corporate seal, together with the post office address of its principal office. § 223. Teust Companies. • 203 No forelgp corporation, having authority to act as executor of or trustee under the last will and testament of any deceased pc-r- son, shall establish or maintain directly or indirectly any branch office or agency in this state or shall in any way solicit directly or indirectly any business as executor or trustee therein. 'If any such foreign corporation violates this provision, such foreign cor- poration shall not thereafter be appointed or act as executor or trustee in this state. The validity of any mortgage heretofore given by a foreign corporation to a trust company doing business within the foreign domicile of such mortgagor to secure the pay- ment of an issue of bonds shall not be affected by any of the pro- visions of this section and such mortgage shall be enforcible in accordance with the laws of this state against any property covered thereby within the state of New York. Source. — 'Former § 186, subd. 11. The exceptions in favor of federal reserve banks and domestic corporations exercising powers conferred by § 185, subd. 1, are new. CROSS-EEFERENCES. — Superintendent as attorney to accept service of process, see § 28. Probibition against encroachments upon certain banking powers, see § 140. NO OTHER REQUIREMENTS OF FOREIGN TRUST COMPANIES.— Under the former law the Attorney-General was of the opinion that a foreign trust company could not exercise in this state any of the powers conferred on domestic trust companies without complying with the provisions of former §§ 14, 33-a, 33-b and 34. Atty-Gen. Rep. (1912) vol. 2, p. 530; Atty.-Gen. Rep. (1905) 422. Under the present law compliance with this section is all that is required of a foreign trust company. FOREIGN TRUST COMPANIES MAY LEND MONEY directly upon bonds and mortgages in this state. Atty.-Gen. Rep. (1905) 435. CANNOT BE TRUSTEE UNDER NEW YORK MORTGAGE.— A foreign trust company is forbidden by this section to exercise the powers conferred by § 185, subd. 4, and is therefore excluded from the right to act as trustee for the bondholders under a mortgage by a New York corporation on lands in this state. Atty.-Gen. Rep. (1907) 477. FOREIGN TRUST COMPANY AS EXECUTOR.— In the absence of the ex- press authorization contained in this section it seems that a foreign trust company would not act as executor in this state by reason of the prohibition in Code Civ. Proc, § 2612, against granting letters testamentary to " an alien not an inhabitant of this State." See Matter of Avery, 45 Misc. 529. 204 • Banking Law. ARTICLE VI. Savings Banks. Section 230. Incorporation; qualifications of incorporators; certificate of organization. 231. Notice of intention to organize; filing, publication and service. 232. Submitting organization certificate to superintendent. 233. When corporate existence begins; conditions precedent. 234. Initial guaranty fund; agreement and bond of incorporators. 235. Expense fund; agreement and bond of incorporators. 236. Return of initial guaranty fund and expense fund. 237. Eeturn of previous contributions. 238. General powers. 239. Investment and restrictions thereon. 239-a. Investment of deposits, etc., in judgments against the State. 240. Restrictions on taking, holding and conveying real estate. 241. Requirements as to mortgage loans. 242. Restrictions on dealing in commodities, exchange, gold and silver. 243. Restrictions on borrowing money, pledging securities and issu- ing certificates of deposit. 244. Restrictions on deposit of funds. 245. Restrictions as to place of business; branch ofiices. 246. Restrictions as to book-entries; amortization of securities. 247. Restrictions on amount of deposits; refusal or return of de- posits. 248. Regulations and restrictions as to repayment of deposits; pass- books. 249. Repayinent of deposits of minors; trust and joint deposits. 250. Actions to recover deposits regulated. 251. Available fund. 252. Guaranty fund. 253. Amount of guaranty fund; how determined. 254. Calculation of earnings for dividend period. 255. Deductions from net earnings for guaranty fund. 256. Dividends; accumulation of guaranty fund and undivided profits. 257. Percentum of par value surplus ; how determined. 258. Advertisements of surplus or guaranty fund. 259. Change of location. 260. Board of trustees. 261. Oath and declaration of trustee. 262. By-laws. 263. Officers. 264. Meetings of trustees; reports of officers. 265. Compensation of trustees, officers and attorneys. 266. Increase or reduction of number of trustees. § 230. Savings Banks. 205 Section 267. Restrictions on trustees and officers. 268. Removal and forfeiture of office of trustee. 269. Filling vacancies in board of trustees. 270. Security from officers and employees. 271. Pensions. 272. Examination of vouchers and assets by trustees. 273. Reports to superintendent. 274. Reports of dormant accounts. 275. No other report or supervision required. 276. Communications from bank department. 277. Liability of savings banks for assessments by superintendent. 278. Preference of deposits made by savings bank. 279. Advertisements of unauthorized savings banks; use of word " saving;" school savings. 280. Reduction of liability to depositors. 281. Charters of all savings banks to be conformed to this article. § 230. Incorporation; qualifications of incorporators;, certificate of organization. When authorized by the superintendent of banks as provided by section twenty-three of this chapter, not less than nine or more than thirty persons may form a corporation to be known as a savings bank. Such persons must be citizens of the United States at least four-fifths of them must be residents of this state, and at least two-thirds of them must be residents of the county where the business of the .savings bank is to he, transacted. They shall subscribe and acknowledge an organization certificate in dupli- cate, which shall specifically state: 1. The name by which the savings bank is to be known. 2. The place where its business is to be transacted. 3. The name, occupation, residence and post-oifice address of each incorporator. 4. The sums which each incorporator will contribute in cash to the initial guaranty fund and to the expense fund respectively, as provided in sections two hundred thirty-four and two hundred thirty-five of this article. 5. A declaration that each incorporator will accept the respon- sibilities and faithfully discharge the duties of a trustee of the savings bank, and is free from all the disqualifications specified in section two hundred sixty of this article. Source. — Former § 130. Minimum number of incorporators reduced from 13 to 9 ; for reason, see note on reduction of minimum number of trust com- 206 Banking Law. • § 231. pany incorporators, § 180. Maximum number has also been limited so as to prevent scattering of possibility. Qualification of residence in state comes from former § 137 defining qualifications as to residence of trustees; qualification of residence in county is new, as is also qualification as to citizenship. Subdivision 4 and the last clause of subdivision 5 are new. OTHER STATUTES AFFECTING SAVINGS BANKS.— Savings banks are subject to all provisions of the General Corporation Law, except such as are made inapplicable either expressly or by necessary implication. (See Gen. Corp. L., § 321.) But as they have no capital stock (Const. Art. VIII, § 4), they are not subject to the provisions of the Stock Corporation Law. Exemption of deposits from taxation, see Tax Law, § 4, post. Franchise tax, see id. § 189, post. Credit on purchase of State bonds, see id. § 190, post. Recording tax on mortgages, see id. §§ 252, 253. CONSTITUTIONAL PROVISION.— Art. VII, § 4, requires the Legisla- ture to make uniform all charters of savings banks and institutions for sav- ings; provides that no such corporation shall have any capital stock, that the trustees shall have no interest in the profits, or in any loan or use of money or property of the corporation. CROSS-REFERENCES.— Definition of " savings bank," see § 2. Trustees, see §§ 260-269. Similar requirements in regard to other corporations seeking to engage in business under the Banking Law, see § lOO and cross-references there given. Qualifications of incorporators, see Gen. Corp. Law, § 4, post. Name of corporation, see Gen. Corp. Law, § 6, post. Change of name, see Gen. Corp. Law, §§ 60-65, post. Amended and supplemental certificates of incorporation, see Gen. Corp. IJaw, § 7, post. Lost or destroyed certificates, see Gen. Corp. Law, § 8. Certificate as evidence, see Gen. Corp. Law, § 9. Extension and revival of corporate existence, see Gen. Corp. Law, §§ 37- 39, 41, post. False statements or rumors as to banking institutions, see Penal Law, § 303, post. Only incorporators, who constitute the first board of trustees of a savings bank, need be citizens of the United States; members elected thereafter need not be citizens. Atty.-Gen. Rep. July 22, 1915. § 231. Notice of intention to organize; filing, publicaton and serv- ice upon existing Savings banks. At the time of executing the organization certificate, the pro- posed incorporators shall sign a notice of intention to organize § 232. .Savings Banks. 20Y the savings bank, which shall specify their names, the name of the proposed corporation and its location as set forth in the or- ganization certificate. The original of such notice shall be filed in the office of the superintendent of banks within sixty days after the date of its execution and a copy thereof shall be published at least once a week for four successive weeks in a newspaper desig- nated by the superintendent as provided in section twenty of this chapter, the. publication to be commenced within thirty days after such designation. At least fifteen days before the organization certificate is submitted to the superintendent for examination as provided in the section next following, a copy of such notice shall be served upon each savings bank organized and doing business in the village, borough or city, if in a city not divided into bor- oughs, specified as the location of the proposed savings bank, by mailing such copy, postage prepaid, to said savings bank. Source.— Former § 131, revised. Limitation of time ■within whicli original notice must be filed with superintendent, designation of newspaper hy super- intendent, time within which publication must be commenced after designa- tion, the savings banks to be served with notice (formerly those organized and doing business in the coimty) and the manner or service of notice, are new. CROSS-REFEREJSPCES. — Duties of Superintendent upon receipt of notice of intention, see § 20. Similar provision as to banks, see § 101; as to trust companies, see § 181. § 232. Submitting organization certificate to superintendent; proof of publication and service of notice of intention. After the lapse of at least twenty-eight days from the date of the first due publication of the notice of intention to organize and within ten days after the date of the last publication thereof, the organization certificate, executed in duplicate, shall be submitted for examination to the superintendent of banks at his office in Albany, with affidavits showing due publication and service of the notice of intention to organize prescribed in section two hun- dred thirty-one of this article. Source. — New. A substitute for former § 132. CROSS-REFERENCES. — See the cross-references given under § 102 which is identical with this section. 208 Banking Law. §§ 233, 234. § 233. When corporate existence begins; conditions precedent to commencing business. When the superintendent shall have approved the organization certificate, as provided in section twenty-three of this chapter, the corporate existence of the savings bank shall h^in, and it may exercise all the powers necessary to the completion of its organi- zation. But the savings bank shall transact no business other than that relating to the completion of its organization until : 1. The incorporators shall have made the deposit of the initial guaranty fund required by section two hundred and thirty-four of this article, and if the superintendent shall so require, shall have entered into the agreement or undertaking with the superin- tendent and shall have filed the surety bond securing the same, as prescribed in said section. 2. The incorporators shall have made the deposit of the expense fund required by section two hundred and thirty-five of this article, and if the superintendent shall so require, shall have entered into the agreement or undertaking with the superintend- ent and shall have filed the surety bond securing the same, as prescribed in said section. 3. It shall have transmitted to the superintendent of banks the name, residence and post-ofiiee address of each officer of the cor- poration. 4. The superintendent shall have duly issued to it the authori- zation certificate specified in section twenty-four of this chapter. Source. — Former §§ 32 and 135. Subdivisions 1 and 2 are new; sub- division 3 is based on former § 135, and subd. 4 on former § 32. CROSS-REFERENCES. — For similar provisions as to other persons and corporations engaging in business under the Banking Law, see § 103 and cross-references there given. Forfeiture of corporate rights by not commencing business, see § 485. § 234. Initial guaranty fund; agreement of incorporators to con- tribute; bond. Before any savings banlv hereafter organized shall be author- ized to do business in this state, its incorporators shall create a guaranty fund for the protection of its depositors against losses upon its investments whether arising from depreciation in the market value of its securities or otherwise. § 234. Savings Banks. 209 1. Such guaranty fund shall consist of payments in cash made by the original incorporators and of sums credited thereto from the earnings of the savings "banTj as hereinafter required. 2. The incorporators shall deposit to the credit of such savings bank in cash as an initial guaranty fund at least five thousand dollars. They shall also enter into such agreement or under- taking with the superintendent of banks as trustee for the de- positors with the savings bank as he may require, to make such further contributions in cash to the guaranty fund of such savings bank as may be necessary to maintain the solvency of the savings bank and to render it safe for it to continue business. Such ■ agreement or undertaking to an amount approved by the superin- tendent of banlcs shall be secured by a siu-ety bond executed by a domestic or foreign corporation authorized by the superintendent of insurance to transact within this state the business of surety, and shall be filed in the banking department. Such agreement or undertaking and such surety bond need not be made or fur- nished unless the superintendent of banks shall require the same. 3. Prior to the liquidation of any such savings banlc, such guaranty fund shall not be in any manner encroached upon, except for losses and the repaj^-ment of contributions made by incorpo- rators or trustees as hereinafter provided, until it exceeds twenty- five per centum of the amount due depositors. 4. The amounts contributed to such guaranty fund by the in- corporators or trustees shall not constitute a liability of the savings bank, except as hereinafter provided, and any losses sus- tained by the savings bank in excess of that portion of the guar- anty fund created from earnings may be charged against such contributions pro rata. Source. — Xew. CROSS-REFERENCES.— Definition of guaranty fund, see § 3. Return of contributions to initial guaranty fund, see § 236, subd. 2. Return of contributions heretofore made, see § 237. Establishment of guaranty fund of existing savings banks, see § 252. Transferable certificates representing amounts contributed, see § 238, subd. 2. Right to dividends thereon, see § 256, subd. 3. Under the former law, no statutory provision was made to meet the ex- penses of a new savings bank until it secured deposits from which it coiild create earnings, nor was there any fund against which expenses and losses 14 210 Banking Law. § 235. could be ■ charged in the first instance so that dividends might be paid ai initio to depositors. This and the following section providing for an expense fund wete incorporated for the purpose of providing a method of instituting a savings bank, under which the liability for such advances was subordinated to deposit liabilities, and the future necessity, of resorting to questionable expedients was obviated. § 235. Expense fund; agreement of incorporators to contribute; bond. Before any savings bank hereafter organized shall be authorized to do business in this state, its incorporators shall create an ex- pense fund from which the expense of organizing such savings bank and its operating expenses may be paid until such time as its earnings are sufficient to pay its operating expenses in addition to such dividends as may be declared and credited to its deposit- ors from its earnings. The incorporators shall deposit to the credit of such savings banlt in cash as an expense fund the sum of five thousand dollars. They shall also enter into such an agreement or undertaking with the superintendent of banks as trustee for the depositors with the savings bank as he may require, to make such further contribu- tions in cash to the expense fund of such savings bank as may be necessary to pay its operating expenses until such time as it can pay them from its earnings in addition to such dividends as may be declared and credited to its depositors. Such agreement or undertaking, to an amount approved by the superintendent of banks, shall be secured by a surety bond executed by a domestic or foreign corporation authorized by the superintendent of insur- ance to transact within this state the business of surety, and shall be filed in the banlcing department. Such agreement or undertaking and such surety bond need not be made or furnished unless the superintendent of banks shall require the same. The amounts contributed to the expense fund of such savings bank by the incorporators or trustees shall not constitute a liabil- ity of such savings bank, except as hereinafter provided. Source. — New. CROSS-RErERE>fCES.— How expense fund may be returned, see § 236, subd. 1. Transferable certificates representing amount contributed, see § 238, subd. 2. Eight to dividends thereon, see § 256, subd. 3. For purpose of section see note to § 234. §§ 236, 237. Savia-gs Banks. 211 § 236. Eeturn of initial guaranty fund and expense fund. 1. Contributions made by the incorporators or trustees to the expense fund may be repaid pro rata to the contributors from that portion of the guaranty fund created from earnings, when- ever such payinents will not reduce the guaranty fund below five per centum of the total amount due depositors. In case of the liquidation of the savings bank before such contributions to the expense fund have been repaid, any contributions to the expense fund remaining unexpended after the payment of the expenses of liquidation may be repaid to the contributors pro rata. 2. Whenever the contributions of the incorporators or trustees to the expense fund of such savings bank have been returned to them, the contributions made to the guaranty fund by incor- porators or trustees may be returned to them pro rata, from that portion of the guaranty fund created from the earnings of the savings bank, provided that such repayments will not reduce the earned portion of the guaranty fund of such savings bank below five per centum of the amount due depositors. In case of the liquidation of the savings bank before such contributions to the guaranty fund have been repaid, any portion of such contribu- tions not needed for the payment of the expenses of liquidation and the payment of depositors in full and the repayment of contributions to the expense fund may be repaid to the con- tributors pro rata. Source. — New. CROSS-REFERENCES.— Initial quaranty fund, see § 234. Expense fund, see § 235, Transferable certificates representing contributions, see § 238, subd. 2. Return of contributions heretofore made, soe § 237. See note to § 234. § 237. Eeturn of contributions heretofore made. Contributions heretofore made by the incorporators or trustees of any savings banlc to pay its expenses or to maintain its sol- vency, under an agreement with the superintendent of banks that such contributions may be returned whenever such return will not affect the solvency of such savings bank or render it unsafe for it to continue business, may be returned in accordance with the provisions of such agreement. 212 Banking- Law. § 238. Source. — New. This section was inserted so that extra-legal expedients heretofore adopted to protect depositors of new institutions might be legalized, and both the savings bank and contributors to the funds might be protected in the return of the money. See note to § 234. § 238. General powers. In addition to the powers conferred by the general corporation law, every savings bank shall have, subject to the restrictions and limitations contained in this article, the following powers : 1. To receive deposits of money, to invest the same in the property and securities prescribed in section two hundred and thirty-nine of this article, to declare dividends in the manner pre- scribed in sections two hundred and iifty-four to two hundred and fifty-six of this article, and to exercise by its board of trus- tees or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of a savings bank. 2. To issue transferable certificates showing the amounts here- tofore or hereafter contributed by any incorporator or trustee for the purpose of maintaining the solvency of such savings bank, or for the purpose of paying its expenses. Such, certificate shall show that it does not constitute a liability of such savings bank, except as hereinbefore provided. 3. To purchase, hold and convey real property as prescribed in sections two hundred and thirty-nine and two hundred and forty of this article. 4. To pay depositors as hereinafter provided and, when re- quested by them, by drafts upon deposits to the credit of the savings bank in the city of If ew York or in foreign exchange, and to charge current rates of exchange for such drafts. 6. To borrow money in an emergency for the purpose of re- paying depositors and to pledge or hypothecate securities as col- lateral for loans so obtained. 6. To collect or protest promissory notes or bills of exchange and remit the proceeds of the collections by drafts upon deposits to the credit of the savings bank in the city of New York, and to charge the usual rates or fees for such collection and remittance or such protest. 1. To sell gold or silver received in payment of interest or § 239. Savings Banks. 213 principal of obligations owned by the savings bank, or from de- positors in the regular course of business. 8. To do al] other acts authorized by this article. Source. — ^Subdivision 1 is from former § 135 rewritten; subd. 2 is new; subd. 3 is a power transferred from former § 147; subd. 4 comes from former § 152; subd. 5 is adapted from former § 152, but the power to borrow is limited to the purpose stated, and the requirements of the previous approval of the superintendent of banks and the resolution of the trustees have been transferred to § 243; subd. 6, in so far as it provides for the manner of payment of proceeds of collections is adapted from former § 152, but the power to collect and protest notes and time bills is not only new but was expressly withheld from savings banks by former § 152; subd, 7 is ffraa former § 152; subd. 8 is new. CROSS-REFERENCES.— Powers of corporations generally, see Gen. Corp. Law, §§ 10, 11; acquisition of real property, id., § 13, 14. See note to definition of savings bank, § 2. Power to make by-laws, see § 262. Restrictions on power to borrow money, hypothecate securities or issue certificates of deposit, see § 243. Limitation on amount of deposits, see § 247. Regulations aa to repayment of deposits, see §§ 248, 249. Investments and loans, see §§ 239, 240, 241 and notes thereto. Regulations and restrictions as to dividends, see § 256. MAY NOT ACT AS TRUSTEE. — The Banking Law does not authorize a savings hank to act as trustee. Atty.-Gen. Rep. (1910) 853. % § 239. Investment of deposits and guaranty fund and restrictions thereon. A savings bank may invest the moneys deposited therein, the- sums credited to the guaranty fund thereof and the income de- rived therefrom, in the following property and securities and no others, and subject to the following restrictions : 1. The stocks or bonds or interest-bearing notes or obligations; of the United States, or those for which the faith of the United States is pledged to provide for the payment of the interest and principal, including the bonds of the District of Columbia. 2. The stocks or bonds or interest-bearing obligations of this, state, issued pursuant to the authority of any law of the state. 3. The stocks, bonds or interest-bearing obligations of any state of the United States, upon which there is no default and upon wbich tiiere has been no default for more than ninety days ; pro- 214 Banking Law. § 239. vided that within ten years immediately preceding the invest- ment such state has not been in default for more than ninety days in the payment of any part of principal or interest of any debt duly authorized by the legislature of such state to be contracted by such state since the first day of January, eighteen hundred and seventy-eight. 4. The stocks, bonds, interest-bearing obligations, or revenue notes sold at a discount, of any city, county, town, village, school district, union free school district or poor district in this state, provided that they were issued pursuant to law and that the faith and credit of the municipality or district that issued them are pledged for their payment. 5. The stocks or bonds of any incorporated city situated in one of the states of the United States which was admitted to statehood prior to January first, eighteen hundred and ninety-six, and which since January first, eighteen hundred and sixty-one, has not repu- diated or defaulted in the payment of any part of the principal or interest of any debt authorized by the legislature of any such state to be contracted, provided said city has a population, as shown by the federal census next preceding said investment, of not less than forty-five thousand inhabitants, and was incorporated as a city at least twenty-five years prior to the making of said investment, and has not, since January first, eighteen himdred and seventy-eight, defaulted for more than ninety days in the payment of any part either of principal or interest of any bond, note or other evidence of indebtedness, or effected any compromise of any kind with the holders thereof. But if, after such default on the part of any such state or city, the debt or security, in the payment of the principal or interest of which such default oc- curred, has been fully paid, refunded or compromised by the issue of new securities then the date of the first failure to pay principal or interest, when due, upon such debt or security, shall be taken to be the date of such default, within the provisions of this sub- division, and subsequent failures to pay installments of principal or interest upon such debt or security, prior to the refunding or final payment of the same, shall not be held to continue said de- fault or to fix the time thereof, within the meaning of this sub- division, at a date later than the date of said first failure in pay- ment. If at any time the indebtedness of any such city, together § 239. Savings Banks. 215 with the indebtedness of any district, or other municipal cor- poration or subdivision except a county, which is wholly or in part included within the bounds or limits of said city, less its water debt and sinking funds, shall exceed seven per centum of the valuation of said city for purposes of taxation, its bonds and stocks shall thereafter, and until such indebtedness shall be reduced to seven per centum of the valijation for the purposes of taxation, cease to be an authorized investment for the moneys of savings banks. 6. Bonds, and mortgages on unincumbered real property situ- ated in this state, to the extent of sixty per centum of the ap- praised value thereof. Not more than sixty-five per centum of the whole amount of deposits and guaranty fund shall be so loaned or invested. If the loan is on unimproved and unproductive real property, the amount loaned thereon shall not be more than forty per centum of its appraised value. No investment in any bonds and mortgages shall be made by any savings bank except upon the report of a committee of its trustees charged with the duty of investigating the same, who shall certify to the value of the prem- ises mortgaged or to be mortgaged, according to their judgment, and such report shall be filed and preserved among the records of the corporation. 7. The following bonds of railroad corporations: (a) The first mortgage bonds of any railroad corporation of this state, the principal part of whose railroad is located within this state, or of any railroad corporation of this or any other state or states connecting with and controlled and operated as a part of the system of any such railroad corporation of this state, and of which connecting railroad at least a majority of its capital stock is owned by such a railroad corporation of this state, or in the mort- gage bonds of any such railroad corporation of an issue to retire all prior mortgage debt of such railroad companies respectively; provided that at no time within five years next preceding the date of any such investment, such railroad corporation of this state or such connecting railroad corporation respectively shall have failed regularly and punctually to pay the matured principal and inter- est of all its mortgage indebtedness, and in addition thereto regu- larly and punctually to have paid in dividends to its stockholders during each of said five years an amount at least equal to four 216 Backing Law. § 239. per centum upon all its outstanding capital stock j and provided, further, that at the date of every such dividend the outstanding capital stock of such railroad corporation, or such connecting rail- road company respectively shall have been equal to at least one- third of the total mortgage indebtedness of such railroad cor- porations respectively, including all bonds issued or to be issued under any mortgage securing any bonds in which such investment shall be made. If by means of consolidation a railroad cor- poration shall own and possess the properties and franchises which prior thereto belonged to similar corporations, and if the out- standing capital stock of the railrbad corporation formed by such consolidation shall be equal to at least one-third of the total mort- gage indebtedness of such railroad corporation, including all bonds issued or to be issued under any mortgage securing any bonds in which such investment shall be made, and if during the five years next preceding such consolidation no one of the consolidating rail- road corporations shall have failed regularly and punctually to pay the matured principal and interest of all its mortgage indebt- edness, and if in addition thereto during the five years next pre- ceding such consolidation, the dividends paid in cash by one or more of such consolidating corporations have equaled or exceeded four per centum per annum upon an amount equal to the combined capital stock of the consolidating corporations as outstanding at the time of each dividend payment during such five-year period, such successor railroad corporation formed by such consolidation shall be considered as having regularly and punctually paid such ma- tured principal and interest and such dividends equal to or exceed- ing four per centum per annum during the same period of five years, provided further that the amount of dividends paid in cash during each of such five years has equally or exceeded four per centum per annum on the stock of the consolidated corporation as outstanding at the time of such consolidation. (b) The mortgage bonds of the following railroad corporations : The Chicago and Northwestern Kailroad Company ; Chicago, Bur- lington and Quincy Railroad Company, Michigan Central Rail- road Company, Illinois Central Railroad Company, Pennsylvania Railroad Company, Delaware and Hudson Company, Delaware, Lackawanna and Western Railroad Company, New York, New Haven and Hartford Railroad Company, Boston and § 239. Savings Banks. 217 Maine Eailroad Company, Maine Central Eailroad Company, the Chicago and Alton Eailroad Company, Morris and Essex Eailroad Company, Central Eailroad of New Jersey, United New Jersey Eailroad and Canal Company, also in the mortgage bonds of railroad companies whose lines are leased or operated or controlled by any railroad company specified in this paragraph if said bonds be guaranteed both as to principal and interest by the railroad company to which said lines are leased or by which they are operated or controlled. Provided that at the time of making investments authorized by this paragraph the said railroad corporations issuing such bonds shall have earned and paid regular dividends of not less than four per centum per annum in cash on all their issues of capital stock for the ten years next pre- ceding such investment, and provided the capital stock of any said railroad corporations shall equal or exceed in amount one-third of the par value of all its bonded indebtedness ; and further provided that all bonds authorized for investment by this paragraph shall be secured by a mortgage which is a first mortgage on either the whole or some part of the railroad and railroad property of the company issuing such bonds, or that such bonds shall be mortgage bonds of an issue to retire all prior mortgage debts of such railroad com- pany ; provided, further, that the mortgage which secures the bonds authorized by this paragraph is dated, executed and recorded prior to January first, nineteen hundred and five. (c) The mortgage bonds of the Chicago, Milwaukee and Saint Paul Eailway Company, and the Chicago, Eock Island and Pacific Eailway Company, so long as they shall continue to earn and pay at least four per centum dividends per annum on their outstanding capital stock, and provided their capital stock shall equal or exceed in amount one-third of the par value of all their bonded indebted- ness,, and further provided that all bonds of either of said com- panies hereby authorized for investment shall be secured by a mortgage which is a first mortgage on either the whole or some part of the railroad or railroad property actually in the possession of and operated by said compamy, or that such bonds shall be mort- gage bonds of an issue to retire all prior debts of said railroad com- pany; provided, further, that the mortgage which secures the bonds authorized by this para^aph is dated, executed and re- corded prior to January first, nineteen hundred and five. 218 , Banking Law. § 239. (d) The first mortgage bonds of the Fonda, Johnstown and Gloversville Railroad Company, or in the mortgage bonds of said railroad company of an issue to retire all prior mortgage debts of said railroad company and provided the capital stock of said railroad company shall equal or exceed in amount one-third of the par value of all its bonded indebtedness and provided also that such railroad be the standard gauge of four feet eight and one-half inches, and in the mortgage bonds of the Buffalo Creek Railroad Company of an issue to retire all prior mortgage debts of said rail- road company, provided that the bonds authorized by this para- graph are secured by a mortgage dated, executed and recorded prior to January first, nineteen hundred and five. (e) The mortgage bonds of any railroad corporation incorpo- rated under the laws of any of the United States, which actually owns in fee not less than five hundred miles of standard gauge rail- way exclusive of sidings, within the United States, provided that at no time within five years next preceding the date of any such in- vestment such railroad corporation shall have failed regularly and punctually to pay the matured principal and interest of all its mort- gage indebtedness and in addition thereto regularly and punctually to have paid in dividends to its stockholders during each of said five years an amount at least equal to four per centum upon all its outstanding capital stock; and provided further that during said five years the gross earnings in each year from the operations of said company, including therein the gross earnings of all railroads leased and operated or controlled and operated by said company, and also including in said earnings the amount received directly or indirectly by said company from the sale of coal from mines ovsTied or controlled by it, shall not have been less in amount than five times the amount necessary to pay the interest payable during that year upon its entire outstanding indebtedness, and the rentals for said year of all leased lines, and further provided that all bonds au- thorized for investment by this paragraph shall be secured by a mortgage which is at the time of making said investment or was at the date of the execution of said mortgage (one) a first mort- gage upon not less than seventy-five per centum of the railway owned in fee by the company issuing said bonds exclusive of sid- ings at the date of said mortgage or (two) a refunding mortgage issued to retire all prior lien mortgage debts of said company out- § 239. Savings Banks. 219 standing at the time of said investment and covering at least sev- enty-five per centum of the railway owned in fee by said company at the date of said mortgage. But no one of the bonds so secured shall be a legal investment in case the mortgage securing the same shall authorize a total issue of bonds which together with all out- standing prior debts of said company, after deducting therefrom in case of a refunding mortgage, the bonds reserved under the provi- sions of said mortgage to retire prior debts at maturity, shall ex- ceed three times the outstanding capital stock of said company at the time of making said investment. And no mortgage is to be re- garded as a refunding mortgage, under the provisions of this para- graph, unless the bonds which it secures mature at a later date than any bond which it is given to refund, nor unless it covers a mile- age at least twenty-five per centum greater than is covered by any one of the prior mortgages so to be refunded. (f) Any railway mortgage bonds which would be a legal in- vestment under the provisions of paragraph (e) of this subdi- vision, except for the fact that the railroad corporation issuing said bonds actually owns in fee less than five hundred miles of road, provided that during five years next preceding the date of any such inve^stment the gross earnings in each year from the operations of said corporation, including the gross earnings of all lines leased and operated or controlled and operated by it, shall not have been less than ten million dollars. (g) The mortgage bonds of a railroad corporation described in the foregoing paragraph (e) or (f) or the mortgage bonds of a railroad owned by such corporation, assumed or guaranteed by it by endorsement on said bonds, provided said bonds are prior to and are to be refunded by a general mortgage of said corpo- ration the bonds secured by which are made a legal investment under the provisions of said paragraph (e) or (f ) ; and provided, further, that said general mortgage covers all the real property upon which the mortgage securing said underlying bonds is a lien. (-h) Any railway mortgage bonds which would be a legal in- vestment under the provisions of paragraph (e) or (g) of this subdivision except for the fact that the railroad corporation is- suing said bonds actually owns in fee less than five hundred miles of road, provided the payment of principal and interest 220 Banking Law. § 239. of said bonds is guaranteed by endorsement thereon by, or pro- vided said bonds have been assumed by, a corporation whose first mortgage is, or refunding mortgage bonds are, a legal investment under the provisions of paragraph (e) or (f ) of this subdivision. But no one of the bonds so guaranteed or assumed shall be a legal investment in case the mortgage securing the same shall authorize a total issue of bonds which, together with all the outstanding prior debts of the corporation making said guarantee or so as- suming said bonds, including therein the authorized amount of all previously guaranteed or assumed bond issues, shall exceed three times the capital stock of said corporation, at the time a£ making said investment. (i) The first mortgage bonds of a railroad the entire capital stock of which,, except shares necessary to qualify directors, is owned by, and which is operated by a railroad whose last issued refunding bonds are a legal investment under the provisions of paragraph (a), (e), or (f) of this subdivisions, provided the payment of principal and interest of said bonds is guaranteed by endorsement thereon by the company so ovsmiug and operating said road, and further provided the mortgage securing said bonds does not authorize an issue of more than twenty thousand dollars in bonds for each mile of road covered thereby. But no one of the bonds so guaranteed shall be a legal investment in case the mort- gage securing the same shall authorize a total issue of bonds which together with all the outstanding prior, debts of the com- pany making said guarantee, including therein the authorized amount of all previously guaranteed bond issues, shall exceed three times the capital stock of said company, at the time of ■ making said investment. Bonds which have been or shall become legal investments for savings banks under any of the provisions of this section shall not be rendered illegal as investments, though the property upon which they are secured has been or shall be conveyed to another corporation, and though the railroad corporation which issued or assumed said bond has been or shall be consolidated with another railroad corporation, if the consolidated or purchasing corporation shall assume the payment of said bonds and shall continue to pay regularly interest or dividends or both upon the securities issued against, in exchange for or to acquire the stock § 239. Savings Banks. 221 of the company consolidated or the property purchased or upon securities subsequently issued in exchange or substitution there- for, to an amount at least equal to four per centum per annum upon the capital stock outstanding at the time of such consolida- tion or purchase of said corporation which has issued or assumed such bonds. ISTot more than twenty-five per centum of the assets of any savings bank shall be loaned or invested in railroad bonds, and not more than ten per centum of the assets of any savings bank shall be invested in the bonds of any one railroad corporation described in paragraph (a) of this subdivision, and not more than five per centum of such assets in the bonds of any other railroad corporation. In determining the amount of the assets of any savings bank under the provisions of this subdivision it securities shall be estimated in the manner prescribed for determining the per centum of par value surplus by section two hundred and fifty-seven of this article. Street railroad corporations shall not be considered railroad corporations within the meaning of this subdivision. 8. (a) Promissory notes payable to the order of the savings bank upon demand, secured by the pledge and assignment, if necessary, of the stocks or bonds or any of them enumerated in subdivisions one, two, three, four, five and ten of this section or by the railroad bonds or any of them mentioned and described in subdivision seven of this section, but no such loan shall exceed ninety per centum of the cash market value of such securities so pledged. Should any of the securities so held in pledge depreciate in value after the making of such loan, the savings bank shall require an immediate payment of such loan or of a part thereof or addi- tional security therefor, so that the amount loaned thereon shall at no time exceed ninety per centum of the market value of the securities so pledged for such loan. (b) Promissory notes made payalble to the order of the savings bank upon demand by a savings and loan association of this state which has. been incorporated for three years or more and has an accumulated capital of at least fifty thousand dollars. 9. Real estate as follows: (a) A plot whereon there is or may be erected a building or buildings suitable for the convenient transaction of the business of 222 Banking Law. § 239. the savings bank, from portions of which not required for its own use a revenue may be derived. (b) Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its business. (c) Such as it shall purchase at sales under judgments, decrees or mortgages held by it. The trustees of a savings bank shall not be held liable for in- vesting in state or municipal bonds named in the last list fur- nished by the superintendent of banks pursuant to section fifty- two of article two of this chapter, or in any railroad bonds men- tioned in such list, which have been legally issued and properly executed, unless such savings bank shall have been notified by the superintendent of banks that, in his judgment, such bonds do not conform or have ceased to conform to the provisions of this section. 10. Bonds of the land bank of the State of New York, Source. — Former §§ 146, 147, 150. Subdivision 7a, amended by L. 1915, chap. 515. In effect May 4, 1915. The amendment of 1915 added the last sentence to subdivision 7a. Subd. 8(a) amended and subd. 10 added by L. 1916, chap. 363. In effect May 1, 1916. The language of the first sentence is based upon the first sentence of former § 146, with the addition of the words "the sums credited to the guaranty fund thereof," and " in the following property and securities and no others; and subject to the following restrictions." This sentence and subdivision 8 supersede the first sentence of former § 150 relating to loans on personal security. Subdivisions 1 and 2 are subdivisions 1 and 2 of former § 146, adopted without change. Subdivision 3 supersedes former § 146, subd. 3, the provisions of which are materially amended and condensed. The former subdivision was the result of legislation designed to include certain specific issues of state bonds among the investments authorized. The present subdivision makes all state bonds subject to the same requirements. The present proviso that the state shall not have been in default on any debt authorized by the legislature to be contracted by the state since Janua/ry 1st, 1878, is designed to make available as investments the bonis of southern states which may have defaulted in the payment of debts contracted during the " reconstruction period " after the Civil War. Subdivision 4 is former § 146, subd. 4, amended so as to include revenue notes sold at a discount. Subdivision 5 is former § 146, subd. 5, adopted without change, except that the clause at the end " but the superintendent of banlts may, in his discretion, require any savings bank to sell such bonds or stocks of said § 239. Savings Banks. 223 city, as may have been purchased prior to said increase of debt/' has been transferred to § 55. Subdivision 6 includes the first four sentences of former § 146, subd. 6, without substantial change, except the addition of the words " and guaranty fund " in the second sentence. Subdivision 7 includes all of subdivision 6 of former § 146 except the first four sentences, the intention being merely to place in a separate sub- division the provisions relating to railroad bonds. No substantial change is made in the text. Subdivision 8 is adopted from former § 148 which permitted such loans from the available fund. See note to § 251. Subdivision 9 supersedes subdivision 7 of former § 146 and adopts parts of former § 147 without substantial oliange. The last paragraph of the section is new. CROSS-REFERENCES.— Duty of superintendent to furnish list of legal investments, see § 52; to furnish estimated market value of bonds, see § 53; to determine valuation of securities in arrears of interest, see § 54. When superintendent may require sale of securities, see § 55. Duty of trustees to make investments, see § 251. Restrictions on taking and holding real estate, see § 240. Requirements as to mortgage loans, insurance of buildings and recording of mortgages, see § 241. Method of carrying investments on books, see § 246. Amortization of securities, see § 246. Criminal liability of trustees for unlawful investments, see Penal Law, § 296, post. General Corporation Law, §§ 13 and 14, relating to the acquisition of real property, are excluded by this section from application to savings banks. LIABILITY OF TRUSTEES. — Trustees of a savings bank are under a positive duty to see to it that the funds of the bank are not invested con- trary to law, and a disregard of that obligation renders the trustees per- sonally liable. Paine v. Barnum, 59 How. Pr. 303; Paine v. Mead, 59 How. Pr. 318; Hun v. Gary, 82 N. Y. 65. This rule is now qualified by the last paragraph of § 239. When a loss sustained by a savings bank through the illegal purchase by the trustees of certain bonds of a foreign state has been made good by third persons who gave their obligations to the bank in compliance with a require- ment imposed by the superintendent as a condition of permitting the bank to continue in business, the trustees are released from liability to the bank. Hun V. Van Dyck, 26 Hun 567, afC'd 92 N. Y. 660. DEPRECIATION OF SECURITY. — A savings bank cannot legally retain and continue an investment which though legal when made has become illegal by reason of the changed condition and character of the security. In such a case the superintendent of banks had power, under the former Banking Law, to require the bank to dispose of the security. The manner of making the change of investment rests in his sound discretion, but the power should 224 Bankistg Law. § 239. be so exercised as to prevent loss or embarrassment in the business of the bank. Atty.-Gen. Eep. (1908) 371. This is now covered by § 55. UNAUTHORIZED SECURITY ACCEPTED AS PAYMENT.— A savings bank may accept in payment of a debt securities not authorized by statute as investments. Rome Savings Bajik v. Krug, 102 N. Y. 331. SUBDIVISION 3 To fulfill the requirements of the statute the bonds or obligations must not only be issued by a State, but must be obligations of the State for which the credit of the State is pledged. Att.-Gen. Rep. (1909) 730. The bonds of the Board of Commissioners of the Port of New Orleans are not legal investments for savings banks. Atty.-Gen. Rep. (1909) 730; Atty.- Gen. Rep. (1911), vol. 2, p. 611. A state's resistance of the payment of its bonds on the ground that the Constitution did not authorize the creation of the debt is not a default in payment within the meaning of the statute. Atty.-Gen. Rep. (1892) 64. That ten years have not elapsed since the admission of a state to the Union does not prevent its bonds from being authorized investments, if since becoming a State it has never defaulted in the payment of any of its obligations. Atty.-Gen. Eep. (1909) 728. In 1891 the Attorney-General gave his opinion that the bonds of the State of Minnesota would not be legal investments for savings banks until all of the bonds issued in 1858 and known as " Minnesota State Railroad Bonds " had been cancelled or the State had been released from liability thereon. Atty.- Gen. Rep. (1891) 260. Where the State is restrained by injunction from paying the interest, this does not constitute a default. Op. Atty.-Gen., Feb. 19, 1915. Bonds of the territory of Hawaii are legal investments for the savings banks of this State. Atty.-Gen., August 10, 1914. The following State bonds, according to the rulings of the Attorney-Gen- eral, are legal investments for savings banks in this State: Bonds of the State of Colorado, Atty.-Gen. Rep. (1892) 64; bonds of the State of Okla- homa, Atty.-Gen. Eep. (1909) 728; bonds of the State of New Mexico issued pursuant to an act of the legislature approved June 1, 1912, Atty.-Gen. Rep. (1913), vol. 2, p. 391; the refunding bonds of the State of Tennessee issued pursuant to the act of the General Assembly approved February 21, 1913, Atty.-Gen. Rep. (1913), vol. 2, p. 158. Bonds or certificates of indebtedness of the Ohio State University, if issued in conformity to the statutes of Ohio, are " interest bearing obligations " of that State, and are legal investments for savings banks. Atty.-Gen, Eep. (1892) 265. In 1912 the Attorney-General gave his opinion that the bonds of the State of Louisiana were not legal investments for savings banks, because that State had defaulted in the payment of certain of its obligations known as "baby bonds." Atty.-Gen. Eep. (1912) 346. But later, upon a fuller pres- entation of the facts, the Attorney-General ruled that the " baby bonds " were not obligations for which the credit of ihe State was pledged, ajid § 239. Savings Banks. 225 therefore that the State was not in default; and that bonds about to be issued by the State pursuant to constitutional and statutory authority to refund certain bonds known as " Consolidated Bonds " authorized by the legislature of 1892, issued in 1895, and constituting legal investments for savings banks .in New York, were likewise legal investments. SUBDIVISION 4 See General Municipal Law, § 7, making municipal bonds a charge upon the municipality and providing for their payment. The fact that the inhabitants of a village or school district do not own the fee of the land on which they reside, as where the land in the village or district is held on long leases, does not prevent the bonds of the village or school district from being authorized investments under this subdivision. Atty.-Gen. Eep. (1899) 275. Warrants issued by the City of Buffalo pursuant to Laws of 1889, ch. 323, as amended by Laws of 1890, ch. 383, are " interest bearing obligations " of said city within the meaning of this subdivision, and are legal investments for savings banks. Atty.-Gen. Eep. (1891) 213. The village and school bonds of the village of Salamanca are legal invest- ments for savings banks. Atty.-Gen. Rep. (1899) 275. The bonds of the City of Cohoes, issued under Laws of 1904, ch. 471, are legal investments for savings banks. Atty.-Gen. Eep. (1909) 736. A JUDGMENT AGAINST A CITY is not an obligation of the kind de- scribed in the statute as an authorized investment. Atty.-Gen. Eep. (1903) 362. . SUBDIVISION 5 The trustees of a savings bank should not allow bonds of a city to remain past due in their hands, nor should they enter into an agreement with the city to extend the time of payment of the bonds while other bonds of the same issue would be paid. Atty.-Gen. Eep. ( 1911 ) , vol. 2, p. 196 : The words "the valuation of said city for purposes of taxation," as used in the third sentence of this subdivision, means the sum at which the property is assessed. Atty.-Gen. Eep. (1911), vol. 2, p. 686. In estimating the valuation of property for purposes of taxation to deter- mine whether the indebtedness of a city of another State exceeds 7 per cent, of such valuation, it is proper to include the valuation placed upon money and credits in said city pursuant to the statutes of the State in which it is situated. Op. Atty.-Gen., April 27, 1914. Said valuation includes personal property as well as real estate. Atty.-Gen. Eep. (1911), vol. 2, p. 133. In computing the indebtedness of a city to determine whether it exceeds 7 per cent, of the " valuation of said city for purposes of taxation," tax certificates of the city should be added to the city's general indebtedness only when the faith and credit of the municipality are pledged for their pay- ment so that the obligation created is general; and even then they should not be so added until there is a failure of the special fund devoted to their redemption. Atty.-Gen. Eep. (1896) 249. The amount of securities in the city's sinking fund should be deducted from its indebtedness. Atty.-Gen. Eep. (1895) 309. 226 Banking Law. § 239. Within the meaning of this subdivision debts incurred by a state during a period when it had no legal state government recognized by the United States, as was the situation in Texas from 1861 to 1869, are not debts "authorized by the legislature of * * * such state to be contracted;" and the failure of a state to pay its indebtedness incurred in aid of the rebellion against the United States, which it was forbidden to pay by the Fourteenth Amendment to the United States Constitution, is not a repudia- tion or default in payment. Atty.-Gen. Eep. (1912), vol. 2, p. 442. That certain bonds of the Territory of Florida, issued in aid of various corporations, and certain bonds of the State of Florida, issued in aid of cer- tain railroads, remain unpaid, is not such a default on the part of the State of Florida as to render the bonds of the City of Jacksonville illegal invest- ments for savings banks. The unpaid bonds having been illegally issued. Op. Atty.-Gen., June 9, 1914. The following municipal bonds, according to the opinion of the Attorney- General, are legal investments for savings banks in this State: Bonds of the city of Dallas, Texas, Atty.-Gen. Eep. (1912), vol. 2, p. 442; bonds of the city of Seattle, Washington, Atty-Gen. Eep. (1910), p. 830; bonds of Kansas City, Kansas, Atty.-Gen. Eep. (1910), p. 827; the improvement bonds of the city of Portland, Oregon, issued pursuant to § 383-a of the Portland charter, Atty.-Gen. Eep. (1913), vol. 2, p. 288. The bonds of the city of San Francisco are no longer legal investments, as the indebtedness of the city exceeds 7 per cent, of the assessed value of prop- erty therein. Op. Atty.-Gen., March 12, 1915. Bonds of the city of Omaha, Nebraska, are legal investments for savings banks. Atty.-Gen. Rep., February 29, 1916. Bonds of the city of El Paso, Texas, are legal investments for savings banks. Atty.-Gen. Eep., April 20, 1916. Independent school district bonds of the city of Duluth, Minnesota, are not legal investments for savings banks. Atty.-Gen. Eep., July 26, 1915. The bonds of the city of San Francisco are no longer lawful investments for savings banks. Atty.-Gen. Eep., March 12, 1915. SUBDIVISION 6 A twenty-one year lease with a privilege of two renewals of twenty-one years each is not an incumbrance which will prevent a savings bank from taking a mortgage of the fee. Atty.-Gen. Eep. (1896) 171. A savings bank may take a mortgage upon an undivided interest in real estate held by tenants in common, provided that the mortgage share is of the prescribed value. The fact that others than the mortgagor have interests in common with him does not constitute an incumbrance. Atty.-Gen. Eep. (1896) 271. A savings bank may invest in a second mortgage when it holds the first mortgage on the same property. The intent of the section with respect to " unincumbered " real property is to secure to the bank a first lien. The same result may be accomplished by discharging the first mortgage and taking a new one for the entire loan. Atty.-Gen. Eep. (1909) 723. EESTEICTIVE COVENANT AS AN INCUMBEANCB.— If a restrictive covenant affecting the use of real estate is not in the nature of a condition,. § 239. Savings Banks. 227 and no forfeiture or disturbance of title can result from its breach, and the value of the property will not be reduced in consequence thereof, it is not an incumbrance within the meaning of this subdivision; but the effect of the restriction should be considered by the trustees of the bank in estimating the value of the property. Atty.-Gen. Rep. (1891) 51. A MORTGAGE OF A LEASEHOLD ESTATE, though the term of the lease is ninety-nine years, is not an authorized investment. Atty.-Gen. Rep. (1899) 275. BONDS SECURED BY TRUST MORTGAGE.— Bonds secured by a mort- gage executed by a corporation to a trustee are not legal investments for savings bank? except in so far as the statute (see subd. 7) expressly author- izes investment in such securities. The mortgages contemplated by subdi- vision 6 are such as vest in the bank, directly or by assignment, title to 'the mortgage as well as to the bond and the right to foreclose without the intervention of a trustee. Atty.-Gen. Rep. (1892) 299; Atty.-Gen. Rep. (1902) 245. In the case of a trust mortgage it makes no difference that the savings bank takes all the bonds. Atty.-Gen. Rep. (1892) 299. A loan made by a savings bank to individuals, but for the benefit of a foreign corporation, with collateral security of the foreign corporation's notes secured by trust deeds upon unimproved vacant land in a foreign state, the value of the land being not more than one-fifth of the amoiuit of the loan, is illegal and renders the trustees personally liable. Paine v. Barnum, 59 How. Pr. 303. See also Paine v. Irwin, 59 How. Pr. 316; Paine v. Meade, 59 How. Pr. 318. PARTICIPATION MORTGAGE NOT AUTHORIZED.— Real estate upon which a savings bank would have been authorized to loan $65,000 was mort- gaged to the extent of $74,000. A proposal was made that the mortgagee assign his mortgage to the bank so that the latter would become the absolute owner thereof to the extent of $65,000, with the right to collect that sum with interest before any money was payable to the mortgagee; that if more should be collected the bank should pay it over to the mortgagee, who should have the right to an accounting of all such excess moneys received by the bank. Attorney-General O'Malley gave his opinion that while the proposed plan would not violate the statutory prohibition against lending more than sixty per cent, of the value of the land, it placed the bank in the position o£ a trustee, and that the Banking Law did not permit a savings bank to enter transactions of that character. Atty.-Gen. Rep. (1910) 853. BUILDING LOAN. — Real estate upon which a building is in the process of construction must, until completion of the building, be deemed " unpro- ductive " within the meaning of this subdivision. Its prospective value cannot be considered. Hence a " building loan " or loan for the purpose of constructing a building cannot exceed forty per cent, of the value of the land at the time when the loan is authorized and the value of the land certified by the trustees. Atty.-Gen. Rep. (1912), vol. 2, p. 318. AMOUNT OF SURPLUS THAT MAY BE INVESTED ON MORTGAGE.— Under the language of this subdivision as it formerly stood, the limitation that "not more than sixty-five per centum of the whole amount of deposits shall be so loaned or invested " applied to deposits only and had no reference to surplus. Atty.-Gen. Rep. (1906) 501. But now the surplus constitutes the guaranty fund ( § 252 ) and the present 228 Bankiitg Law. § 239. subdivision prohibits the investment of more than sixty-five per centum of the deposits " and guaranty fund " on mortgage. VIOLATION" NOT AVAILABLE TO DEBTOE.— That a loan upon bond and mortgage was made by the savings banks in violation of the provisions of this subdivision, the mortgage not being a first lien and the value of the mortgaged property not being certified, is not available as a defense to the debtor. Auburn Savings Bank v. Brinkerhofi, 44 Hun 142. SUBDIVISION 7 (a) In mentioning the bonds of a railroad company the statute has reference to bonds of which the company is the maker or obligor and for the payment of which it is directly liable in an action on the bonds. Atty.-Gen. Rep. (1904) 365. The Manhattan Elevated Railway Company was held by the Attorney- General to be a " railroad corporation " within the meaning of this paragraph. Atty.-Gen. Rep. (1899) 183; Atty.-Gen. Rep. (1902) 217. The 31^ per cent, bonds of the New York Central & Hudson River Railroad Company, due 1997, are not first mortgage bonds within the meaning of this paragraph. Op. Atty.-Gen., Dec. 17, 1914. Railroad bonds, which are legal investments for savings banks, are not deprived of their status by the extension of the lien of the mortgage by which they are secured to cover additional railroad properties on which there are prior mortgage liens. Op. Atty.-Gen., March 12, 1915. The 3% per cent, bonds of the New York Central & Hudson River Railroad Company secured by the company's mortgage of 1897 are not rendered illegal as investments for savings banks by reason of the extension of the lien of that mortgage to cover additional railroad properties acquired through the con- solidation of April 16, 1913, upon which properties there exist prior mortgage liens, securing bonds of the constituent companies assumed by the New York Central & Hudson River Railroad Company at the date of the consolidation, which bonds the mortgage of 1897 does not purport to retire. Atty.-Gen. Rep., March 12, 1915. Bonds of the New York Central & Hudson River Railroad Company under its refunding improvement mortgage to the Guaranty Trust Company, dated, October 1, 1913, are legal investments for savings banks. Atty.-Gen. Rep., May 27, 1915. The 3^ per cent, bonds of the New York Central & Hudson River Railroftd Company, due 1997, are not first mortgage bonds within the meaning of paragraph a, subdivision 7, of sec. 239 of the Banking Law. Atty.-Gen. Rep., December 17, 1914. Assumed bonds of the Buffalo, Rochester & Pittsburgh Railroad, a company complying with paragraph (a) of subdivision 7 are legal investments. Atty.- Gen. Rep., March 12, 1915. Bonds of the Fonda, Johnstown & Gloversville Railroad Company are legal investments for savings banks although the company has recently ceased to pay four per cent, on its capital stock. Atty.-Gen. Rep., March 16, 1915. Mortgage bonds of other railroads assumed by a railroad complying with this paragraph are legal investments. Op. Atty.-Gen., March 12, 1915. A CHANGE OP MOTIVE POWER from steam to electricity, as authorized by law, does not affect the legality of investments in the company's bonds. Afly.-Gen. Rep. (1902) 217. § 239. Savings Banks. 228a. SUBDIVISION 7 (b) The refunding bonds of the Chicago & Alton Eailroad Company are legal investment for savings banks. Atty.-Gen. Rep. (1900) 192. Mortgage bonds of other railroads, assumed by the Chicago & Northwestern Bailroad which has acquired their properties, are lawful investments for savings banks under the terms of subdivision 7 (b) of section 239 of the Banking Law. Atty.-Gen. Rep., March 12, 1915. The bonds of the Burlington, Cedar Rapids and Northern Railway Company are not legal investments for savings banks, because the property of that company was conveyed to the Chicago, Rock Island and Pacific Railroad Company, which is not mentioned in paragraph (b), and the subsidiary com- panies of which are not mentioned in paragraph (c). The fact that the lat- ter company executed a mortgage providing for the payment of the bonds of the former company does not affect the situation, as that mortgage is only a collateral undertaking. Atty.-Gen. Rep. (1904) 338; Atty.-Gen. Rep. (1904) 365. SUBDIVISION 7 (c) The following bonds of the Chicago, Milwaukee & St. Paul Railway Com- pany are legal investments: The 25-year, 4 per cent., gold bonds of 1909; the 15-year, 4 per cent., European loan of 1910, debenture bonds, and the 4% per cent, convertible gold bonds of 1912. Op. Atty.-Gen., April 14, 1914. Mortgage bonds of other railroads assumed by a railroad company with this paragraph are legal investments. Op. Atty.-Gen., March 12, 1915. Bonds assumed in the same manner by railroads complying with paragraph (c) of section 239, subdivision 7 are also legal investments. Atty.-Gen. Rep., March 12, 1915. SUBDIVISION 7 (d) Bonds of the Fonda, Johnstown & Glovergyille Railroad Company are legal investments for savings banks, although the company has recently ceased to pay 4 per cent, on its capital stock. Atty.-Gen. Rep., March 16, 1915. Refunding railroad bonds issued to retire all prior mortgage debts, if once established as legal investments, are not rendered illegal through the acquisi- tion by the railroad of additional properties upon which there are mortgage debts. It is immaterial whether or not such debts are assumed by the rail- road, and if assumed, whether or not the lien of the refunding mortgages is extended to cover such properties. Op. Atty.-Gen., March 12, 1915. Mortgage bonds of other railroads assumed by a railroad company with this paragraph are legal investments. Op. Atty.-Gen., March 12, 1915. SUBDIVISION 7 (e) The words " gross earnings " as used in § 239, subd. 7-e of the Banking Law of this State includes gross earnings of the lessee railroad corporation notwithstanding the fact that the report of said company to the railroad commission is made separately from that of the lessor. Atty.-Gen. Rep., December 11, 1914. The proviso of this paragraph with respect to dividends means payment of dividends in cash; a stock dividend will not sufSce. Atty.-Gen. Rep. (1908) 371. The statute does not require that the railroad issuing the bonds shall have owned five himdred miles of track for five years preceding the date of the investment by the savings bank. It is enough that the railroad owns that amount of track when the investment is made. Atty.-Gen. Rep. (1909) 712. 228b. Banking Law. § 239. In computing the gross earnings of the railroad company, the rentals for the year of " all leased lines " must be included, but not rentals for track, yards, terminals, office or facilities or properties other than leased lines. Atty.-Gen. Eep. (1909) 740. It seems that the bonds secured by the Northern Division mortgage of the Eastern Railway Company of Minnesota ( a company which has been absorbed by the Great Northern Railway Company) are legal investments for savings banks. Atty.-Gen. Eep. (1909) 712. In January, 1908, the bonds of the Missouri Pacific Sailway Company ceased to be legal investments for savings banks. Atty.-Gen. Eep. (1908) 371. Mortgage bonds of other railroads assumed by a railroad which must comply with this paragraph are not legal investments unless such assumed bonds comply with paragraph (g). Op. Atty.-Gen., March 12, 1915. Railroads which must comply with paragraph (e) of subdivision 7 are not entitled to have bonds assumed by them listed as lawful investments unless the assumed bonds comply with paragraph (g), that is, are refunded by bonds which are themselves legal investments. Assumed bonds of the Baltimore & Ohio Railroad are not therefore lawful investments, because its refunding bonds are not legal investments. Atty.-Gen. Eep., March 12, 1915. Refunding railroad bonds issued to retire all prior mortgage debts, once established as legal investments for savings banks, are not rendered illegal through the acquisition by the railroad company of additional properties upon which there are at the date of purchase mortgage debts then assumed, or not assumed, by the railroad company, and if assumed, whether or not the lien of the refunding mortgage is extended to cover the equities in these after-acquired properties. Atty.-Gen. Rep., March 12, 1915. SUBDIVISION 8 See note to § 251. Though the investments which a savings bank is authorized to make do not include commercial paper, and a promissory note discounted by such a bank may be void, the bank may nevertheless recover the money lent thereon. Pratt V. Short, 79 N. Y. 437; Rome Savings Bank v. Krug, 102 N. Y. 331. A savings bank having discounted promissory notes may accept in satisfac- tion of the debt the notes of other persons and may recover thereon. Rome Savings Bank v. Krug, 102 N. Y. 331. Where money is lent by a savings bank by way of discount of promissory notes, but upon the security of a bond and mortgage as well, the mortgage is valid and may be enforced. Pratt v. Eaton, 79 N. Y. 449. See also Auburn Savings Bank v. BrinkerhofF, 44 Hun 142. SALE OF PLEDGED STOCK ON STOCK EXCHANGE.— A savings bank holding corporate stock pledged as security for a loan may sell the stock through a broker on the New York Stock Exchange, and a contract with a broker for the purpose is binding upon the bank. The loan on the security of the stock is not void, and even if it were voidable, the fact does not affect the rights of the broker, who is under no duty to inquire as to the bank's title to the stock. Sistare v. Best, 88 N. Y. 527, afif'g 24 Hun 384. SUBDIVISION 9 BANK BUILDING. — The purchase of an unnecessarily expensive property as a home for the bank is not justified even though it is for a fair value § 239a. Savings Banks. 228c. and the motive of the trustees is to advertise the bank. Him v. Gary, 82 N. Y. 65. ERECTING BUILDINGS AS AN INVESTMENT.— The erection of houses by a savings bank upon land purchased by it is an unauthorized investment, although the land was bought at foreclosure of a mortgage owned by the bank. Atty.^Gen. Eep. (1908) 378. § 239-a. Investment of deposits, etc., in judgments against the State. A savings bank may also invest moneys deposited therein, the sums credited to the guaranty fund thereof and the income derived therefrom in : 1. Judgments heretofore or hereafter obtained against the state, for or on account of any liability or obligation heretofore created or incurred by the state. 2. Contracts ente'red into by the special examiner and appraiser of canal lands and the owner of lands, structures and waters or property rights pertaining thereto or connected therewith, here- tofore appropriated or damaged by the state in the construction of the improved canals, as provided for by chapter one hundred and ninety-five of the laws of -nineteen hundred and eight and acts amendatory thereof. And it is hereby authorized to purchase, take an assignment of, hold, sell and assign said judgments and contracts, and to liqui- date and settle the same with the state as hereinafter provided. On obtaining a judgment or entering into a contract, and on the approval by the attorney-general of the title to lands, structures and waters appropriated or damaged, as herein provided, the at- torney-general may certify such approval to the person or persons entitled to payment by reason of such appropriation or damage, in duplicate. Every such assignment and every subsequent assignment thereof by the bank shall be in duplicate and set forth the postofiice ad- dress of the assignee ; and one copy thereof must be forthwith filed by the assignee with the comptroller. On the assignment of such judgment or contract to a savings bank, the assignor shall thereupon deliver to such savings bank the duplicate certificates of the attorney-general, one of which shall thereupon be filed by such savings bank with the state comptroller. The comptroller is hereby authorized and it shall be his duty to pay to such savings bank immediately upon the effecting of any 228d. Banking Law. § 239a. such assignment and the filing thereof with him, the interest, if any, accrued on such judgment or contract debt to the time of the effecting of the assignment, and he shall on the first day of January of each year, until the judgment or contract deht is paid in full, pay to such hank or its assigns the interest which has accrued thereon since the time of effecting the assignment, provided, how- ever, that the comptroller may at any time serve upon such banlv or its assignee, either personally or by mailing the same to the postoffice address given in the assignment, a notice to the effect that funds are available for the payment of the same and that he is authorized and ready to issue his warrant to pay the same, where- upon it shall be the duty of every such assignee to accept such payment. Interest shall be allowed and paid by the state on each such judgment or contract so assigned until the twentieth day after the service by the comptroller of the aforementioned notice or until payment, if payment be sooner made. At any time after such assignment and certificate by the attorney-general shall be filed with the comptroller, the comptroller may demand of the attorney- general that the abstract of title and certificate of search as to in- cumbrances and all releases, waivers, contract settlements, convey- ances and other instruments affecting such title be filed forthwith in the ofiBce of the comptroller. The filing thereof shall thereupon authorize the comptroller to make payment as hereinabove pro- vided. In determining the value of the assets or property held by a savings bank or of said judgments or contracts the superintendent of banks shall value such judgments and contracts at the face value thereof with accrued interest. A savings bank shall not purchase any such judgments or con- tract and take an assignment thereof unless such assignment shall be indorsed with the approval of the attorney-general, and, upon said approval being so indorsed, the judgment or contract assigned shall thereby become and remain until paid a valid obligation of the state to the assignee thereof, or to its successor or assigns, for the amount therein specified. The word " judgment " as used in this section includes and is intended to be synonymous with the words " determination " and " award." Added by L. 1915, Ch. 269. In effect April 13, 1915. § 240. Savings Banks. 229 § 240. Restrictions on taking and holding real estate. The cost of the plot and building or buildings for the trans- action of the business of a savings bank shall in no case exceed twenty-five per centum of the guaranty fund of such savings bank, except with the approval of the superintendent of banks; and before the purchase of such property is made or the erection of a building or buildings is commenced the estimate of the cost thereof and plans of the building or buildings shall be submitted to the superintendent for such approval. All real estate purchased by any savings bank or taken by it in satisfaction of debts due it, shall be conveyed to it directly by name and the conveyance shall be immediately recorded in the office of the proper recording officer of the county in which such real estate is located. Every parcel of real estate purchased or acquired by any savings bank shall be sold by it within five years from the date on which it shall have been acquired unless: 1. There shall be a building thereon occupied by the savings bank as an office; or 2. The superintendent of banks, on application of its board of trustees, shall have extended the time within which such sale shall be made. Source. — The first paragraph is from former § 147; "net surplus" has been changed to " guaranty fund." The sec»nd paragraph is new and is adapted from former § 27, subd. 3, relating to the recording of mortgages taken to secure loans. The second and third paragraphs are identical with § 107, relating to banks, and § 189, relating to trust companies. The last paragraph is taken from former § 147, subd. 2, second sentence. CROSS-REFERENCES. — Purposes for which real estate may be acquired, see § 239, subd. 9. Recording mortgages and assignments thereof, see § 241. Restrictions on taking and holding real estate by other corporations and individuals under this chapter, see cross-references under § 107. For extension of time to dispose of real estate, see § 49, subd. 3. For investment in real estate, see § 239, subd. 9. The approval of the Superintendent of Banks, as required by this section may be given nunc pro tunc, when the trustees have proceeded in good faith and in ignorance of the statutory requirement. Atty.-Gen. Rep. (1896) 193. 230 Bajstking Law. § 241. § 241. Requirements as to mortgage loans; abstract of title or title policy; insurance of buildings; recording. 1. In ail cases of loans upon real property, a bond secured by a mortgage of the real estate upon which the loan is made, to- gether with a complete abstract of title to such real estate, signed by the person or corporation furnishing such abstract of title, or a policy of title insurance of a title company authorized to in- sure titles to real estate in the state of New York, shall be re- quired of the borrower. 2. Whenever buildings are included in the valuation of any real property upon which a loan shall be made by a savings bank, they shall be insured by the mortgagor in such company or com- panies as the savings bank shall direct, and the policy of insuT- ance shall be duly assigned to the savings bank, or the loss made payable to the savings bank, as its interest may appear; and any such savings bank may renew such policy of insurance in the same or such other company or companies as it may elect, from year to year, or for a longer or shorter term, in case the mortgagor shall neglect to do so, and may charge the amount paid to the mortgagor. All the necessary chargeis and expenses paid by the savings bank for such renewal or renewals shall be paid by the mortgagor to the savings bank and shall be a lien upon the prop- erty mortgaged, recoverable with interest from the time of pay- ment as part of the moneys secured to be paid by the mortgage. 3. Every mortgage and every assignment of a mortgage taken or held by a savings bank shall immediately be recorded in the office of the proper recording officer of the county in which the real property described in the mortgage is located. Source.— Former §§ 150, 151, 27 subd. 3. Subdivision 1 is taken from the second sentence of former § 150; the pro- visions as to abstract of title and policy of title insurance are new. Subdivision 2 is taken from former § 151 without substantial change. Subdivision 3 is taken from former § 27, subd. 3, without substantial change. The provisions of former § 150 that " all expenses of searches, examinations and certificates of title, and of drawing, perfecting and recording papers, shall be paid by the borrower,'' have been omitted from the present section because subd. 1 now requires the borrower to furnish an abstract of title or policy of title insurance, and § 265, subd. 3, authorizes the savings bank to require the borrower to pay " all expenses of searches, examinations and cei" §§ 242, 243. Savings Banks. 231 tificates of title, including the drawing, perfecting and recording of papers," and empowers the attorney for the savings bank to collect of the borrower and retain for his own use the usual fees for such services. CROSS-REFERENCES — Recording deeds, see § 240. Attorney's fees and expenses connected with mortgage loans, see § 265, subd. 3, and note. INSURANCE. — While a savings bank making a loan upon mortgage has the right to insist, by virtue of this section, that the mortgagor cancel his existing insurance policies upon the property and procure insurance in a company designated by the bank's directors, the right may be waived. The right having been waived, the bank cannot thereafter procure additional insurance at the mortgagor's expense in the absence of any new reason therefor. Heal v. Richmond County Sav. Bank, 127 App. Div. 428, aflF'd in 196 N. Y. 549. MORTGAGE TAX.— The tax on mortgages (Tax Law, Art. II) is not a part of the " expenses * * * of recording papers " which former section 150 imposed upon the borrower. The mortgagee, even though a savings bank, is primarily liable to pay the tax. Atty.-Gen. Rep. (1906) 504; Atty.-Gen. Rep. (1906) 507. § 242. Eestrictions on dealing in commodities or in exchange, gold or silver. 1. A savings bank shall not purchase, deal or trade in any goods, wares, merchandise or commodities whatever, except such personal property as may be necessary for the transaction of its authorized business. 2. A savings bank shall not, nor shall any oflScer thereof in his regular attendance upon the business of the savings bank, in any manner buy or sell exchange, gold or silver, except as authorized by subdivision four and seven of section two hundred thirty-eight of this article. Source. — Former § 152. Amended by L. 1915, Chap. 372. In effect May 1, 1915. The amendment of 1915 added the words " four and " in subd. 2. § 243. Resitrictions on borrowing money, pledging securities and issuing certificates of deposit, A savings bank shall not 1. Borrow money, or pledge or hypothecate any of its securities as collateral for the repayment of money borrowed, except with the written approval of the superintendent of banks and in pursu- ance of a resolution adopted by a vote of a majority of its board of trustees duly entered upon their minutes, whereon shall be re- corded by ayes and nays the vote of each trustee. 232 Banking Law. .§§ 244, 245. 2. Make or issue any certificate of deposit payable either on de- mand or at a fixed day. Source. — Former § 162, second and third sentences. CROSS REFERENCE. — ■ For power to borrow money and pledge securities, see § 238, subd. 5. PLEDGE TO SECURE DEPOSITS.— The pledge of securities by a savings bank to secure deposits made by a postal savings bank or deposits of court funds would amount to a preference of the deposits to the amount of the securities. Such a pledge is contrary to the spirit of Article VI (former Art. IV) of the Banking Law and is not within the exception of the prohi- bition against borrowing money or pledging or hypothecating securities, except with the written approval of the Superintendent of Banks, etc. Atty.- Gen. Rep. (1912) vol 2, p. 500. § 244. Restrictions on deposit of savings bank's funds. !N"o savings bank shall deposit any of its funds witii any other moneyed corporation unless the latter has been designated as a de- positary for the savings bank's funds by vote of a majority of the trU'Stees of the savings bank exclusive of any trustee who is an offi- cer, director or trusitee of the depositary so designated. Source. — Former § 27, subd. 5. Further restrictions on deposits are found in § 261 relating to the " avail- able fund." In designating a depositary under § 244 the trustees should strictly conform to the provisions of § 251. CROSS-REFERENCES.— Deposit of available fund, see § 251; preference of deposits, see § 278. Similar provision as to banks, see § 111; as to trust companies, see § 196; as to investment companies, see § 294. § 245. Restrictions as to place of business; branch offices. 1. A savings bank shall notdo business or be locaited in the same room with or in a room connecting with any bank, trust company or national banking association; lonless it b« a savings bank law- fully so doing business or lawfully so located when this act takes effect. 2. No savings bank, or any officer or director thereof, shall transact its usual business at any place other than its principal place of business, except that it may, providii^ the merger agree- ment so provides, continue to occupy and maintain as a branch office, the place of business occupied and maintained at the time of merger by any savings bank which it has received into itself by merger pursuant to article twelve of this chapter. § 246. Savings Banks. 233 Source. — Former § 27, subd. 11, is the source of subd. 1. The provisions of subd. 2 are new. The prohibitions of subd. 1 (former § 27, subd. 11) were doubtless intended to prevent confusion of the business of banking institutions thus closely- connected and to preclude access by the officers and employees of one insti- tution to the moneys of the other. Thus where a bank and a savings bank did business in tlie same room and received money over the same counter, and the cashier of the bank, who was the treasurer of the savings bank, misappropriated money delivered to him for the savings bank, the bank was held liable. Fishkill Savings Inst. v. Bostwick, 92 N. Y. 564. See also Kelley v. Chenango Valley 'Sav. Bank, 22 App. Div..202. 'CfiOiSS-REFEKEiNCE. — •Subdivision 1. — Similar provisions relating to private bankers, see § 171, and note thereunder. § 246. Restrictions as to entries in books; amortization of securities. 1. No saving bank stall by any system of accounting or any device of bookkeeping, directly or indirectly enter any of its assets upon its books in tbe name of any otber individual, partnersbip, nnincorporated association or corporation, or under any title or designation tbat is not truly descriptive thereof. 2. Tbe stocks, bonds, promissory notes or. other interest-bearing obligations purchased by a savings bank shall not be entered on its books at more than the actual cost thereof, and shall not thereafter be carried upon the books for a longer period than until the next declaration of dividends, or in any event for more than one year, at a valuation exceeding their present cost as determined by amor- tization, that is, by deducting from the cost of any such stock or security purchased for a sum in excess of the amount payable thereon at maturity, and charging to profit and loss, a sufficient sum to bring it to par at maturity, or adding to the cost of any such stock or security purchased at less than the amount payable thereon at maturity, and crediting to profit and loss, a sufficient sum to bring it to par at maturity. 3. No savings bant shaJl enter or at any time carry on its books the real estate and the building or buildings thereon, used by it as its place of business, at a valuation exceeding their actual cost to such savings bank. 4. Every savings bank shall, moreover, conform its methods of keeping its books and records to such orders in respect thereto aa shall have been made and promulgated by the superintendent of banks pursuant to section fifty-six of this chapter. Any sav- 234 Banking Law. § 247. ings bank that refuses or neglects to obey any siieh order shall be subject to a penalty of one hundred dpllars for each day it so refuses or neglects. Source. — Subdivisions 1, 2 and 3 are new. Subdivision 4 is derived from former § 8. CROSS-EEFEEENCES. — For similar restrictions on other corporations doing business under the Banking Law, see § 109, relating to banks, and the cross-references there given. § 247. Bestrictions on amount of deposits; refusal or return of de- posits. 1. The aggregate amount of deposits to the credit of any indi- vidual at any time, including in such aggregate all deposits cred- ited to him as trustee or beneficiary of a voluntary and revokable trust and all deposits credited to him and another or others in either joint or several form, shall not exceed three thousand dol- lars, exclusive of dividends, and exclusive also of deposits arising from judicial sales or trust funds standing in his name as executor, administrator or trustee named in a vrill or appointed by a court of competent jurisdiction, provided a, certified copy of the will, judgment, order or decree of the court authorizing such deposits or appointing such exeCjUtor, administrator or trustee is filed with the savings bank; and exclusive, also, of trust fundsi and deposits credited to an individual and another or others in either joint or several form, received and credited by the savings bank prior to July first, nineteen hundred thirteen. Additional accounts may, however, be maintained in the name of a parent as trustee for a dependent oar minor child and in the name of a child as trustee for a dependent parent, provided, however, that not more than two hundred and fifty dollars shall be deposited to any such accQunt during any six months period. 2. The aggregate amount of deposits to the credit of any society or corporation at any time, shall not exceed five thousand dollars, exclusive of dividends, unless such deposit has been made pur- suant to a judgment, order or decree of a court of record and a certified copy of the judgment, order or decree is filed with the savings bank. 3. Every savings bank may further limit the aggregate amount which an individual or any eorporation or society may deposit, to> § 248. Savings Banks. 235 such sum as it may deem expedient to receive ; and may, in its dis- cretion, refuse to receive a deposit or at any time return all or any part of any deposit. Source.— Former § 143. The provisions of subd. 1, making the $3,000 limitation include trust de- posits and joint deposits, are new; they are confirmatory of opinions of the Attorney-General (Atty.-Gen. Rep. [1912] Vol. 2, p. 555; Atty.-Gen. Rep. [1913] p. 35). The words "exclusive of dividends" are new. All of subd. 1 beginning with the words " standing in his name as executor,'' and the requirement of subd. 2, that a certified copy of the judgment, etc., be filed, are new. The exception in former § 143 of deposits made prior to May 17, 1875, is omitted. Subdivision 3 is taken from the third sentence of former § 143. CROSS-REFERENCES. — General powers as to receiving and repaying deposits, see §§2, 238. Repayment of deposits regulated, see §§ 248, 249. CONTRACT NOT VOID.— An individual whose deposit exceeds $3,000 may recover from the bank the full amount of the deposit. The contraot between the bank and the depositor is not made void by the statute. Taylor V. Empire State Sav. Bank, 66 Hun 538. INTEREST ON EXCESS. — Under former statutes imposing a limitation upon deposits (Laws of 1882, Ch. 409, § 290, as amended by Laws of 1885, Ch. 477 ) , if the deposit exceeded the maximum amount no interest thereon could be allowed or recovered. Taylor v. Empire State Sav. Bank, 66 Hun 538. INCLUDES TRUST DEPOSITS.— This limitation includes deposits made by an individual in trust for another, as long as the trustee has the power to withdraw the money; and it makes no difference that the trust accounts are made in alternation, as "A in trust for B " and " B in trust for A." If, however, it is made to appear that the trust has become irrevocable by de- livery of the pass-book to the beneficiary or by notice to him, he, and not the trustee, is chargeable with the deposit. Atty.-Gen. Rep. (1913) 35. This conclusion remains unaffected by the new provisions of subd. 1. § 248. Regulations and restrictions as to repayment of deposits; pass- books. 1. The sums deposited with any savings bank, together with any dividends credited thereto, shall he repaid to the depositors thereof respectively, or to their legal representatives, after demand, in such manner and at such times, and under such regulations, as the board of trustees shall prescribe, subject to the provisions ol this and the next following section. Such, regulations shall be 236 Banking Law. § 248. posted in a conspicuous place in the room where the business of such savings bank shall be transacted, and shall be printed in the passbooks or other evidences of deposit furnished by it, and shall be evidence between such savings bank and the depositors holding the same, of the terms upon which the deposits therein acknowledged are made. The savings bank may at any time by a resolution of its board of trustees require a notice of sixty days before repaying deposits, in which event no deposit shall be due or payable until sixty days after notice of intention to withdraw the same shall have been personally given by the depositor, and such deposits, if not with- drawn within fifteen days after the expiration of the sixty days' notice, shall not then be due or payable under such notice or by reason thereof. Nothing herein contained, however, shall be construed as im- pairing contracts heretofore made between savings banks and their depositors as to notice of withdrawal, or as prohibiting any sav- ings bank from making payments of deposits before the expiration of said sixty day notice. But no savings bank shall hereafter agree with its depositors in advance to waive said sixty days' notice nor shall it in the case of deposits hereafter made require a longer notice than the sixty days aforesaid. 2. Except as provided in subdivision three of this section, a savings bank shall not pay any dividend or deposit, or portion of a deposit, or any check drawn upon it by a depositor, unless the pass-book of the depositor be produced, and the proper entry be made therein at the time of the payment. 3. The board of trustees of any savings bank may by its by-laws, provide for making payments in cases of loss of pass-book, or other exceptional cases where the pass-books cannot be produced without loss or serious inconvenience to depositors, the right to make such payments to cease when so directed by the superintendent of banks, upon his being satisfied that such right is being improperly exercised by such savings bank ; but payments may be made upon the judgment or order of a court. 4. If any person shall die leaving in a savings bank an account on which the balance due him shall not exceed two hundred and fifty dollars, and no executor of his last will and testament or no § 248. Savings Bai^ks. 237 administrator of his estate shall be appointed, the savings bank may in its discretion pay the balance of his account to his widow (or if the decedent was a married woman, to her surviving husband), next of kin, funeral director or other creditor who may appear to be entitled thereto. As a condition of such payment the savings bank may Require proof by affidavit as to the parties in interest, the filing of proper waivers, the execution of a bond of indemnity, with sureties, by the person to whom the payment is to be made, and a proper receipt and acquittance for such pay- ment. For any such payment made pursuant to this subdivision the savings bank shall not be held liable to the decedent's executor or administrator thereafter appointed, unless the payment shall have been made within one year after the decedent's death and an action to recover the amount shall have been commenced within one year after the date of payment. Source.— Former §§ 143, 152. The second, third and fourth paragraphs of subdiv. 1 and all of subdiv. 4 are new. Amended by L. 1916, chap. 164. In eflfeot Apr. 7, 1916. CEOSS-EEFEEENCES.— Eepayment of deposits of minors, trust deposits and joint deposits, see § 249. General power to receive deposits, see §§2, 238. Eestrictions on amount of deposits, see § 247. Power to enact by-laws as to repayment of deposits, see § 262. Deposits as assets of deceased depositor's estate, see Code Civ. Proc, § 2712. DEPOSITOES AEB CEEDITORS.— The relation of a depositor in a sav- ings bank to the corporation is that of a creditor. People v. Mechanics' & Traders' Sav. xnst., 92 N. Y. 7, rev'g 28 Hun 375; Mierke v. Jefferson County Savings Bank, 208 N. Y. 347. DEPOSITOES AND OTHER CREDITOES SHAEE EATABLY UPON IN- SOLVENCY. — Upon the insolvency of a savings bank the assets of the cor- poration become a trust fund for its creditors. Depositors stand upon the same basis as other creditors, and share ratably with them and with each other in receiving payment from the insolvent estate. People v. Mechanics' & Traders' Sav. Inst., 92 N. Y. 7, rev'g 28 Hun 375; People v. Ulster County Savings Bank, 64 Hun 434, aff'd in 133 N. Y. 689, on opinion below. A judgment obtained .by a general creditor of a savings bank against its receiver in an action that was pending when the receiver was appointed, is not entitled to a preference over depositors. People v. Mechanics' & Traders' Sav. Inst., 92 N. Y. 7, rev'g 28 Hun 375. DEPOSIT IN NAME OTHEE THAN DEPOSITOR'S.— A person may deposit his money in the names of others or in the names of fictitious persons, with- out impairing his title to the deposits. Washington v. Bank for Savings, 171 N. Y. 166, aif'g 65 App. Div. 338; Eoughan v. Chenango Valley Sav. Bank, 158 App. Div. 786. Deposits of depositor's own money in the names of third persons without 16 238 Bankiitg- Law. § 248. their knowledge, the intent being that they should take only if they should survive the depositor, no notice being given to them and the depositor retain- ing the pass-books; held, after the death of said third persons, to belong to the depositor. Eeld also that the depositor need not administer the estates of said persons in order to recover the deposits. Roughan v. Chenango Valley Sav. Bank, 158 App. Div. 786. RULES OF BANK. — In the absence of any rules or regulations assented to by its customers, a savings bank is governed by the same legal principles that apply to other moneyed institutions with respect to payment of deposits. Allen V. Williamsburgh Sav. Bank, 69 N. Y. 314. Questions involving the relations of a savings bank to its depositors and arising outside of the rules and regulations adopted by the bank pursuant to the statute must be determined by " broad and comprehensive legal rules of general application." Kelley v. Buffalo Sav. Bank, 180 N. Y. 171, 177, rev'g 88 App. Div. 374. The court will not, unless for substantial reasons, interfere with reasonable rules made by a savings bank, pursuant to statute, for the regulation of its business. Rosenthal v. Dollar Sav. Bank, 61 Misc. 244. See "Effect of By-Laws and Rules" (infra). DEATH OF DEPOSITOR.— The following decisions under the former law should be read in connection with subdiv. 4 of the present section. Upon the death of a depositor the savings bank remains indebted to his estate in the amount of his deposit, and is bound to make payment to his executor or administrator. Boone v. Citizens' Sav. Bank, 84 N. Y. 83; Mierke V. Jefferson County Sav. Bank, 208 N". Y. 347. When a depositor in a savings bank has died but the bank has no notice of his death, and a third person presents the depositor's pass-book and a draft purporting to bear his signature, the bank does not act at its peril in paying out money to that person, but its duty is to use ordinary care accord- ing to the special circumstances of the case. Kelley v. Buffalo Sav. Bank, 180 N". Y. 171, rev'g 88 App. Div. 374. See also Hayden v. Brooklyn Sav. Bank, 15 Abb. Pr. N. S. 297. It has been said that a by-law of a savings bank providing (as in former § 143, now subd. 1 of § 248) that upon the death of a depositor his deposit shall be paid to his legal representatives, puts upon the bank the duty of ascertaining at its peril who is entitled to the money upon the depositor's death. Farmer v. Manhattan Sav. Inst., 60 Hun 462, 465; Podmore v. South Brooklyn Sav. Inst., 48 App. Div. 218; Mahon v. South Brooklyn Sav. Inst., 175 N. Y. 69. That rule, however, is too broad and is not one of general application. Kelley v. Buffalo Sav. Bank, 180 N. Y. 171. A by-law of a savings bank providing that upon a depositor's death his deposit shall be paid to his legal representatives, is designed for the protec- tion of the depositor who can no longer protect himself. A by-law provid- ing that although the bank will endeavor to prevent frauds all payments made to persons producing the pass-book shall be valid payments to discharge tlie bank, is designed for the protection of the bank. These two by-laws must be read together. Hence, when the bank has notice of a depositor's death it acta at its peril in paying the deposit to a person who claims the money under an alleged gift causa mortis. Mahon v. South Brooklyn Sav. Inst., 175 N. Y. 69 (as limited by Kelley v. Buffalo Sav. Bank, 180 N. Y. 171). § 248. Savings Banks. 239 If the bank has no notice of the depositor's death, its duty, under such rules, in paying out money to a third person who presents the decedent's pass-book and a draft purporting to bear his signature, is measured by the n;le of ordinary care, to be applied according to the circumstances of the particular case. Kelley v. Buffalo Sav. Bank, 180 N'. Y. 171, rev'g 88 App. Div. 374, and limiting Mahon v. South Brooklyn Sav. Inst., 175 N. Y. 69. When a depositor makes a valid parol gift of his deposit and then dies, the donee becomes his " legal representative " within the meaning of a by-law of the bank providing that upon the death of a depositor the deposit shall be paid to his or her legal representatives upon presentation of the pass-book, and the donee may recover the deposit from the bank without having an administrator of the donor appointed. Casgriff v. Hudson City Sav. Inst., 24 Misc. 4. PAYMENT TO FOREIGN ADMINISTEATOE.— A savings bank is pro- tected in paying in good faith a deposit of a non-resident to the latter's administrator appointed in the state of the deceased depositor's domicile; the fact that an administrator had been appointed in this state before the pay- ment does not affect the validity of the payment if the bank had no actual notice of the appointment; sufficient notice thereof is not afforded by the record of the appointment in the surrogate's office. Maas v. German Sav. Bank, 176 N. Y. 377, aff'g 73 App. Div. 524. PASS-BOOKS. — The pass-book issued by a savings bank to a depositor is not a negotiable instrument, and mere possession thereof does not constitute proof of the right of the holder to draw money thereon. Allen v. Williams- burgh Sav. Bank, 69 N. Y. 314, 319; Smith v. Brooklyn Sav. Bank, 101 N. Y. 58 ; Kxunmel v. Germania Sav. Bank, 127 N. Y. 488. See also Wall v. Emi- grant Industrial Sav. Bank, 64 Hun 249, 254. The provision of the Banking Law that no savings bank shall pay any deposit unless the pass-book of the depositor shall be produced and the proper entry made therein, does not make the production of the pass-book an arbitrary condition which must at all hazards be complied with, and a depositor is entitled to receive his money where circumstances render the production of the book impossible, for the rule is to protect the bank against the payment of deposits to others than those entitled thereto and the reasonableness of the excuse for not producing the book must be determined in the light of this purpose. Meighan v. Emigrant Industrial Sav. Bank, 168 App. Div. 542. To protect a savings bank in paying a deposit to a third person on mere ■presentation of a pass-book, there must be a contract between the depositor and the bank clearly authorizing such payment, and the power will not be inferred from loose or doubtful language in a rule or by-law of the bank. Smith V. Brooklyn Sav. Bank, 101 N. Y. 58. Attorney-General Jackson advised the Superintendent of Banks that he might properly decline to approve a by-law of a savings bank making the unqualified provision that "All payments made to persons producing the pass-book of a depositor issued by this bank shall be valid payments to dis- charge the bank of all liability." In his opinion it would be contrary to public policy to protect a bank in paying a deposit to a person whose only evidence of right to the deposit is the possession of a pass-book which might have been obtained by theft or fraud. Atty.-Gen. Rep. (1908) 395. A depositor may assign and transfer his interest in his deposit without the 240 Banking Law. § 248. delivery of his pass-book; and the assignment becomes effective when it is accepted and acted upon by the bank. A rule or regulation of the bank re- quiring the assignee to present the pass-book is waived when the bank gives effect to the assignment and notifies the parties that presentation of the pass- book is unnecessary. Augsbury v. Shurtliff, 114 App. Div. 626, aff'd in 190 N. Y. 507. Where an account was payable to either father or son " or the survivor of them," and, after the father's death, his executor held the pass-book claim- ing that the deposit belonged to the decedent's estate, it was held that, .,s the bank could not make payment to the son without the production of the pass-book, the executor should be joined as a co-defendant in an action by the son against the bank to recover the deposit. Waterman v. Albany City Sav. Inst., 86 Misc. 274. EFFECT OF BY-LAWS AND EULES.— By-laws or rules of a savings bank printed in the pass-book accepted and used by a depositor constitute a con- tract between the depositor and the bank, binding upon both. Warhus v. Bowery Sav. Bank, 21 N. Y. 543; Appleby v. Erie County Sav. Bank, 62 N. Y. 12; Allen v. Williamsburgh Sav. Bank, 69 N. Y. 314; Mitchell v. Home Sav. Bank, 38 Hun 255 ; Wilcox v. Onondaga County Sav. Bank; .40 Hun 297 ; Kel- ley V. Chenango Valley Sav. Bank, 22 App. Div. 202 ; Winter v. Williamsburgh Sav. Bank, 68 App. Div. 193; Rosenthal v. Dollar Sav. Bank, 61 Misc. 244; Israel v. Bowery Sav. Bank, 9 Daly 507. See also Schoenwald v. Metropol- itan Sav. Bank, 57 N. Y. 418; Boone v. Citizens Sav. Bank, 84 N. Y. 83; Riley V. Albany Sav. Bank, 36 Hun 513, aff'd in 103 N. Y. 669 ; Campbell v. Schenec- tady Sav. Bank, 114 App. Div. 337. But a provision in such by-laws printed in the pass-book and designed to protect the bank against liability for paying out a deposit on presentation of the pass-book by the wrong person, does not absolve the officers of the bank from the duty to exercise care and diligence to protect the depositor against fraud, or relieve the bank from liability for their negligence. Kum- mel V. Germania Sav. Bank, 127 N. Y. 488; Gearns v. Bowery Sav. Bank, 135 N. Y. 557; Kelley v. Buffalo Sav. Bank, 180 N. Y. 171; Campbell v. Schenec- tady Sav. Bank, 114 App. Div. 337. See also Smith v. Brooklyn Sav. Bank, 101 N. Y. 58 ; Wall v. Emigrant Industrial Sav. Bank, 64 Hun 249 ; Abramo- witz V. Citizens Sav. Bank, 17 Misc. 297. A by-law printed in the pass-book that although the bank will endeavor to prevent frauds upon its depositors, yet all payments to persons producing pass-books issued by the bank shall be valid payments to discharge the bank, is in effect an undertaking by the bank to use ordinary care not to pay to others than the depositor, but saving itself harmless in case the pass-book is produced by some one not the owner and payment is made to him without negligence. Schoenwald v. Metropolitan Sav. Bank, 57 N. Y. 418; Appleby v. Erie County Sav. Bank, 62 N. Y. 12; Wilcox v. Onondaga County Sav. Bank, 40 Hun 297 ; Hayden v. Brooklyn Sav. Bank, 15 Abb. Pr. N. S. 297 ; Kelley v. Buffalo Sav. Bank, 180 N. Y. 171; Campbell v. Schenectady Sav. Bank, 114 App. Div. 337. When such a by-law provides that the bank '' will use its best efforts to prevent fraud," the duty of the bank officers with respect to paying a deposit to the right person is not limited by ordinary care and diligence. Allen v. Williamsburgh Sav. Bank, 69 N. Y. 314. A clerk of a, savings bank whose duties are to receive deposits, give pass- books therefor and enter the money to the credit of the depositors, has no § 249. Savings Banks. 241 implied or apparent authority to make any agreement with respect to with- drawal of a deposit, in addition to, or in conflict with, the regulations printed in the pass-book. Eiley v. Albany Sav. Bank, 38 Hun 513, aff'd in 103 N. Y. 669. A by-law providing that deposits can be withdrawn at certain dates upon one month's previous notice, is waived when the bank unqualifiedly refuses to pay and bases its refusal on other grounds. Eiley v. Albany Sav. Bank, 36 Hun 513, aff'd in 103 N. Y. 669. See also Abramowitz v. Citizens' Sav. Bank, 17 Misc. 297. The relation of debtor and creditor exists between the bank and the depositor, and the bank cannot enforce rules which, in effect, make the deposit non- assignable. Where a depositor assigns his account, the bank cannot justify its refusal to pay the assign by a rule requiring the depositor to appear in person to withdraw his account. Bank of U. S. v. Public Bank, 151 N. Y. Supp. 26. LOSS OF PASS-BOOK. — A by-law providing that when a pass-book is lost the bank will decide as to the person to whom payment shall be made, does not justify the bank in refusing to make payment to the depositor when for several years the bank has had ■ knowledge of the loss of the pass-book and no third person has made any claim to the deoosit. Mills v. Albany Exchange Sav. Bank, 28 Misc. 251. When the pass-book is not produced, an action to recover the deposit can- not be maintained without evidence that the book is lost, if objection is made on that ground. Warhus v. Bowery Sav. Bank, 21 N. Y. 543. By-laws of a savings bank providing that no money can be withdravm except on production of the pass-book, and that if the pass-book be lost imme- diate notice in writing shall be given to the bank, are waived when the bank is promptly and repeatedly informed of the loss of a pass-book, but does not intimate any desire for written notice and bases its refusal to pay upon other grounds. Mierke v. Jefferson County Sav. Bank, 208 N. Y. 347. See also Kenny v. Harlem Sav. Bank, 65 Misc. 466, rev'g 61 Misc. 144. INDEMNITY WHEN PASS-BOOK IS LOST.— In the absence of an appro- priate by-law, a savings bank cannot lawfully require a bond of indemnity from a depositor as a condition of paying a, deposit when the pass-book has been lost; and the depositor's failure to furnish such a bond is no defense to an action to recover the deposit. Mierke v. Jefferson County Sav. Bank, 208 N. Y. 347; Mills v. Albany Exchange Sav. Bank, 28 Misc. 251; Eoughan v. Chenango Valley Sav. Bank, 158 App. Div. 786. § 249. Kepayment of deposits of minors, trust deposits and joint deposits. 1. When any deposit shall be made by or in the name of any minor, the same shall be held for the exclusive right and benefit of such minor, and free from the control or lien of all other per- sons, except creditors, and shall be paid, together with the divi- dends thereon, to the person in whose name the deposit shall have been made, and the receipt or acquittance of such minor shall be a valid and sufficient release and discharge to such savings bank for such deposit or any part thereof. 242 Banking Law. § 249. 2. When any deposit shall be made by any person in trust for another, and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to such savings bank, in the event of the death of the trustee, the deposit or any part thereof, together with the dividends thereon, may be paid to the person for whom the deposit was made. 3. When a deposit shall be made by any person in the names of such depositor and another person and in form to be paid to either or the survivor of them, such deposit and any additions thereto made by either of such persons after the making thereof, shall become the property of such persons as joint tenants, and the same together with all dividends thereon shall be held for the exclusive use of such persons and may be paid to either during the lifetime of both or to the survivor after the death of one of them, and such payment and the receipt or acquittance of the one to whom such payment is made shall be a valid and sufEcient release and discharge to such savings bank for all payments made on account of such deposit prior to the receipt by such savings bank of notice in writing not to pay such deposit in accordance with the terms thereof. The making of the deposit in such form shall, in the absence of fraud or undue influence, be conclusive evidence, in any action or proceeding to which either such savings bank or the surviving depositor is a party, of the intention of both depositors to vest title to such deposit and the additions thereto in such survivor. Source.'"— Former § 144. The last sentence of subdiv. 3 is new. CROSS-REFERENCES.— Similar provision as to banks, see § 148; as to trust companies, see § 198. Restrictions on amount of trust deposits and joint deposits, see § 247, subd. 1. Power to enact by-laws as to repayment of deposits, see § 262. DEPOSITS IN TRUST.— The provisions now embraced in subdiv. 2 with respect to deposits in trust were apparently intended to relieve the bank from the consequences of the uncertainty resulting from decisions that the form of the deposit alone was not conclusive as to the intent of the depositor to create a trust. See Cunningham v. Davenport, 147 N. Y. 43; Matter of Totten, 17fl N. Y. 112, 119; Garvey v. Clifford, 144 App. Div. 193. The death of the cestui que trust during the life of the depositor revokes the tentative trust created by such deposit. In re Thompson's Estate, 85 Misc. 291. When a person deposits his own money in trust for another, thus constitut- ing himself a trustee, the beneficiary cannot compel the bank to pay the deposit to him if the trustee is alive and does not consent and is not a party to the action; and it makes no difference that the trustee has disappeared. Hemmerich v. Union Dime Savings Bank, 144 App. Div. 413. § 249. Savings Banks. 243 "Although the facts may show an absolute gift or irrevocable trust as be- tween donor and donee, we think that a bank, in which the moneys involved are deposited, should not be bound thereby until it has proper notice of the termination of the trust by the death of the donee or the donor or by some direct notice by the donor during his or her lifetime. Until the happening of some such event the bank should not be required to recognize the right of any one to exercise dominion over or withdraw the deposit except the person with whom it made the contract of deposit." Hemmerich v. Union Dime Sav. Inst., 144 App. Div. 413, 418. The provisions of subdiv. 2 apparently settle a disputed question. It was formerly held that when a deposit was made in trust for another and the trustee died, the bank was bound to make payment to the trustee's adminis- trator upon production of his letters and the pass-book, and was protected in making payment to him unless the beneficiary asserted a right to receive the deposit — that until the beneficiary made such claim the bank owed no duty to him and had no right to inquire into the character of the trust. Boone v. Citizens' Sav. Bank, 84 N. Y. 83. On the other hand, it was held that after the death of both trustee and beneficiary the bank was protected, in the absence of demand by the trustee's administrator, in paying the de- posit to the administrator of the beneficiary — a decision in harmony with the present statute. Bishop v. Seaman's Bank for Savings, 33 App. Div. 181. When a person creates an irrevocable trust in a deposit and the bene- ficiary dies leaving a will bequeathing the deposit and appointing the legatee executor, the latter is entitled to recover the deposit from the bank, the trustee being made a party to the action. Whitfield v.'Greenwieh Sav. Bank,- 4 Month. L. Bull. 69 (Super. Ct.). Where a husband deposits money in a savings bank in his own name in trust for his wife, the wife cannot maintain an action -at law against the bank to recover the deposit. Herpe v. Herpe, 89 Misc. 142. DEPOSITS IN TRUST FOR FICTITIOUS PERSONS belong to the de- positor. Washington v. Bank for Savings, 171 N. Y. 166, aff'g 65 App. Div. 388. JOINT DEPOSITS.— The provisions of subd. 3 (except the last sentence which is new) were added to the statute by chapter 247 of the Laws of 1907. The subdivision does not govern accounts opened before its provisions were enacted. Berg v. Keber, 78 Misc. 468, 472; Bonnette v. Molloy, 153 App. Div. 73, modified on a point of practice in 209 N. Y. 167. The language of subd. 3 was intended to do away with the uncertainty attendant upon the rule that a deposit in joint form was not conclusive as to the depositor's intent, and to protect the bank in making payment to either person named or the survivor. See Clary v. Fitzgerald, 155 App. Div. 659; Schneider v. Schneider (No. 1), 122 App. Div. 774; Kelly v. Beers, 194 N. Y. 49, 55; Bonnette v. Molloy, 153 App. Div. 73, 75-6, modified on a point of practice in 209 N. Y. 167 ; Berg v. Keber, 78 Misc. 468 ; West v. McCuUough, 123 App. Div. 846, aff'd in 194 N. Y. 518; Bradt v. Bradt, 143 App. Div. 8G3. Even before the last sentence of subd. 3 was added it was held that the effect of these provisions is not merely to protect the bank, and that the single fact, unexplained by other competent evidence, that a deposit is made in the form mentioned in the statute " fixes the respective rights of the de- positors named as joint owners of the property with all the incidents attach- ing to such ownership." Clary v. Fitzgerald, 155 App. Div. 659, 663-664. The omission of the words " or the survivor of them " does not conclusively show absence of intent to create a joint tenancy with survivorship. Evidence 244: Banking Law. § 249. is admissible to show the intent of the depositors. Corcoran v.. Hotaling, 164 App. Div. 75. The fact that the deposit is entered in form to the credit of A " or " B with words of survivorship, does not change the eiTect of the deposit as being in the names of both. A deposit in that form is within the meaning of the statute, and presumptively, at least, the deposit becomes the property of the persons named, as joint owners. Clary v. Fitzgerald, 155 App. Div. 659. It was held, however, that the statute did not preclude the depositors or their representatives, as between themselves, from showing by other com- petent evidence that title as joint owners was not intended or established. Clary v. Fitzgerald, 155 App. Div. 659; Anson v. Savings Bank of Utiea, 155 App. Div. 939. This rule is now changed by the last sentence of subd. 3. The provisions of subd. 3 apparently do not extend to a case where a deposit is made in the name of the depositor " or " another without words of survivorship, the money deposited belonging solely to the depositor. A de- posit in that form does not give rise to any inference of a transfer or gift by the depositor to the other person named (Matter of Bolin, 136 N. Y. 177; Grafing v. Irving Sav. Inst., 69 App. Div. 566, 570) ; it does not create a trust or constitute the parties joint owners of the deposit (Grafing v. Irving Sav. Inst., supra), and upon the death of the depositor the bank is protected in' making payment to his executor who produces the pass-book, in the ab- sence of any demand by the other party (Grafing v. Irving Sav. Inst., sf^pra). So where the deposit thus entered is made up of contributions by each, and the form of deposit was used so that each should have the right to draw the money, the interests of the parties as between themselves are several, not joint, and upon the death of one the bank is not justified in paying the entire deposit to his executor or administrator against the protest and claim of the survivor, but is liable to pay to the survivor the amount which as between the parties belongs to him; and this is true although the decedent's executor or administrator 'presents the pass-book and the rules of the bank provide that all payments to persons producing pass-books shall be valid pay- ments to discharge the bank (Mulcahey v. Emigrant Industrial Sav. Bank, 89 N. Y. 435). The joint tenancy is created at the time the deposit is made and is not "made in contemplation of the death * * * or intended to take effect in possession or enjoyment at or after such death " within the meaning of the Tax Law. Matter of Tilley, 166 App. Div. 240. One of the joint tenants is not ousted from the tenancy through the with- drawal by the other joint tenant and deposit in another bank of part of the money. In re Klenk, 150 N. Y. Suppl. 365. JOINT DEPOSIT BY MERGER OF ACCOUNTS.— When a husband and wife, having separate deposits in a savings bank, join in an instrument direct- ing that their accounts be merged so as to run to either depositor " or the survivor of them," the instrument is an order which remains executory aild revocable until it is presented to and acted upon by the bank. (Augsbury v. Shurtliff, 180 N. Y. 138.) But when the order is delivered to the bank and acted upon by it, before the death of either depositor, the transfer is effectual to vest in the survivor the title to the whole of the merged deposits. (Augs- bury V. Shurtliff, 114 App. Div. 626, aff'd in 190 N. Y. 507.) In such a case it seems that presentation of the pass-books to the bank is not essential to complete the assignment or transfer of the funds into the joint account; at least, a rule or regulation which would require such presentation § 250. Savixgs Banks. 245 may be waived by the bank in so far as it is made for the bank's protection. ■{Augsbury v. Shurtliff, 114 App. Div. 626, aff'd in 190 N. Y. 507.) § 250. Actions to recover deposits; interpleader; costs; statute of limitations. 1. In all actions against any savings bank to recover for moneys on deposit therewith, if there be any person or persons, not parties to the action, who claim the same fund, the court in which the action is pending, may, on the petition of such savings bank, and upon eight days' notice to the plaintiif and such claimants, and without proof as to the merits of the claim, make an order amend- ing the proceedings in ■ the action by making such claimants parties defendant thereto; and the court shall thereupon proceed to determine the rights and interests of the several parties to the action in and to such funds. The remedy provided in this section shall be in addition to and not exclusive of that provided in section eight hundred twenty of the code of civil procedure. 2. The funds on deposit which are the subject of such an ac- tion may remain with such savings banli to the credit of the action until final judgment therein, and be entitled to the same dividends as other deposits of the same class, and shall be paid by such savings bank in accordance with the final judgment of the court ; or the deposit in controversy may be paid into court to await the final determination of the action, and when the deposit is so paid into court such savings bank shall be struck out as a party to the action, and its liability for such deposit shall cease. 3. The costs in all actions against a savings bank to recover deposits shall be in the discretion of the court, and may be charged upon the fund afi'ected by the action. 4. When a savings bank shall have paid a deposit balance to any person and shall have closed such account on its books, any action against the savings bank to recover such deposit balance must be commenced within twenty years after the date of such pa^anent. Except as otherwise provided in this section and in sub- division four of section two hundred and forty-eight of this article, the statutes limiting the time within which actions may be com- menced shall have no application to actions brought by depositors, their representatives or assigns against savings banks for deposits made therein. 246 Banking Law. § 250. Source. — Former § 145. In subdivision 1 the words "and without proof as to the merits of the claim,'' and all of the last sentence, are new. The first sentence of subdivision 4 and the exceptions in the second sentence, are new. The first sentence of former § 145, relating to the competency of a wife as a witness in an action by her husband, has been omitted as unnecessary. CROSS-EEFERENCES.— Provisions similar to subdivisions 1, 2 and 3, as to banks, see § 113; as to trust companies, see § 199. Interpleader by order, see Code Civ. Proc, § 820. Interpleader by suit of debtor, see Code Civ. Proc, § 820-a. ■Statutes of limitation made inapplicable by this section, see Code Civ. Proc, § 382, Subd. 1; § 410. INTERPLEADER. — " The objedt of this statute is to relieve these savings banks from two or more litigations over the* same deposit, with all the expenses attending to same, and danger of having to pay the deposit to two or more different persons. A recovery by one claimant would be no b"ar to a recovery of the same deposit by as many others as might severally claim the same." McGuire v. Auburn Sav. Bank, 78 App. Div. 22, 26. See also Gifford v. Oneida Sav. Bank, 99 App. Div. 25, 27. When a deposit is made in the names of two persons jointly and one of them sues the bank to recover the deposit, the bank may require the other to be made a party defendant. McKeown v. Bank for Savings, 26 Misc. 824. The amendments embraced in subdivision 1 to the effect that the court may make an order amending the proceedings by making the claimants parties defendant " without proof as to the merits of the claim," and that this remedy shall be in addition to that provided in Code Civ. Proc, § 820, were made to do away with conflicting and unsatisfactory decisions on the ques- tion whether the technical rules applicable to a proceeding under said section of the Code were applicable to a proceeding under this section (formerly § 145) of the Banking Law See Steiner v. East River Sav. Inst., 60 App. Div. 232, 235; McGuire v. Auburn Sav. Bank, 78 App. Div. 22; Mahro v. Greenwich Sav. Bank, 16 Misc. 537, 40 N. Y. Supp. 29 (reversing 16 Misc. 275, 38 N. Y. Supp. 126. An application made under § 820 of the Code of Civil Procedure is gov- erned, of course, by the rules applicable to that section. Mars v. Albany Sav. Bank, 64 Hun 424 ; Steiner v. East River Sav. Inst., 60 App. Div. 232. The provisions of the Banking Law do not apply to an action brought by the drawee of an unaccepted draft upon a savings bank. The statute is limited by its terms to actions for the recovery of money on deposit, and the drawing of a draft does not operate as an assignment of the funds in the hands of the drawee. Master v. Bowery Sav. Bank, 31 Misc. 178. When a depositor in a savings bank gives by his will a life estate in all his real and personal property, with remainders over, and appoints the life tenant as executor, the remaindermen have only a. future interest in the moneys of the estate and a claim by them against the bank is not such a § 250. Savings Banks. 24Y claim as is contemplated by this section. Gifford v. Oneida Sav. Bank, 99 App. Div. 25. The fact that the defendant savings bank makes answer, merely to escape default, denying that the amount of the deposit claimed by plaintiff was the amount in its possession, does not affect the right of the bank to have a claimant brought in as a party defendant. Quinn v. Bank for Savings, 86 N. Y. Supp. 285. In an action against a savings bank to recover the amount of a deposit standing in the name of a decedent, plaintiff claiming the deposit under an alleged gift, it is proper for the court to grant the bank's application to join as a party defendant the depositor's administrator who had previously made claim to the fund. Quinn v. Bank for Savings, 8ff N. Y. Supp. 285. An order adding a, claimant as a party defendant or granting an inter- pleader under this section may properly require the pass-book to be sur- rendered to the clerk of the court pending the determination of the action. Faivre v. Union Dime Sav. Inst., 49 Super. Ct. (27 J. & S.) 558, 13 N. Y. Supp. 423; Quinn v. Bank for Savings, 86 N. Y. Supp. 285. The statute provides that the deposit which is the subject of the action may remain with the savings bank "to the credit of the action;" or in the alternative that it may be paid into court to await the final determina- tion of the action. But see McKeown v. Bank of Savings, 26 Misc. 824. The order of interpleader should not provide for the opening by defendant bank of a new account to the credit of the action. Faivre v. Union Dime Sav. Inst., 59 Super. Ct. (27 J. & S.) 558, 13 N. Y. Supp. 423. To justify an order adding parties defendant under this section it must appear that one or more persons other than plaintiff actually claim the de- posit. It is not enough that other persons may claim it. So when the donee of a deceased depositor sues to recover the deposit, and the heirs and next of kin of the decedent are living and make no claim, the bank is not entitled to an order directing them to be. made parties or requiring that an adminis- trator be appointed. Cogsriff v. Hudson City Sav. Inst., 24 Misc. 4. But an order of interpleader may be granted although the third party claims only part of the deposit. Progressive Handlanger Union v. German Sav. Bank, 23 Abb. N. C. 42. When a deposit was made by A in the form "A in trust for B," and upon A's death his administrator sues the bank to recover the deposit, alleging that to the knowledge of the bank the name of B was fictitious and the money belonged solely to A, the bank is not entitled to an order making B, his next of kin, etc., parties defendant. Unless plaintiff can prove said alle- gations he must fail, for otherwise upon the death of the trustee the bene- ficiary might be entitled to the deposit; while if plaintiff does prove the alle- gations the bank will not require the relief asked. Washington v. Seaman's Bank for Savings, 29 Misc. 492. An account was carried in the name of a father and his infant son " pay- able to either or the survivor of them." The father having died, an action was brought against the bank by the infant's guardian to recover the deposit, payment of which had been refused by reason of the guardian's inability to produce the pass-book, which was held by the father's executor, who claimed that the deposit belonged to the decedent's estate. It was held that the executor should be make a party defendant, but that, the deposit should remain in the bank pending the. decision of the controversy and the bank should not be struck out as a party to the action. Waterman v. Albany City Sav. Inst., 86 Misc. 274. 248 Banking Law. § 251. § 251. Available fund and purposes for which created. The trustees of every savings bank shall as soon as practicable invest the moneys deposited with them in the securities described in section two hundred and thirty-nine of this article, except as hereinafter provided. For the purpose of paying withdrawals in excess of receipts and meeting current expenses, or for the purpose of awaiting a more favorable opportunity for judicious investment, any savings bank may keep on hand or on deposit in any bank in this state organized under any law of this state or of the United States, or with a trust company incorporated under any law of this state, an available fund not exceeding twenty per centum of the aggregate amount credited to its depos- itors, but the sum deposited by any savings bank in any one bank or trust company shall not exceed twenty-five per centum of the paid up capital and surplus of such bank or trust company, and no more than five per centum of the aggregate amount credited to the depositors of any savings bank shall be deposited in a bank or trust company of which a trustee of such savings bank is a director. Source. — Former §§ 148, 149. The maximum amount of the fund is raised from ten to twenty per centum of the deposits and the provisions of former § 148 authorizing the loan of the fund and relating to the securities pledged for such a loan have been broadened and transferred to § 239, subd. 8. The increase in the percentage of amounts credited to depositors which may be carried in the available fund is more apparent than real; for formerly the available fund did not include excess of receipts over payments and funds awaiting Judicious investment, which were treated by former § 149 as "tem- porary deposits." The five per cent, limitation at the end of the section is new. CROSS-REFERENCES.— Necessity for designating depositary, see § 244, and note; preference of deposits, see § 278 and note. AMOUNT OF DEPOSIT.— It has been held that a savings bank might de- posit in one bank and in a single account a portion of its available fund, for current expenses, and a portion of its accumulated funds the temporary deposit of which was authorized by former § 149, notwithstanding that the aggregate amount of the two funds deposited would exceed the percentage of the available fund which might be deposited in one bank under former § 148. Chenango Valley Sav. Bank v. Dunn, 40 App. Div. 552. This rule would seem to obtain no longer under the amended section. UNAUTHORIZED DEPOSIT NOT A LOAN.— The fact that a savings bank making an authorized deposit with another bank secures from the latter § 252. Savings Banks. 249 an agreement to pay interest thereon, does not convert the deposit into an unauthorized loan. Erie County Sav. Bank v. Coit, 104 N. Y. 532; Matter of Patterson, 18 Hun 221, aff'd 78 N. Y. 608, on opinion below. Upton v. N". Y. & Erie Bank, 13 Hun 269. LOANS OF AVAILABLE FUOT).— The following opinions were rendered under the provisions of former § 148 authorizing and regulating loans of the available fund — provisions now embraced in § 239, subd. 8. The twenty-five per cent, limitation with respect to deposits had no appli- cation to loans made under former § 148. Atty.-Gen. Eep. (1909) 735. The available fund might be loaned upon the pledge of any of the first mortgage bonds of a railroad which could be purchased as an investment under subdivision 6 of former § 146 (now § 239, subdiv. 7), except bonds issued to retire all prior mortgage indebtedness of the railroad when sucli indebtedness had not actually been retired so as to make the refunding mort- gage a first mortgage. Atty.-Gen. Rep. (1911) vol. 2, p. 371. SECURITIES MAY NOT BE LOANED.— The securities in which the funds of a savings bank are invested were no part of its available fund which might be loaned under former § 148. Lender no circumstances may the bank lend such securities. It may not lend them to national banks for deposit in the treasury department as security for additional circulation. Atty.-Gen. Rep. (1906) 516; Atty.-Gen. Rep. (1909) 720. This rule cannot be evaded by an agreement which provides in substance for a sale of the securities to a, national bank and a resale by the latter to the savings bank at the same price, but which creates no contingency under which title may vest absolutely in the national bank. Such a transaction is in effect a, loan. Atty.-Gen. Rep. (1909) 720. § 252. Guaranty fund. The surplus of every savings bank, at the time this act takes effect, the contributions of its incorporators or trustees under the provisions of section two hundred and thirty-four of this article, and, the sums credited thereto from its net earnings under the provisions of section two hundred and fifty-five of this article, shall constitute a guaranty fund for the security of its depositors and shall be held to meet any contingency or loss in its business from depreciation of its securities or otherwise, and for no other purpose except as provided in section two hundred and thirty-six six, two hundred and thirty-seven and subdivision six of section two hundred and fifty-six of this article. Source. — New. Former § 153 provided for the optional accumulation of a fund from net profits to the amount of fifteen per cent, of the deposit lia- bilities. Amended by L. 1915, Chap. 372. In eflfect May 1, 1915. 250 Bastking Law. § 253. The guaranty fund provisions of the present law represent compronaises between the widely divergent views of experienced savings bankers. While all savings bank surpluses now become the guaranty funds of the respective banks, and while gradually increasing percentages of net earnings must be credited to this fund until it equals ten per centum of deposit liabilities, the entire amount of these percentages need not be so credited if by so doing dividends will be reduced below SV2 per cent.; and so long as there remain any unreturned contributions to the initial guaranty or . expense funds only the same percentage is credited to the guaranty fund as is declared in divi- dends. Moreover, provision has been made also for an undivided profits ac- count for use in equalizing dividends throughout loan periods. These changes undoubtedly tend to strengthen the security of savings insti- tutions; and the prohibition against using any part of the guaranty fund for dividends, except such portion as, when added to undivided profits, exceeds 25% of deposit liabilities, supplies the institution with a fund which serves as a partial substitute for capital. See §§ 253, 255, 256. CROSS-REFEEENCES.— Definitions of " guaranty fund," " surplus " and " net earnings,'' see § 3. Guaranty fund of savings and loan association, see § 392; of land bank, see § 427; of credit union, see § 457. Determination of amount of guaranty tund, see § 253. OWNERSHIP OF SURPLUS.— The surplus of a savings bank is the prop- erty of the depositors, not of the bank or of its trustees. People ex rel. Newburgh Savings Bank v. Peck, 157 N. Y. 51. SURPLUS EXEMPT FROM LOCAL TAXATION.— Under Tax Law, § 4, Bubd. 14, exempting from taxation " the deposits in any bank for savings which are due depositors," the surplus of a savings bank is exempt. People ex rel. Newburgh Savings Bank v. Peck, 157 N. Y. 51. But see Tax Law, § 18% post, imposing a franchise tax of one per centum on the par value of its surplus and undivided earnings. § 253. Amount of guaranty fund; how determined. 1. To determine the amount of the guaranty fimd of a savings bank its total liabilities due and accrued, its undivided profits and its net earnings since the last declaration of dividends shall be subtracted from its total assets. The value of its assets for the purpose of this calfiulation shall be stated as follows: (a) Its interest bearing stocks, bonds, or other obligations shall not be valued above the estimated market value thereof as last de- termined by the superintendent of banks. (b) The value of its real estate shall not in any event be esti- mated above cost, and if such real estate has been acquired by foreclosure, judgment or decree the value of such real estate so § 253. Savings Banks. 251 acquired shall not be estimated above its actual casb value as de- termined by written appraisal signed by at least three trustees of such savings bank and filed with it. (c) Such assets shall be excluded as have been disallowed by the superintendent of banks or its trustees, and also any debts owing to it which shall have remained due without prosecution and upon which no interest shall have been paid for more than one year, or on which a judgment has been recovered which shall have remained unsatisfied for more than two years, unless the superintendent of banks, upon application by such savings bank, shall have fixed a valuation at which such debts may be carried as an asset, or unless such debts are secured by first mortgage upon real estate, in which latter case they may be carried at the actual cash value of such real estate as determined by written ap- praisal signed by at least three trustees of such savings bank and filed with it. 2. The amount of the guaranty fund of a savings bank at the close of any dividend period may be determined by adding to the guaranty fund at the beginning of such period any appreciation in the estimated market value of its securities resulting from a revaluation thereof by the superintendent of banks, the sums re- covered on items previously charged to it and any amounts al- lowed by the superintendent of banks on account of assets previ- ously disallowed and charged to it, and deducting therefrom all losses sustained by the savings bank during such period. In the computation of losses all items shall be included which shall have been disallowed by its board of trustees or by the superintendent of banks, together with any depreciation in the value of its securi- ties below their estimated market value as last fixed by the super- intendent of banks, and all debts owing to it upon which no inter- est shall have been paid for one year or on which a judgment has been recovered which shall have remained unsatisfied for two years, unless the superintendent of banks upon the application of the savings bank shall have fixed a value at which such debts may be allowed or unless such debts are secured by first mortgage upon real estate, in either of which events only the amount by which such debts exceed the value allowed by the superintendent of banks or the cash value of the real estate securing them as determined 252 Banking Law. § 254. by written appraisal signed by at least three trustees of such sav- ings bank and filed with it, need be so deducted. Source. — New. CROSS-EEFEREI\^CES.— Definitions of "guaranty fund," "surplus," "net earnings," '" undivided profits " and " dividend period," see § 3. Similar provision as to savings and loan associations, see § 393. See note to § 252. § 254. Calculation of earnings for dividend period. 1. Gross earnings. To determine the amount of gross earnings of a savings bank during any dividend period the following items may be included: (a) All earnings actually received during such period, less in- terest accrued and unpaid included in the last previous calcula- tion of earnings; (b) Interest accrued and unpaid upon debts owing to it secured by collateral as authorized by this article, upon which there has been no default for more than one year, and upon cor- porate stocks, bonds, or other interest-'bearing obligations owned by it upon which there is no default; (c) The sums added to the cost of securities purchased for less than par as a result of amortization. (d) Any profits actually received during such period from the sale of securities, real estate or other property owned by it. 2. Net earnings. To determine the amount of its net earnings for such dividend period the following items shall be deducted from gross earnings: (a) All expenses paid or incurred, both ordinary and extra- ordinary, in the transaction of its business, the collection of its debts and the management of its affairs, less expenses incurred and interest accrued upon its debts deducted at the last previous cal- culation of net earnings for dividend purposes; (b) Interest paid or accrued and unpaid upon debts owing by it; (o) The amounts deducted through amortization from the cost of corporate stocks, bonds or other interest-bearing obligations pur- chased above par in order to bring them to par at maturity ; (d) Any losses that may have been sustained by it in excess of its guaranty fund and undivided profits. § 2,55. Savings Banks. 253 The balance thus obtained shall constitute the net earnings of such savings bank for such period. Source. — Former § 28. The language is for the most part new. One important purpose of this method of calculating net earnings is to prevent the declaration of a dividend based on paper profits. In calculating earnings for dividend purposes securities must be carried at amortised cost until sold. This provision was contained in much less definite language in former § 153. CROSS-REFERENCES.— Definitions of "guaranty fund," "net earnings," " undivided profits " and " dividend period," see § 3. Similar provision as to banks, see § 116; as to trust companies, see § 202: General powers as to dividends, see §§2 (definition) 238, subd. 1. § 255. Deductions from net earnings for guaranty fund. If at the close of any dividend period the guaranty fund of any savings bank be less than ten per centum of the amount due to depositors, there shall be deducted from its net earnings for such period and credited to its guaranty fund five per centum of its net earnings during the year nineteen hundred and fourteen; six per centum during the year nineteen hundred and fifteen; seven per centum during the year nineteen hundred and sixteen; eight per centum during the year nineteen hundred and seventeen ; nine per centum during the year nineteen hundred and eighteen; ten per centum during the year nineteen hundred and nineteen, and tern per centum during any year thereafter in which a dividend shall be declared or so much of such percentages as will not compel it to reduce its dividends to depositors below the rate of three and one-half per centum per annum. The amount of net earnings remaining after such deduction for the guaranty fund and its undivided profits shall be available for the declara- tion of dividends for such period. While the trustees of a savings bank are paying its expenses or any portion thereof, the amounts to be credited to its guaranty fund shall be computed at the same percentages upon the total dividends credited to its depositors instead of upon its net earnings. Source. — New. CROSS-REFERENCES.— Definitions of "guaranty fund," "dividend pe- riod," "undivided profits" and "net earnings," see § 3. 17 254 Banking Law. § 256. Similar provisions as to banks, see § 118; as to trust companies, see § 204; as to savings and loan associations, see § 395; as to credit unions, see § 459. See note to § 252. § 256. Regulations and restrictions as to dividends; accumulation of guaranty fund and undivided profits; liability of trustees; extra dividends. 1. Every savings bank shall regulate the rate of dividend not to exceed five per centum per annum upon the deposits therewith, in such manner that depositors shall receive as nearly as may be all the earnings of the savings bank after transferring the amount required by section two hundred and fifty-five of this article, and such further amounts as its trustees may deem it expedient and for the security of the depositors to transfer, to the guaranty fund which to the amount of ten per centum of the amount due its de- positors the trustees shall gradually accumulate and hold. Such trustees may also deduct from its net earnings, and carry as undivided profits for the purpose of maintaining its rate of dividends, such additional sums as they may deem wise. 2. Every savings bank may classify its depositors according to the character, amount or duration of their dealings with the sav- ings bank, and may regulate the dividends in such manner that each depositor shall receive the same ratable portion of dividends as all others of his class. 3. Contributions to the expense fund and unimpaired contribu- tions to the initial guaranty fund made by the incorporators or trustees of such savings bank, shall be entitled to have dividends apportioned thereon, which may be credited and paid to such incorporators or trustees, or to their representatives or assigns. Whenever the guaranty fund of any such savings bank is suffi- ciently large to permit the return of such contributions, the con- tributors may receive dividends thereon not theretofore credited or paid at the same rate paid to depositors. 4. A savings bank shall not (a) Declare, credit or pay any dividend on any deposit except as authorized by a vote of a majority of the board of trustees duly entered upon their minutes, whereon shall be recorded the ayes and nays, upon each vote. (b) Pay any dividend other than the regular quarterly or semi- annual dividend, or the extra dividend prescribed in subdivision six of this section. § 2i56. Savings Banks. 255 (c) Declare, credit or pay dividends on any deposit for a longer period than the same has been deposited; provided, how- ever, that deposits made not later than the tenth business day of the month commencing any semi-annual dividend period or the third business day of any month, or withdrawn upon one of the last three business days of the month ending any quarterly or semi-annual dividend period, may have dividends declared upon them for the whole of the period or month when they were so de- posited or withdrawn ; and provided further that, if the by-laws so provide, accounts closed between dividend periods may be credited with dividends at the rate of the last dividend, computing from the last dividend period to the date when closed. 5. Whenever any dividend shall, except as provided in sub- division six of this section, be declared and credited in excess of the sum of its net earning since the last declaration of dividends, after making the deductions for amortization and for its guaranty fund as provided in sections two hundred and forty-six, two hun- derd and fifty-four and two hundred and fifty-five of this article, plus such undivided profits as it shall have accumulated in ac- cordance with the provisions of subdivision one of this section, the trustees voting for such dividend shall be jointly and severally liable to such savings bank for the amount of such excess so de- clared and credited. 6. The trustees of any savings bank whose undivided profits and guaranty fund, determined in the manner prescribed in sec- tion two hundred and fifty-three of this article, amount to more than twenty-five per centum of the amount due its depositors, shall at least once in three years divide equitably the accumula- tion beyond such twenty-five per centum as an extra dividend to depositors in excess of the regular dividend authorized. A notice posted conspicuously in a savings bank of a change in the rate of dividends shall be equivalent to a personal notice. Source.— Former §§ 152, 153. Subds. 3 and 5 amended by L. 1915, Chap. 372. In effect May 1, 1915. Subdivision 1 is based upon former § 153. The ten per cent, guaranty fund provided by subdivision 1 takes the place of the optional fifteen per cent. " surplus " fund provided by former § 153. The creation of the undivided profits account ( subd. 1 ) is new. Subdivision 2 is taken from former § 153 without substantial change. Subdivision 3 is new. ■Subdivision 4 (a) is taken from former § 153. 256 Banking Law. § 256. The provisions of subdivision 4(b) are taken from former § 152, except the reference to the extra dividend, that being new. Subdivision 4(c) is taken frojji former § 153, with the exception of the last proviso which is new. Subdivision 5 is taken from former § 153, with modifications as to amor- tization and the guaranty fund. Subdivision 6 is adapted from the last two sentences of former § 153. An extra dividend now depends upon an accumulation of the guaranty fund and undivided profits exceeding twenty-five per cent, of the deposits, instead of a surplus exceeding fifteen per cent, of the deposits as provided in former § 153. CROSS-REFERENCES.— Definitions of "guaranty fund," "net earnings," " undivided profits " and " dividend period," see § 3. General powers as to dividends, see §§ 2 (definition) 238, subd. 1. Criminal liability oi trustees for declaring illegal dividend, see Penal Law, § 297. STJBDIVISION I. CONTRA'OT FOR FIXED RATES.— A savings bank cannot contract to pay future dividends or interest to depositors at a fixed rate. Atty.-Gten. Rep. (1908) 397. This rule applies even though rate fixed is less than the rate usually paid; and it makes no difference that the deposit is made by a postal savings bank or under order of court. Atty.-Gen. Rep. (1912), vol. 2, 500. It is only with respect to moneys of the trustees in the hands of a savings bank which they have distributed to the guarantee and expense funds that the incorporators or trustees are regarded as ordinary depositors and are entitled to their yearly earnings. Atty.-Gen. Rep., July 9, 1914. SUBDIVISION 2. BY-LAW CLOSING INACTIVE ACCOUNTS.— A savings bank has no power to enact a by-law providing that all accounts shall be closed and shall cease to draw interest at the expiration of ten years from the time of the last deposit or draft. Atty.-Gen. Rep. (1905) 441. SUBDIVISION 4(c). COMPUTATION OF DIVIDEND PERIOD.— The provision that the trus- tees shall not declare or allow interest (dividends) on any deposit for a longer period than the same has been deposited, with exceptions as to de- posits made not later than the tenth "business day" of the month, etc. (now subd. 4[c] ) , formerly did not contain the word " business." The word was inserted in former § 1&3 for the apparent purpose of avoiding a ruling of the AttorneyiGeneral that the provision referred to calendar days and that holi- days could not be excluded. Atty.-Gen. .Rep. (1908) 384. SUBDIVISION 5. DIVIDENDS IN EXCESS OF EARNINGS.— The provisions of the Act of 1875 (Ch. S71, § 33) relating to the declaration of interest and dividends did not require that expenses be deducted from earned interest or profits of the bank before ascertaining whether a given rate of interest or dividend could § 257, 258. Savings Banks. 257 lawfully be declared; and it did not require that the interest or profits earned should actually have .been received. Van Dyck v. McQuade, 86 N. Y. 38. LIABILITY OF TRUSTEES.— The provisions making the trustees person- ally liable for interest or dividends unlawfully declared and paid are penal in their character and must be strictly construed. A trustee cannot be held liable for the amount of a dividend declared and paid in violation of the statute, unless he voted for it. Approving 'the dividend after it has been de- clared is not enough to make him liable. Van Dyck v. McQuade, 86 N. Y. 38. § 257. Per centum of par value surplus; how determined. In determining the per centum of par value surplus held by any savings bank, its interest-bearing stocks and bonds shall not be estimated above their par value or above their market value if below par. Its bonds and mortgages on which there are no arrears of interest for a longer period than six months shall be estimated at their face, and its real property at not above cost. But the value of such stocks or bonds, or bonds and mortgages, as are in arrears of interest for six months or more, and of all other invest- ments not herein enumerated, shall be estimated according to the valuation placed thereon by the superintendent of banks, as pro- vided in section fifty-four of this chapter. Source. — Former § 154. The main purpose of this section is to provide a method for computing the franchise tax of one per centum on the par value of the surplus and undivided earnings of savings banks. See Tax Law, § 189, post. § 258. Advertisements of surplus or guaranty fund. No savings bank shall hereafter put forth any sign or notice or publish or circulate any advertisement or advertising literature upon which or in which it shall be stated that such savings bank has a surplus or guaranty fund in excess of its market value surplus or guaranty fund as determined under the provisions of this article, unless the nature of the same be clearly made to appear. Source. — New. CROSS-REFERENCES.— Valuation of securities, see §§ 53, 54, 257. Determination of amount of guaranty fund, see § 253. 258 Banking Law. § 259 § 259. Change of location. Any savings bank may make a written application to the su- perintendent of banks for leave to change its place of business to another place in the same county. The application shall state the reasons for such proposed change, and shall be signed and acknowledged by a majority of its board of trustees. If the pro- posed place of business is within the limits of the town, village, borough or city, if in a city not divided into boroughs, in which the present place of business of the savings bank is located, such change may be made upon the written approval of the superin- tendent; if beyond such limits, notice of intention to make such application, signed by two principal officers of the savings bank shall be published once a week for two successive weeks immedi- ately preceding such application in a newspaper published in the city of Albany in which notices by state officers are required by law to be published, and in a newspaper to be designated by the superintendent, published in the county in which the present place of business of such savings bank is located. If the superintendent shall grant his certificate authorizing the change of location, as provided in section fifty of this chapter, the savings bank shall cause such certificate to be published once in each week for two' successive weeks in the newspapers in which the notice of applica- tion was published. When the requirements of this section shall have been fully complied with, the savings bank may, upon or after the day specified in the certificate, remove its property and effects to the location designated therein, and thereafter its prin- cipal place of business shall be the location so specified; and it shall have all the rights and powers in such new location which it possessed at its former location. Source.— ' Former §§ 31, 147. CROSS-REFERENCES.— For similar provisions as to other corporations doing business under the Banking Law, see § 119 and the annotations to that section. Duties of superintendent on application for change of location, see § 50. § 260.. Savings Banks. 259 § 260. Board of trustees; number and qualifications. 1. There shall be a board of trustees who shall have the entire managenaent and control of the affairs of the savings bank. The persons named in the certificate of authorization shall be the first trustees. The board shall consist of not less than nine members, nor, except as provided in section two hundred and sixty-six of this article, more than thirty members. 2. A person shall not be a trustee of a savings bank, if he (a) Is not a resident of this state; provided, however, that one- fifth of the trustees of any savings bank in the city of New York may be residents of a state which adjoins said city. (b) Has been adjudicated a bankrupt or has taken the benefit of any insolvency law, or has made a general assignment for the benefit of creditors. (c) Has suffered a judgment recovered against him for a sum of money to remain unsatisfied of record or unsecured on appeal for a period of more than three months. (d) Is a trustee, officer, clerk or other employee of any other savings bank. 3. Nor shall a person be a trustee of a savings bank solely by reason of his holding a public office. Source. — Former §§ 137, 140. Subdivision 3 is new; it is designed to meet provisions in old charters making mayors of cities ex officio members of boards of trustees of savings banks. Formerly there was no limit upon the number of trustees except that there should not be less than thirteen (former § 137.) CROSS-REFERENCES. — Increase or reduction of number of trustees, see I 266. For purpose of reduction of minimum number and placing a limit on maxi- mum number, see note to | 230. Liability of trustees for declaring unlawful dividend, see § 256, subd. 5, and annotations. rhity of trustees to make investments, se^e § 251. Liability of trustees for unlawful investments, see note to § 239. When trustees not liable for investing in unauthorized securities, see § 2S9 (last paragraph). • Criminal liability of director for fraud or violation of law, see Penal Law, § 297, post. Criminal liability of officer, etc., for receiving deposits in insolvent savings bank, see Penal Law, § 295, post. 260 Banking Law. § 261. Falsification of books, reports or statements by trustee, ofScer, etc., see Penal Law, § 304, post. BOEEOWEE NOT ELIGIBLE AS TEUSTEE.— A man who has borrowed a large axasa of money from a savings bank is not eligible as trustee of the bank. The prohibition against a trustee's borrowing money from the savings bank (former § 142, now § 267, siibd. 2[e] ) should be construed not only to prevent a trustee from becoming a debtor to the bank, but to prevent a debtor to the bank from becoming a trustee. Atty.-Gen. Eep. (1905) 441. NUMBEE OF TEUSTEES.— By force of the section (now § 281) by which the charters of all savings banks are conformed to the present law, and which applies to savings banks incorporated before its enactment in 1892, the num- ber of trustees of such a savings bank is restricted by the present law to the prescribed minimum; the number must be definitely fixed and can be changed only as provided by the existing statute (now § 266), notwithstanding that a by-law adopted before these statutes were enacted provides for a variable number. Atty.-Gen. Eep. (1907) 475. STATUS AND DUTIES OF TEUSTEES.— The relation existing between a savings bank and its trustees is mainly that of principal and agent, and the relation between the trustees and the depositors is similar to that of trustee and cestui que trust. The trustees are bound to observe the limits placed upon their powers in the charter, and if they transcend those limits and cause damage they are liable. They are bound also to use in the execution of the trust such care and judgment as men of ordinary skill and prudence commonly exercise in the conduct of their own affairs ; and when a loss occurs by their failure in this respect they are liable and cannot excuse them- selves on the ground that they did not possess the skill and judgment requisite for the performance of their duties. Hun v. Gary, 82 N. Y. 65. See also Atty.-Gen. Eep. (1906) 516. . A person who votes in Connecticut shall not be a trustee of a savings bank, even though he maintains a residence in New York City. Atty.-Gen. Eep., May 18, 1916. The State of Connecticut does not adjoin the State of New York within the meaning of section 260-2 a. Atty.-Gen. Eep., June 7, 1915. § 261. Oath and declaration of trustee. 1. Each trustee, whetlier named in the certificate of authoriza- tion or elected to fill a vacancy, shall, when such certificate of au- thorization has been issued, or when notified of such election, take an oath that he will, so far as it devolves on him, diligently and honestly administer the affairs of the savings bank, and will not knowingly violate, or willingly permit to be violated any of the provisions of law applicable to such savings bank. Such oath shall be subscribed by the trustee making it and certified by the officer before whom it is taken, and shall be immediately trans- mitted to the superintendent of banks and filed and preserved in his office. 2. Prior to the first day of March in each year, every trustee of every savings bank shall subscribe a declaration to the effect §§ 262, 263. Savings Banks. 261 that he is, at the date thereof, a trustee of the savings bank, and that he has not resigned, become ineligible, or in any other man- ner vacated his office as such trustee. Such declaration shall be acknowledged in like manner as a deed to be entitled to record and shall be transmitted to the superintendent of banks and filed in his office prior to the tenth day of March in each year. Source. — Former § 137. CROSS-REFERENCES.— Forfeiture of oflSce for failure to comply with this section, see § 268, subdiv. 2 (a) and suhdiv. 3 (a). As to oaths of directors of other corporations doing business under the Banking Law, see § 124 and cross-references there given. § 262. By-laws. The board of trustees of a savings bank may from time to time make by-laws, rules and regulations, not inconsistent with law, for the election of officers and for their respective powers and duties and the manner of discharging the same ; for the appoint- ment of committees and with reference to their duties; for the increase or reduction of the number of trustees, subject to the pro- visions of section two hundred and sixty-six of this article; for the repayment of deposits, subject to the provisions of sections two hundred and forty-eight and two hundred and forty-nine of this article, and generally for transacting, managing and directing the affairs of the savings bank. A copy of the same shall be trans- mitted to the superintendent of banks, who shall be notified of any amendment or change therein. Source. — Former § 138, amplified. CROSS-REFERENCES.— See annotations to §§ 248, 249, 256, 260. Power to make by-laws as to dividends, see § 256, subd. 4(c). Oeneral power of corporation to make by-laws, see Gen. Corp. Law, § 11, subd. S. § 263. Officers. The board of trustees shall elect from their number or other- wise, a president and two vice-presidents and such other officers as they may deem fit. Source. — Former § 137. 262 Banking Law. § 264. § 264. Meetings of trustees; quorum; reports of officers, 1. Regular meetings of the board of trustees shall be held at least once a month. 2. A quorum at any regular or special or adjourned meeting shall consist of not less than five, of whom the president shall be one, except when he is prevented from attending by sickness or other unavoidable detention, when he may be represented in forming a quorum by the first vice-president, or in case of his absence for like cause, by the second vice-president ; but less than a quorum shall have power to adjourn from time to time until the next regular meeting. 3. The board of trustees shall, by resolution duly recorded in the minutes, designate an officer or officers whose duty it shall be to prepare and submit to each trustee at each regular meeting of the board, or to an executive committee of not less than five members of such board, a written statement of all the purchases and sales of securities, and of every loan, made since the last regular meeting of the board, describing the collateral to such in- debtedness as of the date of meeting at which such statement is submitted; but such officer or officers may omit from such state- ment loans of less than one thousand dollars, except aa hereinafter provided. Such statement shall also contain a list giving the aggregate of loans to each individual, partnership, unincorporated association or corporation whose liability to the savings bank has been increased one thousand dollars or more since the last regular meeting of the board, together with a description of the collateral to such indebtedness held by the savings bank at the date of the meeting at which such statement is submitted. A copy of such statement, together with a list of the trustees present at such meeting, verified by the affidavit of the officer or officers charged with the duty of preparing and submitting such statemrait shall be filed with the records of the savings bank within one day after such meeting, and shall be presumptive evidence of the matters therein stated. Source.— Former §§ 42, 139. Subdivisions 1 and 3 are adapted from former § 42. Subdivision 2 is taken from former § 139; it changes the quorum from seven (former § 139) to five. For reason of change, see note to § 230. § 265, Savings Banks. 263 CROSS-REFERENCES. — Similar provision as to banks, see § 129; as to trust companies, see § 214; as to personal loan associations, see § 357. Quorum of directors and powers of majority, see Gen. Corp. Law, § 34. This section (formerly § 42), providing that the trustees may by resolu- tion require the detail information of the bank's business to be given to the executive committee composed of at least five members of the board leads necessarily to the inference that the trustees who are not members of the executive committee are not to be charged with knowledge of the detail management, which need only be reported to the executive committee. Kav- anaugh v. Gould, 147 App. Kv. 281. § 265. Compensation of trustees, officers and attorneys. 1. A trustee of a savings bank shall not directly or indirectly re- ceive any pay or emolument for his attendance at meetings of the board, or for any other services as trustee, except as provided in this section. 2. Trustees acting as officers of the savings bank, whose duties require and receive their regular and faithful attendance at the institution, and the trustees appointed as a committee to examine the vouchers and assets pursuant to section two hundred and sev- enty-two of this article, to perform the duties required by subdi- vision six of section two hundred and thirty-nine of this article, or to render other special services as members of committees pro- vided for in the by-laws, may receive such compensation as in the opinion of a majority of the board of trustees shall be just and reasonable ; but such majority shall be exclusive of any trustee to whom such compensation shall be voted. 3. An attorney for a savings bank, although he be a trustee thereof, may receive a reasonable compensation for his profes- sional services, including examinations and certificates of title to real property on which mortgage loans are made by the savings bank ; or if the savings bank requires the borrowers to pay all ex- penses of searches, examinations and certificates of title, including the drawing, perfecting and recording of papers, such attorney may collect of the borrower and retain for his own use the usual fees for such services, excepting any commissions as broker or on account of placing or accepting such mortgage loans. 4. If an officer or attorney of a savings bank shall receive, on any loan made by the savings bank, any commission which he is 264 Baitking Law. § 266. not authorized by this section to retain for his own use, he shall immediately pay the same over to the savings bank. Source.— Former §§ 141, 142, 155. Subd. 2 amended by L. 1915, Chap. 372. In effect May 1, 1915. Subdivision 1 is based upon former § 142 and the last sentence of former § 155. Subdivision 2 is based upon the last part of former § 141 and the first sentence of former § 155. Subdivision 3 is based upon the second sentence of former § 150 in so far as concerns the liability of the borrower to pay the expenses of searches, examinations and certificates of title, etc. The rest of the subdivision is new. The savings bank may pay its attorney for the services mentioned and may charge the sum to the mortgagor, or the attorney may collect his fees from the mortgagor if the savings bank so directs. One purpose of subdivi- sion 3 ii to supply an omission in the former Banking Law with respect to compensation of trustees for services as attorneys. Subdivision 4 is new. ATTORNEY AS TRUSTEE.— A savings bank was not authorized by former § 155 to pay for the services of one of its trustees in acting as secretary to the Board of Trustees and keeping the minutes of its monthly meetings, although said trustee was an attorney without whose advice it might have been necessary occasionally to employ counsel. Atty.-Gen. Itep. (1910) 840. Subdivision 3 apparently modifies this rule. EXPENSES OF TRUSTEES" ATTENDING MEETHNGS.— A savings bank has no right to pay the actual and necessary expenses incurred by trustees attending meetings of the board. Atty.-Gen. Rep. (1905) 444. MAJORITY VOTING FOR COMPENSATION.— The majority required to vote compensation to a trustee means a majority of the full board excluding both the particular trustee whose compensation is in question and all other trustees to whom compensation is paid.. This applies to a proposed increas? of salary. Atty.-Gen. Rep. (189^) 121. § 266. Increase or reduction of number of trustees. The board of trustees of every savings bank may, by resolution incorporated in its by-laws, increase or reduce the number of trustees named in the original charter or certificate of au- thorization. 1. The number may be increased to a number designated in the resolution and not exceeding thirty, provided that reasons there- for are shown to the satisfaction of the superintendent of banks and his written consent thereto is first obtained. 2. The number may be reduced to a number designated in the resolution but not more than thirty or less than nine. The re- § 267. Savings Banks. 265 duction shall be effected by omissions to fill vacancies occurring in tlie board. 3. Where a savings bank now has more than thirty trustees, vacancies in the board shall not be filled until the total number of trustees shall have been reduced to thirty. Source. — rormer § 137. The limitation as to the maximum number is new. The minimum number is reduced from thirteen to nine; for reason of change, see note to § 230. Subdivision 3 is new. CKOSS-EEFERENCES.— See § 260 and notes. Change of number of directors of bank, see § 127; of savings and loan association, see § 408; of land bank, see § 433. § 267. Bestrictions upon trustees and officers. 1. A trustee of a savings bank shall not (a) Have any interest, direct or indirect, in the gains or profits of the savings bank, except to receive dividends upon the amounts contributed by him to the guaranty fund and the expense fund of the savings bank as provided in sections two hundred and thirty-four and two hundred and thirty-five of this article. (b) Become a member of the board of directors of a bank, trust company or national banking association of which board enough other trustees of the savings bank are members to constitute with him a majority of the board of trustees. 2. iTTeither a trustee nor an officer of a savings bank shall (a) For himself or as agent or partner of another, directly or indirectly use any of the funds or deposits held by the savings bank, except to make such current and necessary payments as are authorized by the board of trustees. (b) Eeceive directly or indirectly and retain for his own use any commission on or benefit from any loan made by the savings bank, or any pay or emolument for services rendered to any bor- rower from the savings bank in connection with such loan, ex- cept as authorized by section two hundred and sixty-five of this article. (c) Direct or require a borrower of the savings bank on mort- gage to negotiate any policy of insurance on the mortgaged prop- erty through any particular insurance broker or brokers, or at- tempt to divert to any particular insurance broker or brokers the patronage of borrowers from the savings bank, or refuse to accept 266 Banking Law. § 267. any such insurance policy because it was not negotiated through a particular insurance broker or brokers. (d) Become an indorser, surety or guarantor, or in any manner an obligor, for any loan made by the savings bank. (e) For himself or as agent or partner of another, directly or in- directly borrow any of the funds or deposits held by the savings bank, or become the owner of real property upon which che sav- ings bank holds a mortgage. A loan to or a purchase by a corpo- ration in which he is a stockholder to the amount of fifteen per centum of the total outstanding stock, or in which he and other trustees of the savings bank hold stock to the amount of twenty-five per centum of the total outstanding stock, shall be deemed a loan to or a purchase by such trustee within the meaning of this section; except when the loan to or purchase by such corporation shall have occurred without his knowledge or against his protest. A deposit in a bank shall not be deemed a loan within the meaning of this section. This section shall not be construed to prohibit a savings bank from making a loan to a religious corporation, club, or other mem- bership corporation of which one or more trustees of such savings bank may be members or officers but in which they have no finan- cial interest, nor shall it be construed to prohibit a savings bank from making loans to or purchasing guaranteed mortgages from any stock corporation, provided no trustee owns more than fifteen per centum of the capital stock of such corporation, and the total amount of such stock owned by all the trustees of such savings bank is less than twenty-five per centum of such capital stock. Source.— Former §§ 137, 140, 142, rewritten. Subdivision 2(e), and all of subd. 2: ( e ) after the words " held by the savings bank" in the first sentence, are new. Const., Art. VIII, § 4, provides that no trustee of a savings bank or in- stitution for savings shall have any interest, direct or indirect, in the profits of the corporation, and that no director or trustee thereof shall be interested in any loan or use of any of its money or property. See § 260 and notes; also § 263 as to oflBcers. Overdrafts by, or commissions and gratuities to officer, director, etc., see Penal Law, § 294. post. SUBDIVISION I (a). This section does not forbid a trustee of a savings bank from depositing his own money therein. There can be no " gains or profits " of the bank un- § 268. Savings Banks. 267 til the fixed charges have been paid and interest credited on the deposits. Atty.-Gen. Rep. (1906) 515. SUBDIVISION 2(d). The prohibition against a trustee's becoming an indorser, surety, etc., is not violated when a trustee gives a mortgage to malce up a deficiency in the savings bank's assets caused by a loss upon a loan previously made. Best v. Thiel, 79 N. Y. 15. SUBDIVISION 2(e). A loan upon the security of land of a corporation in which one of the trustees is a large stockholder is illegal and renders the trustees personally liable. Paine v. Barnum, 59 How. Pr. 303. The provisions of the second sentence of subd. 2(e) is based upon this decision. The prohibition against a trustee's or officer's borrowing, directly or in- directly, any funds or deposits of the bank, is not avoided by purchasing mortgages from him. Buying mortgages violates the prohibition as much as lending money and taking mortgages for security. Paine v. Irwin, 59 How. Pr. 316. Such prohibition is violated when an officer takes checks upon the bank, signed by its secretary and president, and uses them for stock speculation on his own account, the checks being paid by other checks upon banks where the savings bank keeps its funds on deposit. Knapp v. Roche, 62 N. Y. 614. Borrower not eligible as trustee, see annotations to § 260. THE LAST PARAGRAPH OF THE SECTION is designed to abrogate a ruling of the Attorney-General that a trustee of a savings bank has such an interest in a loan by the bank to a religious corporation of which he is a member and a trustee, that the loan violates the statute and forfeits his office. Atty.- §§ 489, 490. in section two hundred and eight of this chapter, and that thej may adopt new by-laws for said corporation. Source. — Former § 36. § 489. Submission of merger agreement to superintendent of banks. Such merger agreement and sworn copies of the proceedings of the meetings of the respective boards of directors or trustees at which the making of such agreement was authorized, shall be sub- mitted in duplicate to the superintendent of banks for his ap- proval. Source. — Former § 36. CROSS-REFERENCES.— Discretion of superintendent, see § 48. § 490. Submission of merger agreement to stockholders or share- holders. Except in the ease of savings banks, the merger agreement shall, within sixty days after due notice to such corporations of its ap- proval by the superintendent, be submitted to the stockholders or shareholders of each of such corporations at a meeting thereof to be called upon notice of at least two weeks, specifying the time, place and object thereof addressed to each shareholder at his last known post-office address and deposited in the post-office, postage prepaid, and published for at least two successive weeks in one newspaper in each of the counties in which such corporations have their principal place of business; and if such agreement, as ap- proved by the superintendent of banks, shall be approved at each of such meetings by the vote or ballot of the stockholders or shareholders owning at least two-thirds in amount of the stock or shares of their respective corporations, it shall there- upon become binding upon such corporations. A sworn copy of the proceedings of such meetings, made by the secretaries thereof respectively, shall be presumptive evidence of the holding and action of such meetings. Source. — Former § 37. " Within sixty days after due notice to such corpo- rations of its approval by the superintendent '' is new. PUBLICATION OF NOTICE.— The notice to stockholders should be pub- lished in a daily newspaper on the twelve secular days of two successive weeks. Atty.-Gen. Rep. (1912) vol. 2, p. 76. §§ 491-493, FOBFEITUEE OF COEPOEATE EXISTENCE, EtC. 403 § 491. Resubmission of approved merger agreement of savings banks to board of trustees. The merger agreement of two or more savings bants shall, within sixty days after due notice to such savings banks of its approval by the superintendent, be submitted to a special meeting of the board of trustees of each of such savings banks. A notice of at least fifteen days which shall state the time, place and object of the meeting and shall be accompanied by a complete copy of the merger agreement, shall be duly given by mail to each trustee. If the merger agreement, as approved by the superintendent of banks, shall be duly approved at each of such meetings by a vote of three-fourths of all the members of each board of trustees, it shall thereupon become binding upon such savings banks. Source. — New. § 492. Filing approved merger agreement and copies of proceedings. After such merger agreement shall have become binding upon the respective corporations who are parties thereto, as provided in the two immediately preceding sections, one of the duplicates thereof with a copy of the superintendent's written approval and a sworn copy of the proceedings of the meetings at which such agreement was finally approved, made by the secretaries thereof respectively, shall be filed in the office of the superintendent, and the other duplicate of such agreement with the written approval of the superintendent and another sworn copy of such proceedings, shall be filed in the office of the clerk of the county in which is located the principal place of business of the corporation into which the other corporation or corporations are to be merged. Source. — Former § 37. § 493. When merger takes effect. Upon filing the duplicates of such merger agreement, together with copies of its approval by the superintendent, as prescribed in the last preceding section, the merger agreement shall take effect according to its terms and the merger shall thereupon take place as provided in the agreement. Source. — 'Former § 37. 404 Banking Law. § 494. § 494. Effect of merger. TJpon the merger of any corporation into another as provided in this article: 1. Its corporate existence shall be merged into that of such other corporation; and all and singular its rights, privileges and franchises, and its right, title and interest in and to all property of whatsoever kind, whether real, personal or mixed, and things in action, and every right, privilege, interest or asset of con- ceivable value or benefit then existing which would inure to it under an unmerged existence, shall be deemed fully and finally, and without any right of reversion, transferred to and vested in the corporation into which it shall have bean merged, without further act or deed, and such last-mentioned corporation shall have and hold the same in its own right as fully as the same was possessed and held by the merged corporation from which it was, by operation of the provisions of this article, transferred. 2. Its rights, obligations and relations to any person, creditor, depositor, trustee or beneficiary of any trust, shall remain un- impaired, and the corporation into which it shall have been merged shall by such merger succeed to all such relations, obli- gations, trusts and liabilities, and shall execute and perform all such trusts, in the same manner as though it had itself assumed the relation or trust, or incurred the obligation or liability; and its liabilities and obligations to creditors existing for any cause whatsoever shall not be impaired by such merger; nor shall any obligation or liability of any stockholder or shareholder in any corporation which is a party to such merger be affected by any such merger, but such obligations and liabilities shall continue as fully and to the same extent as existed before such merger. 3. A pending action or other judicial proceeding to which any corporation that shall be so merged is a party, shall not be deemed to have abated or to have discontinued by reason of the merger, but may be prosecuted to final judgment, order or decree in the same manner as if the merger had not been made ; or the corpora- tion into which such other corporation shall have been merged may be substituted as a party to such action or proceeding, and any judgment, order or decree may be rendered for or against § 495. rOEFEITUEE OF CoEPOEATE EXISTENCE, EtC. 405 it that might have been rendered for or against such other cor- poration if the merger had not occurred. Source. — Former §§39 and 40, redrafted. Subdivision 1 is from former § 39. The clause " and every right, privilege, interest or asset of conceivable value or benefit then existing which would inure to it under an unmerged existence " is adapted from Matter of Bergdorf, 206 N. Y. 309. Subdivisions 2 and 3 are from former § 40. EFFECT ON MERGED CORPORATION.— The merged corporation does not survive the merger or exist within or as a part of the other corporation. It remains a corporation for the single purpose of being sued upon and defend- ing against caxises of action existing against it at the time of the merger, and otherwise is non-existent. With the one exception it becomes rightless, propertyless and powerless. Matter of Bergdorf, 206 N. Y. 309, 315. RIGHT TO ACT AS EXECUTOR.— Where a trust company is named as executor of a will, but before the testator's death it is merged into another trust company, the latter is entitled to letters testamentary. By virtue of the statute the will is to be read as if the latter company were designated therein. Matter of Bergdorf, 206 N. Y. 309, aflf'g 149 App. Div. 530. FORMAL ASSIGNMENT OF GUARANTY UNNECESSARY.— The merged company need not execute a formal assignment to the other company of a guaranty held by it in order to entitle the latter to maintain an action thereon. The provisions of this section are sufficient to vest title to the cause of action. Bank of Long Island v. Young, 101 App. Div. 88. GOODWILL OF MERGED COMPANY.— It is not necessary to make allow- ance for the goodwill of the merged company, if it would add nothing to the assets in case of dissolution. Colby v. Equitable Trust Co., 124 App. Div. 262, aff'd 192 N. Y. 535. TAXATION OF STOCK OWNED BY MERGED CORPORATION.— Stock owned by the corporation which is merged into the other and transferred by it to the other is taxable in the manner specified in Tax Law, § 270. Atty.- Gen. Rep., Jan. 16, 1913. § 495. Issuance of new certificates of stock or shares. The corporation into which the other corporation or corpora- tions shall have been merged as provided in this article, may require the return of the original certificate or certificates held by each stockholder or shareholder in such other corporation or corporations and may issue in lieu thereof new certificates for such number of its own shares as such stockholder or shareholder may be entitled to receive under the merger agreement. Source. — 'Former § 37. 406 Banking Law. § 496. § 496. Bights of dissenting stockholders or shareholders. Any stockholder or shareholder not voting in favor of such agreement of merger at the meeting prescribed in section four hundred and ninety of this article, may at such meeting or within twenty days thereafter object to the merger and demand payment for his stock or shares; or, in the case of savings and loan asso- ciations or credit unions, if such shareholder be a borrower, he may demand liquidation of his indebtedness and cancellation of his shares. If the merger takes effect at any time after such demand, such stockholder or shareholder may, at any time within sixty days thereafter, apply to the supreme court at any special term thereof, held in the county wherein is situated the principal place of business of the corporation into which the other or others are .merged, for the appointment of three persons to appraise the value of his stock or shares or the amount of said indebtedness, if any. The court shall thereupon appoint such appraisers and designate the time and place of their first meeting, with such directions in regard to their proceedings as shall be deemed proper, and shall also direct the time and manner in which payment shall be made of the value of such stock or shares to such stockholder or shareholder or liquidation of such indebted- ness by him and cancellation of his stock or shares. The court may fill any vacancies in the board of appraisers. The appraisers shall meet at the time and place designated, and after being duly sworn to discharge their duties honestly and faithfully, they shall make and certify a written estimate of the value of such stock or shares, and the amount of such indebtedness, if any, at the time of the appraisal, and shall deliver one copy to the corporation and an- other to such stockholder or shareholder if demanded. The charges and expenses of the appraisers shall be paid by the corporation. When the corporation shall have paid the appraised value of such stock or shares, or if such stockholder or shareholder be a borrower as aforesaid, when he shall have paid the amount of his indebtedness as fixed by such appraisal, such stock or shares shall be cancelled and such stockholder or shareholder shall cease to be a member of said corporation or to have any interest in such stock or shares or in the corporate property, and such stock or shares may be held and disposed of by the corporation for its own benefit; and if such stockholder or shareholder be a borrower § 496. FOEFEITUEE OF CoEPOEATE EXISTENCE, EtC. 407 as aforesaid, proper instruments of acquittance shall be duly executed and delivered to him by the corporation and thereupon he shall be discharged from all further liability to the corporation. Source. — Former § 38. THIS SECTION IS NOT UNCONSTITUTIONAL aa depriving the dissent- ing stockholders of their property without due process of law. Colby v. Equit- able Trust Co., 192 N. Y. 535, aff'g 124 App. Div. 262. WHO IS A "STOCKHOLDER."— In Matter of Rogers, 102 App. Div. 466, it was held that the term " stockholder " as used in former § 38 meant the actual owner of stock and not the record holder of shares belonging to an- other. But in the present law, § 3, the term is defined as meaning, unless otherwise qualified, the holder of record. 408 Banking Law. §§ 500-502. ARTICLE XIII. Laws Repealed; Construction; When to Take Effect. Section 500. Laws repealed. 501. Construction. 502. When to take effect. § 500. Laws repealed. Of the laws enumerated in the schedule hereto annexed, that portion specified in the last column is hereby repealed. § 501. Construction. The provisions of this chapter shall be construed as a continu- ation of the provisions of chapter ten of the laws of nineteen hun- dred nine, as amended, modified or amended according to the lan- guage employed, and not as a new enactment. Source. — Gen. Constr. Law, § 95. § 502. When to take effect. This act, except the repeal of chapters lihree hundred forty-eight of the laws of nineteen hundred ten and three hundred ninety-three of the laws of nineteen hundred eleven, shall take efEect imme- diately ; and the repeal of chapters three hundred forty-eight of the laws of nineteen hundred ten and three hundred ninety-three of the laws of nineteen hundred eleven, shall take effect on November first, nineteen hundred fourteen. The act as originally introduced provided that the provisions relating to private bankers should become effective August 1, 1914, but before its enact- ment this date was changed to November 1, 1914. See notes to §§ 152, 161, 172. Schedule of Laws Repealed. 409 SCHEDULE OF LAWS EEPEALED. Revised Statutes. . . Part 1, chapter 20, title 20 All. Laws of Chapter Section 1782 35 AU 1804 117 All 1807 173 1 1812 , 239 59 R. L. 1813... 71 All 1815 32 All 1816 223 All 1816 14 All (fortieth session) 1817 263 2 1818 236 All 1824 240 All 1825 325 15, 16 1828 20 15, If 16 (2d Meet.) 1828 21 1,11145,216,220,263,412 (2d Meet.) 1829 94 All 1830 243 All 1830 295 All 1833 260 All 1834 7 All 1834 190 13 1835 46 All 1835 155 All 1835 262 All 1835 307 All 1837 20 All 1837 74 All 1837 235 All 1837 350 All 1837 450 All 1837 474 All 1838 51 All 1838 260 All 1839 30 All 410 Banking Law. Laws of Chapter Section 1839 . .. 347... 1-3 1839..... . .. 355... AU 1840 18... AU 1840 . .. 202... All 1840 . .. 363... All 1841 46 . . . All 1841 . .. 130... All 1841 . .. 292... All 1841 . .. 319... All 1842 3... All 1842 . .. 222... All 1842 ... . 247... All 1843 . .. 218... All 1844 . .. 41... , All 1844 . .. 239... All 1844 . .. 281... All 1845 . .. 114... All 1846 ... 97... All 1847 ... 160... All 1847 . .. 419... All 1847 ... 452 .. , All 1847 ... 478 .. , All 1848 ... 340.. All 1848 ... 344.. All 1849 ... 97... All 1849..... ... 226.. AU 1849 ... 313.. AU 1849 ... 437.. AU 1850 ... 91.. AU 1850 ... 251.. AU 1850 ... 331.. All 1851 ... 68.. AU 1851 ... 122.. All 1851 ... 164.. All 1851 ... 203.. AU 1853 ... 223.. All 1853 ... 250.. AU 1853 ..„ 257.. AU Schedule of Laws Repealed. 411 Laws of Chapter iSection 1853... . 492 ... All 1854 . 72 ... All 1854........ . 138 ... All 1854 . 185 ... All 1854 . 242 ... All 1855 . 69 ... All 1855 93 ... All 1855 . 336 ..., All 1857 . 103 ... All 1857 . 136 ... AU 1857 . 189 ... All 1857 . 370 ... All 1857 . 804 ... All 1858 . 132 ... AU 1858 . 136 ... All 1859 . 236 ... AU 1859 . 277 ... AU 1859 . 365 ... AU 1862 . 62 ... AU 1862 . 422 ... AU 1863 . 22 ... AU 1863 . 241 ... AU 1863 . 315 ... All 1863 . 372 ... AU 1864 . 113 ... AU 1865 . 97 ... AU 1865.. . 214 ... AU 1865 . 476 ... AU 1866.., . 26 . . . AU 1866.., . 348 ... AU 1866 . 564 ... AU 1867 . 32 ... AU 1867 . 191 ... AU 1867 . 475 ... All 1867 . 476 ... AU 1867.., . 861 ... AU 1868 . 845 ... AU 1869 . 213 ... AU 27 412 Banking Law. Laws of Chapter Section 1870 163 All 1871 456 All 1871 660 All 1871.. 693 All 1871 907 All 1872 820 20 1873 585 All 1874 126 All 1874 324 All 1875 50 All 1875 371 All 1875 564 All 1875 613 All 1877 10 All 1877 69 AU 1877 256 All 1878 96 All 1878 99 All 1878 274 All 1878 347 All 1878 372 All 1879 122 All 1879 247 All 1879 422 All 1879 424 All 1879 428 All 1879 437 AU 1879 442 All 1880 134 All 1880 202 All 1880 287 All 1880 567 All 1881 373 All 1882 191 All 1882 402 All 1882 409 1-311, 328 1883 273 All 1883 282 All Schedule of Laws Repealed. 413 Laws of Chapter Section 1883 . ., 338 ... All 1883 . .. 439 ... All 1884 ... 47 ... All 1884 . .. 48 ... All 1884 . . . 504 ... All 1885 . .. 329 ... All 1885 . .. 425 ... All 1885 . .. 477 ... All 1886 . . . 498 ... All 1886 . .. 564 . .'. All 1886 . .. 569 ... All 1886 . .. 575 ... All 1887 . .. 517 ... All 1887 . .. 518 ... All 1887 . .. 524 ... All 1887 . . . 546 ... All 1887 . .. 556 ... All 1888 . .. 277 ... All 1888 . .. 373 ... All 1889 ... 177 ... All 1889 . .. 414 ... All 1889 . .. 558 ... All 1890 ... 146 ... All 1890 . .. 429 ... All 1890 . .. 439 ... All 1890 . .. 506 ... All 1890 . .. 525 ... . All 1891 . .. 374 ... AU 1892 . .. 689 ... All 1893 . .. 313 ... All 1893 ... 314 ... All 1893 . .. 315 ... All 1893 . .. 337 ... All 1893 ... 408 ... All 1893 . .. 440 ... All 1893 ... 696 ... All 1894 ... 178 ... All 1894 ... 705 ... All 414 Banking Law. Laws of Chapter Section 1895 39... All 1895 ... 326... AU 1895 . .. 382... All 1895 ... 415... All 1895 .. 706... All 1895 ... 813... AU 1895 .. 929... All 1895 ... 930... All 1896..... .. 206... AU 1896 .. 452... AU 1896 .. 453... AU 1896 .. 454... AU 1896 .. 851... All 1897 .. 134... AU 1897 .. 386... All 1897 .. 441... AU 1898 .. 73... All 1898 98... AU 1898 .. 193... AU 1898 .. 236... AU 1898 .. 333... All 1898 .. 348... AU 1898 .., 410... AU 1898 .. 556... AU 1899 .. 386... AU 1899 .. 451... AU 1899 .. 704... AU 1900 .. 42... AU 1900 .. 89... AU 1900 .. 199... AU 1900 .. 240... AU 1900 .. 310... AU 1900 .. 552... AU 1900 .. 567... All 1901 .. 171... AU 1901 .. 253... AU Schedule of Laws Repealed. 415 Laws of Chapter Section 1901..,..,.. ,.. 328 ... All 1901 ,.. 406 ... All 1901 . . 443 ... All 1901 , . . 4Y2 ... All 1901 ,.. 503 ... All 1901 , .. 510 ... All 1901 , .. 660 ... All 1902 54 . . . All 1902 ... 78 ... All 1902 ... 145 ... All 1902 , .. • 360 ... All 1902 , .. 440 ... All 1902 . .. 598 ... All 1903 , ... 84 ... All 1903 . .. 160 ... All 1903 . .. 328 ... All 1903 . .. 640 ... All 1904 ... 479 ... All 1904 ... 492 ... All 1904 . .. 568 ... All 1904 , . .. 607 .. . All 1904 . .. 693 ... All 190,5 ., . .. 297 All 190,5 , . .. 333 ... All 190,5 . .. 394 All 1905 . .., 401 ... All 190,5 ... 414 . . . All 190,5 . .. 416 ... All 190,5 ..., 418 ... All 190,5 . .. 456 ... All 190,5 . .. 491 ... All 190,5 . .., 564 ... All 190,5 ... 604 ... All 190,5 . .. 649 .,.., All 190,5 ... 673 ... All 190,5 . .. 757 ... All 1906 . .. 337 ... All 416 E lANKiiirG Law. Laws of Chapter Section 1906 ,. . 432 ... All 1906 , .. 438 ... All 1906 ... 481 ... All 1906 .. 572 . . . All 1906 ... 573 ... All 1906 . . 581 . . . All 1906 . . 600 . . . All 1906 .. 601 . . . All 1907 . . 247 . . . All 1907 .. 408 . . . All 1907 .. 522 . . . All 1907 .. 612 . . . All 1908 .. 57 . . . All 1908 .. 119 ... All 1908 .. 120 ... All 1908 ... 121 1 1908 .. 122 . . . All 1908 .. 123 . . . All 1908 .. 124 . . . All 1908 .. 125 . . . All 1908 .. 143 . . . All 1908 .. 151 1 1908 .. 152 . . . All 1908 .. 163 . . . All 1908 .. 154 . . . All 1908 .. 155 . . . All 1908 .. 156 1 1908 .. 158 . . . All 1908 .. 169 ... All 1908 .. 184 . . . All 1908 .. 194 1 1909 .. 10 . . . All 1909 25 ... 150-154 1909 .. 223 . . . All 1909 .. 240 ... 2,3 1909 .. 294 . . . All 1909 .. 402 ... All 1909 ,. 410 . . . All Schedule of Laws Repealed. 417 Laws of Chapter Section 1909 ... 497 . . . All 1910 ... 126 . . . All 1910 ... 127 . . . All 1910 ... 348 . . . All 1910 ... 399 ... All 1910 . .. 452 . . . All 1911 . .. 200 ... All 1911 ... 371 . . . All 1911 ... 382 . . . All 1911 ... 393 . . . All 1911 ... 585 ... All 1911 ... 687 ... All 1911 ... 707 ... All 1911 ... 708 ... All 1911 ... 709 ... All 1911 .... 772 ... All 1911 ... 861 ... All 1912 ... 49 ... All 1912 ... 100 ... All 1912 ... 101 ... All 1912 ... 102 ... All 1912 ... 103 ... All 1912 ... 104 . . . All 1912 ... 192 ... All 1912 ... 212 ... All 1912 ... 237 ... All 1913 ... 94 ... All 1913 ... 103 ... All 1913 ... 113 ... All 1913 ... 317 ... All 1913 ... 416 ... AU 1913 ... 451 ... All 1913 ... 482 ... All 1913 ... 484 ... All 1913 ... 579 ... All 1913 ... 582 ... All 1913 ... 628 ... All 1913 ... 670 ... All 418 Banking Law. Code of Civil Procedure 746, last sentence. Code of Civil Procedure 752, last sentence. All of the laws in the foregoing list previous to Laws of 1909, ch. 10 (chapter 2 of the Consolidated Laws, constituting the "Banking Law") were repealed by that act, which is repealed by this chapter. The remainder of the laws repealed were amendments to the Banking Law, with the following exceptions : Laws of 1909, ch. 25, §§ 150-154, constituted Art. 10 of the General Business Law, relating to sellers of tickets for transportation to or from foreign countries. Laws of 1910, ch. 348, constituting Art. 3-a of the General Business Law relating to private banking. Laws of 1911, ch. 393, which amended Art. 3-a of the General Business Law. Laws of 1913, ch. 579, constituting Art. 5-a of the General Business Law which dealt with the subject of personal loan brokers. GENERAL STATUTES RELATING TO BANKING CORPORATIONS GENERAL CORPORATION lAW. § 1. Short title. This chapter shall be known as the " General Corporation Law," § 2. Classification of corporations. A corporation shall be either 1. A municipal corporation, 2. A stock corporation, or 3. A non-stock corporation. A stock corporation shall be either 1. A moneyed corporation, 2. A railroad or other transportation corporation, or 3. A business corporation. A non-stock corporation shall be either, 1. A religious corporation, 2. A membership corporation, or 3. Any corporation other than a stock corporation. A reference in a general law to a class of corporations described in accordance with this classification shall include all corporations theretofore formed belonging to such class. § 3. Definitions. 1. A " municipal corporation " includes a county, town, school district, village and city and any other territorial division of the state established by law with powers of local government. 2. A " stock corporation " is a corporation having a capital stock divided into shares, and which is authorized by law to dis- tribute to the holders thereof dividends or shares of the surplus profits of the corporation. A corporation is not a stock corpo- [419] 4'20 Geneeal Statutes. ration because of having issued certificates called certificates of stock, but which are in fact merely certificates of membership, and which is not authorized by law to distribute to its members any dividends or share of profits arising from the operations of the corporation. 3. The term " non-stock corporation " includes every corpora- tion other than a stock corporation. 4. A " moneyed corporation " is a corporation formed under or subject to the banking or the insurance law. 5. A " domestic corporation " is a corporation incorporated by or under the laws of the state or colony of New York. Every corporation which is not a domestic corporation is a foreign cor- poration, except as provided by the code of civil procedure for ■the purpose of construing su.ch code. 6. The term "directors," when used in relation to corpora- tions, shall include trustees or other persons, by whatever name known, duly appointed or designated to manage the affairs of the corporation. 7. The term " certificate of incorporation " shall include arti- cles of association or any other written instrument required by law to be filed, to effect the incorporation of a corporation, in- cluding a certificate copy of an original certificate of incorpora- tion filed for such purpose in pursuance of law. 8. The term " member of a corporation " shall include every person having a right to vote at a meeting of the corporation for the election of directors, other than a person having a right to vote only upon a proxy. 9. The term " office of a corporation " means its principal office within the state, or principal place of business within the state if it has no principal office therein. 10. The term " business of a corporation," when used with ref- erence to a non-stock corporation, includes the operations for the conduct of which it is incorporated. 11. The term "corporate law" or "laws," when used in any law forming a part of the consolidation of the general laws of the state of which this chapter is a part, means the general stat- utes of this state relating to corporations included in such consol- idation. General Coepoeation Law. 4:20a 12. The existence of an easement in real property acquired or reserved by a municipal corporation, a railroad corporation or other transportation corporation, shall not be deemed an encum- brance upon such real property under any law relating to invest- ments in mortgages upon real property by corporations, trustees, executors, administrators, guardians or other persons holding trust funds, but the effect of such an easement upon the real property which it affects, shall be taken into consideration in determining the value thereof. Amended by L. 1914, ch. 128. In effect April 6, 1914. Chap. 128 of L. 1914, added subd. 12. § 4. Qualifications of incorporators. A certificate of incorporation must be executed by natural per- sons, who must be of full age, and at least two-thirds of them must be citizens of the United States and one of them a resident of this state. This section shall not apply to a corporation formed by the reincorporation or consolidation of existing corporations, or to the reorganization of a corporation upon the sale of the property and franchises of a previously existing corporation or otherwise. § 6. Corporate names. 1. No certificate of incorporation of a proposed corporation having the same name as a corporation authorized to do business under the laws of this state^Yor a name so nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its incorporation, or of authorizing it to do business in this state; nor shall any corporation except a religious, charitable or benevolent corporation be authorized to do business in this state unless its name has such word or words, abbreviation, affix or prefix, therein or thereto, as will clearly in- dicate that it is a corporation as distinguished from a natural person, firm of copartnership; or unless such corporation uses with its corporate name, in this state, such an affix or prefix. A corporation formed by the reincorporation, reorganization or consolidation of other corporations or upon the sale of the property or franchises of a corporation, or a corporation acquir- ing or. becoming possessed of all the estate, property, rights, privileges and franchises of any other corporation or corporations 420b General Statutes. by merger, may have the sam.e name as the corporation or one of the corporations to whose franchises it has succeeded. No corporation shall be hereafter organized under the laws of this state, with the word " trust," " bank," " banting," " insurance," " assurance," " indemnity," " guarantee," " guaranty," " title," " causualty," " surety," " fidelity," " savings," " investment," " loan " or " benefit " as part of its name, except a corporation formed under the banking law or the insurance law. 2. No corporation, society or association, whether now existing or hereafter organized under or by virtue of the laws of this state, shall ever employ the words " Lucretia Mott " to designate, de- scribe or name any hospital, infirmary or dispensary, or any part thereof, or any similar institution. Amended Jby L. 1911, chap. 638; L. 1912, chap. 2, and L. 1913, chap. 24. § 7. Amended and supplemental certificates. If in the original or amended certificate of incorporation of any corporation, or if in a supplemental certificate of any corporation any informality exist, or if any such certificate contain any matter not authorized by law to be stated therein, or if the proof or acknowledgment thereof shall be defective, the corporators or di- rectors of the corporation may make and file an amended certificate correcting such informality or defect or striking out such unau- thorized matter; and the certificate amended shall be deemed to be amended accordingly as of the date such amended certificate was filed, and upon the filing of such an amended certificate of in- corporation, the corporation shall then for all purposes be deemed to be a corporation from the time of filing the original certificate. The supreme court may, upon due cause shown, and proof made, and upon notice to the attorney-general, and to such other persons as the court may direct, and upon such terms and con- ditions as it may impose, amend any certificate of incorporation which fails to express the true object and purpose of the cor- poration, so as to truly set forth such object and purpose. Geneeal Coepoeation Law. 420c When an amended or supplemental certificate is filed, an entry shall be made upon the margin of the index and record of the original certificate of the date and place of record of every such amended certificate. The amendment of a certificate under this section shall be with- out prejudice to any pending action or proceeding, or to any rights previously accrued. § 10. Limitation of powers; provisions of certificate. 1. No corporation shall possess or exercise any corporate powers not given by law, or not necessary to the exercise of the powers so given. 2. The certificate of incorporation of any corporation may con- tain any provision for the regulation of the business and the con- duct of the affairs of the corporation, and any limitation upon its powers, or upon the powers of its directors and stockholders, which does not exempt them from the performance of any obligation or the performance of any duty imposed by law. § 11. Grant of general powers. Every corporation as such has power, though not specified in the law under which it is incorporated: 1. To have succession for the period specified in its certificate of incorporation or by law, and perpetually when no period is specified. 2. To have a common seal, and alter the same at pleasure. 3. To acquire by. grant, gift, purchase, devise or bequest, to hold and to dispose of such property as the purposes of the cor- poration shall require, subject to such limitations as may be pre- scribed by law. 4. To appoint such officers and agents as its business shall require, and to fix their compensation, and 5. To make by-laws, not inconsistent with any existing law, for the management of its property, the regulation of its affairs, 420d GrEJSTERAL STATUTES. and the transfer of its stock, if it has any, and the calling of meetings of its members. Such by-laws may also fix the amount of stock, which must be represented at meetings of the stock- holders in order to constitute a quorum, unless otherwise pro- vided by law. By-laws duly adopted at a meeting of the mem- bers of the corporation shall control the action of its directors. Wo by-law adopted by the board of directors regulating the elec- tion of directors or ofiicers shall be valid unless published for at least once a week for two successive weeks in a newspaper in the county where the election is to be held, and at least thirty days before such election. Subdivisions four and five of this isection shall not apply to municipal corporations. § 13. Acquisition of additional real property. When any corporation, except a life insurance corporation, shall have sold or conveyed any part of its real property, the supreme court may, notwithstanding any restriction of a general or special law, authorize it to purchase and hold from time to time other real property, upon satisfactory proof that the value of the property so purchased does not exceed the value of the property so sold and conveyed within the three years next preceding the application. § 14. Acquisition of property without the state. Any domestic corporation transacting business in other states or foreign countries may acquire and dispose of such property as shall be requisite for such corporation in the convenient trans- action of its business. Any domestic corporation establishing or maintaining a charitable, philanthropic or educational institution within this state may also, carry on its work and establish or main- tain one or more branches of such institution or an additional institution or additional institutions in any other state, the Dis- trict of Columbia or in any part of the territories or dependencies of the United States of America or in any foreign country and for either of said purposes may take by devise or bequest, hold, purchase, mortgage, sell and convey or otherwise dispose of such real and personal property without this state as may be requisite therefor. But nothing in this section contained shall be construed as exempting from taxation property to any additional amount than is now allowed to such corporation under existing laws. General Cobpoeation Law. 421 § 22. Prohibition of banking powers. No corporation, domestic or foreign, other than a corporation formed' under or subject to the banking laws of this state or of the United States, except as permitted by: such laws, shall by any implication or construction be deemed to possess the power of carrying on the business of discQunting bills, notes or other evidences of debt, of receiving deposits, of buying and selling bills of exchange, or of issuing bills, notes or other evidences of ddbt for circulation as money, or of engaging in any other form of banking; nor shall any such corporation, except an express company having contracts with railroad companies for the opera- tion of an express service upon the lines of such railroad com- panies, or a transatlantic steamship company, or a telegraph company, or a corporation incorporated prior to the year eighteen hundred and fifty, to promote the welfare of emigrants, possess the power of receiving money for transmission or of transmitting the same, by draft, traveler's check, money order or otherwise. Amended by L. 1911, chap. 771. § 23. Qualification of members as voters. Unless otherwise provided in the certificate of incorporation, every stockholder of record of a stock corporation shall be entitled at every meeting of the corporation to one vote for every share of stock standing in his name on the books of the corporation ; and at every meeting of a non-atock corporati.on, every member, unless disqualified by the by-laws, shall be entitled to one vote. The stock- holders of a stock corporation, by a by-law adopted by a vote at any annual meeting, or at any special meeting duly called for S|Ueh purpose, may prescribe a period, not exceeding forty days prior to meetings of the stockholders, during which no transfer of stock on the books of the corporation may be made. Except in cases of express trust, or in which other provision shall have been made by vpritten agreement between the parties, the record holder of stock which shall be held by him as security, or which shall actually belong to another, upon demand therefor and payment of necesr sary expenses thereof, shall issue to such pledgor or to such actual owner of such stock, a proxy to vote thereon. 'No member of a corporation shall sell his vote or issue a proxy to vote to any 422 Geneeal Statutes. person for any sum of money or any thing of value. The books and papers containing the record of membership of the corpora- tion shall be produced at an.y meeting of its members upon the request of any member. If the right to vote at any such meeting" shall be challenged, the inspectors of election, or other persons presiding thereat, shall require such; books, if they can be had, to be produced as evidence of the right of the person challenged to vote at such meeting, and all persons who may appear from such books to be members of the corporation may vote at ^uch meeting in person or by proxy, subject to the- provisions of this chapter. § 26. Proxies. Every member of a corporation, except a religious corporation, entitled to vote at any meeting thereof may so vote by proxy. IvTo officer, clerk, teller or bookkeeper of a corporation, formed under or subject to the banking law shall act as proxy for any stockholder at any meeting of any such corporation. Every proxy must be executed in writing by the member him- self, or hj his duly authorized attorney. No proxy hereafter made shall be valid after the expiration of eleven months from the date of its execution unless the member executing it shall have speci- fied therein the length of time it is to contin,ue in force, which shall be for some limited period. Every proxy shall .be revocable at the pleasure of the person executing it ; but a corporation having no capital stock may prescribe in its by-laws the persons who may act as proxies for members, and the length of time for which proxies may be executed. § 27. Challenges. Every member of a corporation offering to vote at any election or meeting of the corporation shall, if required by an inspector of election or other officer presiding at such election or meeting, or by any other member present, take and subscribe the following oath : " I do solemnly swear that in voting at this election I have not, either directly, indirectly or impliedly received any promise or any sum of money or any thing of value to influence the ^ving of my vote or votes at this meeting or as a consideration therefor." Any person offering to vote as proxy for any other person shall Ge:s-eeal Coupoeatiok" Law. 423 present kis proxy and, if so required-, take and suibseribe the fol- lowing oath ; ^' I do solemnly swear that I have not, either directly, indirectly or impliedly, given any promise or any Siiim of money or any thing of value to induce the giving of a proxy to me to vote at this election, or received any promise or any sum of money or any thing of value to influence the giving of my vote at this meeting, or as a consideration therefor." The inspectors or per- sons presiding at the election may administer such oath, and all such oaths and proxies shall be filed, in the office of the corporation. § 28. Effect of failure to elect directors. If the directors shall not be elected on the day designated in the by-laws, or by law, the corporation shall not for that reason be dis- jiolved; but every director shall continue to hold his office and discharge his duties until his successor has been elected. § 29. Mode of calling special election of directors. If the election has not been held on the day so designated, the directors shall forthwith call a meeting of the members of the cor- poration for the pfurpose of electing directors, of which meeting notice shall be given in the same manner as of the annual meeting for the election of directors. If such meeting shall not be so called within one month, or, if held, shall result in a failure to elect directors, any member of the corporation may call a meeting for the purpose of electing directors by publishing a notice of the time and- place of holding such meeting at least once in each week for two successive weeks immediately preceding the election, in a newspaper published in the county where the election is to be held and in such other man- ner as may be prescribed in the hy-laws for the publication of notice of the annual meeting, and by serving upon each member, either personally or by mail, directed to him at his last Imovm post-cffice address, a copy of such notice at least two weeks before the meeting. § 30. Mode of conducting special election of directors. Such meeting shall be held at the office of the corporation, or if it has none, at the place in this state where its principal business 28 424 Geneeal Statutes. has been transacted, or if access to such office or place is denied or can n.ot be had, at some other place in the city, village or town where such office or place is or was located. At such meeting the members attending shall constitute a quo- rum. They may elect inspectors of election and directors and adopt by-laws providing for future annual meetings and election of directors, if the corporation has no such by-laws, and transact any other business which may bQ transacted at an aryiual meeting of the members of the corporation. § 37. Extension of corporate existence. Any domestic corporation at any time before the expiration thereof, may extend the term of its existence bey.ond the time specified in its original certificate of incorporation, or by law, or in any certificate of extension of corporate feistence, by the consent of the stockholders owning ■two'-thirds in amount of its capital stock, or if not a stock corporation, by the consent of two-thirds of its members, which consent shall be given either in writing or by vote at a special meeting of the stockholders .called for that purpose, upon the same notice as that required for the annual meetings of the corporation ; and a certificate under the seal of the corporation that such consent was given by the stockholders in writing, or that it was given by vote at a meeting as aforesaid, shall be subscribed and acknowledged by the president or a vicenpr^ident, and by the secretary or an assistant secretary of the corporation, and if a corporation formed under or subject to the banking law shall be filed in the office of the superintendent of banks, if an insurance corporation, in the office of the superintendent of insurance, and otherwise in the office of the secretary of state, -and shall by such officer be duly recorded and indexed in a book specially provided therefor, and a certifijed copy of such certificate, with a certificate of such officer of such filing and record, or a duplicate original of such certificate, shall be filed and similarly recorded and in- dexed in the office of the clerk of the county wheirein the corpora- tion: has its principal place of business, and shall be noted in the margin of the record of the original certificates of such corporation, if any, in such offices, and thereafter the term of the existence of such corporation shall be extended as designated in such certificate. The certificate of incorporation of any corporation whose dura- Geneeal Coepoeation Law. 425 tion is limited by such certificate or by law, may require that the consent of the stockholders owning a greater percentage than two- thirds of the stock, if a stock corporation, or of more than two- thirds of the members, if a non-stock corporation, shall be requisite to effect an extension of corporate existence as authorized by this section. Amended by L. 1913, ch. 306. § 38. Revival of corporate existence. If the term of existence of any domestic corporation shall have expired and it shall be made satisfactorily to appear to the supreme court that such corporation was legally organized pursuant to any law of this state, and that it shall have issued its bonds payable at a date beyond the date fixed in its charter or certificate of incorpora- tion for the expiration of its corporate existence, and such bonds shall be unmatured and unpaid, or, if a bank, incorporated under a general law of this state, that shall have issued any other obliga- tions or shall have incurred any other indebtedness which at the date of the application shall be satisfied or unpaid, the supreme court may, lUpon the application of any person interested and upon such notice to such other parties as the court may require, by order, authorize the fiding and recording of a certificate re- viving the existence of such corporation, upon such conditions and with such limitations as such order shall specify, and ex- tending such corporate existence for a term not exceeding the term for which it was originally incorporated. Upon filing and recording such certificate in the same manner as certificates of extension of corporate existence duly issued before the expira- tion of the existence of a domestic corporation are authorized by law to be filed and recorded, such corporate existence shall be revived and extended in pursuance of the terms of such order, b;ut such revival and extension shall not affect any litigation com- menced after such expiration and pending at the time of such revival. Amended by L. 1911, chap. 63. § 39. Approval of certificates of extension or revival; when required. In the case of a corporation formed under or subject to the bank- ing law, no certificate of extension or revival shall be filed or re- 426 Geneeal Statutes. corded unless it shall have indorsed thereon the -written approval of the superintendent of banks; or, if an insurance corporation, unless it shall have indorsed thereon the -written approval of the superintendent of insurance ; andj if a turnpike or bridge corpora- tion, it shall not be filed unless it shall have indorsed thereon or annexed thereto a certified copy of a resolution of the board of supervisors of each county in vs^hich such turnpike or bridge is located, approving of and authorizing such extension. § 60. Petition by eorporatioE to change name. A petition to assume another corporate name may be made by a domestic corporation, whether incorporated by a general or special law, to the supreme court at a special term thereof, held in the judicial district in which its principal business office shall be situated,' or, if it be other than a stock corporation, at a special . tenn held in the jiudicial district in which its certificate of incor- poration is filed or recorded, or in which its principal property is situated, or in which its principal operations are or theretofore have been conducted. If it be a banking, insurance or railroad corporation, the petition must be authorized by a resolution of the directors of the corporation, and approved if a banking corpora- tion, by the superintendent of banks; if an insurance corporation by the superintendent of insurance, and if a railroad corporation, by the public service commission. The petition to change the name of any other corporation must have annexed thereto a certificate of the secretary of state, that the name which such corporation proposes to assume is not the name of any other domestic cor- poration or a name which he deems so nearly resembling it, as to be calculated to deceive. Amended byy unani- mous consent without a meeting, in which case there shall be filed in the offices herein specified the unanimous consent of the stock- holders in writing, signed by them, or their duly authorized proxies, but no such consent shall be valid unless: there is annexed thereto an affidavit of the custodian of the stock book of such cot- poration stating that the persons who have signed such consent, either in person or by proxy, are the holders of record of the entire capital stock vi said corporation issued and outstanding. If a corporation foirmed imder or subject to the banking law, the consent of the Siuperintendent of banks, and if an insurance cor- poration, the consent of the superintendent of insurance, shall be first obtained to such increase or reduction of the number of directors. This section shall apply to any stock corporation whether organized under a general or special law, and the num- ber of directors may be increased as hereby provided notwithstand- ing the maximum nimiber of directors now prescribed by law. If the number of directors be increased, the additional directors authorized by such increase shall be elected by the votes of a majority of the directors in office at the time of the increase. If the original or an amended certificate of incorporation of the corporation shall provide that the directors shall be divided into two or moire classes, whose terms of c&ce shall respectively expire at different times, the additional directors shall be divided among such classes as nearly as p'ractioable in proportion to the respective numbers of directors constituting each class prior to such increase. Amended by L. 1909, chap. 421. Stock Coepoeatiojst Law. 435 § 27. When acts of directors void. When the directors of any corporation for the first year of its corporate existence shall hold over and continue to be directors after the first year, because of their neglect or refusal to adopt the by-lavsrs required to enable the stockholders to hold the annual election for directors, all their acts and proceedings while so hold- ing over, done for and in the name of the corporation, designed to charge upon it, any liability or obligation for the services of any such director, or any officer, or attorney or counsel appointed by them, and every such liability or obligation shall be held to be fraud|ulent and void. § 28. liability of directors for making unauthorized dividends. The directors of a stock corporation shall not make dividends, except from the suiplus profits, arising from the business of such corporation, nor divide, withdraw or in any way pay to the stock- holders or any of them, any part of the capital of such corporation, or reduce its capital stock, except as authorized by law. In case of any violation of the provisions of this section, the directors under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large upon the minutes of such directors at the time, oi' were not present when the same happened, shall jointly and severally be liable to such corporation and to the creditors thereof to the full amount of any loss sustained by such corporation or its creditors respectively by reason of such withdrawal, divisiooi or reduction. But this section shall not prevent a division and dis- tribution of the assets of any such corporation remaining after the payment of all its debts and liabilities upon the dissolution of such corporation or the expiration of ita charter; nor shall it prevent a corporation from accepting shares of its capital stock in complete or partial settlement of a debt owing to the corporation, which by the board of directors shall be deemed to be bad or doubtful. § 30. Officers. The directors of a stock corporation may appoint from their number a president, and may appoint a secretary, treasurer, and oth«r officers, agents and employees, who shall respectively have 4:36 GrENEEAL Statutes. such powers and perform such duties in the management of the property and affairs of the corporation, subject to the control of the directors, as may be prescribed by them or in the by-laws. The directors may require any such officer, agent or employee to give security for the faithf|Ul performance of his duties, and may remove him at pleasure. The policyholders of an insurance cor- poration shall be eligible to election or appointment as its officers. § 31. Inspectors and their oath. The inspectors of election of every stock corporation shall be appointed in the manner prescribed in the by-laws, but the inspec- tors of the first election of directors and of all previous meetings of the stockholders shall be appointed by the board of directors named in the certificate of incorporation. No director or officer of a moneyed corporation shall be eligible to election or appoint- ment as inspector. Each inspector shall be entitled to a reason- able compensation for his services, to be paid by the corporation, and if any inspector shall refuse to serve, or neglect to attend at the election, or his office become vacant, the meeting may appoint an inspector in his place unless the by-laws otherwise provide. The inspectors appointed to act at any meeting of the stockholders shall, before emtering upon the discharge of their duties, be sworn to faithfully execute the duties of inspector at s(uoh meeting with strict impartiality, and -accordiag to the best of their ability, and the oath so taken shall be subscribed, by them, and immediately filed in the office of the clerk of the county in which such election or meeting shall be held, with a certificate of the result of the vote taken thereat. § 35. Liability of officers for false certificates, reports or public notices. If any certificate or report made or public notice given by the officers or directors of a stock corporation shall be false in any material representation, the officers and directors signing the same shall jointly and severally be personally liable to any person who has become a creditor or stockholder of the corporation upon the faith of any such certificate, report, notice or any material repre- sentation therein to the amount of the debt contracted upon the Stock Coepoeation Law. 437 faith thereof if not paid when djue, or the damage sustained by any purchaser of or subscriber to its stock upon the faith thereof. The liability imposed by this section shall exist in all cases where the contents of any such certificate, report or notice or of any material representation therein sball have been communicated either directly or indirectly to tbe person so becoming a creditor or stockholder and he became such creditor or stockholder upon the faith thereof. No action can be maintained for a cau^e of action created by this section unless brought within two years from the time the certificate, report or public notice shall have been made or given by the officers or directors of such corporation. § 60. Issue and transfers of stock. The stock of every stock corporation shall be represented by certificates prepared by the directors and signed by the president or vice-president and secretary or treas,urer and sealed with the seal of the corporation, and shall be transferable in the manner prescribed in this chapter and in the by-laws. No share ^all be transferable imtil all previous calls thereon shall have been fully paid in. § 51. Transfers of stock by stockholder indebted to corporation. If a stockholder shall be indebted to the corporation, the direc- tors may refuse to consent to a transfer of his stock until such indebtedness is paid, provided a copy of this section is written oi printed upon the certificate of stock. § 62. Increase or reduction of capital stock. Any domestic corporation may increase or reduce its capital stock in the manner herein provided, but not above the maximum or below the minimum, if any, prescribed by general law governing corporations formed for similar purposes. If increased, the holders of the additional stock issued shall be subject to the same liabilities with respect thereto as are provided by law in relation to the original capital; if reduced, the amount of its debts and liabilities shall not exceed the amount of its reduced capital, unless an insurance corporation, in which case the amount of its debts and liabilities shall not exceed the amount of its reduced, capital and other assets. The owner of any stock shall not be 438 Geneeax Statutes. §§ 63, '64. relieved from any liability existing prior to the reduction of the capital stock of any stock corporation. If a banking corporation, whether the capital be increased or reduced, its assets shall at least be equal to its debts and liabilities and the capital stock, as increased or reduced. A domestic railroad corporation may in- crease or reduce its capital stock in the manner herein provided, notvfithstanding any provision contained herein, or in any general or special law fixing or limiting the amount of capital stock which may be issued by it. § 68. Notice of meeting to increase or reduce capital stock. Every such increase or reduction must be authorized either by the unanimous consent of the stockholders, expressed in writing and filed in the oiEce of the secretary of state and in the ofl3.ce of the clerk of the county in which the principal business ofl&ce of the corporation is located, or by a vote of the stockholders owning at least a majority of the stock of the corporation, taken at a meeting of the stockholders specially called for that purpose in the manner provided by law or by the by-laws. Notice of the meeting, stating the time, place and object, and the amount of the increase or reduction proposed, si^ed by the president or a vice-president and the secretary, shall be published once a week, for at least two successive weeks, in a newspaper in the county where its principal business office is located, if any is published therein, and a copy of such notice shall be duly mailed to each stockholder or member at his last-known post-office address at least two weeks before the meeting or shall be personally served on him at least five days before the meeting. § 64. Conduct of such meeting; certificate of increase or reduction. If, at the time and place specified in the notice, the stockholders shall appear in person or by proxy in numbers representing at least a majority of all the shares of stock, they shall organize by choosing from their number a chairman and secretary, and take a vote of those present in person or by proxy, and if a sufficient number of votes shall be given in favor of such increase or reduc- tion, or if 'the same shall have been authorized by the unanimous § 64. Stock Coepoeatiobt Law. eonsent of atcxMioldera expressed in writing signed by tlaem or their duly autkorized proxies, a certificate of tke proceedings stow, ing a compliance with, the provisions of this chapter, the amount of capital theretofore authorized, and the proportion thereof ac- tually issued, and the amount of the increased or reduced capital stock, and in case of the reduction of capital stock the whole amount of the ascertained debts and liabilities of the corporation, shall be made, signed, verified and acknowledged by the chairman and secretary of the meeting, and filed in the office of the clerk of the county where its principal place of business shall be located, a duplicate thereof in the office of the secretary of state, and, if a cor|HDiration farmed umder or subject to the banking law, a tripli- eaite theireof. in the office of the STnrperinteBdent of banks, and if an insurance corporation,, a triplicate thereof in the ofiice of the superimtendent of insurance. In ease off a reduction of the capital stocik, except of a railroiad corporation or a moneyed corporation, such eertifiea-te or consent hereinafter provided for shall have indofrsedl thereon the approval of the comptroller, to the effect that the reduced capital is sufficient for the proper purposes of the corporation,, and is in excess of its ascertained debts and liabili- ties; and in ease of the increase or reduction of the capital stock of a railroad corporation or a moneyed corporation, the certificate or the unanimous consent of stockholders, as the case may be, shall have indorsed thereon the approval of the public service commis- sion having juriadietion thereof, if a railroad corporation ; of the superintendent of banks, if a corporation formed under or subject to the banking law, and of the superintendent of insurance, if an insurance corporation. When the certificate herein provided for, or the unanimous consent of stockholders in writing, signed by them or their duly authorized proxies, approved as aforesaid, has been filed, the capital stock of such corporation shall be increased or reduced, as the case may be, to the amount specified in such certificate or consent. The proceedings of the meeting at which such increase or reduction is voted, or, if such increase or reduc- tion shall have been authorized by unanimous consent without a meeting, then a copy of such consent shall be entered upon the minutes of the corporation. If the capital stock is reduced, the amount of capital over and above the amount of the reduced 29 438b General Statutes. capital shall, if the meeting or consents so determine or provide, be returned to the stockholders pro rata, at such times and in such manner as the directors shall determine, except in the case of the reduction of the capital stock of an insurance corporation, as an alternative to make good an existing impairment. Amended by L. 1913, ch. 305. TAX LAW § 4. Exemption from taxation. The following property shall be exempt from taxation : 14. The deposits in any bank for savings vphich are due de- positors, the accumulations in any domestic life insurance corpo- ration, held for the exclusive benefit of the insured, other than real estate and stocks, novf liable for taxation; the accumulations of any incorporated co-operative loan association upon the shares of such association held by any person ; and personal property of any corporation, person, company or association transacting the busi- ness of fire, casualty, or surety insurance in this state equal in value to the unearned premiums required by the laws of this state, or the regulations of its insurance department, to be charged as a liability. !§ 13. Stockholders of bank taxable on shares. The stockholders of every bank or banking association organ- ized under the authority of this state, or of the United States, shall be assessed and taxed on the value of their shares of stock therein ; said shares shall be included in the valuation of the per^ sonal property of such stockholders in the assessment of taxes in the tax district where such bank or banking association is located, and not elsewhere, whether the said stockholders reside in said tax district or not. § 14. Place of taxation of individual bank capital. Every individual banker shall be taxable upon the amount of capital invested in his banking business in the tax district where the place of such business is located and shall, for that purpose, be deemed a resident of such tax district. Tax Law. 439 § 23. Banks to make report. The chief fiscal officer of every bank or banking association organized under the authority of this state, or of the United States, shall, on or before the first day of July, in each year, furnish the assessors of the tax district in which its principal office is located a .statement under oath of the condition of such bank or banking association on the first day of June next p're- ceding, stating the amount of its authorized capital stock, the number of shares and the par value of the shares thereof, the amount of stock paid in, the amount of its surplus and of its undi- vided profits, if any, a complete list of the names and residences of its stockholders and the number of shares held by each. In case of neglect or refusal on the part of any bank or banking association to report as herein prescribed, or to make other or further reports as may be required, such bank or banking associa- tion shall forfeit the S|Um of one hundred dollars for each failure, and the additional sum of ten dollars for each day such failure continues, and an action therefor shall be prosecuted by the county treasurer of the county in which such bank or banking association so neglecting or refusing to report is located, and in the city of New York by the receiver of taxes thereof. There shall^ in addi- tion to such report, be kept in the office of every such bank or banking association a full and correct list of the names and resi- dences of all stockholders therein, and of the number of shares held by each, and such lists shall be subject to the inspection of the assessors at all times. The list of stockholders furnished by such bank or banking association shall be deemed to contain the names of the owners of such shares as are set opposite them, respectively, for the purpose of assessment and taxation. § 24. Bank shares, how assessed. In assessing the shares of stock of banks or banking associations organized under the authority of this state or the United States, the assessment and taxation shall not be at a greater rate than is made or assessed upon other moneyed capital in the hands of individual citizens of this state. The value of each share of stock cf each bank and banking association, except such as are in liqui- dation, shall be ascertained and fixed by adding together the 440 Geneeal Statutes. amotmt of the capital stock, surplus and undiTided' prefits d suda. bank, or banking association and by dividing tbe result by the rnmiber of outstaaiding shares of sneh bank oar banking aaso- ciation. The value of each share of stock in each bank or banking association in Idquidation shall b© ascertained' amA fixed hj divid- ing the actual assets of such bank or banking association by the number of outstanding shares of such bank or banking asso- ciatioitt. The rate of tax. upon the shares e£ stock of banks and bamking associations ahaO.1 be one per eentum upon the value thesreof, as ascertained and fixed in the manner hereinbefore pro- vided, and the owners of the stock of banks and tanking associa- tions shall be entitled to no deduction from the taxable value of their shares- because of the personal indebtedness of auch owners, or for any other reason whatsoever. Complaints in rela- tion to the assessments of the shares of stock of banks and bank- ing associations made under the provisions of this article' shall be heard and determined as provided in section thirty-seven of this chapter. The said tax shall be in lieu of all other taxes whatsoever for state, county or local purposes upon the said shares of atoeky and mortgages, judgments and other choses in action an in organisation certificates— (Continued) : land bank 421 personal loan companies 340 safe- deposiit companies 315 savings and loan associations 375 trust companies 180 qualifications and disqualifications: banks 133 credit, unions 465 land hank , / 430 personal, loan companies ^.. ^ 354 safe deposit companies 325 ^STinga, and loan associations 405 trust companies 210 quorum : banks 100, 129 investment companies 290 personal loan companies 340, 357 safe deposit companies 315 trust companies 180, 214 reincorporated investment company 309 reincorporated personal loan association 343 restrictions on: banks 130 investment companies 301 savings and loan associations 409 trust companies 222 restrictions on loans to: banks 108 credit unions 454 trust companies 190 term of office: banks 125 credit unions 467 personal loan companies 356 safe deposit companies 327 savings and loan associations 376 trust companies 208 vacancies : banks 123, 126 credit unions • 465 land bank 430, 462 personal loar companies 354 safe deposit companies 325 savings and loan associations 405, 407 trust companies 210, 212 33 486 General Ii^dex. (References are to Bectlonii.) Discretion: powers of superintendent 48 Dissolution: order terminating corporate existence 79 Dividend Period: definition of 3 Dividends: amortization of securities (see Amortization of Securities). to creditors, in liquidation 78 to depositors of savings banks 238, 256 to shareholders: credit vinions 453, 458, 459 savings and loan associations 378, 382, 392, 395 to stockholders: banks 118, 133 personal loan companies 350, 365 trust companies 204, 218 unclaimed dividends ( see Unclaimed Deposits, Etc. ) . Dormant Accounts (see Unclaimed Deposits, Etc.). Earnings : calculation of: banks 116 credit unions 458 savings and loan associations 394 savings banks 254 trust companies 202 net earnings (see Net Earnings). Election of Officers (see Officers). Employees: acts of, as prima facie evidence against principal 372 of banking department: appointment, compensation, etc 13 how compensation paid 17 of superintendent in liquidation 62, 63 restrictions on: banks 139 investment companies 301 savings and loan associations 409 trust companies 222 restrictions on loans to: banks 108 trust companies 190 General Index. 487 (References are to sections.) Employees— (Continued): savings banlcs: fidelity bonds 270 pensions 271 Encioachments on Powers (see Prohibitions). Encroachments on Reserves: assessments for: by superintendent 30 liability of bank. 112 liability of private banker 166 liability of trust company 197 order by superintendent to make good 56 to be made good before declaring dividend: banks 118 trust companies 204 Endorsement: when regarded as loan i 369, 373 Estimated Market Value: calculation of guaranty fund: savings and loan associations 393 savings banks 253 list of legal investments for savings banks 53 reports of savings banks to superintendent 273 Evidence (see Burden of Proof; Presumptive Evidence). Examinations by Directors or Trustees: banks 130, 131 savings banks 272 trust companies 215, 216 Examinations by Superintendent: corporations, etc., subject to banking law 39 exempted private banker 26 foreign reserve depositary 38 investigations (see Investigations by Superintendent). refusal to submit to, as ground for taking possession 57 savings banks: result to be certified on records 40 Examiners: appointment, compensation, etc 13 certification of examination of savings bank 40 compensation when acting as special deputy 63 examinations of corporations, etc 39 how compensation paid 17 reports presumptive evidence 59 48.8 Gbioieal Index. ^BiefexesieeS' axe to> i»eet£o»».) Examiners — (Continued) : reports to superintendent 41 rsatrietione- on ; 15 retdremrenit: on- pension 16 Executions: exemptions from (see Exemptions). Executive Committee: banks . . . 129 personal loan companies 357 sasvings- banks' 264 trust companies" 214 Executors (see also Administraitois) :. included in definiition of priiiate banker. 2 liability; aa stockbolders; banks 120 safe deposit companies 322 trust' companies 206 power of foreign corporation to act as ^ 223 trust companies as 185, 188 Exemptions: fS:om execution and taxation: credit unions 461, 474 land bank 438 savings and loan, associations ._ 411 private bankers filing afiSdavits , 160 superintendent exempt from filing and recording fees 71 Expense Fund of Savings Bank: creation 235 deposit of, by incorporators 233 dividends to contributors 256 investigation by superintendent 23 return of 236 statement in organization certificate 230 Expenses: calculation of net earnings: banks ,. 116 credit unions 458 savings and loan associations 394 savings banks 254 trust companies 202 of banking department (see Banking Department). of land bank 429 Gekekal Ihdex. 489 (He£e3reiLces am to sections.) Expenses — (Continued) : ctf liquidation (see Liquidation by Superintendent), savings and loan aesociations: restrictions on payment of ,. 390 Express Company.: not a private banker 2 EKtensions of Time by S.uperintendent 49 Federal Reserve Bank: exercise of trust company povcers .,. ,223 power to become member: banks . 106 trust companies 185 prohibitions against unauthorized banking 140 reserves of members: banks 112 trust companies 197 use of sign or word indicating bank 141 Federal Reserve Notes: excluded from reserves: banks 112 trust companies 197 Fees: credit unions 453, 457 savings and loan associations 376, 378 superintendent : acceptance of service for foreign corporations 28 copies and certifications 18 exemption of, from filing and recording fees 71 license, for foreign bank 145 payment into state .treasury 19 Fidelity Bonds: officers and employees of savings banks 270 Fiduciaries : liability as stockholders: banks 120 safe deposit companies ,. . 322 trust conipanies , 206 ■trust companies as 185, 18& Filing for Examination: defective certificates not to be filed 21 organisation or application certificate 22 private banker's affidavit 25 time within which authorization certificate must issue 24 490 Geneeal Index. (References Are to sections.) Fines: credit unions 4'53, 454 savings and loan associations 378, 389 Fiscal Agent: powers of trust company 185 Foreien Branches: banks 110 trust companies 195 Foreign Corporations: application certificate ( see Application Certificate ) . assessments for expenses of banking department 17 conditions precedent to engaging in business: banking corporations 144, 145 investment companies 303, 304 trust companies 223 deposit of securities with superintendent: investment companies 33, 306 examinations by superintendent 39 licenses 27 penalties (see Penalties and Forfeitures). power to act as executor or trustee 223 prohibitions : exercise of investment company powers 302 exercise of trust company powers 223 transacting savings and loan business 420 unauthorized banking 140 reports to superintendent: banking corporations 147 investment companies 298 reserve depositaries 38 revocation of license i 29 effect on banking corporations 146 effect on investment companies 308 rights and privileges under license: banking corporations 146 foreign investment companies 305 submitting agents' names to superintendent: banking corporations 144 investment companies 307 superintendent as attorney to accept service of process 28 designation by bank 145 designation by trust company 223 designation by investment company 304 General Index. 491 (References are to sections.) Forfeitures (see Penalties and Forfeitures) ; corporate rights forfeited by non-user 485 Governor: appointment of superintendent 10 Gross Earnings: calculation of (see Earnings). Guaranty: •when regarded as loan 369, 373 Guaranty Fund: credit unions 457, 459 definition of 3 land bank 427 savings and loan associations 392, 393, 395 savings banks (see also Initial Guaranty Fund) ..252, 253, 255, 256, 258 Guardian: trust company as 185, 188 Habitual Drunkards: trust company as committee of 185, 188 Immunity: offender testifying as witness 370 Impairment of Capital: as ground for taking possession 57 assessment of stockholders: banks 121 safe deposit companies 323 trust companies 207 eflFect on right to declare dividends: banks 118 credit unions 459 trust companies 204 order by superintendent to make good 56 Incorporation: powers and duties of superintendent 20-24 requirements in case of: banks 100 credit unions 450 investment companies 290 land bank 421 personal loan companies 340 safe deposit companies 315 savings and loan associations 375 savings banks 230 trust companies • ISO 4*92 General Index. (References are to sections.) Incorporators: banks 100, 101 credit unions 490 investigation by superintendent as to fitness - 23 investment companies 290 personal loan companies 340 safe deposit companies 315 savings and loan associations 375 savings banks - 230, 231 agreement as to expense fund 235 agreement as to initial guaranty fund 234 contributions to guaranty fund 252 dividends on contributions 256 initial guaranty fund and expense fund 233 return of oontributions . . . . , 236, 237 trust companies 180, 181 Index: persons entitled to unclaimed dividends, etc 47 Individual Bankers: assessments for expenses of banking department 17 assessments for encroachments on reserves 30 bill payable otherwise than in money prohibited . . . . ; 142 definition of 2 examinations by superintendent 39 liquidation (see Liquidation by Superintendent). rate of interest, usury 114 rights of, preserved 143 use of sign or words indicating bank 141 Infants (see Minors). Initial Guaranty Fund of Savings Bank: creation 234 deposit of, as condition precedent 233 dividends to contributors 256 investigation by superintendent 23 return of 236 statement in organization certificate 230 Intention to Organize ( see Notice of Intention to -Organize) . Insolvency: liquidation (see Liquidation by Superintendent), priorities in assets of insolvent (see Priorities), securities deposited by foreign corporation: lien in favor of residents • 33 trust company as receiver 185, 18S Geneeal Index. 493 (References are to sections.) Insurance: mortgage loans by savings banks 241 Interest: on judgments and contracts held by savings banks 239a on securities deposited with superintendent 33 application in payment of assessments 34 banks 105 foreign investment companies 306 investment companies 292 private bankers 161 trust companies 184 on stockholders liability 80 on trust funds held by trust company 188 personal loan company or broker: reduction of rate by order of superintendent 56, 350, 364 private bankers: effect on status of payment on deposits 26, 150, 151, 160 prohibition against usury 368 rate chargeable: banks and bankers 114, 115 investment companies 293 personal loan companies 344 personal loan brokers 362 savings and loan associations 376, 378, 385 trust companies 200, 201 savings bank deposits 256 unclaimed interest ( see Unclaimed Deposits, Dividends aTid Interest ) . usury (see Usury). valuation of securities in arrears of 54 I-Ditei^Ieader: actions to recover deposits: banks 113 savings banks ^ 250 trust companies 199 Inventory: of assets o'f insolvent; 66 Investigations by Superintendent: application for authorization certificate 23 application by foreign corporation for license 27 application to open branch offices 51 examinations (see Examinations by Superintendent). * exempted private banker 20 private banker's affidavit 25 special investigations. 39 494 General Index. (References are to sections.) Investment Companies: assessments for expenses of banking department 17, 299 branch offices 293 change of location 206 communications from banking department 297 capital required 290 conditions precedent to commencing business 291 deposit of securities with superintendent 292 deiinition of 2 encroachments on powers prohibited 302 examination by superintendent 39 foreign investment companies (see also Foreign Corporations).. 302-308 forfeiture of corporate rights by non-user 485 general powers 2fl3 incorporation 290 incorporators (see Incorporators). liquidation (see Liquidation by Superintendent). merger ( see Merger ) . organization certificate ." 29t> preservation of records 300 reincorporation under banking law 309 restrictions : as to entries in books 295 on officers, directors and employees ". . 301 on powers 294 reports to superintendent 298 voluntary dissolution 4S6 when corporate existence begins 291 Investments (see also Eestrictions). banks 106, 107, 108 credit unions ^ 453 land bank 424, 425 private bankers 155, 162 savings and loan associations 378, 384, 386 savings banks ^ 239, 239a effect of conforming charter 281 estimated market value 53 list to be furnished by superintendent 52 when sale may be required by superintendent 55 trust companies 185, 188, 189, 190, 193 Joint Deposits: banks ]«48 savings banks 249 trust companies 198 Geneeal Index. 495 (References are to sections.) Judgments: purchase by savings banks 239a when not liens on insolvent's assets 77 Land Bank: amendment of by-laws 435 annual meeting of shareholders 436 assessments for expenses of banking department 17 bond of directors 430 change of number of directors 433 commissions and payment of expenses 429 conditions precedent to commencing business 423 debentures (see Debenture Bonds of Land Bank). definition of 2 examinations by superintendent 39 exemptions from taxation 438 forfeiture of corporate rights by non-user 483 general powers 424 guaranty fund 427 incorporation 421 incorporators ( see Incorporators ) . individual liability of shareholders 428 liquidation (see Liquidation by Superintendent). membership 428 oath of directors 431 officers 434 organization certificate 421 penalties (see Penalties). preference of creditors 437 proposed by-laws 422 qualifications of directors 430 restrictions on powers 425 savings and loan associations: investment in shares and obligations 384 powers as to land bank 378 provisions in by-laws of 376 transfer of shares 428 vacancies in board of directors 432 voluntary dissolution 486 when corporate existence begins 423 Laws Repealed 500 Letters of Credit: banks 106. 108 trust companies 185, 190 Letters Testamentary: granting to trust company 188 4:916 Geneeal iNBEX, (Reierences are to sections.) Licenses: foreign corporations (see Foreign CQr.pQratiom&), reincorporation of personal loan AsseciEutions.,,. ....-.-... 343 Liens: against assets of insolvent 65 attorneys' liens (see Attorneys' Liens). of credit unions on shares and dividends 453 of safe deposit companies on stored property 331 of savings and loan -associations on shares 378 securities deposited by foreign corporations 33 when judgments do not constitute 77 Limitations of Actions: actions by superintendent against direotor.s, trustees or officers . . 81 actions on unaccepted claim 76 actions to recover savings bank deposits ,.. 248, 250 stockholders' liability : banks 120 safe deposit companies 322 trust companies . 206 Liquidation by Superintendent: acceptance or rejection of claims 75 actions against directors, trustees or officers i 81 actions by attorney -general to dissolve 59 appointment of special deputies 15 assessments, penalties and forfeitures entitled to priority 32 assets (see Assets). compounding debts and compromising claims 69 deposit of moneys collected 70 disposition of unclaimed dividends 78 dividends to creditors 78 effect of accepting claims 76 enforcement of stockholders' liability 80 filing list of accepted claims 75 how superintendent's possession may terminate 58 inventory of assets 66 limitation of actions on unaccepted claim 76 liquidating and conserving assets . 69 notice to bailor to remove goods 68 notice to creditors to prove claims ■.■ 72 notice to persons holding assets 65 objections to claims 74 payment of expenses 63 power to make examination after taking possession 3& preference of actions by superintendent 71 Geneeal Index. 497 (References are to Hections.) Liquidation by Superintenaent — (Continued) : priorities ( see Priorities ) . procedure where attorneys' liens are asserted 64 property held as bailee or depositary 67, 68 resumption of business 61 relief against closing by superintendent 60 special deputies, assistants, counsel etc 62 savings and loan associations: participation of shares in assets 402 savings banks: return of contributions 236 superintendent must list claims 73 stockholders' meeting after paym'ent of creditors 79 superintendents pQwer to sue, execute instruments, etc 71 superintendent exempt from filing and recording fees 71 termination of corporate existence 79 unclaimed deposits, dividends and interest 45 within what time claims may be proved 72 when judgments not liens 77 List: accepted claims 75 claims, presented to superintendent 73 estimated market value of bonds 53 legal investments for savings bamks 52 stockholders of trust company 183 unclaimed deposits, dividends and interest 46 Loans: collateral demand loans (see Collateial D^nand. Loans).. credit unioaa: additional security 468 loans to non-members prohibited 478 interest (see Interest). personal loan companies: evidences of indebtedness 346 what constitutes loan within state 373 power to lend (see also Powers) : banks 1*^ credit unions ■*>•' foreign banks l'^' investment companies 293 personal loan companies 344 savings and loan associations 378 trust companies '■°'' 498 Gbiteeal Index. (References are to sections*) Loans ^ (Continued) : restrictions on (see also Eestriotions) : banks 108, 139 credit unions 454, 478 investment companies 294, 301 personal loan companies 345 private bankers 164 safe deposit companies 319 savings and loan associations 386 trust companiea ,. 190, 222 savings and loan associations: repayment 402 usury (see Usury). what constitutes loan within state 373 Location: branch offices (see Branch •OfSces). change of location (see Change of Location). restrictions as to (see Restrictions). statement in application or organization certificate: banks 100 credit unions 450 foreign banking corporations 144 foreign investment companies 303 investment companies 290 land bank 421 personal loan companies 340 personal loan brokers 359 private bankers 151 safe deposit companies 315 savings and loan associations 375 savings banks 180 trust companies 180 statement in notice of intention to organize: banks '. 101 savings banks 231 trust companies 181 Losses: calculation of net earnings: banks lUB credit unions 458 savings and loan associations 394 savings banks 254 trust companies 202 chargeable against guaranty fund: credit unions 457 savings and loan associations 392, 393 savings banks 252, 253 Geneeal Index. 499 (References are to sections*) Losses — (Continued) : payment out of bank's surplus fund 117 payment out of initial guaranty fund 234 reduction of liability to depositors or shareholders: credit unions 462 savings and loan associations 404 savings banks 280 Lunatics: trust company as committee 185, 188 Market Value (see also Estimated Market Value): how stocks, etc., carried on books: banks 109 trust companies 194 Married Person: assignment of wages or salary 347 Married Women: power of trust company to act for 185 Members (-see Shareholders). Merger: agreement to merge 488 branch offices of savings banks 245 effect of 494 filing approved agreement 492 granting letters testamentary to successor 188 issuance of new stock or shares 495 re-submission of approved agreement to savings bank trustees 491 rights of dissenting stockholders or shareholders 496 submission of agreement to stockholders or shareholders 490 submission of agreement to superintendent 489 when authorized 487 when merger takes effect 496 Minors: deposits of: banks 148 savings banks 249 trust companies 198 powers of trust company as to 185, 188 500 Geneeal Index. (References are to sections^) Minutes: communications from banking department (see Communications from Banking Department ) . declaration of dividends by savings bank 256 meeting of stockholders: change from state bank to trust company 138 re-incorporation of investment company 309 re-incorporation of personal loan association 343 voluntary dissolution 486 Moneys Paid into Court: books and accounts of depositary: banks 109 trust companies 194 trust company as depositary 185, 188, 192, 194 Monthly Meetings: directors (see Directors). private bankers 169 savings bank trustees 264 Mortgages: banks 108 land bank 424, 425 power of foreign banks to loan on 145 private bankers 162, 163, 164 savings and loan associations 384, 386, 391 savings banks 239, 241 to foreign trust company, validity of 223 trust companies 190 valuation where in arrears of interest 54 Name:. corporate name (see Corporate Name). descriptive name: personal loan brokers 363 private bankers 155 statement in application certificate: personal loan brokers 359 private bankers 151 National Banks: change from state to national bank 137 change to state bank 104 designation as reserve depositaries 38, 166 not foreign corporations 145 prohibitions against unauthorized banking 140 use of sign or word indicating bank ., , 141 General Index. 501 (References are to sections.) Net Earnings: calculation of (see Earnings). crediting for dividend purposes: banks 118 savings and loan associations 395 trust companies 204 definition of 3 personal loan companies: reduction of interest and charges 56, 350 reports to superintendent: banks 133 personal loan companies 365 trust companies 218 transfers to guaranty fund: credit unions 457 savings banks 252, 255 transfers to surplus fund: banks 117 trust companies 203 transfers to undivided profits of savings bank 256 Ne'wspaper (see Publication). Non-Stock Corporations: credit unions 2 land bank 2 savings and loan associations 2 Notary Public: opening safe, vault or box 67, 331 Notice: acceptance of private banker's afBdavit 25 amendment of by-laws (see Amendment of By-Laws). annual meeting (see Annual Meeting of Stockholders or Shareholders) . appointment of trust company as guardian, etc 188 approval of application to engage in business 23 assessment of stockholders' liability 80 assessment to make good impairment of capital: banks 121 safe deposit companies 323 trust companies 207 change from state bank to trust company 138 change from state to national bank 137 change of location (see Change of Location). change of number of directors (see Directors). flisposition of unclaimed sums 79 33 502 General Index. (References are to secfions.) Notice — (Continued) : extra dividends to depositors 256 interpleader (see Interpleader). meeting of stockholders after payment of creditors ■ 79 refusal to allow branch office 51 re-incorporation : of investment company 309 of personal loan association 343 revocation : acceptance of private banker's aflBdavit 26 authorization certificate or license 29 time for making report 42 to bailor of property held by insolvent 67, 68 to creditors of insolvent to prove claims 72 to persons holding assets of insolvent , 65 voluntary dissolution 486 withdrawal of free shares 397 Notice of Intention to Organize: banks 101 savings banks 231 trust companies , 181 proof of publication and service: banks 102 savings banks 232 trust companies 182 superintendent's powers and duties 20 Oath: committees and officers of credit unions 466 deputies and examiners 13 directors (see Directors). power of superintendent and examiners to administer 39 reports of examiners and special agents 41 superintendent of banks 10 trust company acting as fiduciary 188 trustees of savings banks 261 verification of reports (see Verification). Objections: to claims of creditors 74 Office Buildings (see also Real Estate) : banks 106, 109, 116 land bank 424, 425 private bankers 163 savings and loan associations 384, 387, 391 savings banks 239, 240, 246 trust companies 185, 194, 202 Geneeal Index. 503 (References are to aectlonii.) OfBcets: actions by superintendent against 81 acts of, as prima facie evidence against corporation 372 banks 128 credit unions 472 land bank 434 oath (see Oath), restrictions on: banks 139 investment companies 301 savings and loan associations 409 savings banks 267 trust companies 222 restrictions on loans to: banks ., 108 credit unions 454 trust companies 190 savings and loan associations 376 savings banks 263 by-laws 262 compensation 265 fidelity bonds 270 pensions 271 transmission of names to superintendent 233 trust companies 213 OfSces and Furniture: of banking department 12 OfSce Sign: use by private banker of word " bank," etc 150 OfScial Bonds: agent to continue liquidation 79 deputy acting as superintendent 14 directors of land bank 430 superintendent of banks 10 when required of trust companies 188 OfScial Oath (see Directors; Oath). OfScial Seal (see Seal). Orders of Court (see Supreme Court). Orders of Superintendent: authority to make 56 disobedience as ground for taking possession 67 penalty for disobeying order as to bookkeeping (see Penalties). 504 General Index. (References are to sectionB.) Orders of Superintendent — (Continued) : reducing rate of interest or charges: personal loan companies 56, 350 personal loan brokers 56, 364 Organization Certificate: powers and duties of superintendent: defective certificate, not to be filed ; 21 filing " for examination " 22 filing approved certificate 23 requirements: banks , lOO change from national to state bank. ._ 104 change from state bank to trust company 138 credit unions 450 investment companies 2"90 land bank 421 personal loan companies 340 re-incorporation of investment companies 309 re-incorporation of personal loan associations 343 safe deposit companies 315 savings banks 230 savings and loans associations 375 trust companies 180 submission to superintendent: banks 102 savings banks 232 trust companies 182 Partnership: acts of one as prima facie evidence against others 372 included in definition of personal loan broker 2 included in definition of private banker 2 Par Value Surplus: determination of per centum 257 Passbooks: savings banks r. 248 Pawnbrokers: powers of personal loan com'panies 344 prohibition against usury not applicable 368 Payment into Court: deposits claimed by more than one person: banks 113 savings banks 250 trust companies 199 General Index. 505 (References are to sections.) Penalties and Forfeitures: application of interest or proceeds of securities 34 bills payable otherwise than in money prohibited 142 disobedience of order as to keeping books: banks lOd investment companies 295 personal loan companies and brokers 367 private bankers 165 safe deposit companies 320 savings and loan associations 391 savings banks 246 trust companies 194 effect of change from state to national bank 137 encroachments on powers of banks 140 enforcement in name of superintendent 31 entitled to priority 32 excessive dividends to savings bank depositors 256 failure of private banker to give receipt 168 failure to report directors' examinations: banks 131 trust companies 216 failure to report to superintendent: banks 133 credit unions 477 foreign banks 147 foreign investment companies 298 investment companies 298 personal loan companies and brokers 365 private bankers 170 safe deposit companies 329 savings and loan associations 413 savings banks 273 trust companies 218 failure to report unclaimed deposits: banks 134 private bankers ■ 157 savings banks 274 V trust companies 219 failure to submit agents' names to superintendent: foreign investment companies 307 forfeiture of corporate rights by non-user 485 liability of personal loan brokers 3i62 loans to non-members by credit unions 478 payment of recoveries into state treasury 19 prohibitions (see Prohibitions). 506. Geneeal Index. (References are to sections.) Penalties and Forfeitures — (Continued) : publishing statements calculated to deceive: loans of $200 or less 371 purchasing or loaning on own stock: banks 108 investment companies 294 trust companies '90 purchase of note issued for less than f»ce value: banks 108 trust companies 190 unauthorized borrowing by oflBcer, director or employee: banks 139 investment companies , 301 trust companies 222 unauthorized branch offices: banks 110 personal loan companies 349 unauthorized loans by officers, directors or employees: banks 139 investment companies 301 trust companies 190 unauthorized loans to officers, directors, etc.: banks 108 trust companies 190 unauthorized use of term " credit union " 479 unauthorized use of word " savings " 279 unlawfully engaging in personal loan business 369 use of sign or words indicating bank 141 usury: :banks and bankers. . : ;« 114 loans under $200 368 trust companies 200 violation of restrictions by examiner 15 violations by foreign trust companies 223 violations of private banking law 172 Pensions: retirement of deputies, clerks and examiners 16 savings bank employees 271 Perjury: false report by foreign bank 147 Permanent Capital: conditions precedent to engaging in business: personal loan brokers 381 private bankers 162 General Index. 507 (References are to sections.) Permanent Capital— (Continued) : examination as to paymeni of ..-r^-. ... 24 examination of private banker 160 investment by private bankers 155, 162, 164' net earnings of personal broker 56 requirements as to: personal loan brokers 360 private bankers 154 revocation of acceptance of affidavit 26 statement of amount in application certificate: personal loan brokers 359 private bankers 151 Personal Loan Associations: continuation of ^ 343 Personal Loan Brokers: application certificate 359 assessments for expenses of banking department 17 books and records 367 conditions precedent to engaging in business 361 continuation of 343 definition of 2 designation of superintendent to accept service 362-a encroachment on powers of 368, 369 examinations by superintendent 39 investigation of applicant 23 liability for assessments by superintendent 366 liquidation (see Liquidation by Superintendent), penalties ( see Penalties and Forfeitures ) . permanent capital 360 powers, duties and liabilities 362 publishing statements calculated to deceive 371 orders to reduce charges 56 reports to superintendent 365 restrictions on profits 364 revocation of authorization certificate 29 title to be taken in descriptive name 364 what constitutes loan within state 373 Personal Loan Companies: annual meeting of stockholders 353 assessments for expenses of banking department 17 bonds to superintendent 342 books and records 367 branch offices 349 capital requirements 340 change of location 362 508 Geneeal Index. (References are to sectlona.) Personal Loan Companies — (Continued) : communications from banking department 358 conditions precedent to commencing business ., 341 continuation of 343 definition of 2 encroachments on powers of 368, 369 examinations by superintendent 39 forfeiture of corporate rights by non-user 485 general powers 344 incorporation 340 incorporators (see Incorporators). liability for assessments by superintendent 3€'6 liquidation (see Liquidation by Superintendent), merger (see Merger). monthly meeting of directors , 357 net earnings and dividends 350 oath of directors 355 orders to reduce charges 56 organization certificate 340 publishing statements calculated to deceive 371 qualifications of directors 354 re-incorporation of personal loan associations 343 reports to superintendent , 365 restrictions : assignments of wages or salary , 347 evidences of indebtedness 346 loans, interest and charges 345 place of transaction of business 348 revocation of authorization certificate 29, 342, 351 term of office of directors 356 voluntary dissolution 486 what constitutes loan within state 373 when corporate existence begins 341 Personal Property: lien of safe deposit company 331 power to receive for safe keeping: banks 106 safe deposit companies 317 trust companies 185 superintendent's power to dispose of 69 Place of Business (see Locatioa). Pledgees: liability as stockholders: banks 120 safe deposit companies 322 trust companies 206 General Index. 509 (References are to sections.) Population: definition «f g Power of Attorney (see also Attorney in Fact) : what constitutes loan within state 373 Powers: banks 106 credit unions 453 encroachmentB on (see Prohibitions). investment companies 293 land bajak 424 personal loan brokers 362 personal loan companies 344 restrictions on ( see Restrictions ) . safe deposit companies 317 savings and loan associations 378 savings banks 238 specially chartered trust companies 187 trust companies 185^ 186 to hold stock of safe deposit company 190 Preference: actions by superintendent 71 priorities in assets (see Priorities). Preservation of Books and Records: banks 136 investment companies 300 personal loan companies and brokers 367 private bankers 165 trust companies 221 President: banks 128 trust companies 213 savings banks 263, 264 Presumptive Evidence: agreement for merger 488 documents bearing superintendent's seal 11 reports of superintendent and examiners 59 statements to directors or trustees: banks 129 personal loan companies 357 savings banks 264 trust companies 214 violations of article 9 372 Priorities: assessments, penalties and forfeitures 32 depositors of private bankers ^ 156 510 General Index. (References are to sections.) Priorities— (Continued) : deposits by credit unions 456 deposits by land bank 437 deposits by savings and loan associations 414 deposits by savings banks 278 deposits by superintendent: moneys collected in liquidation 70 unclaimed deposits, etc 45 determination of priorities 78 superintendent not to determine 75 trust funds held by trust company 188 Private Bankers: aflSdavit to obtain exemptions: contents 160 duties of superintendent 25 revocation of acceptance 26, 158 annual report of unclaimed deposits 157 application certificate 151 assessments for encroachments on reserves 30 assessments for expenses of banking department 17 bills payable otherwise than in money prohibited 142 books and records 165 change of location 159 conditions precedent to transacting business 152 definition of 2 deposits of securities with superintendent 161 examinations by superintendent 39 exemptions 160 Increase or decrease of permanent capital ' 154 investigation of applicant 23 investments of capital and deposits 155, 162 liquidation (see Liquidation by Superintendent). monthly meetings and reports 169 permanent capital 154 preference of deposits in case of insolvency or suspension 156 rate of interest 114 reserves ; 166 restrictions: ■ as to place of business 171 purchases of and loans on real estate 164 revocation of authorization certificate 29, 168 rights and privileges under authorization certificate 153 sale of real property and securities 163 termination of surety company's liability 161 title to be taken in descriptive name 155 Geneeal Index. 511 (References are to sections.) Private Bankers— (Continued) : transfer of securities held by comptroller 161 transfer of securities held by surety company 161 transmission of money by 167, 168 use of sign or words indicating bank 141 usury 114 violations of article prohibited 172 what private bankers subject to banking law 150 Process: service on superintendent (see Attorney in Fact; Foreign Corporations). Prohibitions: advertisements by savings banks of surplus or guaranty fund 258 against encroachments on powers: of banks 140 of investment companies 302 of trust companies 223 relating to interest 368 bills payable otherwise than in money 142 foreign corporatioms cannot transact savings and loan business 420 investment by private bankers of permanent capital and deposits .... 162 loans to non-members of credit unions 478 publishing statements calculated to deceive: personal loan companies and brokers 371 unauthorized use of word " savings " 279 unlawfully engaging in personal loan business 369 use of sign or words indicating bank 141 use of term " Credit Union " 479 violations of private banking law 172 Proof of Claims (see Claims of Creditors). Publication: annual report of unclaimed deposits, etc.: banks 134 private bankers 157 savings banks 274 trust companies . 219 examiners' and special agents' reports 41 list of unclaimed deposits, etc 46 notice of annual meeting of land bank 436 notice of assessment of stockholders: banks 121 safe deposit companies 323 trust companies 205 512 Genebal Index. (References are to section*.) Publication— (Continued) : notice of intention to cliange location: banks 119 designation of newspaper by superintendent 50 investment companies 296 savings and loan associations 403 savings banks 259 trust companies 205 notice of intention to organize: banks 101, 102 designation of newspaper by superintendent 20 savings banks 231, 232 trust companies 181, 182 notice of meeting of stockholders after payment of creditors 79 notice of revocation of authorization certificate or license 29 notice to creditors to prove claims 72 reports to superintendent: banks 133 summary of reports 43 trust companies 218 Qualifications: directors (see Directors). incorporators (see Incorporators). superintendent of banks 10 trustees of savings banks 260 Quorum: directors (see Directors). trustees of savings banks 264 Sailroad Bonds: investments of savings banks ,j;. 239 Sate of Interest (see Interest). Real Estate: extension of time to dispose of 49 how carried on books: banks 100 savings and loan associations 391 savings banks 246 trust companies 194 powers and restrictions as to: banks 106, 107, 108 land bank 424, 425 private bankers 162, 163, 164 ' savings and loan associations 384, 386, 387 savings banks 238, 239, 240 trust companies 185, 189, 190 superintendent's power to dispose of 69 General Index. 513 (References are to sections.) Receipt: for money received by private banker for transmission 168 for securities deposited with superintendent 36 for unclaimed deposits, dividends and interest 45 Keceiyers: enforcement of stoekliolders' liability by: banks 120 safe deposit companies 322 trust companies 206 trust companies as 185, 188 when examiner shall not be appointed 15 Kecording: authorization certificate 24 conveyances : to banks 107 to savings and loan associations 387 to savings banks 240 to trust companies 189 exemption of superintendent from recording fees 71 instruments sealed by superintendent 11 mortgages : to banks ] 08 to savings and loan associations 386 to savings banks , 241 to trust companies 190 Records: preservation of ( see Preservation of Books and Records ) . Reduction of Capital: not to be authorized on resumption of business 61 private bankers 154 personal loan brokers 360 References: to determine objections to claims 74 Registrar: powers of trust company 85 what corporations may act as 223 Registration: securities deposited with superintendent 33 Re-incorporation: investment companies 309 national changing to state bank 104 514 Genekal Index, (References are to sections*) Re-incorpoiation — ( Continued) : personal loan associations 343 state bank changing to national 137 state bank changing to trust company 138 Rejection: claims of creditors 75 Removal of Examiner: grounds for 15 Renewal: bond of personal loan company 342 license to foreign corporations 27, 146 Report of Superintendent 83 Reports to Superintendent: by corporations and persons subject to banking law: banks 133 credit unions 477 extension of time by superintendent 49 foreign banks 147 foreign investment companies 298 foreign reserve depositaries 38 investment companies 298 personal loan companies and brokers 365 powers and duties of superintendent 42 private bankers 170 publication of ( see Publication ) . safe deposit companies 329 savings and loan associations 413 savings banks 273, 275 trust companies 218 by examiners and special agents 41, 59 of directors examinations: banks 131 trust companies 216 of unclaimed deposits, etc. (see Unclaimed Deposits, Dividends and Interest). special reports (see Special Reports to Superintendent). Reserves: banks 1 12 deposit in federal reserve bank 112 designation^ of depositaries 38 encroachments on (see Encroachments on Reserves). private bankers 166 reserve depositary defined 3 reserves on deposit defined 3 reserves on hand defined 3 trust companies 197 Geneeal Index. 515 (References are to Hectlons.) Restrictions: as to bookkeeping: banks 109 investment companies 295 personal loan companies and brokers 367 safe deposit companies 320 savings and loan associations 391 savings banks 246 as to branch offices (see Branch Offices). as to deposit of funds: banks Ill savings banks 244 trust companies 196 as to place of business: personal loan brokers 362 personal loan companies 348 private bankers 171 savings banks 245 as to purchases of, or loans on stock (see Stock). as to real estate (see Eeal Estate). on banks (see Banks). on credit unions (see Credit Unions). on examiners 15 on foreign corporations (see Foreign Corporations). on individual bankers (see Individual bankers). on investment companies (see Investment Companies). on land bank ( see Land Bank ) . on officers, directors and employees: banks 139 investment companies 301 savings and loan associations 409 savings banks 267 trust companies 222 on personal loan brokers (see Personal Loan Brokers). on personal loan companies (see Personal Loan Companies). on private bankers ( see Private Bankers ) . on safe deposit companies (see Safe Deposit Companies). on savings and loan associations (see Savings and Loan Associa- tions) . on savings banks (see Savings Banks). on trust companies (see Trust Companies). Resumption of Business: after closing by superintendent 61 Retirement: of deputies, clerks and examiners 16 516 General Index. (References are to sections.) Return of Securities: deposits with superintendent 37 Bevocation: of acceptance of private banker's affidavit 26, 158 of authorization certificate (see Authorization Certificate), of license (see Foreign Corporations). Safe Deposit Companies: annual meeting of stockholders 324 assessments for expenses of banking department i7 assessment of stockholders vfhen capital impaired 323 books and records 320 branch offices 318, 319 capital requirements 315 change of location 321 communications from banking department 328 conditions precedent to commencing business 316 definition of ., 2 disposition of deposited property on liquidation 67, 63 examinations by superintendent 39 forfeiture of corporate rights by non-user 485 general powers 317 incorporation 315 incorporators (see Incorporators). liability for assessments by superintendent 330 liquidation ( see Liquidation by Superintendent ) . merger ( see Merger ) . oath of directors 326 organization certificate 315 penalties (see Penalties and Forfeitures). power of bank to hold stock 106 power of trust company to hold stock 190 qualifications and disqualifications of directors 325 remedy for nonpayment of box rent 331 reports to superintendent 329 restrictions on powers 319 special remedies applicable to 331 stockholders, rights and liabilities of 322 tenure of office of directors 327 voluntary dissolution 486 when corporate existence begins 316 Salary (see Compensation). "Savings": unauthorized use of word prohibited 279 General Index. 517 (References are to sections.) Savings and Loan Associations: accumulative prepaid shares 383 amendment of by-laws 410 amortization of securities 391 annual report to shareholders 415 assessments for expenses of banking department 17 calculation of earnings for dividend period 394 change of location 403 change of number of directors 408 character of association 382 charters conformed to article 418 classes of shares 383 communications from banking department 412 construction of reference to laws of 1892 416 construction of term " by-laws " 419 definition of 2 dividends to shareholders 395 how credited 382 dues, when payable 383 examinations by superintendent 39 exemptions 411 failure to pay matured shares or withdrawls 57 fines and restrictions thereon 389 forfeiture of corporate rights by non-user 485 formation of land bank 421 general powers 378 guaranty fund 392, 393 income shares 383 incorporation 375 incorporators ( see Incorporators ) . installment premium plan 385 installment shares 383 juvenile savings shares 383 liquidation (see Liquidation by Superintendent). loans and investments 384 matured shares 396 matured value of shares hereafter issued 381 membership, dues and capital 379 merger (see Merger). oath of directors 406 organization certiiicate 375 participation of shares in apportioned profits 383 penalties ( see Penalties and Forfeitures ) . permanent associations 382 premium, premium plan and restrictions 385 priority of deposits by 278, 414, 456 518 General Index. (References are to sectlonm.} Savings and Loan Associations — (Continued) : prohibitions against encroachments on powers 420 proposed by-laws 376 qualifications and disqualifications of directors 405 reduction of liability to members 404 repayment of loans and application of pledged shares 402 reports to superintendent 413 restrictions : as to entries in books 391 on directors and officers 409 on payment of expenses 390 on payment of matured shares and withdrawals 398 on power to borrow 388 on real estate mortgages 386 on taking, holding and conveying real estate 387 retirement of shares 399 review of superintendent's refusal to approve by-laws 410 rights of certain associations preserved 417 savings shares 383 serial associations 382 shares in names of fiduciaries ., 380 shares in names of two persons 380 suspension and forfeiture of shares 400 term of office of directors 376 transfer of shares 401 vacancies in board of directors 407 .valuation by superintendent of securities in arrears of interest.... 54 voluntary dissolution , 486 when corporate existence begins 377 withdrawal of free shares 397, 398 Savings Banks: advertisements of unauthorized savings banks 279 advertisements of surplus or guaranty fund 258 amortization of securities 246 assessments for expenses of banking department 17 available fund 251 board of trustees 260 branch offices 245 by-laws 262 calculation of earnings for dividend period 254 change of location 259 charters conformed to article 281 classification of depositors 256 communications from banking department 276 compensation of trustees, officers and attorneys 265 Geneeal Index. 519 (References are to sections.) Savings Banks— (Continued) : conditions precedent to commencing business 23S deductions from net earnings for guaranty fund. 255 definition of ^ 2 dividends to depositors 256 estimated market value of bonds 53 examinations by superintendent 39 examinations by trustees 272 expense fund 235 filling vacancies in board of trustees ; 269 forfeiture of corporate rights by non-user 485 general powers 238 guaranty fund 252, 253 incorporation 230 incorporators (see Incorporators). increase or reduction of board of trustees 266 initial guaranty fund 234 interpleader in actions to recover deposits 250 investigation of proposed corporation 23 investments 238, 239-a liability for assessments by superintendent 277 liquidation ( see Liquidation by Superintendent ) . list of legal investments furnished by superintendent 52 meetings of trustees 264 merger (see Merger). no other report of supervision required , 275 notice of intention to organize 231 oath and declaration of trustees 261 ofiicers 263 organization certificate 230 passbooks 248 penalties (see Penalties and Forfeitures). pensions 271 per centum of par value surplus 257 preference of deposits made by 278, 414, 456 reduction of liability to depositors 280 refusal or return of deposits 247 removal and forfeiture of oflBce of trustee 268 repayment of deposits 248, 249 reports of dormant accounts z74 reports to superintendent 273 requirements as to mortgage loans 241 restrictions : as to entries in books 246 as to place of business 245 on amount of deposits 247 520 GrECsfEEAL luDEX, (References nre to iiectloiisO Savings Banks — (Continued): on borrowing money 243 ou certificates of deposit 243 on dealings . 242 on deposit of funds 244 on pledging of securities 243 on taking and holding real estate 240 on trustees and officers 267 result of examination to be certified on records 40 return of contributions heretofore made 237 return of initial guaranty fund and expense fund 236 security from. oflBcers and employees 270 submitting organization certificate to superintendent 231 trustees (see Trustees of Savings Banks). use of the word " savings " 279 valuation by superintendent of securities in arrears of interest 54 voluntary dissolution 486 when corporate existence begins 233 when superintendent may require sale of securities 55 School Savings: exception from prohibitions 279 Seal: superintendent's official 11 fees for afSxing 18 Secietaty of State: duty to provide official seal 11 filing deputies' official oath 13 superintendent's oath of office filed with 10 Senate: appointment of superintendent 10 Shareholders (see also Shares) : annual meeting (see Annual Meeting of Stockholders or Shareholders). credit unions: distribution on dissolution 457 individual liability 461 loans to 453 meetings 464 qualifications of directors 465 reduction of liability to 462 restrictions on borrowing 4<54 withdrawal and expulsion 463 definition of 3 General Index. 521 (References are to sectlOBS.) Shareholders — (Continued) : land bank: commissions and charges 429 debenture bonds 426 individual liability 428 qualifications of directors 430 merger (see Merger). savings and loan associations: annual report to 415 dividends 396 dues : 379 entrance fees 378 exemptions 411 fees 376 fines , 389 how dividends credited 382 joint ownership 380 loans to 37S, 384 matured shares 396 premium or interest on loans 385 reduction of liability to 404 repayment of loans and application of pledged shares 402 restrictions on payment of matured shares and withdrawals. .. . 398 retirement of shares 399 suspension and forfeiture of shares 40O transfer of shares 401 withdrawal of free shares 397 voluntary dissolution 486 Shares (see also Shareholders) : credit unions: lien on 453 ownership as qualification of director 465 restriction on power to issue . 454 statement of, in organization certificate 450 issuance after merger 495 land bank: payment for subscriptions in cash required 423 statement in organization certificate 421 transfer of shares 428 savings and loan associations: application to loans 402 exemptions from execution and taxation 411 loans on 385 matured shares 396 matured value of, hereafter issued 381 522 General Index. (References are to sections.) Shares — (Continued) : participation in apportioned profits 383 qualifications of directors 405 restrictions on payment 398 retirement of 399 statement of matured value in organization certificate 375 transfer of shares 401 withdrawal of free shares 397 Short Title: " Banking Law " 1 Special Agents (see also Special Investigations) : appointment, compensation, etc 13 how compensation paid 17 reports to superintendent 41 Special Deputies: compensation 63 examiner may be appointed 15 to assist in liquidation 62 Special Investigations (see also Special Agents) : power of superintendent to make 39 Special Reports to Superintendent: banks 133 credit unions 477 investment companies 298 personal loan companies and brokers 365 private bankers 170 safe deposit companies 329 savings and loan associations 413 savings banks 273 superintendent's power to require 42 trust companies 218 State: judgments and contracts as savings bank investments 239-a State Comptroller: approval of bond of deputy acting as superintendent 14 approval of superintendent's bond 10 designation of trust company as depositary 188, 192 investments of savings banks 239-a transfer of securities to private banker 161 warrant for expenses of banking department 17 State Treasurer: approval of bond of deputy acting as superintendent 14 approval of superintendent's bond 10 State Treasury: payment of expenses of banking department 17 reimbursements of 19 General Index. 523 (References are to sections.) S'^tute of Limitations (see Limitations of Actions). Stock (see also Stockholders) : investments of savings banics 239 issuance after merger 495 provision for transfer in organization certificate: banks 100 investment companies 290 safe deposit companies 315 trust companies 180 qualifications of directors (see Directors). restrictions as to purchases of, and loans on: banks 108 investment companies , 294 trust companies 190 sale of, to make good impairment of capital : banks 121 safe deposit companies 323 trust companies 207 transfer as affecting stockholders' liability (see Stockholders). valuation where in arrears of interest 54 Stockholders: (see also Stock). annual meeting (see Annual Meeting of Stockholders). •assessment when capital impaired (see Impairment of Capital). change from personal loan association to personal loan company .... 343 change from state bank to trust company 138 change of location (see Change of Location). definition of 3 directors must be ( see Directors ) . dividends to ( see Dividends to Stockholders ) . liability of: banks 120 enforcement by superintendent 80 safe deposit companies 322 trust companies 206 list of, filed with superintendent: trust companies 183 meeting after creditors paid in full 79 merger (see Merger). reincorporation of investment companies 309 voluntary dissolution 486 Stock Transfer Tax: exemptions of shares: of savings and loan associations 411 - of credit unions 461 524 Geneeal Index. (References are to sections.) Street Railways: bonds not authorized investments for savings banks 239 Superintendent of Banks: agreement with savings banks' incorporators: as to expense fund 235 as to initial guaranty fund 234 annual report of.. 83 application certificate (see Application Certificate). appointment of deputies, clerks, etc 13 appointment of special deputies 15, 62 appointment, term of office, etc 10 assessments by (see Assessments by Superintendent; Encraachments on Reserves; Impairment of Capital), authorization certificate (see Authorization Certificate). bond of 10 bond of deputy acting as superintendent 14 bond of personal loan companies . . i 341, 342 branch offices ( see Branch Oflices ) . by-laws (see By-laws) . capital ( see Capital ; Impairment of Capital ; Permanent Capital ) . certification of examination of savings bank 40 change from national to state bank 104 change from state bank to trust company 138 change from state to national bank 137 change of location (see Change of Location). deposits of securities with (see Deposit of Securities with Superin- tendent ) . designation of reserve depositaries 38 (See also Reserves.) discretionary powers 48 duty to make public official acts 82 examinations (see Examinations by Superintendent). extensions of time i 49 fees for copies and certifications 18 filing certificate " for examination " 22 foreign corporations (see Foreign Corporations). how salary paid. 17 investigations (see Investigations by Superintendent; Special Inves- tigations ) . licenses ( see Foreign Corporations) . liquidation (see Liquidations by Superintendent). list of legal investments for savings banks 52 list furnished savings banks of estimated market value of bonds 53 merger (see Merger^ . may require savings banks to sell securities 65 Geneeal Index. 525 (References are to sections.) Superintendent of Banks — (Continued): notice of intention to organize (aee Notice of Intention to Organize). offices, furniture, etc., of department 12 official seal (see Seal). orders (see Orders of Superintendent). organization certificate (see Organization Certificate). powers as trustee for creditors and depositors 44 power to pension deputies, etc 16 priorities (see Priorities). private bankers (see Private Bankers). proceedings in name of, for violations of law 31 publication of reports (see Publication). refusal to file defective certificate 21 reimbursement of state treasury 19 reincorporation of personal loan association 343 review of refusal to approve by-laws:. savings and loan associations 410 credit unions 473 reports from corporations, etc (see Reports to Superintendent). stockliolders' (see Stockholders). term of office 10 unclaimed deposits, dividends and interest (see Unclaimed Deposits, Dividends and Interest). valuation of securities in arrears of interest 54 voluntary dissolution (see Voluntary Dissolution). Supreme Court: actions to recover deposits: banks 113 savings banks 250 trust companies 199 approval of expenses of liquidation 63 compounding debts and compromising claims 69 declaration of dividends to creditors 78 determination of attorneys' liens in liquidation 64 determination of priorities 75 determining claims objected to 74 disposition of property held as bailee 67 disposition of unclaimed sums after liquidation 79 distribution to stockholders after liquidation; 79 order for payment of unclaimed sums 47 private banker's bond: termination of surety company's liability 161 reduction of liability to depositors 280 reduction of liability to members 404 relief against closing by superintendent 60 526 GrENEEAL IndEX. (References are to sections.) Supreme Court — (Continued): repayment of savings bank deposits 248 review of superintendent's refusal to approve by-laws: credit unions 473 savings and loan associations 410 voluntary dissolution 486 Sureties: bond of agent to continue liquidation 79 bond of deputy acting as superintendent 14 on superintendent's official bond 10 what constitutes loan 369, 373 Surety Company: bond to secure expense fund 235 fidelity bonds of savings bank employees 270 bond of personal loan company 342 bond of savings bank 234 release from liability on private banker's bond , 161 Surplus: definition of 3 restrictions on investments of land bank 425 savings banks: advertisements prohibited 258 incorporation in guaranty fund 252 Surplus Fund: banks 117, 118, 133 definition of 3 trust companies 203, 204, 218 Taxation: change from state to national bank 137 exemptions from (see Exemptions). Term of OfSce: directors (see Directors). superintendent of banks 10 Time: Extensions of (see Extensions of Time). Time Deposits: definition of , 3 Title: short title of banking law 1 Title Insurance: mortgage loans by savings banks 241 powers of trust companies 186 Geneeal Index. 527 (References are to sections.) Total Piofits: definition of 3 Total Reserves (see also Reserves) : definition of 3 Transfer Agent: powers of trust company 185 what corporations may act as 223 Transmitters of Money: foreign banking corporations 144 preference in case of insolvency or suspension 15b receipt 16S regulations as to 167 to whom hanking law applicable 150 Treasurer (see State Treasurer). Trust Companies: additional powers of certain companies 186 amortization of securities 193, 194 amount of capital stock required 180 annual meeting of directors 213 annual meeting of stockholders 209 annual reports of unclaimed deposits, etc 219 a.s depositaries of private bankers' reserves 166 assessments for encroachments on reserves 30 assessments for expenses of banking department 17 assessment of stockholders when capital impaired 207 calculation of earnings for dividend period 202 change from state bank to trust company 138 change of location 205 communications from banking department 217 conditions precedent to commencing business 183 crediting net earnings for dividend purposes 204 definition of 2 depositary of savings bank funds 251 deposit of securities with superintendent 184 deposits in names of more than one person 198 deposits of minors 198 designation as reserve depositaries 38 directors ' 208-216 dividends to stockholders 204 election of officers 213 encroachment on powers prohibited 223 examinations by directors 215 examinations by superintendent 39 forfeiture of corporate rights 1^ non-user 485 (general powers 1'85 528 Geneeal Index. (References are to sections.) Trust Companies — (Continued) : incorporation 180 incorporators (see Incorporators). interest and usury aOO-201 interpleader in certain actions 199 liability for assessments '. 220 liquidation (see Liquidation by Superintendent), merger (see Merger). monthly meetings of directors 213 notice of intention to organize 181 oath of directors 211 organization certificate 180 penalties (see Penalties and Forfeitures). power to hold stock of safe deposit company 190 powers of specially chartered companies 187 provisions regulating fiduciary capacities 188 qualifications and disqualifications of directors 210 reports of directors' examinations 216 reports to superintendent 218 reserves 197 restrictions: as to entries in books 194 on branch offices 195 on deposits of funds 196 on investments of capital 193 on loans 190 on officers, directors and employees 222 on power to accept or execute trusts 191 on power to contract 191 on power to receive court funds i 192 on purchases of securities 190 on taking and holding real estate 189 on total liabilities of one person 190 rights and liabilities of stockholders 206 service on, of notice of intention to organize bank 101 submitting organization certificate to superintendent 182 surplus fund 203 title insurance 186 trust deposits 198 vacancies in board of directors .■ 212 voluntary dissolution 486 when corporate existence begins » 183 Trust Deposits: in banks 143 in trust companies 198 in savings banks 249 General Index. &29 (References are to sections.) Trustee: action by superintendent against 81 liability as stockholder (see Fiduciaries). power of foreign corporation to act as 223 superintendent as, for creditors and depositors 44 trust company as 185, 188 Trustees of Savings Banks: board of, qualifications 260 by-laws 262 change of location 259 communications from banking department 276 compensation 265 contributions to guaranty fund 252 dividends on contributions 256 dividends to depositors 256 duty to invest deposits 251 election of officers 263 fidelity bonds of officers and employees 270 filling vacancies 269 increase or reduction of number 266 liability for declaring excessive dividends 256 liability for investments 239 meetings, quorum and reports of officers 264 merger (see Merger). oath and declaration 261 pensions to employees 271 repayment of deposits 248 restrictions on 267 return of contributions 236, 237 statement in organization certificate 230 vacancies 266, 268, 269 voluntary dissolution 486 Unauthorized Banking: prohibitions against .... 140 use of sign or words indicating bank 141 ITnclaimed Deposits, Dividends and Interest: annual report to superintendent: banks 134 private bankers 157 savings banks 274 trust companies 219 disposition of, in liquidation 78 payment of interest into state treasury 19 payments to persons entitled 47 powers and duties of superintendent 415-47 voluntary dissolution 486 530 Geneeal Index. (References are to sections.) Undivided Profits: accumulation of, by savings banks 256 definition of 3 UnincorpoTated Association: included in definition of personal loan broker 2 included in definition of private banker 2 TIsuTy (see also Interest) : by bank or private or individual banker 114 by trust company 200 collateral demand loans 115, 201 credit unions 453 prohibition against 36& savings and loan associations 378, 365 Vacancies: in board of directors (see Directors). in board of trustees (see Trustees of Savings Banks). in office of superintendent: bond of acting deputy 14 term of successor 10 Verification: annual report of unclaimed deposits, etc. ; 134 banks 134 private bankers 157 savings banks 274 trust companies 219 application certificate of private banker ■ 151 application to change location (see Change of Location). list of trust company stockholders 183 minutes of stockholders' meeting: reincorporation of investment company 309 reincorporation of personal loan association 343 voluntary dissolution 486 monthly statements of private bankers 169 objections to claims 74 papers showing change from state bank to trust company. 138 reports of examinations by trustees: savings banks 272 reports to superintendent: banks 135 credit unions 477 foreign banks ' 147 investment companies 298 personal loan companies and brokers 365 private bankers 170 Geneeal Index. 531 (References are to sections.) Verification — ( Continued ) : safe deposit companies 329 savings and loan associations 413 savings banks 273 trust companies 218 special reports to superintendent 42 statement of agents' names: foreign investment companies 307 Vice-President: banks 128 savings banks 263, 264 trust companies 213 Voluntary Dissolution: participation of shares in assets: savings and loan associations 402 priorities ( see Priorities ) . proceedings in 486 Warehouseman's Lien: safe deposit companies 331 When Banking Law to Take Effect 502 Witnesses: offender a competent witness: violations of article relating to personal loan companies 370 power of superintendent and examiners to compel attendance 39